An activist investor movement at UAL would not be a good thing for frequent flyers. I suspect this has less to do with the fact that the company is underperforming DL in operational and revenue metrics and more to do with the sentiment that United appears to be pulling back from its stance on returning capital to its investors through stock buybacks and a long-term dividend ... though all these factors are tangentially related, to be sure.
I think Hunter Keay's exchange with Oscar offers a great deal of insight into the position the activist investors likely hold:
Okay. Yes. I know, Oscar, I am glad you are here because you do have a bit of a reputation of being a capital deployer, so I think it would be helpful for everybody, including your owners, who have been sweating out a pretty difficult year. It’s very hard to buy an airline stock. It is very hard to do that I mean as an investor. And a lot of your owners feel like it’s kind of been sort of hung out to dry a little bit. So I think you would go a long way Oscar if you would commit that barring any sort of major change in the environment, which is I think an easy enough for you to make right here on this call to come out and say barring no major changes in the economy or anything like that exogenous that we will spend more buying back stock than we will on capital spending this year, I think that would go a long way if you would be willing to make that commitment here today?
During the call, Oscar did not take the bait, which I think raised a few eyebrows -- and the ire -- of investors who now feel threatened by the prospect of UAL dialing back its momentum of returning capital to shareholders and instead (possibly) deploying more back into the enterprise.
It will be an interesting fight to watch.