United Continental Holdings, Inc.’s UAL wholly owned subsidiary, United Airlines, reported traffic numbers for November. Traffic, measured in revenue passenger miles (RPMs), was 17.02 billion, up 5.1% from the year-ago figure.
On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) also climbed 5.1% to 20.80 billion. However, load factor (percentage of seats occupied by passengers) remained flat year over year at 81.8% as traffic expansion was on par with capacity expansion.
On a year-to-date basis, the carrier registered a 2.8% rise in RPMs to 198.18 billion while ASMs increased 3.4% to 240.42 billion, both on a year-over-year basis. Load factor contracted 50 basis points to 82.4% as capacity growth exceeded traffic expansion.
The company posted an on-time performance of 76.5% and a completion factor of 99.9% for the month.
United Continental Holdings, Inc. Price
United Continental Holdings, Inc. Price | United Continental Holdings, Inc. Quote
PRASM Outlook Raised
The company has raised the guidance for fourth-quarter consolidated passenger unit revenue (PRASM) from a 1-3% decline to a fall of 2% to flat year over year.
New Share Repurchase Program
On another positive note, the company has announced a new $3 billion share repurchase program. The amount is equivalent to around 17% of the company's market capitalization based on the closing price on Dec. 6. The program has no expiry date.
The company’s previous $2 billion share repurchase program announced in July 2016 is expected to be completed by this year-end.
The increase in guidance as well as the new share buyback authorization seems to have pleased investors. As a result, shares of the company were up 2.2% to $63.53 at the close of trading on Dec 7.
Zacks Rank & Key Picks
United Continental carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are Gol Linhas Aereas Inteligentes S.A. GOL, International Consolidated Airlines Group SA ICAGY and Deutsche Lufthansa AG DLAKY. While Gol Linhas and International Consolidated Airlines sport a Zacks Rank #1 (Strong Buy), Deutsche Lufthansa carries a Zackks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gol Linhas, International Consolidated Airlines and Deutsche Lufthansa have soared more than 200%, 51% and 100 %, respectively, in a year.
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