United Airlines’ lofty margin goals draw scrutiny, after a tepid market guide for 1Q2017

United Airlines has now joined most of its airline peers in officially declaring it too will achieve a positive unit revenue result in 2017; but its unit revenue and margin outlook for 1Q2017 have created some uneasiness among investors who were clearly looking for a better forecast from the airline.

The company's margin pressure and more conservative unit revenue outlook in early 2017, versus its rival Delta, are driven by rising labour costs, United's higher exposure to the Pacific - where overcapacity has created challenges for the large global US network airlines - and, compared with the networks of its peers, the structure of its hub network in capturing traffic flows to warm weather destinations during the US winter season.

In late 2016 United ambitiously declared it would best Delta's margin performance by 2020. Now that the airline has drawn that line in the sand, United's margins will be closely watched as a benchmark for progress in meeting that goal.