United Airlines CEO Jeff Smisek Steps Down Amid Corruption Probe

Jeff Smisek
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Chairman and Chief Executive of United Airlines, Jeff Smisek, has officially resigned from his post. He, along with two additional senior employees of the company, have stepped down from their duties effective as of September 8.

United Airlines, one of America’s largest airline organizations, is currently under a federal corruption investigation, which is ultimately what led to these resignations. Allegedly, the air carrier launched from Newark to Columbia, but it was a money-squandering flight, wherein the then-chairperson of the Port Authority of New Jersey and New York were reaping its profits.

The route that came to be known as the “chairman’s flight” quickly became a sort of barter chip in the rocky relationship between the previously struggling airline and Newark Liberty International Airport. What’s more, this was one of the company’s main profit centers.

Back in 2011, United pressed for huge upgrades for the airport, where it is the top carrier. At this time, David Samson had become head of the Port Authority, which runs all airports in the New York area.

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Following Smisek and Samson’s dinner one evening in Manhattan, the Chicago-based airline started a low-traffic direct flight to Columbia from Newark. The plane would leave Newark on Thursdays and return on Mondays, but this direct flight was questionably canceled in the days following Samson’s resignation last year.

Samson, the longtime friend of New Jersey Governor Chris Christie (who is a Republican candidate in the 2016 presidential elections) withdrew from his post after a 2013 scandal involving Christie’s employees who allegedly conspired to design traffic jams to injure Fort Lee’s mayor because he had refused to endorse Christie’s campaign that year.

Meanwhile, the airline’s parent company, United Continental Holdings, stated in February that along with its executives, the organization was subpoenaed by a federal grand jury on the basis of attempted manipulation of public officials.

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On September 8, the company announced its cooperation with the inquiry while adding that they were conducting one of their own. Smisek, 60, will still pocket about $4.9 million as separation payment (payable in cash), according to a company regulatory filing. He has also agreed to full participation and will get to keep his lifetime parking and flight privileges, as well as the company car that he’d received.

Along with Smisek, the executive vice president of communication and government affairs, Nene Foxhall, and senior vice president of corporate and government affairs, Mark R. Anderson, have also submitted their resignation letters.

Stepping into Jeff Smisek’s shoes as chief executive will be Oscar Munoz, the former chief operating officer for railroad and transport giant CSX.

Source:
Harwell, D., et al., “United Airlines chief steps down amid federal investigation,The Washington Post web site, September 8, 2015.

 
 
 
 

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