United Continental endured two rounds of dreadful publicity in 2017: The notorious “dragging” incident where security guards pulled a 69-year old doctor from a flight in April, and an October conference call where CEO Oscar Munoz and President Scott Kirby shocked investors by failing to address how they’d improve profitability, and asking for “patience” instead. Those mishaps cast doubt on whether United can deliver on a bold strategy. For years, the carrier struggled to integrate reservation systems and schedules from the botched United-Continental merger in 2010. That left United especially vulnerable to super-low fare competition in some critical hubs. United is also fighting to recapture the lucrative corporate customers it lost to American and Delta in many markets. United has pledged to raise capacity as much as 6% in the US this year, an announcement that hammered its stock price. Munoz has made great progress settling labor contracts, and Kirby is a brilliant network planner. But investor fret that expanded capacity will flood United’s routes with seats, further depressing prices and margins, without wooing back business customers.
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