NEW YORK (AP) – Saying they are fed up with poor performance at United Continental Holdings, two investment firms want to shake up the airline’s board of directors and give a prominent role to the ex-CEO credited with saving Continental Airlines more than a decade ago.
In a surprise move Tuesday morning, Altimeter Capital Management and PAR Capital Management made a public pitch to add six of its own nominees to the board. The two investment firms own a combined 7.1 percent stake of United Continental Holdings Inc.
Brad Gerstner, CEO of Altimeter Capital, said in a statement that investors are “greatly disappointed with United’s poor performance and bad decisions over the last several years.” The firms’ announcement comes one day after United increased its existing board by three members to 15, a move Gerstner called “a cynical attempt to preserve power by this entrenched board.”
The most prominent nominee is Gordon Bethune, who served as CEO of Continental Airlines from 1994 to 2004. Bethune is largely seen as turning that troubled airline into one of the country’s leading carriers.
United merged with Continental in 2010 and has struggled ever since. Unions fought the integration, customer service declined, flights were delayed and computer problems persisted. All of that caused United to lose revenue and market share compared to peers such as Delta and American, despite having one of the best route networks.