United Continental Holdings Inc.
) March 2014 airline traffic - measured in revenue passenger
miles or RPMs, which imply revenue generated per mile per
passenger - increased 0.7% year over year to 17.47 billion.
Growth in the U.S. and Latin American traffic offset the decline
from other regions.
Consolidated capacity (or available seat miles/ASMs) for the
month was 21.10 billion, up 2.7% from March 2013. The news failed
to excite shareholders as the stock closed 2.34% down on Tuesday
The load factor (percentage of seats filled by passengers)
deteriorated to 82.8% from 84.4% in the same month, last year.
Higher growth in international capacity resulted in a higher
number of empty seats for the carrier. The company registered a
completion factor of 98.9%, with nearly 79.4% of flights on
In the first three months this year, United generated RPMs of
46.38 billion (down 0.3% year over year) and ASMs of 57.22
billion (down 0.3% year over year). Load factor came in at 81.1%,
flat as compared to March 2013.
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.
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.
However, the mega merger between American Airlines and U.S.
Airways Group to form
American Airlines Group Inc.
) remains a major competitive threat to the company in both
domestic and international markets.
United Continental carries a Zacks Rank #3 (Hold). Other
stocks worth considering within this sector are
Southwest Airlines Co.
Alaska Air Group Inc.
). Both the stocks carry a Zacks Rank #1 (Strong Buy).
AMER AIRLINES (AAL): Free Stock Analysis
ALASKA AIR GRP (ALK): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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