Go Back  Airline Pilot Central Forums > Airline Pilot Forums > Major > United
United Airlines: Major Warning That Wasn't >

United Airlines: Major Warning That Wasn't


Notices

United Airlines: Major Warning That Wasn't

Old 03-03-2020, 03:24 AM
  #1  
Follower
Thread Starter
 
Joined APC: Dec 2019
Posts: 30
Default United Airlines: Major Warning That Wasn't

United Airlines: Major Warning That Wasn't

https://seekingalpha.com/article/4328974-united-airlines-major-warning-wasnt?utm_source=smartnews.com&utm_medium=referral
———
SmartNews
https://bit.ly/smartnews-app



Anybody following United Airlines Holdings (UAL) this week probably thinks the airline issued a major warning. The stock is now down over $30 from the highs just a few months ago, and the company issued updated guidance back on February 24. Naturally, an airline cutting 2020 guidance would only be logical in the face of the coronavirus cutting travel demand and shutting down certain Asian routes, but the statements from the airline weren't much of an actual cut to guidance.Despite the lack of a real warning from United Airlines, the airline sector has been absolutely crushed over the last few weeks. United Airlines is the domestic airline most impacted, with 40% of revenues from transcontinental flights, while Delta Air Lines(DAL) and American Airlines Group (AAL) are at 30%.

Another major reason for the lack of a warning is the impact of fuel. For 2019, United Airlines spent $9 billion on fuel costs, or over 20% of revenues. With oil collapsing and the airline not flying 5% of capacity, the fuel savings will be enormous.
Pivotman is offline  
Old 03-03-2020, 03:53 AM
  #2  
Follower
Thread Starter
 
Joined APC: Dec 2019
Posts: 30
Default Link

https://seekingalpha.com/article/4328974-united-airlines-major-warning-wasnt
Pivotman is offline  
Old 03-03-2020, 03:56 AM
  #3  
Follower
Thread Starter
 
Joined APC: Dec 2019
Posts: 30
Default Oil

Oil in $47-50 WTI/Brent range.

For an airline the size of United, a $1 drop in the price of oil = $100,000,000 in savings.

You may recall the United was profitable in 2014 with oil hovering in the $100//barrel range.
Pivotman is offline  
Old 03-03-2020, 03:58 AM
  #4  
Follower
Thread Starter
 
Joined APC: Dec 2019
Posts: 30
Default Zacks

https://www.zacks.com/investment-newsletter.php?arc=20200303

Stocks soared yesterday with the Dow, S&P, and Nasdaq all recording their biggest point gain ever.

Of course, for perspective, the Dow also saw their biggest point loss just last week.

For even more perspective, the largest percentage gain for the Dow dates all the way back to 3/15/1933 when it surged 15.34%, in spite of the point gain only being 8.26 points.

So while yesterday's 1,293.96 points was impressive, percentage-wise, it was 'only' 5.09%.

Nonetheless, it was still an impressive day all the way around, and one of the biggest moves in recent history.

As I said yesterday morning, last week's pullback seemed way overdone. And the monster rally that ensued proved that to be true.

So where do we go from here?

I still think there's more upside to go.

And I think that because the market had been pricing in the worst case scenario where everybody gets sick, worldwide commerce grinds to a halt, and companies make no money.

But that's just not the reality of the situation.

Stocks soared yesterday with the Dow, S&P, and Nasdaq all recording their biggest point gain ever.

Of course, for perspective, the Dow also saw their biggest point loss just last week.

For even more perspective, the largest percentage gain for the Dow dates all the way back to 3/15/1933 when it surged 15.34%, in spite of the point gain only being 8.26 points.

So while yesterday's 1,293.96 points was impressive, percentage-wise, it was 'only' 5.09%.

Nonetheless, it was still an impressive day all the way around, and one of the biggest moves in recent history.

As I said yesterday morning, last week's pullback seemed way overdone. And the monster rally that ensued proved that to be true.

So where do we go from here?

I still think there's more upside to go.

And I think that because the market had been pricing in the worst case scenario where everybody gets sick, worldwide commerce grinds to a halt, and companies make no money.

But that's just not the reality of the situation.

According to the World Health Organization (WHO), the coronavirus outbreak seems to have peaked in China, where it all began.

And Apple just last week said that their China operations were close to getting back to normal.

But the virus has not yet peaked in other parts of the world. And there's uncertainty as to how severe of an impact we will see in the U.S.

So things could get worse. And from an economic standpoint, that likelihood increases the longer travel restrictions and supply chain disruptions continue.

But so far, the economic impact has been relatively small in the U.S. And with our economy in great shape (above trend GDP, unemployment at a 50-year low, household income at a 20-year high, consumer confidence near record highs, etc.), we are in a strong position to handle it.

That was underscored by two distinctly different manufacturing reports yesterday: China's manufacturing activity plunged to its lowest level on record with a reading of 40.3, according to the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI), vs. the U.S. reading of 50.7 for the PMI Manufacturing Index. (A reading above 50 shows expansion whereas a reading below 50 indicates contraction.)

China has clearly gotten pummeled, but could soon be on the upswing.

In spite of the massive disruptions to China's economy and supply chains that support companies around the world (including in the U.S.), we have fared much better.

It's still early. But the above contrast shows why stocks were grossly oversold, and why a rebound at this juncture was warranted.

In the meantime, news can move the market in this environment.

But keep your eye on the bigger picture. And at this time, it would appear that any dip in economic activity should only be transitory.

And when the worst of this outbreak is finally behind us, stocks are expected to soar as pent-up economic demand is unleashed.

See you tomorrow,e close to getting back to normal.

But the virus has not yet peaked in other parts of the world. And there's uncertainty as to how severe of an impact we will see in the U.S.

So things could get worse. And from an economic standpoint, that likelihood increases the longer travel restrictions and supply chain disruptions continue.

But so far, the economic impact has been relatively small in the U.S. And with our economy in great shape (above trend GDP, unemployment at a 50-year low, household income at a 20-year high, consumer confidence near record highs, etc.), we are in a strong position to handle it.

That was underscored by two distinctly different manufacturing reports yesterday: China's manufacturing activity plunged to its lowest level on record with a reading of 40.3, according to the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI), vs. the U.S. reading of 50.7 for the PMI Manufacturing Index. (A reading above 50 shows expansion whereas a reading below 50 indicates contraction.)

China has clearly gotten pummeled, but could soon be on the upswing.

In spite of the massive disruptions to China's economy and supply chains that support companies around the world (including in the U.S.), we have fared much better.

It's still early. But the above contrast shows why stocks were grossly oversold, and why a rebound at this juncture was warranted.

In the meantime, news can move the market in this environment.

But keep your eye on the bigger picture. And at this time, it would appear that any dip in economic activity should only be transitory.

And when the worst of this outbreak is finally behind us, stocks are expected to soar as pent-up economic demand is unleashed.

See you tomorrow,
Pivotman is offline  
Old 03-03-2020, 08:06 AM
  #5  
Banned
 
Joined APC: May 2014
Position: Tom’s Whipping boy.
Posts: 1,182
Default

Troll........................
BMEP100 is offline  
Old 03-03-2020, 09:52 AM
  #6  
Gets Weekends Off
 
Joined APC: Jan 2017
Position: Pilot
Posts: 522
Default

As of 2 p.m. eastern UAL stock is down another 4% today alone, down about 39% from the high in 2019.
AntiPeter is offline  
Old 03-03-2020, 10:26 AM
  #7  
Gets Weekends Off
 
ugleeual's Avatar
 
Joined APC: Jun 2007
Position: 767/757 CA
Posts: 2,638
Default

Originally Posted by AntiPeter
As of 2 p.m. eastern UAL stock is down another 4% today alone, down about 39% from the high in 2019.
good time to buy if you haven’t already. UAL is still a 80-90 price target... days before the virus hysteria analysts said it was a $107 price target.
ugleeual is offline  
Old 03-03-2020, 11:08 AM
  #8  
You look like a nail
 
Joined APC: May 2012
Posts: 451
Default

Or maybe the reason they haven't offered clarity in the forward-looking guidance is that nobody knows how bad it's going to be. How do you forecast a clear departure form business as usual? My guess is that by the end of the second quarter UAL will be able to offer pretty solid expectations for a the full year. Right now, (I'm guessing) they're just trying to stop the red.
Thor is offline  
Old 03-03-2020, 12:20 PM
  #9  
Banned
 
Joined APC: Jun 2013
Posts: 234
Default

Be a good time for someone to buy UAL. Or buy a majority stake in it. A 14.4B market cap isn’t much for such a big airline.
IHateYou is offline  
Old 03-03-2020, 01:19 PM
  #10  
Gets Weekends Off
 
drywhitetoast's Avatar
 
Joined APC: Jun 2018
Position: Sitting
Posts: 500
Default

Originally Posted by IHateYou
Be a good time for someone to buy UAL. Or buy a majority stake in it. A 14.4B market cap isn’t much for such a big airline.
Skywest maybe? They are Mainline.
drywhitetoast is online now  
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
rballTy
Part 135
5
02-17-2020 02:21 PM
Boeing Aviator
United
9
11-25-2016 12:58 PM
oldmako
United
25
01-19-2016 02:53 PM
bottoms up
United
18
12-22-2015 10:30 AM
bgmann
Regional
31
11-19-2011 07:33 PM

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Thread Tools
Search this Thread
Your Privacy Choices