updated 4/11/2006 6:46:22 PM ET 2006-04-11T22:46:22

Fidelity Investments and U.S. Trust Corp. have become the largest investors in United Airlines parent UAL Corp., new regulatory filings show, and now own one-fourth of the nation’s second-largest carrier based on revenue between them.

Fidelity bought just over 12 million shares last month for a 13 percent stake as of March 31, while U.S. Trust purchased 11.3 million shares and owns 12.2 percent of the company, according to filings Monday with the Securities and Exchange Commission.

The two financial institutions leapfrogged the federal government’s pension agency, the Pension Benefit Guaranty Corp., which owns 11.1 million shares and remains United’s third-largest shareholder, according to Lionshares.com. The market value of the top three shareholders is more than $400 million each.

Neither firm evidently seeks an active role in United ownership. Both made their disclosures on Schedule 13G SEC forms designated for passive investors, or those not seeking to influence a company’s operations.

Fidelity spokesman Mike Shamrell said Tuesday the Boston-based mutual fund company does not comment on individual holdings. United spokeswoman Jean Medina said the company does not discuss individual holders of its stock. A spokesman for U.S. Trust did not immediately return a phone call seeking comment.

United isn’t the only airline winning favor with investment firms. Fidelity also has become the largest shareholder in American Airlines parent AMR Corp., nearly doubling its stake in the first quarter to hold 24.1 million shares, or a 12.9 percent stake, as of March 31.

Unprofitable for years, the U.S. airline industry has seen a resurgence despite soaring fuel prices as passengers fill planes despite several rounds of fare increases, helping carriers’ bottom lines. Bankruptcy restructurings also have helped legacy airlines shed billions of dollars in labor and other costs and veer away from the brink of liquidation.

Fitch Ratings applied a solid B-minus grade to United’s issuer default rating Tuesday, citing “clear improvements” in the company’s credit profile as a result of its bankruptcy overhaul.

“Very strong passenger demand and better pricing are putting all U.S. carriers in a position to counter heavy fuel price pressure with higher fares,” the agency said in a statement for investors.

Nonetheless, many analysts still see airline investments as highly risky.

“I think people figure they’re probably safe for a while,” Morningstar analyst Chris Lozier said. “What they should not forget is that there will be another downturn, and that’s going to cause these stock prices to reverse.”

Elk Grove Village, Ill.-based United emerged from bankruptcy on Feb. 1 after a 38-month restructuring.

United CEO Glenn Tilton is the fourth-largest shareholder with 545,000 shares, worth more than $20 million.

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