United Employees Loyal in Face of ‘Coup Attempt’
Jackie Reddy March 11, 2016
As two hedge fund companies attempt to wrest control of United Airlines’ Board of Directors, its CEO and Chairman receive overwhelming support from employee unions.
The struggle for the board continues at United Continental Holdings, but the unions representing United Airlines’ mechanics and flight attendants have been unwavering in their support for CEO Oscar Munoz and Chairman Henry L. Meyer III.
This backing comes in the face of an attempt by two hedge companies, Altimeter Capital Management and PAR Capital Management, to gain six seats on the carrier’s 15-person board.
Captain Todd Insler of the Air Line Pilots Association (ALPA), the largest pilot union in the world, said in a statement earlier this week that, “United’s pilots have grave concerns about the sudden attempt by two activist investors to gain effective control of United’s Board of Directors.”
He added, “This coup attempt…unnecessarily distracts all employees from our commitment to improve customer service and grow United Airlines.”
Combined, these two hedge fund companies already own a 7.1% share of the carrier. Earlier this week, they announced that it was their intent to place former Continental Airlines head Gordon Bethune as well as five additional representatives of their choosing on United’s Board of Directors, a body which they believe to be “ineffective.”
United Chairman Meyer told the Chicago Tribune earlier this week that he considered the coup to be a “hostile action that … could distract the company from executing on Oscar’s strategic plan.”
Munoz was appointed as CEO last September and has received widespread support from unions, some of whom are currently resolving contract disputes via an arbitration process. There is concern that Munoz, who is recovering from a heart attack, will be forced out if the “coup” is successful.
Sara Nelson, president of the Association of Flight Attendants, stated on Tuesday that, “Oscar Munoz has presented a vision for United Airlines that passengers and employees can believe in. Even during his recovery and sick leave, Munoz engaged meaningfully in repairing labor relations and getting Flight Attendant contract negotiations on track to conclusion.”
While the two hedge fund companies have not issued an official media statement, they have intimated that they are frustrated with United’s performance against America’s “big four” carriers.
[Photo: United]
if the hedge funds are disappointed with United¨s performance, jut think how bad it is for us poor schmucks who have to fly out of United fortress hubs?
Remember that Altimeter and PAR are focused on making money and they don't care about running a good airline .
The timing on this is certainly odd. I could have seen a "coup" attempt being successful at this time last year when Smisek was still entrenched in the job. However, Munoz has received nothing by praise since he took over. What do these guys think they know that the rest of the world doesn't? Seems like they had a plan from before Smisek's ouster, and they just made an ill-advised decision to move forward on it, despite the initial positivity of Munoz's tenure.