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United Continental, Southwest Airlines October Traffic Rises - Analyst Blog

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United Continental Holdings Inc. ( UAL ) reported near-flat traffic figures for the month of Oct 2014. The month's consolidated traffic - measured in revenue passenger miles (RPMs) - improved a mere 0.4% year over year to 17 billion. Growth in Latin American traffic offset the decline in the Atlantic division.

Consolidated capacity (or available seat miles/ASMs) for the month was 20.9 billion, up 0.7% from Oct 2013. The load factor (percentage of seats filled by passengers), however, deteriorated to 81.7% from 81.9% in the same month last year. The company registered a completion factor of 99.3%, with 77.4% of flights on schedule.

Through the first ten months of 2014, United Continental has generated 173.4 billion (up 0.3% year over year) and ASMs of 206.7 billion (up 0.1%), leading to a load factor of 83.9%.

The company's numbers lagged that of rival Southwest Airlines Co. ( LUV ), whose traffic was up more than 4% in Oct 2014. Improved capacity led to the healthy rise in traffic. RPMs came in at 9 billion, up 4.4% from almost 8.6 billion recorded in the comparable period a year ago.

Meanwhile, on a year-over-year basis, Southwest Airlines' capacity (available seat miles/ASMs) increased 0.4% to 10.8 billion. Load factor came in at 83.1%, up 320 basis points (bps) from the year-over-year equivalent of 79.9%.

In the first ten months of 2014, Southwest Airlines generated RPMs of 90.3 billion (up 3.4% year over year) and ASMs of 109.2 billion (down 0.1%), leading to a load factor of 82.7% (up 280 bps).

Another major player in the industry, American Airlines Group ( AAL ), also reported traffic data for the month of October. RPMs came in at 17.9 billion for the month, up 0.2% year over year.

Capacity increased 0.5% to 21.8 billion. Load factor came in at 82.2%, down 0.3% from the year-ago figure. The company still projects the consolidated passenger revenue per available seat mile for the final quarter of 2014 to be approximately flat to up 2%.

United Continental carries a Zacks Rank #2 (Buy). A better-ranked stock in the airline space is Spirit Airlines ( SAVE ), with a Zacks Rank #1 (Strong Buy). Southwest Airlines also carries a Zacks Rank #1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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