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United Airlines (UAL) Invests $2.6B for Houston Expansion

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United Airlines Holdings, Inc. (UAL - Free Report) has announced that it is investing $2.6 billion to renovate and expand Terminal B at George Bush Intercontinental Airport. Additionally, they will open a UAL Club location and Early Bag Storage facility. The airline will also begin a new direct flight from Houston to Georgetown, Guyana.

These investments are part of the airline’s United Next growth plan. The project includes an expansion of 40 gates for larger aircraft allowing for an increase in 40% more passengers who can fly from the airport. This new United Airlines Club will be the largest in the United States. The Early Bag Storage facility is the only one of its kind in North America.

 The decision to expand in Houston is a prudent one given the buoyant air-travel demand scenario. United Airlines CEO Scott Kirby stated, “United Next is about new investments that improve the customer experience and building careers for the next generation of aviation professionals – and all those things and more are coming to life here in Houston”.

In addition, the expansion will create 1,500 United Airlines positions in Houston along with another 4,000 construction-related jobs throughout the project. Such innovative expansion projects are expected to attract more traffic and thereby aid top-line growth. Also, employment growth will get a boost.

Price Performance

Shares of United Airlines have gained 4.5% in the year-to-date period compared with 3.2% growth of the industry it belongs to.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank

United Airlines carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks for investors interested in the Zacks Transportation sector are Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .

Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a new year-round route between Montreal and Madrid. You can see the complete list of today’s Zacks #1 Rank stocks here.

The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand.  

SkyWest presently carries a Zacks Rank #2 (Buy). SKYW's fleet-modernization efforts are commendable. Initiatives to reward its shareholders also bode well. The Zacks Consensus Estimate for current-quarter earnings has surged 83.3% in the past 60 days.


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