uploads/2016/12/ASM-2.png

Will United Continental’s Capacity Continue to Grow in November 2016?

By

Updated

United Continental’s capacity

In November 2016, United Continental Holdings’ (UAL) capacity grew by 1.6% YoY (year-over-year). YTD (year-to-date) as of November, capacity grew 1.3%, which is lower than its growth in 2015. In fiscal 2015, UAL’s capacity grew by 1.5%.

Airline capacity is measured using ASM (available seat miles). ASM is calculated as the number of seats available multiplied by the number of miles.

Article continues below advertisement

Domestic

UAL continues to add capacity across all markets. In November 2016, UAL’s domestic region grew 4.5% YoY, and domestic capacity has risen 2.9% YTD. In fiscal 2015, domestic region capacity grew at an average of 2.5% YoY.

Latin America strength

UAL’s international capacity grew 0.7% YoY in November 2016. Its Latin American market capacity, which was initially expanding, fell 6% YoY in November 2016, and the Atlantic region fell 5% YoY. The Pacific region was the only region that showed growth, reporting a 10.5% YoY rise in November 2016. YTD in August 2016, international capacity had grown by 1.1%.

Outlook

United expects capacity growth of 1%–2% in fiscal 4Q16. For fiscal 2016, it expects a capacity growth of 1.2%–1.4%. The company plans to add capacity in high-growth domestic and Pacific markets while cutting down capacity in challenging regions like Latin America and the Atlantic.

Notably, UAL makes up 1.6% of the total holdings of the PowerShares Dynamic Market Portfolio ETF (PWC).

For a look at the operational performances of Delta Air Lines (DAL), Alaska Air Group (ALK), American Airlines (AAL), and Southwest Airlines (LUV), check out Market Realist’s Airlines Page.

In the next part, we’ll evaluate how well UAL has been able to fill all these extra seats.

Advertisement

More From Market Realist