As airline earnings season approaches, I have been revisiting my theses on the sector. I have recently called Spirit Airlines (SAVE) “a terrible addition to a portfolio“, doubling down on my most bearish call in the airline space published in 2018. International Consolidated Airlines (OTCPK:ICAGY), on the other hand, looks both cheap and fundamentally solid today.
Now is United Airlines’ (NASDAQ:UAL) turn. Once the growth story among the US legacy names, United has pivoted its strategy toward better margins and a healthier balance sheet. Today, I see the airline as a high-quality player in the industry, which puts the stock squarely in the “relative buy” camp, in my view.
How United changed over time
To be honest, United Airlines has often been a question mark for me. While I once saw the company and stock as a growth play in the sector, I turned more skeptical at the start of the COVID-19 crisis and a full bear in 2021. My concerns included a leveraged balance sheet…