United Continental Remains A Strong Buy

United Continental Holdings, Inc. (UAL), together with its subsidiaries, provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. The company transports people and cargo through its mainline and regional operations. As of December 31, 2016, it operated a fleet of 1,231 aircraft. United Continental Holdings, Inc. also sells fuel; and offers maintenance, catering, and ground handling services for third parties. The company was formerly known as UAL Corporation and changed its name to United Continental Holdings, Inc. in October 2010. United Continental Holdings, Inc. was founded in 1934 and is based in Chicago, Illinois.

Today, we take a look at yet another major airline ranked STRONG BUY. United Continental had some ups and downs this year. Good income from the ever-increasing list of fees and add-ons were a high point. Treating customers like cattle was a low. And those lows reached their nadir with video of police dragging an elderly passenger off the plane despite the fact that he was a paid and ticketed customer.

Despite calls for a boycott after that notorious blunder, the company is simply too large for customer action to have much effect. United Continental is the fourth largest (passenger miles) in the US. In many markets, they play a dominant role. When people fly these days, the price is key, and few potential customers are willing to pay more money to fly on a more expensive carrier due to recent PR disasters on the part of the cheapest option. Clearly, treating flyers poorly and going viral for it doesn’t impose much–if any–of a long-term penalty.

Of course, short-term events can impact long-term profits for an industry with thin margins. For example, the ongoing “Bomb Cyclone” will clearly impact the bottom line for many carriers as thousands of flights are canceled, delayed, etc. One might expect that as climate change leads to more and more severe weather, we could see some significant economic impact for transportation-sector industries– such as airlines.