United Airlines To Boost October Flight Capacity To 40%

United Airlines To Boost October Flight Capacity To 40%

United Airlines is gradually adding capacity with plans to fly 40% of its full schedule in October amid hopes of improvement in leisure travel. The company expects to fly 34% of its schedule in September.

On September 4, United Airlines (UAL) announced that it is resuming services to 50 domestic routes and 14 international routes in October. The domestic routes include 37 from the airline’s Chicago, Denver and Houston hubs.

The air carrier is adding additional flight services to 14 leisure destinations in Hawaii, Florida and Mexico.



According to ADARA Traveler Trends Tracker, domestic air and hotel bookings for future travel have been slowly but steadily improving throughout the summer. Bookings were down 64% Y/Y at the end of August compared to 73% Y/Y in early July.

The COVID-19 pandemic has been disastrous for airline companies as travel restrictions and growing virus cases have brought the industry to a standstill and led to losses of billions of dollars. Airlines have had to implement cost-cutting measures by cutting jobs and streamlining services in an effort to survive through the aviation crisis.

Last week, United Airlines announced its plan to furlough over 16,000 jobs effective October 1 as the pandemic continues to weigh on global travel plans. Rival American Airlines also warned last month that it will furlough 19,000 jobs on October 1 as federal aid is running out.  

In an attempt to encourage passengers to book tickets, United Airlines decided to permanently cancel the $200 flight ticket change fees charged for travel within the US. (See UAL stock analysis on TipRanks).

On September 2, Berenberg analyst Adrian Yanoshik reiterated his Hold rating UAL stock while downgrading American Airlines and Delta Airlines and upgrading Southwest Airlines. Yanoshik, cut his industry revenue estimates by 20% for the second half of this year and by 15% for 2021.

The analyst estimates the aviation industry will be able to resume 60% of last year’s traffic levels by the end of 2021, with long-haul traffic down 50% of pre-crisis levels.

The Street has a cautiously optimistic Moderate Buy consensus for UAL based on 5 Buys, 8 Holds and no Sells. Year-to-date, the stock has plummeted 57% with the average analyst price target of $42.70 indicating upside potential of 11.8% over the coming year.

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The post United Airlines To Boost October Flight Capacity To 40% appeared first on TipRanks Financial Blog.

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