United Continental Records Weak Traffic Figures For April

United Continental Holdings, Inc.’s (NYSE:UAL) wholly owned subsidiary, United Airlines, reported dismal traffic figures for April. Consolidated traffic, measured in revenue passenger miles (RPMs), was 18.47 billion, up 5.1% from the year-ago figure.

On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) climbed 6.1% to 22.43 billion. However, load factor (percentage of seats occupied by passengers) declined 80 basis points (bps) to 82.3% as capacity expansion outpaced traffic growth. This decrease in the metric indicates inefficient capacity utilization, inducing vacant seats.

At the end of the first four months of 2018, the airline registered a 4.8% rise in RPMs to 68.32 billion while ASMs rose 4.3% to 84.41 billion, both on a year-over-year basis. Thus, load factor expanded 40 bps to 80.9%.

The company posted an on-time performance of 73% and a completion factor of 99.8% for the month.

The company’s continued expansion efforts are encouraging. It recently raised its stake in the Brazilian carrier, Azul S.A. (NYSE:AZUL) , to 8% from the previous 3.7%. Through this initiative, the airline aims to offer its customers with more connectivity options between the United States and Brazil. (Read more: United Continental Arm Ups Azul Stake to 8%, Shares Up)

Zacks Rank & Key Picks

United Continental carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the airline space are SkyWest, Inc. (NASDAQ:SKYW) and Cathay Pacific Airways Ltd. (OTC:CPCAY) . While SkyWest sports a Zacks Rank #1 (Strong Buy), Cathay Pacific Airways carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest and Cathay Pacific Airways have rallied more than 56% and 14%, respectively, in a year.

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