BUSINESS

All United Continental flights in US grounded temporarily due to computer problems

07/08/2015 09:34 EDT | Updated 07/08/2016 05:59 EDT
All United Continental flights in the U.S. were grounded for about two hours on Wednesday due to computer problems, delaying some arrivals and departures at Canada's three largest airports.

United cited "network connectivity" for the problems, the second time in two months that the airline has been hit by major technical issues.

The U.S. Federal Aviation Administration said the airline had requested the "ground stop" order and then asked for it to be lifted mid-morning.

An industry analyst said the grounding will frustrate Air Canada (TSX:AC) passengers travelling on codeshare with United, but have little lasting impact on United or its Canadian partner.

"The next time you book a flight you probably will remember it but you're going to most likely look for the cheapest fare or the best connection. That's going to be a minor consideration," said David Tyerman of Canaccord Genuity.

Tyerman said there should be no impact on WestJet (TSX:WJA) unless passengers are able to switch from United to the Calgary carrier.

WestJet said it did not see any increase in demand Wednesday morning.

"However, we do have some overlapping routes with United, so we could possibly see some bookings made today as they work to clear the backlog," said spokesman Robert Palmer.

Chicago-based United Continental also halted all takeoffs in the U.S. on June 2 due to what the airline described as computer automation issues.

The Federal Aviation Administration used the same language in its notice about the outage Wednesday.

United suffered a series of computer problems in 2012 after switching to a passenger information computer system previously used by merger partner Continental Airlines.

In each case, hundreds of flights were delayed. A number of high-paying business travellers defected to other airlines and revenue dropped.

"We don't know everything behind this morning's issues yet, but today's incident underscores the sense that something is very wrong at United," said Gary Leff, co-founder of frequent-flier website MilePoint.

Shares of United Continental Holdings Inc. slid 2 per cent to $53.08 in early morning trading.

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With contributions from Associated Press reporters Scott Mayerowitz and Michelle Chapman in New York, Matt Small in San Francisco, and Joan Lowy in Washington, D.C.