How Did United Perform Operationally In October?

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

October was not a very good month for United Continental (NYSE:UAL) financially. The company witnessed its value plummet by more than 12% post the earnings call, when upper management seemingly spooked investors into a selling frenzy after failing to answer Wall Street analysts’ questions. Analysts called into question the company’s growth initiatives that have, so far, failed to deliver.

That said, despite the hurricanes, operationally, the legacy carrier managed to hold its own. The month recorded a better-than-expected 1.7% growth in traffic (revenue passenger miles) y-o-y. The figure was hurt on a negative traffic growth of 2.7% internationally, driven by operational difficulties faced thanks to the hurricanes. Consolidated capacity (available seat miles) increased at a significant 3.4% in comparison to the same month last year. Load factor was hurt notably and came in lower by 130 basis points at 81.1%, again, hurt internationally on adverse weather conditions.

Additionally, the company witnessed yet another month of best in-industry on-time departures, representing the seventh straight month of achieving this feat in the year.

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For Q4, the company continues to expect  consolidated passenger unit revenue to be down 1.0 percent to 3.0 percent compared to the fourth quarter of 2016.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such 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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