Major Stake Holders of United Airlines say the Underperforming Airline’s Board Needs an Overhaul
The transition for United Airlines has not been very smooth after its merger with Continental Airlines in 2010. The carrier has underperformed in the recent past in comparison to stocks of other U. S. airlines. To top that, he carrier has suffered other problems like technical glitches, poor employee relations and a drag on its on-time performance. The profits earned by the company also have not been at par with its peers.
The company's lackluster financial returns along with the stepping down of its ex- CEO, Jeff Smisek in September in the middle of a corruption probe had shaken up the company. However, when Munoz took over the helm there was a bout of enthusiasm which was soon faced a snag as he suffered a heart attack and underwent a heart transplant in January. Recently it was reported that he is expected to join full time work from March 14.
On Tuesday, two of the investment funds that have major stakes in United Continental Holdings Inc started a fight for control. They proposed a slate of directors which will be led by Gordon Bethune. The primary aim is to shake up the board of the airline that's underperforming for several quarters.
According to PAR Capital Management Inc and Altimeter Capital Management LP, the United's "under qualified, ineffective, complacent and entrenched" board had caused years of "inexcusable company underperformance" and requires to be revamped.