United Airlines has faced its fair share of challenges during the last few years, but for now is feeling buoyed buy its domestic networks strategy, positive corporate revenue growth in 2Q2018.
- United Airlines reports corporate revenues increased by double digits in 2Q2018 outpacing the airline’s topline revenue growth of 7.7% for the quarter;
- The US major says growth driven by strong corporate performances in the energy and technology sectors rather than share shift from other airlines;
- United has raised its full year EPS forecast for 2018 – its US network peers Delta and American have both cut their earnings forecast in light of higher fuel prices.
The airline’s corporate revenues increased by double digits in 2Q2018, with executives pointing out that performance outpaced the airline’s topline revenue growth of 7.7% for the quarter.
United recently fielded investor questions over whether its corporate performance in the quarter signaled a share shift from other airlines, but United executives stated it was not a share shift story, citing strong corporate performances in the energy and technology sectors.
The airline’s second largest base by departing frequencies is Houston Intercontinental, and the energy sector is a major driver of the region’s economy. A couple of years ago when fuel prices were markedly lower, United battled significant weakness in corporate revenues from the energy sector.
The airline is also citing positive results from the rebank from its hubs in Chicago and Houston Intercontinental designed to shore up higher yielding connecting revenue.
Recently, company executives stated that one of the goals in rebanking its mid-continent hubs in Houston and Chicago O’Hare was providing customers from short haul cities with more connecting options.
During 2Q2018, in those two hubs combined, United posted a 10% increase in both large medium to small city revenue and an almost 20% increase in small city revenue.
United has raised its full year EPS forecast for 2018 compared with its two large US global network peers Delta and American, which have cut their earnings forecast in light of higher fuel prices. After years of working to find the right strategy, United for now, appears on an upswing.