United Continental Holdings Inc.'s (UAL) Jun 2013 airline traffic – measured in revenue passenger miles or RPMs, which implies revenue generated per mile per passenger – dropped 0.6% year over year to 19.12 billion. Consolidated capacity (or available seat miles/ASMs) for the month was 21.79 billion, down 2.0% from Jun 2012.
The load factor (percentage of seats filled by passengers) improved to 87.7% from 86.5% in the same month, last year. Passenger revenue per available seat mile (PRASM) is estimated to have increased 3.5% to 4.5% year over year. The company registered a completion factor of 98.8%, with nearly 71.1% of the flights on schedule.
For the first half of 2013, United Continental generated RPMs of 100.12 billion (down 1.4% year over year) and ASMs of 120.62 billion (down 3.5% year over year). Load factor was 83.0%, reflecting growth of 170 basis points.
Weak domestic activity impacted the performance of the company during the month, offsetting the busy overseas traffic. Other risk factors such as fuel price instability, high non-fuel expenses and sluggish economic conditions are also detrimental to United's operations.
Despite these headwinds, United is concentrating on improving its business prospects through a number of initiatives. Recently, the company launched a new advertising campaign to endorse the airline's transcontinental Premium Service flights that take off from New York's John F. Kennedy International Airport and fly to Los Angeles and San Francisco. With this promotional activity, the carrier aims to create awareness about its services, hoping to woo additional flyers in the coming days.
United also brought in advanced applications and features on Apple Inc.'s (AAPL) iPhone, Google Inc.'s (GOOG) Android-based smartphones and BlackBerry 10 that will help passengers manage their travel plans in case of flight irregularities.
United Continental – that has agreed to buy 30 Embraer SA's (ERJ) 175 regional jets – cur! rently retains a Zacks Rank #3 (Hold).
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