How Did United Continental Perform Operationally In October?
United Continental’s third quarter earnings remained under pressure, despite considerable fuel savings. The primary reason behind the continued weakness in the top-line is the heavy declines in passenger revenues in the Atlantic (9.7%) and Pacific (2.6%) regions. The carrier maintained capacity discipline in hopes to turnaround its unit revenues. Continuing this trend in October, capacity only grew 1.8% y-o-y. Including this month, so far in the year, capacity is up only 1.3% for United. However, the system is still plagued by some overcapacity as indicated by the 100 bps decline in the load factor. In contrast to the occupancy rate, the number of passengers onboarded increased by 2.2% y-o-y in October.
Going forward, the company expects the pressure on its passenger revenue average seat miles (PRASM) to continue. The expected decline is 4%-6% in the final quarter of the year, mainly due to yield weakness and timings of the holidays.
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Have more questions about United Continental (NYSE:UAL)? See the links below:
- United Continental Q3’16 Earnings Review: Unit Revenues Remain Under The Pump
- United Continental Q3’16 Earnings Preview: Capacity Cuts To Partially Offset The Decline In PRASM
- How Did United Continental Perform Operationally In September?
- What Is United Continental’s New Fleet Plan?
- Is China The New Growth Market For United Continental?
- How Did United Continental Perform Operationally In August?
- Why Are Airline Manufacturers Witnessing A Slowdown In Commercial Orders?
- How Is United Continental Driving Cost Efficiency?
- What Has Led To A 15% Fall In United’s Stock Price Since The Beginning Of The Year?
- What Factors Could Likely Affect United’s Unit Revenues In The Upcoming (Third) Quarterly?
- Is A Turnaround In The Cards For United Continental?
- United Witnessed A Decline In Q2’16 Earnings, Despite Substantial Fuel Cost Savings
- United Continental Q2’16 Earnings Preview: Higher Oil Prices & Declining PRASM To Weigh On Results
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Rebound To $100 Per Barrel By 2018?
- How Will United’s Equity Value Be Impacted If The Crude Oil Prices Average At $50 Per Barrel In 2018?
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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