Chicago-based United Continental Holdings, Inc. (UAL - Free Report) , the parent company of United Airlines, reported disappointing traffic numbers for the month of February. The company recorded a decrease in load factor (percentage of seats filled by passengers) as the traffic decline was more than the capacity contraction.
Traffic – measured in revenue passenger miles (RPMs) – was 13.95 billion, down 0.8% on a year-over-year basis. On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) dipped 0.4% to 18.18 billion. Load factor decreased to 76.7% from 77% a year ago.
At the end of the first two months of 2016, the carrier recorded a 1.7% increase in RPMs to 30 billion, while ASMs grew 2.2% to 38.15 billion, both on a year-over-year basis. Load factor contracted 40 basis points to 78.6% in the period as capacity growth outpaced traffic expansion.
The company posted a completion factor of 99.2% for February. Moreover, 68.5% of scheduled flights (mainline) departed on or before the scheduled time in Feb 2017.
United Continental still expects passenger unit revenues to be down 1% to up 1% on a year-over-year basis in the first quarter of 2017. Even though Delta Air Lines (DAL - Free Report) trimmed its passenger unit revenue guidance for the first quarter recently, unit revenues woes seem to be easing for carriers. We note that carriers like American Airlines Group (AAL - Free Report) and Alaska Air Group (ALK - Free Report) had displayed growth with respect to unit revenues in the fourth quarter of 2016. We expect more carriers to return to positive unit revenues in 2017.
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