Following the announcement of United Airlines regarding the appointment of its general counsel as the company's acting CEO, several stock market analysts reacted negatively to the news. On Monday, aviation giant's parent company, United Continental Holdings appointed Brett J. Hart to assume the responsibilities of CEO Oscar Munoz, who is currently on indefinite medical leave after suffering heart attack last week.
While the scarce details on Munoz's health condition coupled with United Airlines' silence already sparked major concerns, the recent update still earned unfavorable reactions from industry experts. Some even voiced their apprehensions on Hart's background as a lawyer and his limited experience in finance and operations will just further boost the turmoil in United Airlines.
"Mr. Hart has limited experience in finance, operations or customer service, the areas that (United) is most in need of improving - we would have preferred an interim leader with more experience in these areas," S&P Capital IQ analyst Jim Corridore said, as per Chicago Tribune.
Despite understanding the stand of United Airlines to balance Munoz's privacy rights over his medical condition with investors' pursuit for information, analysts expressed their frustrations that the company gave no details on Munoz's health, whose skills they deemed vital to United's improvement strategies.
"I don't want United to overshare - I just want to know if it is a long-term issue," Corridore added. "I would love to have a more detailed explanation of what is happening, because our job as analysts is to determine the value of the stock, and without the information, it's very hard to do that."
With United Airlines' declaration of the board's options to be open and choosing its top legal official instead of an executive with an airline-operations experience, the company hasn't settled all the questions but ignited more concerns about its next steps. And with the sudden change in the company's leadership structure, stock market experts are left confused.
"It's not exactly appeasing that they've stepped in with a non-operator, a non-financial guy," bond researcher Gimme Credit's high-yield debt analyst Vicki Bryan said.
Meanwhile, the latest CEO shake-up in United Airlines marks another struggle for the company as it slowly begins rebuilding its morale after years of strained labor relations after the merger with Continental airlines. And with Hart as its acting CEO, many issues are still left unanswered making Hart's role more challenging.
Moreover, Hart also needs to navigate the U.S. investigation into the airline's ties to the former chairman of the Port Authority of New York & New Jersey, which has triggered the dismissal of Munoz's predecessor, Jeff Smisek, Bloomberg Business noted.
In other news, United Continental Holdings' share decline Tuesday morning amid the latest news on the company's leadership transition, CNBC News reported.