|
 Oscar Munoz, a United board member and CSX Corp chief operating
officer, was immediately tapped as CEO.
"The departures announced today are in connection with the company’s
previously disclosed internal investigation related to the federal
investigation associated with the Port Authority of New York and New
Jersey. The investigations are ongoing and the company continues to
cooperate with the government," UAL said.
United Continental's executive vice president of communications and
government affairs, Irene Foxhall, and its senior vice president of
corporate and government affairs, Mark Anderson, also were leaving,
according to a person familiar with the matter.
The surprise departures at the world's second-largest airline come
just after its chief financial officer left for the same role at
PayPal Holdings Inc <PYPL.O>.
"I think some investors are going to be concerned given that degree
of management turnover," said Joseph DeNardi, an analyst with Stifel
Nicolaus. "I was surprised by" the news of Smisek's departure, he
added. "I would imagine most people were."
United Continental's shares fell 2.8 percent in trading after the
bell.
Smisek, who has been the company's CEO since 2010, will also step
down as chairman and president, United Continental said in a
statement.
UAL's general counsel, Brett Hart, declined during a conference call
Tuesday to elaborate on the reasons for the departures or the status
of a federal investigation into UAL's relationship with David
Samson, a former chairman of the Port Authority of New York and New
Jersey.
In February, the carrier had opened an internal investigation into
its relationship with Samson, following a government probe.
Media reports have said the government probe focused on whether
United added direct flights to Columbia, South Carolina, from Newark
to accommodate Samson, who had a home there.
The route was canceled after Samson resigned in early 2014 following
news of a federal probe into the potential conflict of interest
between his role as port authority chairman and his private law
firm.
The investigations are ongoing and United's internal probe and the
related circumstances do not raise any accounting or financial
reporting concerns, United Continental said on Tuesday.
"We don't expect it to impact our operations," Hart said.
[to top of second column] |
United under Smisek had faced mounting pressure from investors to
improve its day-to-day operations and financial performance.
About 75 percent of United's flights arrived on time during the
first half of this year, according to federal data, the worst record
among the four largest U.S. airlines. UAL executives told Reuters
last month they planned a series of changes to schedules to improve
on-time performance.
While the company struggled initially following the
United-Continental merger under Smisek, "more recently he's done a
good job," DeNardi said, pointing to the company's steadily
improving financial performance.
Munoz, 56, has long served on United's board. He became president
and chief operating officer of CSX in February, where he oversaw
operations, service, human resources, sales, marketing and
information technology. From 2003 to 2013, he served as the rail
company's chief financial officer.
On the call with analysts, Munoz, said he would focus on improving
United's performance with customers.
"We need to reach our customers with a better service product,"
Munoz said.
Smisek will receive a separation payment of $4.9 million, payable as
a lump sum in cash, the company said in a regulatory filing. The
company also said it will give Smisek stock worth nearly $3.5
million.
(Reporting by Sweta Singh in Bengaluru, Alwyn Scott and Lewis
Krauskopf in New York and Joseph White in Detroit.; Editing by Savio
D'Souza, Bernard Orr)
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