United Airlines chairman and chief executive Jeff Smisek and two other senior officials have resigned amid a federal corruption probe, the company said on Tuesday, a major shake-up at the top of America's third-largest airline.
The Chicago-based airline said the resignations were connected to an investigation exploring whether the airline had established a money-losing flight from Newark to Columbia, South Carolina, to benefit the influential former chairman of the Port Authority of New York and New Jersey, who owned a nearby vacation home. The flight became known as the "chairman's flight" inside United Airlines, according to various media reports.
United was seeking big improvements to Newark Liberty International Airport, which the Port Authority runs, around the time the airline launched the direct flight from Newark to Columbia.
The twice-weekly flight began shortly after David Samson became chairman of the Port Authority, which operates all New York-area airports, and was cancelled days after Samson resigned from the post last year.
A longtime ally of Chris Christie, Samson resigned in the wake of Bridgegate, a 2013 scandal in which Christie staffers and appointees appeared to collude to create traffic jams, allegedly to hurt the mayor of Fort Lee who had not endorsed Christie in that year's gubernatorial campaign. The issue engulfed Christie's administration at the time and sorely damaged his presidential prospects. The federal probe, initially launched by the U.S. Attorney for the District of New Jersey, at first centred around actions over the Fort Lee closings, but has expanded into other behaviour by the Port Authority, including its dealings with United.
United Continental Holdings, which owns the airline, said earlier this year that a federal grand jury had subpoenaed the company and its executives amid the investigation.
The company said on Tuesday it is still cooperating with that ongoing investigation and conducting its own internal investigation.
The US attorney's office in New Jersey declined to comment on Tuesday.
Smisek, the airline's chief executive since 2010, will pocket a separation payment of about $4.9 million, payable in cash, a company regulatory filing said.
United said Nene Foxhall, executive vice president for communications and government affairs, and Mark Anderson, senior vice president for corporate and government affairs, have also stepped down.
United shares fell about 2 per cent in after-hours trading.
Oscar Munoz, the chief operating officer of railroad giant CSX, will succeed Smisek as chief executive, the airline said. In a letter to employees, Munoz said he recognises that "this news is unexpected".
"It is certainly a new chapter for United," Munoz said on a conference call Tuesday, "and I hope to make you as optimistic as I am about this airline."