United to pay $2.4M to settle with SEC over NJ to SC flight
WASHINGTON — United Airlines is paying $2.4 million to settle civil charges stemming from allegations the airline reinstated a direct flight from New Jersey to South Carolina as a personal favour to an official with a nearby vacation home.
United’s parent company, United Continental Holdings Inc., is settling the charges filed by the Securities and Exchange Commission. The agency said Friday that the company’s shareholders paid for the money-losing flight that was greenlighted only after the airline disregarded its usual process for evaluating routes.
United operated the route briefly between its hub in Newark, New Jersey, and Columbia, South Carolina. David Samson, who was then the chairman of the Port Authority of New York and New Jersey, lobbied for the flight so he could travel to a home in South Carolina.
The SEC said that Continental Airlines had dropped the route before its 2010 merger with United, and another analysis by United showed it would still lose money. But the SEC says that the airline approved the flights anyway to win Port Authority approval of a hangar project at the Newark airport.