United Continental (UAL) announced that it has a new CEO following the resignation of Jeff Smisek amid a corruption probe. The investigation looks into whether United gave special treatment to David Samson, the former chairman of the Port Authority of New York and NJ. According to the airline, for more than a year, U.S. prosecutors have been investigating the relationship between Samson and United Continental. At issue is whether Samson allegedly asked United for a weekly flight to South Carolina, where he has a vacation home. Following this announcement, S&P Capital IQ analyst Jim Corridore issued a note saying, ‘While this is unwelcome news, our main thesis on United remains intact, that it is showing signs of financial improvement, and trades at a sizable discount to peers.’ The new CEO immediately replacing Smisek is Oscar Munoz. Previously, he was the president and chief operating offer of railroad operator CSX (CSX). On top of the CEO replacement, two other senior officials at United Continental have resigned as part of the investigation. TheStreet’s U-Jin Lee reports from New York.
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