In an attempt to reinvigorate the business, United Continental Holdings (NYSE: UAL) tapped former American Airlines Group (NYSE: AAL) executive Scott Kirby to be its new president, lifting airline industry shares and sector-related exchange traded funds.
The U.S. Global Jets ETF (NYSEArca: JETS), the only dedicated airline industry-related ETF on the market, rose 2.4% Tuesday. JETS, though, was down 10.8% year-to-date.
Kirby, the former president of American Airlines, will be taking on the newly created president tag at United Continental, a move one analyst said gives United someone regarded as “one of the best revenue managers in the industry,” Investor Business Daily reports.
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UAL shares jumped 7.9% and were testing their resistance at the 200-day simple moving average on Tuesday. Meanwhile, AAL shares gained 1.8%.
JETS include a 14.1% tilt toward AAL and 12.8% to UAL.
“United has lacked intellectual rigor,” consultant Robert Mann told Fortune. “Scott going over there will absolutely shake up the place.”
[related_stories]United is currently strengthening its management team under Oscar Munoz, the chief executive, as the company is under pressure to address lagging financial and operational performances. United also recently appointed Andrew Levy as chief financial officer and Julia Haywood as chief commercial officer.
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Kirby will report directly to Munoz and have have responsibility for operations, marketing, sales, revenue management, and network planning, the Wall Street Journal reports.
“Some may view this as negative for Spirit with a view that Kirby will bring the same aggression on pricing to a new seat at United, potentially creating more weakness in the pricing environment,” Credit Suisse analyst Julie Yates said. “However, others may argue it could be a positive catalyst if American eases aggressive pricing behavior that many were led to believe was a function of Mr. Kirby’s strategy.”
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U.S. Global Jets ETF