United Continental names new CEO amid ongoing investigation

In the midst of a federal corruption probe, United Continental Holdings, Inc. said on Tuesday that chief executive Jeff Smisek has resigned from his post. 

United Continental Holdings Inc. said on Tuesday chief executive Jeff Smisek had stepped down amid a federal probe of the airline, and that two other senior executives tied to the investigation would also be leaving the company.

The airline named CSX Corp. chief operating officer Oscar Munoz as CEO, effective immediately.

United Continental's shares fell 2.8 percent in trading after the bell.

Mr. Smisek, who has been the company's CEO since 2010, will also step down as chairman and president, United Continental said in a statement.

"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 in a statement.

United Continental also said its executive vice president of communications and government affairs, and its senior vice president of corporate and government affairs were leaving.

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 a former chairman of the Port Authority.

In February, the carrier had opened an internal investigation into its relationship with the former chairman of the Port Authority of New York and New Jersey, following a government probe.

The investigations are ongoing and it'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," Mr. Hart said.

United under Smisek was under pressure from investors to improve its day to day operations and financial performance. About 75 percent of United's flights arrived on time during the first half of this year, according to federal data, the worst record among the four largest U.S. airlines. UAL executives told Reuters last month they planned a series of changes to schedules to improve on-time performance.

"We need to reach our customers with a better service product," Mr. Munoz said during the conference call with analysts.

Smisek will receive a separation payment of $4.9 million, payable as a lump sum in cash, the company said in a regulatory filing.