United Continental Holdings, Inc.’s (UAL - Free Report) wholly owned subsidiary, United Airlines, reported traffic numbers for November. Traffic, measured in revenue passenger miles (RPMs), was 17.02 billion, up 5.1% from the year-ago figure.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) also climbed 5.1% to 20.80 billion. However, load factor (percentage of seats occupied by passengers) remained flat year over year at 81.8% as traffic expansion was on par with capacity expansion.
On a year-to-date basis, the carrier registered a 2.8% rise in RPMs to 198.18 billion while ASMs increased 3.4% to 240.42 billion, both on a year-over-year basis. Load factor contracted 50 basis points to 82.4% as capacity growth exceeded traffic expansion.
The company posted an on-time performance of 76.5% and a completion factor of 99.9% for the month.
PRASM Outlook Raised
The company has raised the guidance for fourth-quarter consolidated passenger unit revenue (PRASM) from a 1-3% decline to a fall of 2% to flat year over year.
New Share Repurchase Program
On another positive note, the company has announced a new $3 billion share repurchase program. The amount is equivalent to around 17% of the company's market capitalization based on the closing price on Dec. 6. The program has no expiry date.
The company’s previous $2 billion share repurchase program announced in July 2016 is expected to be completed by this year-end.
The increase in guidance as well as the new share buyback authorization seems to have pleased investors. As a result, shares of the company were up 2.2% to $63.53 at the close of trading on Dec 7.
Zacks Rank & Key Picks
United Continental carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Gol Linhas Aereas Inteligentes S.A. (GOL - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and Deutsche Lufthansa AG (DLAKY - Free Report) . While Gol Linhas and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa carries a Zackks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gol Linhas, International Consolidated Airlines and Deutsche Lufthansa have soared more than 200%, 51% and 100 %, respectively, in a year.
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