Shares of United Continental Holdings (NYSE:UAL) gained nearly 4% in early morning trading Tuesday after the airliner announced new efforts to generate revenues and save costs. In an investor call, United detailed a plan that is expected to bring the company an extra $3 billion by 2018.
One of United’s focuses is the efficiency of its current operations. The company said that it will implement new policies that should reduce the cost of irregular operations by minimizing delays and improving schedule quality, among other things.
United also highlighted the fact that its position in the domestic market has “eroded” over the past five years. In that time frame, its domestic consolidated capacity has slipped by 6% and its seat share in major hubs has slipped by 5%.
The airliner is hoping to remedy these issues by a number of in-flight changes, including the addition of new premium seats and elevated food and beverage offerings, as well as out of flight improvements to its United Club experience and mobile app.
Along with this strategic plan, United also updated its second-quarter expectations. The company now expects its quarterly passenger unit revenue to fall between 6.5% and 7.5% year-over-year compared to its previously announced expectation of a 6.5% to 8.5% drop.
United currently holds a Zacks Rank #5 (Strong Sell) based on the unfavorable earnings estimate revision activity it has seen over the past 60 days. However, if today’s updates change the opinions of the analysts, United could be back on a road to recovery.
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