United Airlines: Paris Attack Hurting Passenger Counts

United Continental announced that the recent Paris terrorist attacks have put a dent in the airlines passenger counts.

The airline, based in Chicago, Illinois said the bombings and shooting that took the lives of 130 or more people this past November in the capital city of France are amongst the factors that are expected to cause its passenger revenue for the fourth quarter to drop more than be been expected.

United added that its corporate customers that are in the energy industry, which has taken a huge downturn due to the lower prices of both gas and oil, are also cutting back dramatically on their travel.

In addition, more proof of the softening demands, said the company was the downward revisions for the fourth quarter in the country’s gross domestic product.

The Atlanta Federal Reserve Bank’s new forecasting model for the GDP for real growth of the GDP during the fourth quarter was just 0.8% on January 8, which is down from 1% on January 6.

United announced that it now is expecting its passenger revenue for the 2015 fourth quarter to drop between 5.75% and 6.25%  compared to the same period a year ago. During October, the airline forecast there would be a drop of between 4% and 6%.

United provided this detail late on Monday in its preliminary operational and financial outlook for the final 2015 quarter and the 2015 full year.

In separate news, Delta passed United to become the second largest airline in 2015 in terms of passenger traffic. United had more than 208.6 billion in passenger revenue miles during 2015, compared to 209.6 billion by Delta.

Delta said last week that passenger unit revenue for December had dropped 5% compared to a year ago, which the airline attributes to the strong dollar and the timing this year of the Thanksgiving holiday.

There was no mention by Delta of Paris hurting its passenger traffic. For the fourth quarter, Delta announced that it expected its passenger revenue to drop by 1.5% due to the pressure from the exchange rates with foreign currency versus the U.S. dollar.

 

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