United Continental Holdings: A must-know company overview

United Continental Holdings: A must-know company overview (Part 1 of 14)

United Continental Holdings: A must-know company overview

Company overview

United Continental Holdings Inc. provides transportation services to passengers and cargo. It’s a holding company with United Airlines (UAL) as its wholly owned subsidiary. On October 1, 2010, UAL Corporation changed its name to United Continental Holdings Inc. after merging with Continental. The company has a comprehensive global network covering 369 destinations worldwide in 59 countries. It derives ~58% of its revenue from domestic operations and operates from eight major hubs in the U.S., including airports in Chicago, Denver, Houston, Los Angeles, Newark, San Francisco, and Washington, as well as from Guam International Airport and Narita International Airport in Tokyo.

Apart from the domestic market, United has a strong presence in fast-growing countries like China in the Pacific region and Atlantic region. The company won “Best American Airline serving China” in the 2013 Business Traveller China Awards. It’s one of the 26 members of Star Alliance, which offers more than 18,000 daily flights to 193 countries worldwide.

1.1.Price performanceEnlarge Graph

United’s share price performance

United Continental Holdings Inc. is listed on the New York stock exchange. United (UAL) has provided good returns to its shareholders, as its share price has increased more than 100%, to $43.66 in June 2014 from an annual average of $21 in 2012. In the same period, the S&P 500 Index has increased 35%, to $1,962 from $1,379, and the IVT Index rose 51%, from $89 to $147. Clearly, United has outperformed the market and the Dow Jones transportation ETF (IVT). We also find that all major airline company stock prices have performed well in this period, as Delta’s (DAL) share increased 247%, American Airlines’ (AAL) 244%, Southwest’s (LUV) 164%, and JetBlue’s (JBLU) 72%.

The Realist Discussions

  • diskman

    Long article but it offers no real insight into the poor performance of the airline. Have you actually flown UAL? If so you would know why poor operational management has resulted in a severely degraded customer experience. I disagree with the significance of split-scimitar deployment. All the other majors too are aggressively implementing cost containment with other approaches. UAL has no advantage here and on the other hand is hampered by low revenue growth and therefore shall continue to underperform. Poor execution and leadership is to blame – not a highly unionized workforce or other elements of the company.

  • Too Many

    This article is more of a consolidated source of information; and not wholly accurate one at that. It also doesn’t give much insight into the lowering of quality/services, or how the changes to United have come under Smisek’s leadership, which has shown to be reflective of a Continental hub fortress mentality with little understanding of market competition that United is under.

  • W.D.

    As a 30 year employee, my take on this article is also lots of words but no mention of industry-trailing management totally incapable of managing the combined United-Continental. UAL is lagging DAL in every metric and even the new AMR is already leading us. Combined with totally demoralized employees, UAL’s future is increasingly unsure under this inept management led by Smisek.

  • jettech

    It always seems that anytime any one talks about the CAL-UAL merger they always blame it on Continental. If you remember CAL was turning a profit at the time of the merger. While UAL was still coming out of bankruptcy. Larry Kellner did not think that it was a good time to merge and was pushed out as CEO. CAL was a good airline they received many awards. UAL at the time had the worst on-time record, customer satisfaction rating, labor relations and so on.
    So until the Legacy UAL employees come back to reality and realize that you can’t be bitter at the world the rest of your lives, or you can put that behind you and treat our customers with dignity and respect. Just maybe we can become a great airline again.
    We can still fight for better pay and benefits, and fly an on-time airline that the public wants to fly on, or we can drive our customer base away, and we will not have an airline to fight with.
    Yes, UAL really needs to trim the fat. I mean we have a VP of Fuel Burn. Really? Fuel Burn a job that a senior engineer can do they assigned a VP. That’s just creating a job someone just so they can have a job. We have so much upper management it’s ridiculous. We could probably cut 3/4’s of them.
    Basically what UAL needs at this point is a new Management Team starting from the CEO. Someone with a vision that can move this company in the right direction.