United Continental Airlines’ CEO is taking a medical leave after suffering a heart attack last week, the company said Monday.
The company named executive vice president and general counsel Brett Hart to be the acting CEO. United did not give a time frame for the return of the ailing CEO, Oscar Munoz, 56.
“At this time, it is too soon to know the course of treatment and timing of recovery,” the company said in a statement.
United said that Munoz’s acting replacement, Hart, had a broad role at the company. In addition to serving as United’s top lawyer, Hart was it’s chief lobbyist — responsible for government and regulatory affairs. He also oversaw corporate real estate and security, among other things.
“I am confident in his ability to continue to implement the company’s strategy and Oscar’s mission,” said Henry L. Meyer III, non-executive chairman of the board.
Hart, 46, served as special assistant to the general counsel at the U.S. Department of Treasury and he came to United in 2010 after seven years with Sara Lee, rising to be executive vice president. He was there when its CEO, Brenda Barnes, suffered a stroke that year. Hart announced he was leaving for a position at United three months later.
Hart’s appointment comes only 41 days since Munoz was brought on as CEO to help repair United’s image. He was previously president of railroad CSX and also was an executive at Coke, Pepsi and AT&T.
He took over as CEO last month following the ouster of former CEO Jeff Smisek, who was involved in a scandal tied to the Port Authority of New York and New Jersey.
The Port Authority is being probed for corruption.
Its former chairman David Samson had a vacation home in Charleston, South Carolina. And United began a twice-weekly flight from Newark, N.J., to Charleston that it stopped shortly after Samson resigned.
Those issues were followed by more bad news for the company. A major computer glitch this summer that shut down flights its flights, and United ultimately apologized for “falling short.”
United ranks at the bottom for customer satisfaction among major airlines according to several surveys. Munoz told the Wall Street Journal earlier this month the company’s employees are “disengaged, disenchanted, disenfranchised.”
Many analysts (and travelers) feel that United Airlines is still suffering from integration issues as a result of its merger with Continental five years ago.
United’s stock has lagged Delta, Southwest and its other big rivals in the past five years.
Eric Marshall, a portfolio manager with Hodges Capital and holder of United stock, said it is important for United to have good leadership in place.
He conceded that it would be a blow to United if Munoz is unable to return anytime soon. Marshall said one reason why investors were excited about Munoz is because of his experience at CSX.
Railroads have already gone through some of the same challenges that United has now — such as dealing with consolidation and poor customer service.
But Marshall added that he’s confident United will be able to get back on track even if the company needs to find a new CEO.
The company is scheduled to report its third quarter earnings on Thursday morning.
