How the airlines are reacting to the stock market crash
A day after United Airlines stock plunged by almost half to $1.25 per share after a major stock market plunge, some of its top executives are taking a breather from their jobs.
The stock market has been the focus of many CEOs’ ire since the start of the year, when the company was hammered by a series of incidents including the March 3 bombing of a Detroit-bound plane that killed one person.
But as the Dow Jones Industrial Average began to recover, CEO Oscar Munoz announced that the company will spend about $100 million on a new training facility that will improve safety and performance, and to expand its presence in areas like aviation and retail.
The company is also expanding its presence at its Newark, New Jersey, headquarters.
Munoz also said the company is going to invest $1 billion in an overhaul of its workforce.
The company also cut its dividend by about a third, which Munoz called “a very reasonable move.”
But he also said that the dividend cuts “will not have a substantial impact” on the company’s stock price.
Munsoz, who joined United in February 2013, has been a leader in improving safety and operating practices, and has been an advocate for the airline.
He also led the company through a crisis in late 2015 after it was forced to cancel its annual convention in Houston after a gunman opened fire on the convention center.
The event had drawn thousands of people to the city.MUNOSO: The CEO who saved the day United CEO Oscar M. Munoz said on a conference call with analysts Wednesday that he’s “really glad to see the momentum we’ve seen from the company over the last few days.”
He also said he’s excited about the company moving forward with its plan to build an “airport-like” training facility, adding that “I’m hopeful that this is going a long way toward making the company a model for other companies to follow.”MUNOSH: We’ll be building a training facility and training facility will be part of that.
And we’ll be adding more facilities to be able to meet demand.
MUNOS: We’re very excited to see where the company goes.
We’re really glad to have him here and look forward to seeing how the company evolves and how it continues to grow and thrive and thrive.MUNCHIE: I think he’s been the catalyst for this whole turnaround, which is really important to him.
Munosos also noted that United has spent about $1,300 on an event that will celebrate the 30th anniversary of its opening, adding, “We’re proud to have this facility on site.
We hope to have the facility open for business and the community.”
The company’s $1-billion investment in a training center was one of Munoz’s biggest announcements, but the investment will also likely boost safety and security in the near term, said Jeff Koons, president of the aviation consulting firm IHS Markit.MULTIPLE DEVELOPMENTAL GOALS, AN UNAMERICAN BASE: Munoz also announced that United will add 20 new flight attendants to the workforce, while also adding a $500 million pilot training facility to help prepare pilots for the “unprecedented challenge” of flying commercial aircraft.
The airline has also made several changes to its safety protocols, including introducing new flight crews for a third time and introducing more flight crew members to its training program.
But Munoz did not specify what changes he was announcing in light of the recent stock market drop.
The CEO also didn’t specify how long it would take for United to invest the $100-million in the new facility.
United also announced Wednesday that it will start to implement a pilot training program that will be a step up from its current training programs.
The airline will hire more flight instructors to train pilots and improve their proficiency in operating airplanes, and it will begin a pilot-led flight training program in 2017.
The pilot training will continue to be offered at airports and charter centers.UNAMERICANS ARE PUTTING BACK THEIR EARS: The airline’s stock has rallied more than 30% since it announced the $1 million investment.
But its stock has dropped more than 40% since then.
In fact, United stock has lost more than 60% in the past two months.
MUNCHIES: What’s the stock’s rally?
MUNCHIE.: The stock is up about 50% this year.
MULHOLLAND: The stock’s been trending lower, but it’s really gone down.
Munchies: That’s not good.
MULLINS: I can tell you, the stock is going down.
It’s down more than 50%.
MUNOSHON: You know, the market has always been volatile and there’s always been uncertainty.
It was always the case that we were able to make the right decisions, and I think that we made the right decision today.
MONSIEUR: That seems like the right thing to do. I think
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