United Airlines (NASDAQ:UAL) Tries to Reassure Passengers, Investors Flee
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United Airlines (NASDAQ:UAL) Tries to Reassure Passengers, Investors Flee

Story Highlights

United slips despite its CEO’s reassurances that its flights are safe.

Scott Kirby, CEO of United Airlines (NASDAQ:UAL), tried to reassure passengers that the company is serious about tackling the recent mechanical issues witnessed by its planes. Unfortunately, the airline stock still took a fractional hit in Monday afternoon’s trading session.

Kirby has a lot on his plate right now. Several issues with United flights—involving Boeing (NYSE:BA) aircraft—have emerged and left passengers wondering if booking a flight on United is such a hot idea after all. Just recently, one United flight lost a tire shortly after takeoff, which bounced into a parking lot at a San Francisco airport, damaging several cars parked therein.

Just last week, a panel went missing altogether; though there wasn’t much risk associated with that lost panel, it was still an unnerving development stacked on top of several others. Kirby, therefore, took to a customer email to assure customers that “…safety is our highest priority” and “…is at the center of everything we do.”

A Ring of Insincerity

Kirby went on to note that the incidents were being investigated, and United was “…using those insights to inform our safety training and procedures across all employee groups.” This cut shockingly little ice with passengers or investors, and shares slumped accordingly.

It doesn’t exactly help matters that the aforementioned plane with the missing panel was pressed into service for a flight from Medford to San Francisco on Sunday. Though there were no passengers on the flight, and certainly the plane would have to be flown again at some point to make sure it now worked correctly, it’s still a point that likely didn’t instill much confidence in potential passengers.

Is United Airlines a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on UAL stock based on 10 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 0.91% increase in its share price over the past year, the average UAL price target of $58.93 per share implies 35.6% upside potential.



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