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United (UAL) Plans to Buy Upto 100 Zero-Emission Engines

United Airlines Holdings, Inc. UAL announced that it has become the largest airline to invest in zero-emission hydroelectric engines for regional aircraft, with a new equity stake in ZeroAvia (a hydrogen-electric engine developer). Hydrogen-electric engines use electricity created by a chemical reaction in a fuel cell to power an electric motor instead of burning fossil fuel. Since no fuel is burned, there are no climate-harming emissions or carbon being released into the atmosphere when the engines are operated. This move is in line with UAL’s target of becoming 100% green by 2050.

United Airlines will pursue a conditional purchase agreement for 50 ZeroAvia ZA2000-RJ engines, with an option for 50 more, enough for up to 50 twin-engine aircraft, which will be operated by United Express partners once they are fully developed and certified by regulators as soon as 2028. The ZA2000-RJ is anticipated to be used in pairs as a new power source for existing regional aircraft. The CEO of United Airlines, Scott Kirby, stated, “Hydrogen-electric engines are one of the most promising paths to zero-emission air travel for smaller aircraft, and this investment will keep United out in front on this important emerging technology.”

Recently, on Dec 1, the carrier made its mark in aviation history by operating the first passenger flight using 100% sustainable aviation fuel, from Chicago to Washington DC. Such eco-friendly moves by UAL are highly commendable and expected to reduce carbon emissions in the airline space.

Zacks Rank & Stocks to Consider

United Airlines currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the broader Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Landstar System, Inc. LSTR and C.H. Robinson Worldwide, Inc. CHRW.

The long-term expected earnings per share (three to five years) growth rate for Knight-Swift is pegged at 15%. KNX is benefitting from an improvement in the adjusted operating ratio. Notably, the adjusted operating ratio improved to 82.8% in the first nine months of 2021 compared with 86.6% reported in the first nine months of 2020. In third-quarter 2021, the metric improved to 81.3% from 83.9% a year ago.

This uptick in adjusted operating ratios is primarily driven by higher revenues in the Trucking, Logistics and Intermodal segments. Lower the value of the metric, the better. KNX has surged 48.1% in the past year. Knight-Swift currently sports a Zacks Rank #1.

The long-term expected earnings per share (three to five years) growth rate for Landstar is pegged at 12%. LSTR is benefitting from a gradual recovery in the economy and freight market conditions in the United States.

LSTR’s top and the bottom line increased substantially in each quarter from the third quarter of 2020, owing to robust revenues in the primary segment — truck transportation. LSTR has surged 31.5% in the past year. Landstar carries a Zacks Rank #2 (Buy) presently.

The long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021, with higher revenues across all the segments.

CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has moved up 13.4% in the past year. C.H. Robinson currently carries a Zacks Rank #2.


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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
Landstar System, Inc. (LSTR) : Free Stock Analysis Report
 
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