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Is United Continental finally shedding the baggage from its recent passenger flap?
The US airline’s shares gained about 5 per cent on Tuesday to hit a 12-month high, a day after it reported a more than 7 per cent increase in a key revenue metric and reportedly received words of support from Altimeter Capital’s Brad Gerstner.
It’s a welcome reprieve for United, which has been dogged for weeks by negative attention following a controversy stirred after airport police were called to drag a paying passenger from a crowded United flight.
The rise comes a day after United reported that revenue passenger miles — a key industry metric that calculates the number of paid passengers times how many miles they travel — rose 7.4 per cent in April, just when the passenger-dragging scandal was making headlines across the globe.
The year-on-year increase was accompanied by a 4 per cent rise in consolidated capacity during April — representing the number of available seats multiplied by miles flown — and United forecast an increase in consolidated passenger unit revenue of between 1 and 3 per cent in the second quarter of 2017, compared to the same period a year earlier.
Also on Monday, United got a boost from Mr Gerstner’s comments at the Sohn Investment Conference in New York that he saw the airline’s shares jumping to $135 by 2020 — or even higher, according to a Bloomberg report. Mr Gerstner is the chief executive at Altimeter, which holds about 3.26 per cent of United’s shares.
The boost of confidence sent United’s shares as high as $79.15 — their highest intraday level in 12 months — and put them on track for their highest close in the same time. At pixel time, its shares were up 4.8 per cent at $78.63.