Economics
Wall Street Is Not Excited About United Airlines’ Growth Plan
- Expanded seat supply ignites fears of another fare war
- Shares tumble as investors show unhappiness with CEO’s plan
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United Continental Holdings Inc.’s plan to grow its way to better profits received a rough reception from analysts and investors impatient for a quicker pay off.
The airline’s decision to accelerate an expansion of its network raised fears of another profit-bruising fare war and triggered a decline in shares Wednesday. The strategy is in stark contrast to efforts by rivals to grow more slowly, which would make it easier to raise ticket prices as supply balances with demand.