Back to top

Image: Bigstock

United Continental August Traffic Rises, Load Factor Declines

Read MoreHide Full Article

Chicago-based United Continental Holdings (UAL - Free Report) , the parent company of United Airlines, reported modest traffic numbers for the month of August. The company’s load factor (percentage of seats filled by passengers) declined as traffic growth was outpaced by capacity expansion. The decline in load factor impacted the stock negatively.

Traffic – measured in revenue passenger miles (RPMs) – was 19.9 billion, up 0.6% from 19.8 billion recorded a year ago. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) inched up 1.9% to 23.3 billion. Load factor, on the other hand, decreased to 85.5% from 86.6% a year ago.

At the end of the first eight months of 2016, the carrier’s RPMs were up 0.2% to 141.3 billion and ASMs grew 1% to 170 billion, both on a year-over-year basis. Load factor contracted 70 basis points to 83.1% in the period. The company posted the August On-time Performance of 61.9% and a completion factor of 98.3%.

The carrier continues to expect consolidated passenger revenue per available seat mile (PRASM: a key measure of unit revenue) in the third quarter to decline in the band of 5.5% to 7.5%. Fuel price (inclusive of all cash-settled hedges) is projected in the band of $1.50–$1.55 per gallon. The company now expects its 2016 consolidated unit cost per available seat mile (CASM: excluding fuel, profit sharing and third-party business expenses) to increase in the band of 2.5% to 3.5% on a year-over-year basis. The previous outlook had projected an increase in the band of 2% to 3%. The increase in the full-year guidance for the metric was supported by the deal reached with flight attendants in August.

Price and Consensus


Price and Consensus | Quote

Zacks Rank & key picks

United Continental carries a Zacks Rank # 3 (Hold). Some better-ranked stocks in the airline space include SkyWest Inc. (SKYW - Free Report) , ANA Holdings Inc. and Copa Holdings SA (CPA - Free Report) .  Both SkyWest and ANA Holdings carry a Zacks Rank #2 (Buy), while Copa Holdings sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>    

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Copa Holdings, S.A. (CPA) - free report >>

SkyWest, Inc. (SKYW) - free report >>

United Airlines Holdings Inc (UAL) - free report >>

Published in