United Continental Holdings Inc.’s (UAL) Aug 2013 airline traffic – measured in revenue passenger miles or RPMs, which imply revenue generated per mile per passenger – dropped 0.5% year over year to 19.51 billion. Consolidated capacity (or available seat miles/ASMs) for the month was 22.32 billion, down 1.4% from Aug 2012.
The load factor (percentage of seats filled by passengers) improved to 87.4% from 86.6% in the same month, last year. Passenger revenue per available seat mile (:PRASM) is estimated to have increased 3.5% to 4.5% year over year. According to the company, Yen depreciation impacted the consolidated PRASM by a percentage point during the month. The company registered a completion factor of 99.4%, with nearly 79.3% of the flights on schedule.
For the first eight months of 2013, United Continental generated RPMs of 139.33 billion (down 1.3% year over year) and ASMs of 165.53 billion (down 3.0% year over year). Load factor was 84.2%, reflecting growth of 150 basis points.
Despite these headwinds, United is concentrating on improving its business prospects through a number of initiatives. The carrier is concentrating on redesigning its airport club rooms to offer a restful waiting time for customers and recently unveiled its brand-new United Club lounge in Terminal 2 at San Diego International Airport. Additionally, United got the approval from the U.S. Department of Transportation to start transcontinental services from San Francisco to Chengdu in China, which will expand its operations in the Asia Pacific region.
However, Delta Airlines Inc.’s (DAL) recent tie-up with Virgin will give its archrival more control over the transatlantic route with nine daily roundtrip flights across the region. Other risk factors such as fuel price instability, high non-fuel expenses and sluggish economic conditions are also detrimental to United’s operations.