How Did United Continental Perform Operationally In October?

+25.63%
Upside
47.88
Market
60.15
Trefis
UAL: United Airlines Holdings logo
UAL
United Airlines Holdings

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.

1511

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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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