Larry did not say he wanted to "spend more time with his family" so I'm guessing that he wasn't asked to leave. And why would he be? He's well-respected and he has run a solid airline since he took over from Gordon Bethune. He may not be as colorful as Gordon, but he has proven that he can run an airline in his own way. It's not easy to follow an icon like Gordon, so that's a doubly impressive feat.
Larry says he's leaving the airline to go back into private equity. He's heading up a new firm, in fact. Maybe he's had enough of the airline life, or maybe he simply just wanted a new challenge. Either way, he should be remembered for doing a solid job running a major airline, and that's not something that can be said for many airline CEOs these days.
Jeff Smisek has been with the airline for just as long as Larry (they both came on with Gordon in the mid-1990s), but he has a different background. Jeff is actually a lawyer by training, and his first role with Continental was as general counsel. I don't know much about his leadership skills, but he will certainly have big shoes to fill. (Seriously, Larry is an enormous man. I think he's 7 feet tall with size 25 shoes.)
While it's sad to see Larry go, the succession plan has been in place for sometime, and I imagine there won't be any major changes in direction. I suppose that we'll know for sure once Jeff takes the helm in the new year.