United Airlines Reports Increase In November Load Factor

United Continental Holdings’ (NASDAQ:UAL) wholly owned subsidiary, United Airlines, reported strong traffic figures for November, following which shares of the company increased 1.6% in after-hours trading on Dec 10. Consolidated traffic, measured in revenue passenger miles (RPMs), was 18.23 billion, up 7.1% from the year-ago figure.

Consolidated capacity (or available seat miles/ASMs) rose 5.5% on a year-over-year basis to 21.96 billion. Also, load factor (percentage of seats occupied by passengers) expanded 120 basis points (bps) to 83% as traffic growth outpaced capacity expansion. Notably, this is the carrier’s seventh consecutive month of load factor increase.

At the end of the first 11 months of 2018, the carrier registered a 6.4% increase in RPMs to 210.83 billion, while ASMs climbed 4.8% to 251.89 billion both on a year-over-year basis. As a result, load factor improved 130 bps to 83.7%. The company posted an on-time performance of 66.9% and a completion factor of 99% for November.

United Continental Holdings, Inc. Price

United Continental Holdings, Inc. Price | United Continental Holdings, Inc. Quote

Apart from solid traffic figures, the carrier’s expansion initiatives are encouraging. Most recently, the Chicago, IL-based airline entered into a joint business agreement (JBA) with Copa Holdings (NYSE:CPA) and Avianca (including several of its affiliates). The JBA, on approval from the government, is anticipated to facilitate travel experience between the United States and 19 countries in Central and South America. (Read more: United Continental Arm Inks Deal to Boost Latin American Base)

Zacks Rank & Key Picks

United Continental carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same space are Air France-KLM (OTC:AFLYY) and Spirit Airlines (NYSE:SAVE) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Air France-KLM and Spirit have rallied more than 26% and 60%, respectively, in the past six months.

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