United Continental Holdings Inc (UAL) Makes a Big February Comeback: Delta Air Lines, Inc. (DAL), US Airways Group, Inc. (LCC)

These one-time effects hurt United in February (and, to a lesser extent, March) last year, creating an easier comparable figure to beat. Last month, United’s completion factor dropped to 98% from 99.2% in 2012, creating a unit revenue tailwind. United also shrank capacity by 8.4% (approximately 5% adjusting for the leap year); flying fewer seats tends to boost unit revenue, but it also increases unit costs. Since United plans to keep full-year capacity flat to down 1%, capacity reductions won’t provide such a significant tailwind going forward.

Conclusion
United’s performance last month was certainly stronger than expected, and the company should be given credit for that. However, I am still very skeptical about the company’s overall performance. There were several one-time factors that boosted United’s results last month, and given its track record, the company needs to post several months of strong performance before investors can be more confident that United is on a sustainable upward trajectory.

The article United Makes a Big February Comeback originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of Delta Air Lines. He’s also short March $14 calls for Delta Air Lines and short shares of United Continental Holdings (NYSE:UAL). The Motley Fool recommends Southwest Airlines.

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