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PAR Capital Management Buys More Shares of This Airline Company

According to a freshly-submitted Form 4 filing, Paul Reeder and Edward Shapiro’s PAR Capital Management LP purchased 1.13 million shares of United Continental Holdings Inc. (NYSE:UAL) on Thursday and 780,000 shares on Friday at prices that ranged from $50.49 to $53.21 per share. After the recent purchases, PAR Capital Management owns 16.29 million shares of the airline, which account for 4.84% of its total number of outstanding shares.

Earlier this month, United Continental Holdings Inc. (NYSE:UAL) reached an agreement with both PAR Capital Management LP and Brad Gerstner’s Altimeter Capital Management LP, which owns 11.51 million shares of the airline, under which the size of the Board was increased to 17 from 15 and Mr. Shapiro and Barnaby Harford were appointed to fill the two freshly-created vacancies. In separate SEC filings submitted earlier this year, the two shareholders mentioned above stated that United Continental “has been the worst-performing U.S. airline stock over the last five years” despite having premier, industry-leading strategic assets such as significant scale advantages, strong brand recognition, among other things. To be more detailed, the two shareholders said that United Continental’s weak stock performance reflects “substantial underperformance in terms of operational reliability, customer satisfaction, market share, profitability, and return on invested capital”, for which United’s “underqualified, ineffective, and entrenched Board” could be blamed.

The airline’s Chief Executive Officer and President Oscar Munoz purchased 19,800 shares on Friday for approximately $1 million, which is yet another sign that the company is moving in the right direction. Shares of United Continental are down 12% year-to-date and change hands at around 5.7-times expected earnings, significantly below the forward PE multiple of 17.8 for the S&P 500 Index. David Keidan’s Buckingham Capital Management owns 45,345 shares of United Continental Holdings Inc. (NYSE:UAL) as of March 31.