Trading airlines on United shake-up

Activists are looking to shake up United Continental Holdings, but "Fast Money" traders were split over whether the airline company's shares will benefit.

Two hedge funds, PAR Capital Management and Altimeter Capital Management, said Tuesday they want to install six new board members at the company. United shares have fallen more than 15 percent in the last year, lagging competitors like Southwest and Delta.

Trader Pete Najarian, who has a long position in United call options, said the activist action makes him more optimistic. He contended that the stock "should come back" from the declines.

United Airlines 787 Boeing Dreamliner
Seth Miller | CNBC
United Airlines 787 Boeing Dreamliner

United has dealt with several recent obstacles. It first changed chief executives, then worked through the illness of its new CEO, Oscar Munoz, who is due to return from sick leave.

If United starts to show signs of a turnaround, the stock should "work out," said trader David Seaburg.

Some traders, though, said they would not buy into airlines regardless of leadership changes at United.

"I would stay away from airlines altogether," said trader Brian Kelly.

Trader Steve Grasso agreed, but said United shares could work as a short stop.

Disclosures:

Steve Grasso

Steve is Long AAPL, BA, CC, DD, DIS, DECK, EVGN, KBH, MJNA, MU, OLN, PFE, PHM, T, TWTR, GDX sold BAC firm is long OXY, BP, CVX, RIG, FCX kids own EFA, EFG, EWJ, IJR, SPY

Brian Kelly

Brian Kelly is long BBRY, Bitcoin, GLD, GLD puts, SH, SLV, TLT, US Dollar, UUP, Yen; he is short Aussie Dollar, BLK, British Pound, CS, DB, Euro, EWH, FRC, Hong Kong Dollar, UBS, SPY, Yuan, 5-Year Note Futures

Pete Najarian

Long AAPL, BAC, BMY, DIS, DISCA, GE, KMI, KMI-A, KO, MRK, PEP, PFE, SAVE, VIAB, he is long calls AAL, AMJ, CMCSA, DAL, EMR, EWZ, FDX, FIT, GDX, GE, GM, HAIN, HBAN, KSS, LC, MCD, MDLZ, MPZ, MXIM, NRF, RHT, SLV, SWN, UAL, USG, WPX, WYNN, XME, ZIOP, he is long puts DB, EWH, RIG, VLO.

David Seaburg

Opinions expressed by David Seaburg are solely his own and do not reflect the views and opinions of Cowen Group, Inc