United appoints acting boss after CEO hospitalized
Munoz suffers heart attack; investors rattled
United Airlines announced Monday that it would change its corporate governance process by Tuesday after the hospitalization of CEO Oscar Munoz.
Henry Meyer III, the non-executive chairman of the board, offered no details on what would happen in “the corporate governance process necessitated by the hospitalization.” But Meyer said United’s “thoughts and well wishes are with Oscar.”
In the meantime, the airline has named general counsel Brett J. Hart as acting CEO.
United Continental Holdings is scheduled to report its thirdquarter earnings Thursday.
The Wall Street Journal reported Munoz suffered a heart attack. United confirmed to The Associated Press that Munoz, 56, was hospitalized Thursday after suf- fering a heart attack. The company said it was too soon to know how long Munoz will need to recover. Munoz was appointed Sept. 8 after the ouster of Jeff Smisek.
The shape of United’s leadership structure after his hospitalization is causing concern among some investors.
Rather than offering details, “United seems to be unwittingly amping up the mounting tension and concern surrounding this already painful episode for Mr. Munoz and his family as well as for United’s employees, customers, investors, and other stakeholders,” said Vicki Bryan, senior high yield analyst at Gimme Credit, in an investors note Monday.
Bryan continued to give a rating of “underperform” to the company. Still, while shares dropped roughly 3% in the wake of the first reports about Munoz’s hospitalization, the stock closed 1.39% higher Monday at $56.65 per share.
Smisek was forced out after an internal company investigation that paralleled a criminal investigation of the Port Authority of New York and New Jersey, which operates Newark Liberty International Airport, a United hub.
A former Port Authority chairman, David Samson, asked Smisek to provide flights to South Carolina, according to a report by Bloomberg News. Bloomberg recounted a dinner in September 2011, attended by Samson and Smisek, when Samson allegedly asked that United resume service between Newark and Columbia, S.C., which had an airport closer to Samson’s weekend home.
Twice-a-week flights between Newark and Columbia, S.C., were less than half full during 11 of the route’s 19-month run and less than one-third full during six months, according to a review of Transportation Department figures by Anna. aero.
No charges have been filed against Smisek.