CHICAGO- United Airlines (UA) released its first-quarter 2024 financial results today (April 17, 2024). The company incurred a pre-tax loss of $164 million, marking a $92 million enhancement compared to the same quarter last year.
Adjusted pre-tax loss1 amounted to $79 million, reflecting a $187 million improvement on an adjusted basis over the corresponding period last year.
United Airlines Q1 2024 Report
These figures include an impact of approximately $200 million from the Boeing 737 MAX 9 grounding. Excluding this impact, the company would have reported a quarterly profit.
Operating cash flow stood at $2.8 billion, with free cash flow1 totaling $1.5 billion for the quarter. United maintains its outlook for adjusted diluted earnings per share3 in the range of $9 to $11 for the full year 2024.
During the quarter, United demonstrated robust financial and operational performance. The demand environment remained robust, witnessing a double-digit percentage surge in business demand compared to pre-pandemic levels.
The company capitalized on various opportunities to adjust domestic capacity, significantly enhancing first-quarter profitability. Atlantic and Domestic markets experienced substantial year-over-year growth in passenger revenue per available seat mile (PRASM), with 11% and 6% increases, respectively.
“I extend my gratitude to the United team for their dedicated efforts this quarter, ensuring exceptional operational performance for our customers and maintaining our unwavering commitment to safety, all while achieving outstanding financial outcomes for our shareholders,” remarked United Airlines CEO Scott Kirby.
“We have adjusted our fleet strategy to align more closely with the manufacturing capacity. Leveraging these aircraft, we will seize a unique opportunity available exclusively to United: expanding our mid-continent hubs profitably and further enhancing our highly lucrative international network from our industry-leading coastal hubs.”
United Leases A321neo
United has implemented several modifications to its long-term fleet strategy to align with the future requirements of the airline and the production and delivery schedules of manufacturers.
These adjustments are aimed at streamlining and moderating the company’s aircraft delivery timetable in the forthcoming years. They include:
- Conversion of a portion of Boeing MAX 10 aircraft orders to Boeing MAX 9 from 2025 through 2027 while retaining the flexibility to convert additional Boeing MAX 10 orders into MAX 8 or MAX 9 as necessary.
- Execution of letters of intent with two lessors for the lease of 35 new Airbus A321neos equipped with CFM engines, expected to be delivered in 2026 and 2027.
- Owing to manufacturing and certification delays from previous years, the airline’s contractual commitments for 2024 had escalated to 183 narrowbody aircraft by the end of 2023. At the onset of 2024, these delays were anticipated to persist, with the company expecting 101 narrowbody deliveries. However, following the grounding of the 737 MAX 9 and the FAA’s announcement of significant production capacity constraints on Boeing, the company now projects the delivery of 61 narrowbody aircraft and 5 widebody aircraft in 2024.
- In the near term, the company foresees a minor delay in the entry into service of a few aircraft originally slated for the second quarter, now likely to be pushed to the third quarter. This delay is anticipated to have minimal impact on the company’s capacity plans.
Key Highlights
- Achieved a milestone of incorporating 200 new and retrofitted aircraft featuring United’s distinctive interior design, characterized by larger overhead bins, seatback screens for every seat, and Bluetooth connectivity.
- United Airlines and the International Brotherhood of Teamsters reached a tentative agreement for a four-year contract extension, encompassing the airline’s 9,700 aircraft technicians.
- Inaugurated an expanded Flight Training Center, a state-of-the-art facility spanning 150,000 square feet in Denver, equipped with 12 additional full-motion flight simulators. This center aims to train the next generation of highly skilled pilots.
- Introduced MileagePlus® pooling, making United the pioneer airline to enable customers to combine and utilize miles in a single linked account, offering added benefits to loyalty members and their friends and family.
- Welcomed Rosalind Brewer and Michelle Freyre to United’s Board of Directors, enhancing the diversity and expertise of the leadership team.
- Recognized among Fortune’s Most Admired Companies list, underscoring United’s strong reputation within and across various industries.
New Routes and Destinations
Announced the introduction of services to three novel destinations, unveiling plans for flights connecting Marrakesh, Morocco, with New York/Newark; Cebu, Philippines, with Tokyo-Narita; and Medellin, Colombia, with Houston. This move marks United as the first U.S. carrier to establish routes to Marrakesh and Cebu. Additionally, United disclosed plans for new service from its Guam hub to Tokyo-Haneda, which is set to commence in May.
Expanded service on three existing routes, including the addition of a second summer-seasonal flight between Porto, Portugal, and New York/Newark, a second year-round flight between Hong Kong and Los Angeles beginning in October, and the extension of the second flight between Seoul, South Korea, and San Francisco to year-round operations.
The resumption of service between Shanghai and Los Angeles was announced, with four weekly flights commencing at the end of August and an escalation to daily service by late October.
Restarted summer-seasonal service ahead of schedule on popular routes such as Washington D.C. to Lisbon, Portugal; Barcelona, Spain; and Rome, Italy.
Launched service to Tulum, Mexico, from Houston and New York/Newark by the end of March, with additional services from Chicago and Los Angeles starting in the second quarter. Furthermore, United announced the inauguration of a new service between Georgetown, Guyana, and Houston in the second quarter.
Executed United’s largest quarterly domestic schedule in terms of available seat miles, including the operation of the airline’s most extensive Florida schedule in company history. This expansion involved the addition of three new non-stop routes and a notable year-over-year increase of 19% to the popular wintertime destination.
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