Here's Why United Airlines Stock Soared Nearly 30% in September

Shares in United Airlines (NASDAQ: UAL) soared by 29.6% in September, according to data provided by S&P Global Market Intelligence. The startling rise is mainly due to a relief rally after a heavy sell-off in the stock from the spring and through the summer.The airline industry is known as highly cyclical, and for good reason. The traditional cycle works like this: Airlines like United Airlines see passenger numbers growing and load factors (how much seating capacity is used) increasing. They can raise ticket prices in response to solid demand. Consequently, they increase routes to maximize profits in response to rising demand.After a while, demand starts to wane, leading to pressure on load factors and, ultimately, pricing and profitability. If airlines aren't disciplined in swiftly cutting routes, this could lead to a sharp decrease in profitability.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool