United Continental Q2’16 Earnings Preview: Higher Oil Prices & Declining PRASM To Weigh On Results

by Trefis Team
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UAL
United Airline Holdings
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Key Trends:

  • United revised its PRASM guidance from a decline of 6.5%-8.5% to 6.5%-7.5%, implying a small improvement in the foreign currency environment. However, the drop in passenger unit revenue continues to be significant, which is likely to weigh heavily on the airline’s June quarter revenue.
  • Recovery in crude oil prices in the last three months is expected to cause the airline to exceed its fuel price guidance for the quarter. This will, in turn, pull down the legacy carrier’s operating margins.

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  • Restricted capacity growth will continue to support the airline’s bottom line, partially offsetting the negative impact of higher fuel cost.
  • In a bid to attract more traffic, United is increasingly focusing on elevating the customer experience by introducing free snacks, coffee, and transforming airport clubs.
  • Further, the company is further expanding its network, with services to destinations across Europe and Asia.

Have more questions about United Continental (NYSE:UAL)? See the links below:

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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