MINNEAPOLIS (AP) - United Airlines parent UAL Corp. reports first-quarter results on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: There’s really one big question for every airline this quarter: How is demand holding up? Airlines have been cutting capacity. United has said it reduced capacity 11.7 percent during the first quarter, but many airlines have seen demand fall faster than they’ve been able to remove seats. On Wednesday, American Airlines AMR Corp. reported that revenue fell 15 percent for the quarter, and that corporate travel was especially weak. On Thursday Southwest Airlines Co. said corporate travel deteriorated in February and hasn’t recovered. None of that bodes well for United.
The International Air Transport Association reported this week that premium travel across the Pacific _ a key market for United _ fell 27.3 percent in February versus the same month last year.
BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect United to lose $4.45 per share for the first quarter, on revenue of $3.8 billion.
ANALYST TAKE: When Southwest Airlines reported another quarterly loss on Thursday, UBS Investment Research analyst Kevin Crissey noted that Southwest’s second-quarter passenger revenue outlook was negative. “Readthroughs to other airline stocks are not positive as revenue trends are key industry issue,” he wrote.
WHAT’S AHEAD: United has said its fuel hedges, which have been losing money, will shrink in size as the year goes on. Its collateral requirement drops to $340 million in the second quarter and reaches $30 million by fourth quarter, based on March 13 oil prices.
STOCK PERFORMANCE: UAL shares traded above $12 soon after the quarter began, but hit a low for the quarter of $3.66 last month. Over the past 52 weeks it has traded between $2.80 and $23.52.
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