The company says that it continues to expect full-year 2024 adjusted diluted earnings per share of USD 9 to USD 11
United Airlines (UAL), the third-largest American airline, has incurred a pre-tax loss of USD 164 million in the first-quarter 2024. Declaring its financial results for the quarter, the airline headquartered in Chicago has blamed repeated problems with Boeing 737 Max 9 aircraft for its losses, estimating its impact at USD 200 million.
In a press statement, the airline says that the total operating revenue was USD 12.5 billion, up 9.7 pc compared to first-quarter 2023. It adds that its capacity rose 9.1 pc compared to first-quarter 2023 and in the quarter, the company generated USD 2.8 billion operating cash flow and free cash flow of USD 1.5 billion.
The company says that it continues to expect full-year 2024 adjusted diluted earnings per share of USD 9 to USD 11.
United says that the demand environment remained strong with a double-digit percentage increase in business demand quarter over quarter, as compared to pre-pandemic.
Scott Kirby
“I want to thank the United team for working so hard this quarter to deliver strong operational metrics for our customers and sharpen our focus on safety, while producing excellent financial results for our shareholders,” says Scott Kirby, CEO, United Airlines.
Additionally, the company says it was able to take advantage of a number of opportunities to adjust domestic capacity which drove meaningful improvements in first quarter profitability.
The airline says that Atlantic and domestic markets both saw large passenger revenue per available seat mile (PRASM) increases year over year, with 11 pc and 6 pc growth respectively.
Going forward, United says, it has made several adjustments to its long-term fleet strategy based on future needs of the airline and manufacturers production and delivery timelines that are expected to smooth out and moderate the company’s aircraft delivery schedule in the coming years.
Accordingly, it has converted a portion of Boeing MAX 10 aircraft orders to Boeing MAX 9 from 2025 through 2027, maintained the right to convert more Boeing MAX 10 into MAX 8 or MAX 9 as needed. It has also agreed to letters of intent with two lessors to lease 35 new Airbus A321neos with CFM engines expected in 2026 and 2027.
The airline adds that due to manufacturing and certification delays from prior years, by the end of 2023, the airline’s contractual aircraft commitments for 2024 had increased to 183 narrowbody aircraft. At the beginning of 2024, these delays were anticipated to continue and the company expected 101 narrowbody deliveries.
Following the 737 MAX 9 grounding and the FAA’s announced significant production capacity constraints on Boeing, the company now anticipates 61 narrowbody aircraft and five widebody aircraft to be delivered in 2024.
In the short run, the company expects a small number of aircraft previously scheduled to enter into service in the second quarter to be pushed into the third quarter, which is expected to have minimal impact on the company’s capacity plans.
“We have adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver. And, we will use those planes to capitalise on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs,” says Kirby.
