Yahoo Finance United Traffic Numbers Stay Up Despite Weakness in Latin America
US Airline Industry: Analyzing June 2015 Performance Indicators
Overview
United Airlines (UAL), the wholly owned subsidiary of United Continental Holdings, is one of the most comprehensive route network operators across the globe. The company’s June traffic reports show a 3.4% year-over-year growth in cargo unit revenues. Its passenger unit revenues grew at a slower 1.3% year-over-year pace compared with the same month last year.
The passenger load factor declined by 0.6 basis points to stand at 86.3% for the month, and the completion factor and on-time performance for the month were 97.8% and 66.4%, respectively.
United Airlines was the only airline to report a decreased load factor in June, with a 0.8% decline. The load factors for Delta Air Lines (DAL) and JetBlue Airways (JBLU) increased by 0.6% each, American Airlines (AAL) by 0.4%, Alaska Airlines (ALK) by 0.2%, and Southwest Airlines (LUV) by 0.1%. UAL forms 3.7% of the iShares Transportation Average ETF (IYT).
Weakness in Latin America region
United’s traffic numbers saw a decline of about 2.4% year-over-year, and its capacity declined by 2.7% year-over-year for the Latin America region. This weakness was seen across all operators in this region.
Strong monthly and YTD operational performance
While United Airlines’ traffic and capacity grew by 1.3% and 2.2% for the month of June, the same indicators saw 0.4% and 1.3% growth on a year-to-date (or YTD) basis for the first half of the year. However, the load factor fell by 0.7% to 82.6% on a YTD basis. The company has had a strong operational year until now.
Forecast changed
As a global operator, United Airlines’ numbers are substantially affected by the dollar. The demand from international markets has seen some weakness in the last couple of months. The company has lowered the upper end of its guidance range for its 2Q15 pretax profit margin.
Improved traffic, greater capacity, and fuller planes all contributed to a positive June for the company.
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