United Airlines CEO Jeff Smisek steps down amid probe

Tue Sep 8, 2015 7:41pm EDT
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(Reuters) - United Continental Holdings Inc (UAL.N: Quote) said on Tuesday Chief Executive Jeff Smisek had stepped down in connection with a federal probe of the airline, and that two other senior executives tied to the investigation would also be leaving.

Oscar Munoz, a United board member and CSX Corp CSX.N 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: Quote).

"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.   Continued...

Jeff Smisek, Chairman, President and Chief Executive Officer of Continental speaks during a news conference announcing the merger between Continental and United Airlines in New York, May 3, 2010.  REUTERS/Shannon Stapleton