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United Unveils Business Benefit Plan

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United Airlines, the wholly owned subsidiary of United Continental Holdings Inc. (UAL - Free Report) introduced a new benefit program– MileagePlus Small Business Network. The latest initiative is part of United’s award-winning loyalty program – MileagePlus. It is the first travel loyalty program in U.S. that allows businesses to earn and redeem miles.

All the businesses that join the scheme can win award miles by purchasing goods and services from the program's vendor partners. These comprise major providers of printing, shipping, credit card payment processing, office supplies and computing services, netting over a dozen.

With the help of the earned miles, businesses can buy travel awards and upgrades as well as bid for products at the MileagePlus Headliners auction program. Additionally, the points can be used to buy merchandise, newspaper and magazine subscriptions or dining awards. The companies can also purchase, transfer or award or donate their miles to a MileagePlus charity partner.

Along with this program, United unveiled a new bonus offer. Through this, companies are entitled to earn 1,000 bonus miles by signing up to the aforesaid business-loyalty plan and executing deals that win at least 100 extra miles.

United management holds small businesses that have the potential to generate high revenues for the airline in high regard.  Considering these as esteemed customers, the airline introduced the latest MileagePlus program that offers immense value to businesses of all magnitudes.

We believe that United Continental is poised to benefit from its industry-leading unit revenue growth, strong operational execution, competitive cost structure, capacity discipline, and fleet and network optimization. The company is making continued progress in expanding its on-board products and services in both domestic and international fleets.

However, we remain concerned about escalating fuel prices, the upward movement in non-fuel expenses, competitive threats from other carriers such as Delta Air Lines (DAL - Free Report) and Southwest Airlines Co. (LUV - Free Report) , fluctuations in passenger and cargo demand, and a sluggish global economy.

United Continental – which placed an order with The Boeing Company (BA - Free Report) for 150 brand-new 737 narrow-body airplanes designed with superior CFM engines – currently holds a Zacks Rank #3, implying a Hold rating.

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