Now, Boeing 777s Pose Challenge for United Airlines

According to a report published by Reuters, United Airlines Holdings, Inc. (NASDAQ: UAL) has said it will not resume services of some of its Boeing (NYSE: BA) 777 planes until mid-May. UAL grounded these aircraft after the engine of one of its planes failed shortly after taking off from Denver in February.

Boeing’s 777 airplanes feature PW4000 engines from Pratt & Whitney, a subsidiary of Raytheon Technologies (NYSE: RTX).

Joshua Freed, UAL’s spokesperson, said, “We continue to work conscientiously with Boeing, Pratt & Whitney and the FAA (Federal Aviation Administration) to safely return these aircraft to service soon, and our current plan will allow them to return in the second half of May.”

Chicago-based United Airlines is the only airline in the U.S. that has 52 Boeing 777 planes with PW4000 engines in its fleet.

Wall Street’s Take

Last week, Barclays (NYSE: BCS) analyst Brandon Oglenski maintained a Hold rating on the stock and lowered the price target to $50 from $52 (19.2% upside potential).

In a research note to investors, the analyst said he cut the airline’s estimates “as fuel and labor expenses climb.” However, he added that “capacity reductions and associated unit revenue expansion should partially offset these.”

“Pandemic, war and energy prices aside, airline travel demand appears to be finally on a path to a meaningful and sustainable recovery in Q2,” Oglenski said.

Overall, the stock has a Hold consensus rating based on five Buys, five Holds and three Sells. UAL’s average price target of $50.38 implies 20.1% upside potential. Shares have lost 25.3% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into UAL’s performance.

According to the tool, compared to the previous year, UAL’s website traffic registered a 12.6% decline in global visits in March. However, the website traffic has increased almost 19% year-to-date against the same period last year.

Conclusion

United’s decision to delay the return of Boeing 777 aircraft with PW4000 engines could significantly impact its operations amid a rise in travel demand after two years.

As the company runs flights to 200 domestic and international locations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington, it may have to take a hit in the light of this decision.

UAL stock closed over 1% down on Friday. It lost another 0.3% in the extended trading session to end the day at $41.83.

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