United Airlines head replaced amid federal probe

United Airlines head replaced amid federal probe
PHOTO: Reuters

WASHINGTON - United Airlines announced on Tuesday (Sep 8) that chairman and chief executive Jeff Smisek and two other top officials had stepped down in connection with a federal investigation involving the regional airport authority.

Smisek was replaced "immediately" by board director and CSX chief operating officer Oscar Munoz, the airline's parent UnitedContinental Holdings said. Also leaving were the company's executive vice president of communications and government affairs, and its senior vice president of corporate and government affairs.

Smisek became president and chief executive of United in October 2010 when it merged with his previous employer, Continental. He added the title of chairman at the end of 2012, and had presided over the company's strong growth.

United said the surprise departures were related to a federal investigation associated with the Port Authority of New York and New Jersey, which operates John F. Kennedy, LaGuardia, Newark and other key airports in the New York metropolitan region.

United gave no details on the probe, but media reports for the past year have said the airline was being investigated over alleged favors done for the then-head of the Port Authority, David Samson, as United was seeking public investment in the Newark Airport.

United is alleged to have established a money-losing air route between Newark and Columbia, South Carolina, in 2011, as a favor to Samson, the chairman of the Port Authority, who frequently traveled to the area.

Sansom resigned from the Port Authority in March 2014 over a separate, unrelated scandal over causing a massive traffic jam on a key New Jersey-Manhattan bridge that allegedly was done to punish political enemies of the state's governor, Chris Christie, who is now campaigning for the Republican nomination for US president.

United would only say that its internal investigations into the case "do not raise any accounting or financial reporting concerns."

Munoz has broad experience in US industry, including AT&T, Pepsico, and, in his most recent executive position, president and chief operating officer of the railroad CSX, positions he resigned Tuesday.

"Oscar's track record demonstrates that he has the right blend of strategic vision and strong leadership to continue United's upward trajectory," said board chairman Henry Meyer in a statement.

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