How Important Is United’s International Division For Its Overall Equity Value?

by Trefis Team
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Trefis
UAL
United Airline Holdings
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United Continental’s international operations account for roughly 35% of its total revenue and about 29% of its total EBITDA. Over the long term, the airline aims to expand its international operations, particularly in Asian and Latin American markets, to leverage the growing demand for air travel. However, the currency headwinds in 2015 are likely to continue in the near term. Assuming an annual capacity growth of over 3%, and passenger yield growth of about 1% over the next five years, we estimate that the network carrier’s international operations would contribute about one-fourth of its equity value in 2016.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for United Continental

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