October, 2021

Can United Airlines Capitalize on Its Lack of Controversy? $UAL

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Can United Airlines Capitalize on Its Lack of Controversy? $UAL

Up to this point, United Airlines ($UAL)  has lagged behind its peers in terms of revenue recovery. 
Last quarter’s earnings results for the U.S. passenger airline industry showed the largest increase in revenue since the pandemic slump began in Q1 of 2020…But, $UAL showed the least impressive growth vs. pre-pandemic levels.

2021 Q2 revenue results showed UAL in last place:

  • Delta Airlines ($DAL): -27% vs. 2019
  • Southwest Airlines ($LUV): -33% vs. 2019
  • American Airlines ($AAL): -37% vs. 2019
  • United Airlines ($UAL): -52% vs. 2019

However, LikeFolio data shows that UAL is taking advantage of its competitors’ woes.

Southwest and American Airlines have been dealing with massive PR problems in recent months, which has helped elevate United’s Happiness levels to the top of the pack.

Although DAL maintains a slight lead, UAL’s current Consumer Happiness level reflects the management team’s proactive approach to COVID-19 vaccination.

While LUV and AAL have been embroiled in controversy, United has already vaccinated 99.7% of its 67,000 employees, thanks to being the first airline to require such from its staff.
The move has effectively removed UAL from contention.

In addition to relatively high levels of Consumer Happiness, UAL continues to show signs of booking recovery, with Purchase Intent Mentions trending +31% QoQ and +60% YoY on a 90-day moving average.

The recent Demand growth is somewhat overstated due to swirling vaccine controversy (even UAL isn’t completely immune), but this recovery mirrors TSA checkpoint data, which showed a +128% YoY increase in passenger throughput in the past 30 days.

Furthermore, we’re seeing growth in travel-related behaviors…Particularly business travel, which has recorded the most significant improvement: +52% YoY

Leisure travel and international travel continue to lag – We’ll be keeping a close eye on these trends as Holiday travel ramps up in Q4.

Overall, United is one of the leading airlines based on LF data, rivaled only by Delta.

Keep an eye out for mentions of rising fuel prices hurting the company’s bottom line (this goes for all the airlines reporting this week).

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