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United Airlines (UAUA)

United Airlines (UAUA). Presentation By: Jean-Laurent Pelissier Magda Besser Thomas O’Connor Keith McCulloch. Company Profile. Founded in 1968 as a Delaware corporation as a part of a Reorganization of United Airlines

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United Airlines (UAUA)

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  1. United Airlines (UAUA) Presentation By: Jean-Laurent Pelissier Magda Besser Thomas O’Connor Keith McCulloch

  2. Company Profile • Founded in 1968 as a Delaware corporation as a part of a Reorganization of United Airlines • UAL Corporation is a holding company that controls United Air Lines, United Express, Air Wis Services Inc., Four Star insurance Company Ltd., among others. • Through its subsidiaries, UAL mainly provides domestic and international air transportation services of persons, property, and mail • United Air Lines, Inc. is one of the world’s largest air carriers in the world and controls several key air rights.

  3. Recent News • Recently changed auditors from Deloitte and Touche LLP to Ernest and Young • Finalized order for 25 787-8 “Dreamliner” Jetliner Aircrafts and has the option to buy 50 more from Boeing Co. • Seasonal variables causing flight delays and cancelations • Top on-time performance for November/December ‘09

  4. Key Statistics (03/01/10) • Market Cap: 3.01B • Enterprise Value: 8.15B • Currently Trading at $18.03/share • Forward P/E: 10.30 • PEG Ratio: 0.29 • Price/Sales: 0.18 • Enterprise Value/Revenue: 0.50 • Enterprise Value/EBITDA: 7.165

  5. Industry Analysis • Declining Profits • Less margin, unfilled seats • More Fees attached to flying • Pay per bag, no meals/drinks • Higher security • No liquids, scanning technology • American + British + Iberia • granted antitrust immunity for their transatlantic operations • Business Travelers • More frequent/ higher margin • Leisure Travelers • Don’t upgrade

  6. UAUA vs. Competitors UAUA – United Airlines AMR – AMR Corporation LLC – US Airways Group DAL –Delta Air Lines

  7. SWOT Analysis Strengths Performance • Ranked first in performance for on-time domestic flights by US Department of Transportation in 2009 • Reorganization after declaring bankruptcy – Lowering debt and labor costs • Leading US carrier to Hawaii and largest to Asia and Australia Weaknesses Company reputation • Fallout from Bankruptcy Financials • High debt to asset ratio • Negative profits

  8. SWOT Analysis • Opportunities Rumored mergers Increased volume as economy recovers Futures Rebuild brand in a poorly performing industry • Threats Low cost competitors High price of oil Low demand due to poor economy Labor Unions

  9. Technical Analysis

  10. Technical Analysis

  11. Recommendation • Our Recommendation – BUY • United Airlines is one of the top performers in the industry. • Still has a lot of room for growth • As economy picks back up, business travel will increase which is one of United’s main source of income • Despite technical analysis showing the stock price as riding the top Bollinger band, fundamental analysis points towards future increase in stock price

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