United Airlines – the wholly owned subsidiary of United Continental Holdings Inc. UAL – reported a rise in air traffic numbers in the month of November. Measured in revenue passenger miles (RPMs), traffic stood at 15.92 billion, up 8.8% from 15.28 billion recorded a year ago.
Also, consolidated capacity (or available seat miles/ASMs) increased 1.9% year over year to 19.5 billion. Meanwhile, the load factor or percentage of seats filled by passengers improved by 180 basis points to 81.7%.
At the end of the first eleven months of 2015, United Airlines recorded RPMs of 191.5 billion (up 1.5% year over year) and ASMs of 229.3 billion (up 1.6% year over year). Load factor stood at 83.5% compared with 83.6% last November. Likewise, boarded passenger count in the month rose 6.7% while that for the full year improved 1.6%.
As per Airlines for America (A4A), 25.3 million passengers were expected to travel via U.S. carriers between Nov 20 and Dec 1. Meanwhile, high travel demand has been strongly reflected in November’s air traffic growth. Moreover, United Airlines is poised to witness more traffic during the upcoming holiday season.
Moreover, we believe that the company’s route expansion plans, introduction of ancillary products, fleet revamping and customer service enhancement bode well. Further, United Airlines has been reaping considerable benefits from its joint ventures and code share agreements.
On the other hand, U.S. airline Delta Air Lines Inc. DAL recently posted a 4.6% year-over-year increase in air traffic in the month.
Zacks Rank & Stocks to Consider
United Continental currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are SkyWest Inc. SKYW and Hawaiian Holdings, Inc. HA. Both the companies sport a Zacks Rank #1 (Strong Buy).
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