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United Airlines CEO Jeff Smisek Resigns Amid Federal Investigation

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United Airlines CEO Jeff Smisek Resigns Amid Federal Investigation

Business

United Airlines CEO Jeff Smisek Resigns Amid Federal Investigation

United Airlines CEO Jeff Smisek Resigns Amid Federal Investigation

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The CEO and two other high ranking officials at United Airlines resigned Tuesday in the midst of an internal and federal investigation.

AUDIE CORNISH, HOST:

There's a big shake-up at United Airlines today. The chief executive officer and two other high-ranking officials at United Airlines abruptly resigned in the midst of an internal and federal investigation. The airline is being investigated by the U.S. attorney's office in New Jersey over whether it improperly tried to sway senior officials at the Port Authority of New York and New Jersey. NPR's David Schaper joins us with the latest.

And David, to begin, what's known about this investigation with the U.S. attorney's office?

DAVID SCHAPER, BYLINE: Well, Audie, United Airlines disclosed earlier this year that some of its executives had received subpoenas from a federal grand jury in New Jersey for information about its dealings and interactions with the Port Authority. United announced at that the time that it would conduct its own internal investigation as well. And according to published reports, the investigation focuses on the tenure of former Port Authority Chairman David Samson's activities, including his votes on United Airlines projects at the Newark Liberty Airport. That's one of United's biggest hubs. And the investigation apparently centers on United restarting its service to Columbia, S.C., from Newark. This twice-weekly service started shortly after Samson became chairman, and it ended a couple of days after he resigned last year. United was conveniently offering a flight from Newark to Columbia on Thursday nights with a return flight on Monday mornings. And, oh, by the way - Samson has a vacation home in Aiken, S.C., just 50 miles or so from Columbia. United's legal team says they are fully cooperating with this investigation, providing all the documents that the U.S. attorney's office has requested.

CORNISH: So who were the executives who stepped down today? What were their roles?

SCHAPER: Well, CEO Jeff Smisek is the big name stepping down. Smisek was the CEO of Continental Airlines and took the helm of United when those two airlines merged in 2010, and he's been steering the giant airline ever since. He's ridden through some pretty bumpy times over the last couple of years. There've been more than a few hiccups as those two airlines merged their operations and systems. They've had a couple of embarrassing computer outages, including one today - which is totally unrelated to what's happening in the boardroom today, but they did have their website down for a couple of hours. In addition to Smisek stepping down, the executive vice president of communications and government affairs and the senior vice president of corporate and government affairs stepped down. These would be two high-ranking officials who would interact quite a bit with government officials like those at the Port Authority. And this, as we said, is happening as this investigation into the Port Authority and airlines dealings is ongoing.

CORNISH: So who will replace the chief in the meantime?

SCHAPER: The new CEO is Oscar Munoz. He had been on the board of United Airlines for, I believe, 11 or 12 years. Most recently, he's been president and chief operating officer at the railroad CSX. In a conference call with analysts, Munoz sought to reassure investors that the company does not expect this investigation to have a financial impact and he also sought to explain that the operations would go forward rather smoothly.

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OSCAR MUNOZ: For the investment community, what I can tell you today is that our management team will remain focused on ensuring the continued improvement of our product, our customer service, our operations, and of course, financial performance.

SCHAPER: As for the investigation, airline officials did not address that in this conference call. They say they are fully cooperating but they are not at liberty to discuss the matter publicly.

CORNISH: That's NPR's David Schaper in Chicago.

David thanks so much.

SCHAPER: Thank you Audie.

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