Why the 'Stupid' United Airlines CEO Lost His Job

The CEO and president of the company that runs Chicago-based United Airlines abruptly resigned on Tuesday, but Jeff Smisek’s departure had nothing to do with the airline’s generally shoddy performance.

There are any number of reasons he could have been kicked to the curb.

• lacklustre stock performance
• inept financial management
• poor pricing and booking practices
• an outdated and unwieldy hub structure
• computer system failures
• poor on-time performance: half of its flights are late and the airline recently ranked fourth, behind Delta, American and Southwest
• high baggage fees and poorly handled baggage
• high prices for gag-inducing airline food
• dirty planes
• planes that mysteriously spark or precipitously drop from the sky
• poor labor relations
• bizarre handling of customers’ Diet Coke cans

His only real accomplishment seems to be executing the merger of United and Continental in 2010, for which Smisek received a $4.5 million bonus on top of his $8.1 million 2013 compensation package. Yet analysts say the combination has failed to live up to performance expectations.

That’s a hefty sum for an exceedingly poor record of service.

He’ll probably need that money to pay some lawyers because this is why he was finally forced to leave United: Smisek kissed up to the chairman of the Port Authority of New York and New Jersey by bringing back a United route from Newark to Columbia, S.C., the airport closest to that political bigwig’s weekend vacation house, reports the Chicago Tribune, a route that lost the airline money. This favor for the Port Authority chairman, David Samson, cut about 100 miles off his drive from the airport to his vacation home.

“It’s unbelievable that anyone could be so stupid,” David Primo, a professor of political science and business administration at the Simon Business School at the University of Rochester in New York, told the Tribune. “It’s very rare that you can see such an egregious quid pro quo.

“The probability that you’re going to get caught is so high.”

The deal came to light as a result of the federal investigation into New Jersey Gov. Chris Christie’s bridge scandal. Samson has been described as Christie’s “political mentor.”

So, not only is Jeff Smisek an extraordinarily bad airline CEO, he’s also a “stupid” airline CEO.

Allegedly.

Sources told the Tribune and Bloomberg News:

... investigators are looking at a Sept. 13, 2011, dinner meeting ... where United was lobbying Samson to improve transit connections between Newark and Manhattan and to help subsidize a new aircraft maintenance hangar for the airline. Samson in turn allegedly expressed his dissatisfaction with United’s decision to not resume flights from Newark to Columbia, S.C.

A year later, the flight was back in service. United got what it wanted from the Port Authority. And the 50-seat plane that flew from Newark to Columbia was never close to being full. United staffers dubbed it “the chairman’s flight.”