United Continental Holdings Inc UAL has hired Scott Kirby as President, which comes as a “big surprise,” and could lend significant upside to the company’s shares, Credit Suisse’s Julie Yates said in a report. She added that Mr. Kirby is not only the former President of American Airlines Group Inc AAL, but is regarded by some as being among the industry’s best revenue managers.
United would need to add a new President role, which has so far been held by its CEO. The arrival of the new President “further improves the bench strength at United and helps round out the recent wave of management appointments (Julia Haywood, CCO; Andrew Levy, CFO) with Mr. Kirby’s competitor network carrier and revenue management experience,” analyst Yates commented.
New Hire Should Drive Shares
Although United’s shares did not respond much to the appointments of the new CFO or CCO, the Street is more familiar with Mr. Kirby, and his appointment should lend upside to the company’s shares, Yates stated.
Bad News For AAL
Although American Airlines has positioned Mr. Kirby’s departure as “a result of succession planning,” this could exert pressure on the company’s shares in the near term, the analyst mentioned.
Credit Suisse has a Neutral rating and $47 price target on United, and an Underperform rating and $34 price target on American Airlines.
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