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United Continental January Traffic Up, Load Factor Down

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United Continental Holdings, Inc.’s (UAL - Free Report) wholly owned subsidiary, United Airlines, reported unimpressive traffic numbers for January, with load factor (percentage of seats occupied by passengers) declining owing to capacity overexpansion.

Traffic, measured in revenue passenger miles (RPMs), was 16.33 billion, up 1.8% from the year-ago figure. O n a year-over-year basis, consolidated capacity (or available seat miles/ASMs) also gained 3.3% to 20.62 billion. However, load factor declined 120 basis points to 79.2%.

The company posted an on-time performance of 70.1% and a completion factor of 98.1% for the month.


Q118 Guidance

The company’s prediction for first-quarter 2018 consolidated passenger unit revenues remains unchanged in the range of flat to up 2% year over year. Additionally, the carrier expects capacity to expand between 3.5% and 4.5% in the period. Pretax margin (adjusted) is projected to be flat year over year. Consolidated cost per available seat mile (CASM) excluding third-party business expenses, fuel & profit sharing is estimated in the band of flat to up 1% in the same time frame. While consolidated average aircraft fuel price per gallon is anticipated at approximately $2.11 in the first quarter, Effective Income Tax Rate is estimated between 22% and 24%.

Zacks Rank & Other Key Picks

United Continental carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space include Deutsche Lufthansa AG (DLAKY - Free Report) , Air France-KLM SA (AFLYY - Free Report) and Allegiant Travel Company (ALGT - Free Report) . While Air France-KLM and Allegiant Travel carry the same bullish Zacks Rank of 2 as United Continental, Deutsche Lufthansa sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Deutsche Lufthansa and Air France-KLM have skyrocketed more than 100% in 2017. While the Allegiant Travel stock has rallied 28.7% in the last six months.

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