U.S. airlines climbed to a two-month high after beleaguered United Continental Holdings Inc. won support from one of its biggest shareholders and American Airlines Group Inc. signaled that it"™s gaining additional control over fares.
United shares could jump to $135 by 2020, or even higher under certain circumstances, said Brad Gerstner, chief executive officer of Altimeter Capital Management. Altimeter holds 3.3 percent of the carrier"™s stock, the hedge fund"™s top holding, and helped lead a proxy fight that overturned part of the airline"™s board last year.
"You have to believe the historical skepticism which has been pounded into most financial analysts for decades is too negative," Gerstner said late Monday at the Sohn Investment Conference in New York.
United climbed 5.1 percent to $78.79 at 2:26 p.m. Tuesday in New York. The gain led a Bloomberg index of U.S. airlines to rise as much as 3.1 percent to 131.35, its highest intraday level since March 3. American advanced 4.5 percent to $46.95.
Gerstner"™s upbeat view followed similar support from Warren Buffett, whose Berkshire Hathway Inc. is United"™s top shareholder.
The airline made a "terrible mistake" when it allowed a Chicago airport officer to pull a passenger from his seat and drag him off a plane in early April, Buffett said in an interview Monday morning on CNBC. The billionaire said the incident wouldn"™t change his investment strategy, however. Berkshire reversed course on the airline industry last year, taking stakes in the four biggest U.S. carriers…
