Airline shares take off with CEOs in the spotlight

Listen to this article

00:00
00:00

That could’ve been worse.

Even as their senior officials lined up before a congressional committee to testify about consumer issues in the wake of the United Continental passenger-dragging controversy, airline shares are climbing higher on Tuesday.

A lack of fireworks emanating from the hearing before the House of Representatives’ transportation committee seemed to assuage investors’ concerns about the long-term impact of the incident on United Continental and its fellow airlines, which has underscored fliers’ frequent grievances with air travel.

United Continental — whose chief executive Oscar Munoz appeared before the committee to apologise yet again — saw its shares rise more than 4.3 per cent on Tuesday. Other airlines whose officials offered testimony were also enjoying a small bump, including a 3.5 per cent rise for American Airlines, a 1.7 per cent increase for Alaska Air and a 2.7 per cent boost for Southwest.

One major airline that was absent from the hearing, Delta, saw the biggest gain of all, rising 5 per cent after announcing earlier in the day that its consolidated passenger unit revenue, PRASM — a key industry metric — was up 1 per cent in April year-over-year, despite a recent storm-fuelled snarl at its Atlanta hub.

During the hearing, US lawmakers vented their frustrations over everything from baggage fees to the lack of storage space in overhead luggage bins and said they may consider taking some kind of action to protect air travellers’ consumer rights.

It was the first of two congressional hearings scheduled in the wake of the United incident, with a Senate subcommittee set to hear from airline executives on Thursday.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.