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United Airlines to Suspend Two Global Services on Low Demand

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According to several sources, United Airlines Holdings Inc. (UAL - Free Report) has decided to temporarily discontinue two of its major international routes. Beginning Sep 8, the carrier will cease operating flights connecting Chicago’s O’Hare International Airport (ORD) with Hong Kong (HKG). Additionally, it will suspend service on the Newark Liberty International Airport (EWR)-Buenos Aires, Argentina (EZE) route effective Oct 26.

United Airlines stated that reduced demand on the routes induced the airline to scrap these prominent services. Meanwhile, two regions are currently undergoing tough times. While Hong Kong is witnessing mass-scale political demonstrations that caused the closure of the Hong Kong International Airport earlier in the month, Argentina is in the middle of an economic turmoil. These issues have caused a slackness in demand for business and leisure travel to those places.

However, it is to be noted that, the Chicago-IL-based airline will continue operating its daily flights from San Francisco (SFO) and Newark to Hong Kong. Also, the carrier will keep serving Buenos Aires daily from Houston. Additionally, the carrier is on track to launch a second daily flight connecting SFO with HKG on Oct 26, 2019.

Although the services have been suspended temporarily, it is not known when the operations will return or if at all it will resume.

Zacks Rank & Other Key Picks

United Airlines carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space are Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS - Free Report) , Copa Holdings, S.A. (CPA - Free Report) and Gol Linhas Aereas Inteligentes S.A. (GOL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Controladora Vuela, Copa Holdings and Gol Linhas have rallied more than 57%, 26% and 18%, respectively, so far this year.

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