United Airlines shares: Price analysis before buying or selling

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ISIN code: US9100471096

Ticker: NASDAQ: UAL

Index or market: NASDAQ

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Elements to consider before selling or buying United Airlines shares

Analysis N°1

First, watch for the growth of the airline industry in the US as well as events that can disrupt it like the health crisis did in 2020 and 2021.

Analysis N°2

In general, overall U.S. growth may also affect the profitability of the United Airlines Group.

Analysis N°3

We must also keep an eye on the tourism and travel industry and its growth.

Analysis N°4

Of course, it will also be necessary to monitor the competition in this sector of activity, which can be intense, particularly from low-cost airlines that cut prices and cause it to lose market share.

Analysis N°5

The commodity market and more specifically the price of fuel will also be an element you need to keep an eye on as it can have a relatively large influence on the costs and profitability of this business.

Analysis N°6

Lastly, it will also be necessary to monitor the strategic growth objectives and plans put in place by the group as well as the results actually achieved when the company's quarterly, half-yearly and annual financial statements are published.

Analysis before buying or selling United Airlines shares

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General presentation of United Airlines

A good knowledge of United Airlines is of course essential before speculating on the price of this stock. That is why we are now offering you a detailed presentation of this company and its activities.

United Airlines Group, also known as United Continental Holdings, is a U.S. holding company that includes United Airlines and Continental Airlines.

To better understand the United Airlines Group's business, it is possible to divide it into several segments according to the share of revenue they generate and in this way:

First of all, passenger transport is the main source of profit for the company, generating 91.6% of the company's turnover.
Next come the freight and mail activities, which account for 2.7% of the group's turnover.
Finally, the balance of the turnover, i.e. 5.7% of the turnover, comes from other ancillary activities such as aircraft maintenance and repair services, handling and crew training.

The group currently operates a fleet of 1,358 aircraft, divided between the United Airlines fleet of 777 aircraft, of which 635 are owned and 142 are leased, and the United Express, Continental Express and Continental Connection fleets of 581 aircraft.

It is also important to know the geographical distribution of the United Airlines group's revenues, which generate 62.3% of its revenues in the United States and Canada, 17.1% in the Atlantic, 11.9% in the Pacific and 8.7% in Latin America.

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The major competitors of United Airlines

We now propose you to discover who are the main opponents of the United Airlines group on its main market which is the American market. Indeed, here is a presentation of the main American airlines which are currently facing it:

Delta Airlines

Delta Airlines operates scheduled flights in the United States and around the world. Based in Delaware, Atlanta, the company merged with Northwest Airlines in October 2008. It is one of the world's leading airlines with 75,000 employees and serves 375 destinations in 66 countries.

American Airlines

This American airline operates domestic and international flights from various hubs or platforms based in the country. It is the world's largest airline and serves more than 350 destinations in about 50 countries with over 6,700 flights daily. The group is controlled by AMR Corporation and is a founding member of the OneWorld alliance. The group merged with US Airways in 2013.

Southwest Airlines

This is the first American low-cost airline, which was founded in 1971 in Dallas, Texas.

Jetblue Airways

This low-cost airline is based in Forest Hills, New York, USA, and operates domestic and international flights primarily from its hub at JF Kennedy International Airport.

Frontier Airlines

Finally, the Frontier Airlines Group is also a low-cost airline that operates domestic and international flights from its main hub at Denver Airport. The group currently serves 74 destinations in Costa Rica, Mexico, the Dominican Republic and the United States.

The major partners of United Airlines

Now we're going to look at the recent partnerships that United Airlines Group has put in place over the past few years.

Copa Airlines

Firstly, the group signed an agreement with Copa Airlines and Avianca in 2018 in a joint venture commercial agreement. This will provide customer, community and market benefits for air travel between the US and 19 countries in Central and South America. The three companies, by integrating their complementary networks in a collaborative revenue-sharing arrangement within this joint venture, plan to offer customers benefits including integrated and seamless service, new non-stop routes, additional flights on existing routes and reduced travel times.

Boom Supersonic

More recently, a partnership was set up with Boom Supersonic with the aim of designing a supersonic aircraft with a 2029 horizon for the first commercial flights. A flight between New York and London should thus be possible in 3h30 instead of twice as long as envisaged by Boom Supersonic. The plan is taking shape with the signing of this partnership with United Airlines, which is the first company to order aircraft with a commitment to purchase 15 aircraft called Overture and whose volume could even reach 50 aircraft.

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The factors in favour of a rise in the United Airlines share price:

Finally, we will review the strengths and weaknesses of United Airlines stock and specifically the pros and cons of this company.

As far as the group's strengths are concerned, the following elements stand out:

First of all, the group has a very strong operational network with more than 5,000 flights every day to 360 destinations on 6 continents.
The group also benefits from strong strategic alliances and is a founding member of the Star Alliance, which enables it to win many customers and gain notoriety.
United Airlines also enjoys a high level of brand awareness with a globally recognized brand name and strong industry recognition.
The productivity of the airline's employees is also high, which is an added bonus. In addition, the group's workforce is particularly large, with over 85,000 employees worldwide.
We also appreciate the United Airlines loyalty program, which is one of the strongest and most effective in the industry.
Finally, United Airlines Group offers an excellent customer experience, including in-flight entertainment and excellent branding with extensive advertising.

The factors in favour of a drop in the United Airlines share price:

Of course, United Airlines has not only qualities and strengths but also weaknesses that it is necessary to know before making the analysis. Here they are in detail:

Firstly, it should be noted that the group has been experiencing weaker financial performance in recent years due to continued losses and the Covid-19 crisis.
Another shortcoming of the group is its heavy reliance on third party service providers for customer service, maintenance, refuelling and other operations.
The airline's direct involvement in the September 11 terrorist attacks has also damaged its reputation and brand image.
Finally, unions can hinder the profitability of the United Airlines group in the long term.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Which airports does United Airlines fly into?

United Airlines is based at various airports in the United States and abroad. These include Chicago O'Hare International Airport, Denver International Airport, Antonio B Won Pat International Airport in Guam, George Bush Intercontinental Airport in Houston, Newark Liberty International Airport, San Francisco International Airport, Los Angeles International Airport, Washington Dulles International Airport and Paris Charles de Gaulle Airport.

What analysis should you use to forecast United Airlines' share price?

To understand how the United Airlines share price is likely to evolve in the more or less long term, it is necessary to perform several types of analysis of this stock. First, we will set up a complete technical and graphical analysis of this stock with the main trend and volatility indicators but also a quality fundamental analysis with the study of the news.

Which broker to buy or trade United Airlines shares with?

If you want to invest in the United Airlines share price or buy it online, you can do so with some brokers. But you should first check the reliability of this broker with its official regulations or make sure that it offers the stock of this airline and what are its transaction costs.

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