Wall Street doesn't seem to think the incident will have a lasting effect.
Even though the fury surrounding United Airlines’ treatment of a passenger Sunday spooked investors, Wall Street doesn’t seem to think it will have a lasting effect on the company. At least that’s the indication from the company’s stock price.
By Wednesday morning, shares of United Continental Holdings ual had largely recovered from the losses they suffered Tuesday following the high-profile incident. Shares opened .15% above the stock’s Monday close — a day when United’s stock rose even as anger over videos of the incident gained traction on social media across the world. At the time, angry web users had called for boycotts. Others were cutting up their United-branded credit cards. Eventually, United CEO Oscar Munoz apologized for a second time Tuesday for the forcible removal of a passenger from one of its planes a day earlier.
Wall Street analysts have warned over the past few days that no matter how viral or shocking, United’s poor handling of the issue was unlikely to affect the company’s bottom line. While social media users railed against United on Tuesday, most airline analysts didn’t mention the incident in their commentaries released that day. That’s because airlines have gone through a consolidation craze over the past few years, making United the best — if not the only — option for travelers in some areas.
“Overall, we think demand for UAL flights are unlikely to be affected by this poor customer service incident,” Jim Corridore from CFRA wrote in a Monday note. Meanwhile, United also posted relatively upbeat March travel data on Monday, with the company saying first quarter results would be better than expected.
Shares of United were trading up about 0.11% as of late morning Wednesday, though dipped down almost 1% towards midday.