United Continental Holdings Inc.
) Jan 2014 airline traffic - measured in revenue passenger miles
or RPMs, which imply revenue generated per mile per passenger -
decreased 1.6% year over year to 15.23 billion. Consolidated
capacity (or available seat miles/ASMs) for the month was 18.82
billion, down 2.8% from Jan 2013.
The load factor (percentage of seats filled by passengers)
improved to 80.9% from 79.9% in the same month, last year. The
company registered a completion factor of 95.7%, with nearly
71.1% of flights on schedule.
The harsh winter storms forced the carrier to cancel more than
1,000 flights during the month, which reduced its consolidated
capacity. However, lower capacity as compared to traffic led to a
higher occupancy rate for the month.
The airline behemoth chalked out plans to overhaul its
finances as it underperformed its domestic peers in recent times.
The passenger airline plans to reduce its annual costs by $2
billion by cutting fuel and sourcing costs, improving
maintenance, and optimizing distribution channels.
Additionally, the Chicago-based carrier is also making solid
progress in expanding its on-board products and services in both
domestic and international fleet to perk up its ancillary revenue
Apart from that, expansion of its global and domestic route
network with the introduction of non-stop flights and continuous
investments to upgrade its fleet by scraping the older aircraft
for new fuel efficient ones will drive its bottom line going
forward. We thus remain bullish on the company despite the weak
United Continental carries a Zacks Rank #1 (Strong Buy). Other
stocks worth considering within this sector are
Southwest Airlines Co.
JetBlue Airways Corp.
Copa Holdings SA
). Southwest carries a Zacks Rank #1 while JetBlue and Copa carry
a Zacks Rank of #2 (Buy).
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JETBLUE AIRWAYS (JBLU): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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