United Continental Holdings Inc.
) Aug 2013 airline traffic - measured in revenue passenger miles
or RPMs, which imply revenue generated per mile per passenger -
dropped 0.5% year over year to 19.51 billion. Consolidated
capacity (or available seat miles/ASMs) for the month was 22.32
billion, down 1.4% from Aug 2012.
The load factor (percentage of seats filled by passengers)
improved to 87.4% from 86.6% in the same month, last year.
Passenger revenue per available seat mile (PRASM) is estimated to
have increased 3.5% to 4.5% year over year. According to the
company, Yen depreciation impacted the consolidated PRASM by a
percentage point during the month. The company registered a
completion factor of 99.4%, with nearly 79.3% of the flights on
For the first eight months of 2013, United Continental
generated RPMs of 139.33 billion (down 1.3% year over year) and
ASMs of 165.53 billion (down 3.0% year over year). Load factor
was 84.2%, reflecting growth of 150 basis points.
Despite these headwinds, United is concentrating on improving
its business prospects through a number of initiatives. The
carrier is concentrating on redesigning its airport club rooms to
offer a restful waiting time for customers and recently unveiled
its brand-new United Club lounge in Terminal 2 at San Diego
International Airport. Additionally, United got the approval from
the U.S. Department of Transportation to start transcontinental
services from San Francisco to Chengdu in China, which will
expand its operations in the Asia Pacific region.
Delta Airlines Inc.
) recent tie-up with Virgin will give its archrival more control
over the transatlantic route with nine daily roundtrip flights
across the region. Other risk factors such as fuel price
instability, high non-fuel expenses and sluggish economic
conditions are also detrimental to United's operations.
United operates with the likes of
Southwest Airlines Inc.
JetBlue Airways Corp.
), and carries a Zacks Rank #3 (Hold).
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