United Continental Holdings: A must-know company overview (Part 5 of 14)
United Airlines’ scheduled passenger kilometers
United Airlines ranks first in the combined domestic and international market when ranked by scheduled passenger kilometers. However, in the international market, Emirates leads with 68,013 million more passenger kilometers than United. Similarly, in the domestic region, Delta Air Lines (DAL) leads with 2,980 million more passenger kilometers, followed by United (UAL) and Southwest Airlines (LUV). American Airlines, U.S. Airways, and JetBlue (JBLU) are at the fifth, sixth, and ninth positions, respectively, in the domestic market.
Improvement in yield required to increase passenger revenue per available seat mile
Although United ranks first in scheduled passenger kilometers, lower yield is pushing passenger revenue per available seat mile (or PRASM) down. United’s first quarter PRASM and yield decreased 2%, as 35,000 flights were canceled owing to bad weather conditions. However, in the second quarter, the company expects PRASM to increase by 1% to 3% through:
- Planned changes in the revenue management process, including taking fewer early bookings and reserving seats for high-yielding bookings
- Selling more premium cabin seats
- Matching aircraft size to demand
United has also invested in products and services to enhance customer experience in its aircraft. It has installed satellite-based Wi-Fi on 230 aircrafts and expects to increase this to 450 aircraft by end of the year. It has also launched a new mobile app that’s useful for checking flight status et cetera and generates $1 million revenue per day.
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