United Airlines CEO steps down amid probe

Oscar MunozUnited Airlines chief Jeff Smisek and two other top officials have resigned from the airline in the midst of a federal corruption investigation. At issue is a controversial and money-losing flight from Newark, N.J., to Columbia, S.C., which was reinstated for the benefit of the influential then-chairman of the Port Authority of New York and New Jersey, David Samson, who owned a vacation home near Columbia, according to the Washington Post. The route became known as the “chairman’s flight,” becoming a bargaining tool between United and the Newark Liberty International Airport. The route was canceled after Samson resigned in early 2014, after news broke of a federal probe into the potential conflict of interest.

CNBC reported “shortly after the agency approved a new United hangar at Newark, as well as financial incentives for its construction, the airline moved forward with plans to resume service from Newark to Columbia, according to media reports.”

The advocacy group Business Travel Coalition said that United also reportedly sought rail service to lower Manhattan and airport rent reduction as part of the port authority’s US$8 billion capital improvement plan. The other two employees that stepped down are Nene Foxhall, executive vice president for communications and government affairs, and Mark R. Anderson, senior vice-president for corporate and government affairs.

Oscar Munoz, a United Airlines board member, has been named the new president and CEO of the airline. He will continue to serve on the board of directors. Most recently, Munoz has been the CEO of railroad company, CSX Corp.

Smisek will receive separation pay of about $4.9 million, payable in a lump sum. He agreed to cooperate fully with United “in the defense, prosecution or conduct” of any investigations into the time he led the airline.

Pictured: New CEO of United Airlines, Oscar Munoz.

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