United Continental Leads Carriers Lower as Revenue Slows

United Continental Holdings Inc.
A Boeing Co. 747 jet painted in United Continental Holdings Inc.'s new livery following the airlines' merger, left, sits on the tarmac in San Francisco, California. Photographer: Kim White/Bloomberg

United Continental Holdings Inc. fell the most in four months in New York trading, leading other airlines lower, after reporting that revenue growth slowed this quarter.

The Bloomberg U.S. Airlines Index of 11 carriers tumbled 4 percent, as the Standard & Poor’s 500 and the Dow Jones Industrial Average each declined about 1 percent.

United’s revenue for each seat flown a mile in June rose about 3 percent to 4 percent, data released by the airline after the close of markets yesterday showed. The growth slowed from as much as 15 percent in May, Dan McKenzie, a Rodman & Renshaw analyst, said in a report today. Second-quarter unit revenue will be up an estimated 9.3 percent, Chicago-based United said.

“Revenue growth has slowed, but the extent of the slowdown is still hard to measure,” Kevin Crissey, an analyst at UBS AG, said in a note to investors today.

McKenzie cut his second-quarter United earnings estimate to $1.45 a share from $1.95, while Crissey trimmed his to $1.37 from $1.62 and Gary Chase at Barclays Capital revised his to $1.38 from $1.96.

AMR Corp.’s American Airlines said today that its second-quarter revenue from each seat flown a mile probably increased 4 percent to 5 percent in its main jet operations, and as much as 5.5 percent including the American Eagle regional unit.

Revenue was reduced by about $60 million by a spring hailstorm at American’s Dallas-Fort Worth hub that damaged planes and reduced traffic following the March earthquake and tsunami in Japan, AMR said.

United fell $2.15, or 8.6 percent, to $22.99 at 4:15 p.m. in New York Stock Exchange composite trading, its biggest one-day slide since Feb. 22.

Delta Air Lines Inc. tumbled 51 cents, or 5.1 percent, to $9.43; AMR fell 41 cents, or 6.8 percent, to $5.64; US Airways Group Inc. declined 22 cents, or 2.5 percent, to $8.69; and Southwest Airlines Co. dropped 5 cents to $11.36.

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