Boston, MA 06/12/2014 (wallstreetpr) – United Continental Holdings Inc (NYSE:UAL) experienced declining traffic at the beginning of 2014, due to severe winter weather conditions. So, the airline experienced pressure to generate revenue that reduced the passenger revenues per available seat mile (PRASM).
But, the capacity is gradually increasing with favorable weather conditions and growing traffic in the international routes. Recently, the airline reported the operating statistics for the month of May 2014 and year-to-date results for FY2014.
Highlights
During the month of May 2014, consolidated revenue passenger miles (RPM) increased by 1.2% due to increasing traffic over Latin (+9%), Atlantic (+1.7%) and Pacific (1.9%) route compared to May 2013. The increasing RPM over the month offset the declining traffic from the Atlantic and Pacific route in January and February and reported a consolidated traffic of 0.2% till date.
The traffic results include both mainline and regionally operated flights during the months. RPM for mainline increased by 1.7% that partly offset the 1.8% decline in traffic in regional route.
The increasing traffic over international route rose the available seat miles (ASM) by only 0.2% as the capacity in the domestic route remained low. Therefore, it compressed the overall year to date capacity.
Accordingly, the consolidated load factor for the month increased by 0.9 percentage points to 85.3% (May 2013: 84.4%) and year to date load factor by only 0.4 percentage points to 82.4%.
Hope to recover
The airline is yet to recover from the consolidation with Continental Airlines and the increasing debt repayments and higher investment continues to affect its cash flow generation capacity. In addition, the decreased traffic due to bad weather further increases the PRASM pressure.
However, United Continental Holdings Inc (NYSE:UAL) believes that the traffic in the international continue to increase in the coming quarter so that it will help the airline to meet its capacity and generate revenue.
