By Alwyn Scott and Nick Carey
(Reuters) - United Continental Holdings Inc's (N:UAL) new chief executive, in his first communication to employees, promised to meet with as many workers as possible and "hear about operations directly from you," a sharp contrast with ousted predecessor Jeff Smisek that drew cheers from investors and unions on Wednesday.
Oscar Munoz, who took over as chief executive on Tuesday, made the comments in a letter to United's 84,000 employees, suggesting a new focus at the world's second-largest airline that many thought would lead to better financial and operational performance.
Separately, acting Chief Financial Officer Gerry Laderman said at an investor conference on Wednesday that United was on track to save $1 billion in annual non-fuel costs by next year and would complete a $1 billion share buyback ahead of schedule.
Analysts gave a thumbs up to leadership change, and the company's shares were up 1.1 percent on Wednesday afternoon, after falling as much as 2 percent in extended trading Tuesday.
Smisek and two other senior UAL executives left United on Tuesday as a result of a federal probe involving the Port Authority of New York and New Jersey.
United said Smisek could not be reached for comment.
Munoz, 56, is stepping down from his job as chief operating officer of railroad company CSX Corp (N:CSX), where he was credited with improving operations and service.
Munoz "helped transform the railroad into an industry leader in customer focus, reliability and financial performance," said CRT Capital Group analyst Michael Derchin. "These are major priorities for UAL, in our opinion."
Analysts were also pleased that the new CEO was familiar with the airline due to long service on United's board.
"We believe Mr. Munoz already knows the inherent potential and key investor concerns regarding the company," said Evercore ISI analyst Duane Pfennigwerth. "We were encouraged to hear him speak directly to the integration challenges that United has faced and improving customer service as a priority."
Smisek, who took over in 2010 as United merged with Continental Airlines, had a poor relationship with United's thousands of union employees and union leaders, analysts and union leaders said.
Workers protested at shareholders meetings and called for his ouster over the failure to reach combined labor contracts for flight attendants and mechanics.
Under Smisek, United lagged on financial and operational performance, was dogged by computer outages that stranded passengers and recently posted the worst on-time record among major U.S. carriers.
There were numerous telling examples of Smisek's attitude. Sara Nelson, president of the Association of Flight Attendants, recalled a joint union-management press conference in May to announce concern about Gulf Carriers violating open skies agreements. In a small waiting room before the event, "there was no effort on the part of Smisek to interact with me or any of the other union leaders," Nelson recalled.
More broadly, she described Smisek as disengaged from the airline's operations. "We did not see any evidence of his involvement in daily operations of United," she said.
"Passengers felt that, investors started to see that. We are overjoyed, quite frankly, that the cloud of Smisek's leadership has been lifted."
United and Smisek had faced mounting pressure from investors to improve its day-to-day operations and financial performance.
In February, the carrier said it had opened an internal investigation into its relationship with David Samson, a former chairman of the Port Authority of New York and New Jersey, after it learned of a federal probe.
Media reports have said the probe focuses on whether United added direct flights to Columbia, South Carolina, from Newark to accommodate Samson, who has a home there.
The route was canceled after Samson resigned in early 2014 following news of a federal probe into the potential conflict of interest between his role as port authority chairman and his private law firm.
(Additional reporting Nick Carey. Writing by Alwyn Scott; Editing by Lisa Von Ahn and Bernard Orr)