United sees traffic decline of 0.8%, modest Q4 loss

[nwafan20]

United Airlines December Traffic Declines 0.8%; Sees Modest Q4 Operating Loss

Friday, January 05, 2007; Posted: 06:20 PM


(RTTNews) - United Airlines, a unit of UAL Corp. (UAUA | charts | news | PowerRating), said Friday that its December traffic fell 0.8% from last year as its operations were affected by severe winter snowstorms in its two largest hubs, Chicago and Denver, leading to cancellation of several flights. The company also said it expects to book a modest operating loss for the fourth quarter.

The airline reported a December passenger load factor of 79.6%, down from 80.0% in the same period last year.

The airline's December traffic decreased 0.8% to 9.38 billion revenue passenger miles from 9.45 billion revenue passenger miles in the prior year period, while capacity decreased 0.3% to 11.77 billion available seat miles from 11.81 billion available seat miles a year ago.

During December, severe winter snowstorms affected the airline's operations in its two largest hubs, Chicago and Denver. United Airlines and United Express cancelled about 3,900 flights in Chicago and in Denver, the company said.

For the year to date period, the airline reported a passenger load factor of 82.1%, up from 81.5% last year.

Year to date traffic increased 2.9% to 117.25 billion revenue passenger miles from 113.90 billion revenue passenger miles in the year-ago period, while capacity increased 2.1% to 142.78 billion available seat miles from 139.81 billion available seat miles last year.

Additionally, the company said it estimates the effects of the snowstorms in December reduced fourth quarter mainline capacity growth by 0.6% to 1.5% and consolidated capacity growth by 0.6 point, which negatively impacted the company's fourth quarter cost per available seat mile excluding the cost of fuel.

The company estimates that the snowstorms could trim fourth quarter revenue by about $40 million, and now expects to book a modest operating loss for the quarter.

Analysts polled by First Call / Thomson Financial currently expect the company to earn $0.29 per share on revenue of $4.83 billion for the fourth quarter.

UAL closed Friday's regular trading session at $46.55, down 80 cents or 1.69% and lost an additional 50 cents or 1.07% in after hours trading. The stock is trading in the range of $21.90 to $47.45 over the last year.

Copyright(c) 2007 RealTimeTraders.com, Inc. All Rights Reserved

[T-Bird76]

Yeah so much for the weather proof airport.... What a joke Denver is. Billions spent and the dam airport can't live up to its promises.

[USAF Pilot 07]

Yeah so much for the weather proof airport.... What a joke Denver is. Billions spent and the dam airport can't live up to its promises.

Tommy, to be fair, this past blizzard was the worst Denver has seen since the 1990's, before DIA was open. IMHO although East Coast snowstorms can be bad, you haven't lived through a snowstorm until you've been through one somewhere in the Rockies. No airport in the world can handle snowfall rates of 2-4 inches per hour, with winds sustained over 40MPH, gusting to over 60MPH. This is what DIA was experiencing during the previous "blizzard".

Now all that being said, I'm not a huge fan of DIA, due to the fact that it's in the middle of nowhere, it takes a long time to get your bags, and the airport is too large for a city that size. I will say that though that I have flown into DIA during snowstorms, that would either shut down LGA or cause significant delays at LGA. I remember once, either last year, or the year before, landing at DIA, and seeing nothing but snow, and wondering how it was possible that we could land in such conditions.

The problem with DIA is its size. It is simply too big of an airport. While experts expect the city to grow around the airport, this won't happen for at least another 10-15 years, and honestly I don't know if the size of DIA will ever be justified by Denver population. Also, during a snowstorm, like the one experienced before Christmas, it takes plows too long to clear the taxiways leading to the runways. But the biggest problem is wind. When you have winds sustained at 40MPH, gusting higher, you physically cannot keep an area plowed and free of snow; especially if that area is wide open.

Another problem, is that the only access road to DIA is Pena Blvd. During bad snowstorms, Pena Blvd can become impassible, even with the "wind gates", (as seen in the last blizzard). If people can't travel on Pena Blvd, they cannot reach the airport. This ultimately leads to travel problems.

While I'm not a huge fan of DIA because of factors such as location, bag processing etc.. I will say that the only times I've been delayed into DIA were during the summer, when thunderstorms were located over, or near the field. While I have been delayed into numerous airports, namely LGA and JFK due to weather events such as wind, rain and light snow (to name a few) these factors have never resulted in a significantly delayed flight into DIA. Also, I've been delayed into LGA several times due to "traffic flow" problems, but this has never been a problem at DIA, who hosts both UAL and F9 as hubs.

Anyway, just my 2 cents....