October 19, 2015 / 1:36 PM / 4 years ago

United Airlines CEO to have 'healthy recovery,' his family says

(Reuters) - United Airlines UAL.N Chief Executive Oscar Munoz’s family told the airline’s employees on Monday they expected him to have a “healthy recovery” but provided no further details about why he had been hospitalized.

United Continental Holdings Inc CEO Oscar Munoz is seen in an undated handout picture courtesy of United Airlines. REUTERS/Courtesy of United Airlines/Handout

Munoz, 56, suffered a heart attack last Thursday less than two months after taking the top job at United Continental Holdings Inc, a source familiar with the matter has said.

United has declined to offer details of Munoz’s condition or whether it would replace him on an interim basis. The email from his family, while mostly thanking employees for their well-wishes, offered the first hint of his prognosis since Friday.

“We continue to read your words of encouragement and know that our spirits remain high as we look forward to a healthy recovery,” according to the email, which was seen by Reuters.

The second largest U.S. airline by capacity has only said it will finish on Monday the “corporate governance process” brought about by Munoz’s hospitalization, with plans to provide more details Monday or Tuesday.

Long-time executive Jim Compton, the airline’s chief revenue officer, is seen as a logical candidate for interim CEO, a former U.S. airline executive said on condition of anonymity.

Munoz’s hospitalization interrupted his efforts to rebuild morale at United, which has struggled with late flight arrivals and strained relations with unions.

Munoz spent his first month on the job traversing the United States to meet with workers and flyers for input on how to improve the airline. Unions have welcomed Munoz, hoping he would push the company to conclude contracts with flight attendants and maintenance workers that have been stalled for years.

United did not inform investors of Munoz’s hospitalization until the Wall Street Journal reported it on Friday. The company remained silent on Munoz’s condition through the weekend.

The company’s failure to promptly announce Munoz’s hospitalization or provide details has raised concerns about whether it was disclosing enough to investors.

“It is the obligation of the company to keep the market informed of material developments and this seems clearly material to me,” said John Coffee, a professor specializing in corporate governance issues at Columbia University’s law school.

However, some shareholders said they understood that the airline needed to ascertain the state of Munoz’s health before making disclosures.

“While there does appear to be a lag between information flowing from the media and what the company is providing, given the circumstances, this is completely understandable,” said Mitch Zacks, portfolio manager at Zacks Investment Management, which owns about 90,000 United shares.

Reporting by Ankit Ajmera in Bengaluru and Jeffrey Dastin and Ross Kerber in New York; Editing by Jeffrey Benkoe and Christian Plumb

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