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United Continental’s Capacity Growth: In Line with Higher Target

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United Continental’s capacity

In November 2017, United Continental’s (UAL) capacity rose 5.1% YoY (year-over-year). The average growth for the quarter is close to 4.2% YoY. Year-to-date (or YTD) as of November 2017, UAL’s capacity has risen by 3.4% YoY. That growth is almost twice the growth in 2016. The airline’s capacity increased 1.4% YoY in 2016.

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Domestic continues high growth

The airline’s domestic region continues to see high capacity growth. For November 2017, the region grew 6.3% YoY. YTD as of November 2017, domestic capacity has increased 4.7% YoY.

International is also growing

UAL’s international capacity has also increased 3.5% YoY in November 2017. The Latin American and Atlantic markets both showed good growth. The Latin American region’s capacity improved 9.1% YoY in November 2017, while the Atlantic region’s capacity improved 5.8% YoY and the Pacific region’s capacity declined 1.5% YoY.

YTD in November 2017, international capacity has grown 1.9% YoY.

Outlook

United Continental is aiming at capacity growth of 2.5%–3.5% in 2017. Earlier, its capacity growth target was 0%–1%. The change in its capacity growth target is because UAL has decided to compete aggressively against low-cost carriers.

For an update on rival Delta Airlines’ (DAL) capacity, be sure to read Delta Air Lines Capacity Growth on Track to Meet 2017 Guidance. American Airlines (AAL) and Alaska Air (ALK) haven’t reported their November numbers yet.

In the next part of this series, we’ll find out if United Continental has enough demand to utilize the extra capacity.

Investors can gain exposure to United Continental by investing in the First Trust Nasdaq Transportation ETF (FTXR), which has 3.6% of its portfolio in UAL.

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