- Oct 18, 2011
- 26
- 14
UAL's reduction of capacity is forcing RASM up but it is coming with much larger cost increases, indicating that UA cannot get costs out as it pulls capacity - and still faces increasing non-fuel costs as it settles labor agreements.
UA stock fell further today than most other airlines.
"In a filing with the Securities and Exchange Commission, United said Thursday that it anticipates passenger revenue for each seat flown one mile, a commonly used gauge of pricing power, would rise 5.4% to 6.4% for the quarter.
"But it also sees Q1 costs per mile rising between 11.4% and 12.4%, up from its earlier 8% to 9% forecast."
"However, from an earnings perspective, the severe cost increases that United is experiencing outweigh the company's positive revenue momentum. On average, analysts currently expect United to lose $0.85 per share in Q1. Based on the company's updated revenue and cost guidance, it is almost certain that the company will miss that earnings target. If all of the revenue and cost figures hit the most favorable numbers consistent with the new guidance, United Continental will lose $0.90 per share in the quarter. On the other hand, at the unfavorable end of guidance, United could lose as much as $1.52 per share."
- quotes from Investor's Business Day and Motley Fool.
Airline route also says that UA will not be flying SFO-TPE this year.
UA stock fell further today than most other airlines.
"In a filing with the Securities and Exchange Commission, United said Thursday that it anticipates passenger revenue for each seat flown one mile, a commonly used gauge of pricing power, would rise 5.4% to 6.4% for the quarter.
"But it also sees Q1 costs per mile rising between 11.4% and 12.4%, up from its earlier 8% to 9% forecast."
"However, from an earnings perspective, the severe cost increases that United is experiencing outweigh the company's positive revenue momentum. On average, analysts currently expect United to lose $0.85 per share in Q1. Based on the company's updated revenue and cost guidance, it is almost certain that the company will miss that earnings target. If all of the revenue and cost figures hit the most favorable numbers consistent with the new guidance, United Continental will lose $0.90 per share in the quarter. On the other hand, at the unfavorable end of guidance, United could lose as much as $1.52 per share."
- quotes from Investor's Business Day and Motley Fool.
Airline route also says that UA will not be flying SFO-TPE this year.
