Amid an on-going federal corruption investigation, Jeff Smisek, the chairman and CEO of United Airlines has resigned, along with two other members of senior management. Oscar Munoz, former president of rail giant CSX Corporation, has been appointed to replace Smisek as the airline’s new chief executive and president.
Smisek was the CEO of Continental Airlines before the group merged with United Airlines in 2010
The scandal first came to light early last year when it was discovered that the Chicago-based carrier had been trading favours with senior officials at the Port Authority of New York and New Jersey. Part of United’s “influence campaign” that is being investigated by the US attorney for New Jersey involved the reinstatement of flights to Newark Liberty International Airport in return for desired upgrades to the facility.
For legal and historic reasons, United, the dominant user at Newark, pays around $120m in flight fees – which is more than double of that demanded from other international airports in the US. According to New York’s WNYC News, in 2011 the airline started a campaign to incite fees concessions. Smisek began meeting privately with the authority’s former chairman, David Samson, who had hinted that he would like the Newark to Charlotte, North Carolina flight revived, as it was easier to visit his weekend home. Despite initial hesitation, Smisek proceeded with reinstating the flight following Samson’s delay of a $10m new hanger at the airport – Bloomberg reported in April. During the months and years that followed, the illicit relationship between the airline and Port Authority continued with a series of backhanded favours and political campaign donations.
In a press release published by United on September 8, it was announced that Nene Foxhall, the executive VP for communications and government affairs and Mark Anderson, the senior VP for corporate and government affairs have also resigned in connection with the federal investigation.
Smisek was the CEO of Continental Airlines before the group merged with United Airlines in 2010. Since the merger, United’s performance under Smisek has largely disappointed. As a result of frequent passenger delays and faltering computer systems, the airline now trails behind the competition.