Why United Airlines Stock Popped on Monday

Source The Motley Fool

A bit of litigation news is boosting share prices for United Airlines (NASDAQ: UAL) stock this morning.

Over the weekend, the Chicago Sun-Times reported American Airlines Group (NASDAQ: AAL) is suing Chicago's O'Hare Airport (more precisely, the "Chicago Department of Aviation") for "prematurely reorganizing gates," taking away four of American's slots and giving five more slots to United. American argues this breaches its seven-year-old airline use and lease agreement with the airport and will help United push American out to become the "sole hub carrier" at O'Hare.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

United shareholders like the sound of that a lot, though, and United stock is up 2.1% as of 11:20 a.m. ET Monday. Curiously, American shareholders like the news as well (or, at least, the fact that American is fighting for slots), and its share price is up 2.5%.

Doing the Chicago tussle

United is a long way away from "sole hub carrier" status. As the Sun-Times reports, while United controls 40% of O'Hare gates currently (88 gates), American has 30% -- 71 gates. If the reorganization takes effect, United's share might go to 42%, and American's might fall by less than 2%.

That's hardly revolutionary.

Still, American contends the agreement promised it "the opportunity to earn its fair share of gates at O'Hare before a gate redetermination could be triggered," and that the Department is denying it that fair shake. American asks that no reallocation be permitted before April 2027.

Chicago skyline along the lake shore.

Image source: Getty Images.

How should investors react?

Without all the details, it's hard to comment on the merits of the lawsuit -- but I can comment on the merits of these airline stocks. American Airlines stock looks cheap at 10.5 times earnings. United is even cheaper at just 6.7 times earnings.

Based on those numbers alone, I'm inclined to think United's the better buy.

Should you invest $1,000 in United Airlines right now?

Before you buy stock in United Airlines, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Airlines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Swiss exports crash 36% in the first month of Trump tariffsSwiss exports dropped by 36% in the first month after Trump imposed tariffs.
Author  Cryptopolitan
9 hours ago
Swiss exports dropped by 36% in the first month after Trump imposed tariffs.
placeholder
EUR/JPY appreciates above 163.00 with the Yen retreating across the boardThe Euro is trading higher for the second consecutive day, still fuelled by the delay of Trump’s deadline to avoid 50% tariffs in the US, while the Yen declines alongside super long-term Japanese yields.
Author  FXStreet
9 hours ago
The Euro is trading higher for the second consecutive day, still fuelled by the delay of Trump’s deadline to avoid 50% tariffs in the US, while the Yen declines alongside super long-term Japanese yields.
placeholder
Gold extends correction amidst trade optimism, stronger US DollarGold (XAU/USD) price extends correction, sliding below the $3,300 mark at the time of writing on Tuesday amid improving risk-on mood and a stronger US Dollar (USD). 
Author  FXStreet
10 hours ago
Gold (XAU/USD) price extends correction, sliding below the $3,300 mark at the time of writing on Tuesday amid improving risk-on mood and a stronger US Dollar (USD). 
placeholder
Bitcoin (BTC) To Continue Price Discovery Rally If It Holds These Levels – AnalystAs Bitcoin (BTC) attempts to turn the $110,000 resistance into support, some analysts believe its price discovery rally has just started, forecasting new highs for the flagship crypto.
Author  NewsBTC
10 hours ago
As Bitcoin (BTC) attempts to turn the $110,000 resistance into support, some analysts believe its price discovery rally has just started, forecasting new highs for the flagship crypto.
placeholder
Forex Today: US Dollar rebounds after long weekend, focus shifts to mid-tier US dataThe US Dollar (USD) benefits from the improving risk mood early Tuesday, while trading conditions normalize following a three-day weekend in the US.
Author  FXStreet
11 hours ago
The US Dollar (USD) benefits from the improving risk mood early Tuesday, while trading conditions normalize following a three-day weekend in the US.
goTop
quote