United Continental (UAL) will report first quarter results this afternoon and host a call tomorrow morning at 10:30.
The company is still dealing with the fallout from some truly awful PR after a video of security officers forcibly removing a United passenger who refused to give up his seat in an overbooked flight went viral. United CEO Oscar Munoz's initial apology was a little out of touch, which didn't help the issue.
We can expect United to address its customer service qualms tomorrow on the call. Yesterday, the company announced it will no longer displace passengers that have already boarded to make room for employees.
The question for investors is whether the company has seen an impact to bookings. People have said they want to avoid flying United but that is easier said than done in certain markets as competition is not as strong as it used to be following consolidation in the sector over the last decade.
Last week, the company narrowed Q1 unit revenue guidance to flat from down 1% to up 1%. In March, the company raised capacity growth to 2.5-3.5% from +1-2% and lowered unit cost (CASM) guidance to 5.6-7.2% from +6.6-8.2%.
United has previously called for positive second quarter PRASM (unit revenue) and improving unit revenue through 2017.
Delta (DAL) offered strong second quarter guidance last week, calling for unit revenue and margin improvement.
At ~4.4x EV/EBITDA, United trades at a slight discount to Delta and American (AAL).
Last year, Munoz set out plans to close the margin gap versus its peers by 2020.
The stock has been attempting to hold support near the 70 in recent weeks.