United to eliminate Continental subsidiary on 31 March

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United Continental Holdings will merge its United Airlines and Continental Airlines subsidiaries into one company under the United banner on 31 March.

The move comes as the Chicago-based airline works to complete the merger of United and Continental that closed in 2010. It disclosed the fact in an investor update on 28 March.

Passenger revenue per available seat mile (PRASM) is anticipated to increase by 5.4% to 6.4% during the first quarter compared to a year earlier, according to the update.

PRASM was up 6.5% to 7.5% in February and 3% to 4% in January, according to United.

Consolidated capacity is anticipated to decrease by 5% in the first quarter. This is 1% higher than previous guidance of a 3.5% to 4.5% decline due to increased winter storm activity, according to the update.

Traffic is expected to be down 0.7% to 1.7% while load factor will increase by 2.7 to 3.5 percentage points in the quarter.

Cost per available seat mile (CASM) is anticipated to increase by 11.4% to 12.4% during the period. This is higher than the 8% to 9% increase previously expected due to expenses incurred recovering from the storms, increased investment in preventative maintenance, labour expenses and aircraft depreciation, according to the update.

United expects one-time expenses of $190 million to $220 million during the quarter, which is higher than previous guidance due to the early repayment of a $1.2 billion term loan that was due in 2014.

Debt and capital lease payments will increase to $1.3 billion from previous guidance of $1 billion due to the term loan repayment.

Gross capital expenditure will be about $550 million in the quarter, which is down from $580 million in January.

United anticipates having $6.3 billion in unrestricted liquidity on 31 March.