United Airlines | A company that is rising above the clouds
Heralded as one of the largest airlines to ever form, the new United Airlines has positioned itself for success for decades to come. Beginning in 2011, the company turned profitable for the first time in over a decade. This led to enormous interest in growing and stabilizing this new venture. In order to complete the reformation that they needed to truly satisfy both investors and gain future clients, they needed new locations. However, after 3 years of attempting to go it by themselves, they face multiple monopoly lawsuits.
Some of the clearest examples of this are in their JFK Airport acquisitions. In a seemingly brilliant move, United sold its JFK terminals to Delta in exchange for Newark terminals. This would have given the company 85% of all Newark traffic, however it was not destined to be so. Rather, New Jersey state congress filed a monopoly lawsuit against the United Company, which led to one of the largest losses the company has ever seen. This however has turned out to be for the best.
The company face a new decision that needed to be made. They could either continue trying to go against the flow of the other airlines and grow, or they could take a humongous step forward and merge with another airline. This reached its pinnacle in 2013 with the beginning of the United, Continental merger. This merger has resulted in the formation of the world's largest airline under the new brand United Airlines. This new brand features trips to nearly every location imaginable at United’s normal fares. It over doubled the amount of bases the company had and tripled the number of high-tech aircraft.
Continental had a history of pleasing customers at higher rates. United had a history of providing exceptionally stable service through a humongous variety of destinations. Together they formed an unstoppable client base with some of the highest return rates of any company in the industry. These factors in addition to recent Forbes reviews have let us to believe that United is going to be the breakaways airliner of the 21st century. This in addition to the rapidly increasing stability reviews, the humongous destination list, and the high hopes of the management staff has statistically made it nearly impossible for united to fail.
However on the stock market there still severely undervalued. This may seem like a huge contradiction but in reality it is a large opportunity for smart investors. The stability of the airline has never been nearly as high, yet is often perceived as one of the least safe investments because of the double bankruptcy of the early 2000’s. That double bankruptcy resulted in many pilots forfeiting their pensions, many investors losing their money, and the entire company rolling over. However, we have firm belief that you can use this misconception of the company to your advantage. It is as simple as buying before it gets too high.
We believe the company is now severely undervalued because of the bad years it once had. However at those years were extremely different from the current environment. With low oil prices that are saving the company, as well as the incredible return on each flight ticket the company is poised for a stronger decade than ever before. We believe that buying now may be the best decision you could make while oil prices are low, but before they have been felt throughout the airline industry. We all know that the discount airliners are never going to overtake the grand Airlines, so why hesitate in fear.
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