United Continental Gives Airlines a Lift

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By Trey Thoelcke Published
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United Continental Holdings Inc. (NYSE: UAL) offered a lift to airline stocks on Thursday after announcing late Wednesday that its passenger revenue per available seat mile (PRASM) increased by 3.5% in the second quarter. That exceeded the top-end of 3% from its previous forecast. United also said available seat miles in June increased 0.8% year-over-year, while consolidated load factor fell 0.6 point to 87.1% for the month.

Southwest Airlines Co. (NYSE: LUV) also said on Wednesday that it expects the growth in its PRASM to be greater than 8%, relative to the second quarter of last year. And American Airlines Group Inc. (NASDAQ: AAL) said its second-quarter PRASM growth is expected to be between 5.5% and 6.5%.

United Continental shares were up more than 11% in the noon hour Thursday to $44.55, in a 52-week range of $27.32 to $49.20. American shares were up more than 2% to $42.94, while Delta Air Lines Inc. (NYSE: DAL) shares were almost 2% higher in early trading to $37.63.

Shares of the four airlines featured here had been sliding in the past month, with United leading the way there too with a pullback of about 16%. Some analysts have seen the recent pullback as an inviting entry point for airline stocks, and we wondered recently whether Southwest had become the best airline stock for investors. It now has less than 6% upside potential, if the consensus mean target is to be believed. Note though that United has more than 16% upside potential, if the analysts are correct.

ALSO READ: Boeing 20-Year Forecast Calls for $5.2 Trillion Plane Market

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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