United pilots throw their support behind airline in board dispute
The union representing United’s pilots threw their support behind the airline Thursday, criticizing the attempt by two activist investors to reshape the carrier’s board with their own slate of directors.
In saying they are standing with the airline, the pilots joined with the carrier's flight attendants, who have also criticized the move by two hedge funds that own 7.1% of United Continental's shares to take control of the board with six of their own nominees.
“United's pilots have grave concerns about the sudden attempt by two activist investors to gain effective control of United’s Board of Directors,'' Todd Insler, chairman of the United Master Executive Council of the Air Line Pilots Association said in a statement. "This coup attempt, being done for their own benefit, and without publicly stating their intentions for the future of the airline, unnecessarily distracts all employees from our commitment to improve customer service and grow United Airlines.”
Insler added that if the activist-backed slate gains power, they will make changes that may please shareholders, but will promote “short term gains to the detriment of United’s customers and employees.’’
Like the airline's flight attendants, the union, representing over 12,000 pilots flying for United, says that it is behind the carrier's CEO, Oscar Munoz, who will return to full-time duties on Monday after suffering a heart attack last year and receiving a heart transplant.
The statement by the pilots union is the latest volley in a brewing battle between United and PAR Capital Management and Altimeter Capital Management. On Tuesday, the two hedge funds announced their plan to nominate a group of directors led by Gordon Bethune, the former CEO of United's merger partner, Continental Airlines.
Bethune is responsible for turning Continental around in the 1990s when the airline had lagged in on time performance, luggage handling and other industry performance markers. PAR and Altimeter have accused United’s board of lacking airline expertise and steering the carrier to the bottom of the industry in terms of stock and operational performance.
On Tuesday, the Association of Flight Attendants, which represents 24,000 flight attendants at United, said in a statement that Munoz "has barely had the opportunity to put his plan into effect, but already we are seeing results. These investors are creating a distraction at just the wrong time if their interest is truly in turning around United and building an airline that will again lead the industry with performance, profits, share price and importantly, engaged employees who take pride in the place where they work.''