United Continental (UAL) To Expand Operations In San Juan

In a bid to further expand its operations, Chicago- based United Continental Holdings (NYSE:UAL) recently joined forces with DHL Global Forwarding to extend services in San Juan. DHL Global Forwarding, which offers air and ocean freight forwarding services, is a unit of Deutsche Post (DE:DPWGn) DHL Group.

United Continental, the parent company of United Airlines, aims to promote tourism in Puerto Rico through this move. The carrier intends to operate six flights a week connecting San Juan's Luis Munoz Marin Airport to Newark Liberty International Airport from Dec 18, 2016. Currently, United Continental operates only one flight on the route per week. The carrier will utilize the 344 seater Boeing (NYSE:BA) 777 aircraft on the route.

As part of the expansion initiative, DHL Global Forwarding will expand its San Juan warehouse. The company expects the move to help in increasing capacity for handling shipments that require stringent temperature controls. The use of United Continental’s widebody planes on the route are aimed to cater to the surge in demand for moving temperature-controlled shipments by air.

We appreciate United Continental’s efforts to promote tourism in Puerto Rico. We believe that the increased demand will boost its top line. In fact, the carrier has been constantly making efforts to expand its operations. The carrier’s capacity expansion outweighed its traffic growth in August as it forays into additional markets. As a result, load factor (percent of seats filled by passengers) declined.

Zacks Rank & Key Picks

United Continental carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space include SkyWest Inc. (NASDAQ:SKYW) , ANA Holdings Inc. (OTC:ALNPY) and Copa Holdings SA (NYSE:CPA) . Both SkyWest and ANA Holdings carry a Zacks Rank #2 (Buy), while Copa Holdings sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>