New United Continental chief moves to calm investors, employees

Wed Sep 9, 2015 7:18pm EDT
 
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By Alwyn Scott and Nick Carey

(Reuters) - One day after ousting its chief executive, United Continental Holdings Inc (UAL.N: Quote) and its new boss, Oscar Munoz, moved to reassure shareholders and employees that the company is stable.

The airline also got a boost on Wednesday after acting Chief Financial Officer Gerry Laderman said at an investor conference that United is on track to save $1 billion in annual non-fuel costs by next year and would complete a $1 billion share buyback nearly two years ahead of schedule. UAL told investors it would return $4 billion to shareholders by 2017.

Analysts gave a thumbs up to leadership change, and the company's shares rose, after falling as much as 2 percent in extended trading Tuesday. UAL shares closed slightly higher as broader indexes fell by more than 1 percent.

The stock slumped Tuesday after the airline surprised investors with the announcement that Chief Executive Jeff Smisek

and two other senior executives were leaving the company in connection with a federal probe involving the Port Authority of New York and New Jersey.

In February, the carrier said it had opened an internal investigation into its relationship with David Samson, a former chairman of the Port Authority of New York and New Jersey, after it learned of a federal probe.

Media reports have said the probe focuses on whether United added direct flights to Columbia, South Carolina, from Newark to accommodate Samson, who has a home near the city. A spokeswoman for Samson's lawyers declined to comment.

The route was canceled after Samson resigned in early 2014 following news of a separate federal probe into the potential conflict of interest between his role as port authority chairman and his private law firm.   Continued...

 
Customers of United wait in line to check in at Newark International airport in New Jersey, November 15, 2012. REUTERS/Eduardo Munoz