Penn Wealth Publishing

2021.08.22 Penn Wealth Report Vol 9 Issue 03

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14 penn wealth Report volume 9 issue 03 22 aug 2021 Penn Wealth Report Copyright 2021. All Rights Reserved. investment intelligence United Embraces the Future of Air Travel Airlines e content of this report reflects the personal views, opinions, and research of Penn Wealth Publishing. While measures are taken to help assure the accuracy of data, no guaran- tees can be made and the firm is not liable for any losses incurred by subscribers. is is not a solicitation to buy. Always consult your investment professional before investing any money. Not long ago, United Airlines UAL $44 was probably the only leading carrier we wouldn't touch. e major reason for our disdain was the company's outrageously bad (in our opinion) CEO, Oscar Munoz. Sadly, many leaders of major US companies appear to be completely detached from reality with respect to the condition of their own firms; Munoz could have been the national spokes- man for this group of hapless individuals. Now that he has been replaced by the quite capable Scott Kirby, the outlook isn't only brighter, it is getting—dare we say— rather exciting. Well, as exciting as things can be for an airline emerging from the throes of a global pandemic. Munoz was a manager; and a poor one at that. Kirby appears to be a leader, as evi- denced by the forward-looking strategic vision he has outlined for United. Instead of just throwing out pie-in-the-sky earnings estimates, he is making a bold bet on the future of air travel. From getting booted off of a flight to more leg room For the past generation, United has been the butt of industry jokes about its horrible cus- tomer service. is crystallized a few years ago when a passenger was forcibly removed from a flight due to overbooking—hardly the poor passenger's problem. e incident was bad PR, made worse by a CNBC inter- view with Munoz shortly after the trouble. Before backtracking in a later statement, we watched Munoz essentially blame the paying customer who was treated so indignantly. Munoz was tone deaf, but Kirby seemed to get understand what was happening. To help change the company's image, manage- ment has announced a number of moves designed to improve the comfort of its trav- elers. ere will be 75% more premium seating on flights with North American departures, legroom will increase, and the overhead bins will become larger ere will also be more seatback entertainment, and additional Wi-Fi access. To help foster these changes, United just announced its largest new aircraft order in history, with the com- pany buying 200 new Boeing 737 MAX jets and 70 Airbus A320 NEOs. e $27 billion price tag for the shiny new jets represents the largest aircraft order made in over a decade—by any firm. Embracing supersonic and electric air travel It is hard to believe it has been nearly two decades since the Concorde ceased opera- tions following a nightmarish crash in 2000. Technology has come a long way since the aircraft was designed in the 1960s, however, and the world is ready for supersonic flight once again. To that end, United just made a stunning deal to buy 15 Boom Supersonic aircraft, known as the Overture, and an option to buy 35 more. United plans to start flying the Denver-based company's aircraft on trans- atlantic and Pacific routes be the end of the decade. While the deal is provisional on the Overture meeting the stringent safety, oper- ating, and sustainability requirements of United, we expect to see this Mach 1.7 jet (1,304 MPH) ferrying passengers in the not too distant future. As if the supersonic deal wasn't enough, this past February the airline inked a $1 bil- lion conditional order for Archer Aviation electric VTOL (vertical-take-off-and-land- ing) air taxis as well as 200, 19-passenger electric airliners from Heart Aerospace for regional routes. Nothing like his predecessor, Scott Kirby is proving his leadership prowess at United. Fortunately for investors, too many are focused on the bad-old days of Munoz and the mountain of complaints. Now is the time for astute investors to look at the new United Airlines and consider getting in before takeoff. Now that the hapless Oscar Munoz is gone, United can finally move forward. ...United just made a stunning deal to buy 15 Boom Supersonic Aircraft known as the overture. UAL @ $44

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