United Continental Holdings, which owns United Airlines, said yesterday chief executive Jeff Smisek had stepped down in connection with a federal probe of the airline, and that two other senior executives tied to the investigation would also be leaving.
Oscar Munoz, a United board member and CSX Corp chief operating officer, was immediately tapped as CEO.
"The departures announced today are in connection with the company’s previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey. The investigations are ongoing and the company continues to cooperate with the government," UAL said.
United Continental's executive vice president of communications and government affairs, Irene Foxhall, and its senior vice president of corporate and government affairs, Mark Anderson, also were leaving, according to a person familiar with the matter.
The surprise departures at the world's second-largest airline come just after its chief financial officer left for the same role at PayPal Holdings.
"I think some investors are going to be concerned given that degree of management turnover," said Joseph DeNardi, an analyst with Stifel Nicolaus. "I was surprised by" the news of Smisek's departure, he added. "I would imagine most people were."
United Continental's shares fell 2.8 percent in trading after the bell.
Smisek, who has been the company's CEO since 2010, will also step down as chairman and president, United Continental said in a statement.
UAL's general counsel, Brett Hart, declined during a conference call Tuesday to elaborate on the reasons for the departures or the status of a federal investigation into UAL's relationship with David Samson, a former chairman of the Port Authority of New York and New Jersey.
In February, the carrier had opened an internal investigation into its relationship with Samson, following a government probe.
Media reports have said the government probe focused on whether United added direct flights to Columbia, South Carolina, from Newark to accommodate Samson, who had a home there.
The route was canceled after Samson resigned in early 2014 following news of a federal probe into the potential conflict of interest between his role as port authority chairman and his private law firm.
The investigations are ongoing and United's internal probe and the related circumstances do not raise any accounting or financial reporting concerns, United Continental said on Tuesday.
"We don't expect it to impact our operations," Hart said.