United Airlines Q1 2024 Exceeds Expectations

A United Airlines A320 on approach to land
PlanespotterA320, CC BY-SA 4.0 , via Wikimedia Commons

United Airlines (UAL) reported positive financial results for the first quarter of 2024, exceeding analyst expectations.

Despite a pre-tax loss of $164 million, a significant improvement of $92 million year-over-year, the impact of the Boeing 737 MAX 9 grounding masked what would have been a profitable quarter.

Adjusted for this grounding, the company saw a pre-tax loss of $79 million, a substantial improvement of $187 million year-over-year.

United generated a strong $2.8 billion in operating cash flow and $1.5 billion in free cash flow during the quarter.

The company remains confident in its full-year 2024 outlook, projecting adjusted diluted earnings per share of $9 to $11.

Q1 Strong Demand Drives Profitability

United delivered a robust performance on both financial and operational fronts. Passenger demand continued to remain high in the first quarter.

Notably, business travel experienced a double-digit percentage increase compared to pre-pandemic levels. Strategic adjustments to domestic capacity significantly improved profitability in Q1.

Both Atlantic and domestic markets saw impressive year-over-year passenger revenue growth per available seat mile (PRASM), with increases of 11% and 6% respectively.

“We’re incredibly proud of the United team’s dedication this quarter,” said United Airlines CEO Scott Kirby.

“Their hard work delivered strong operational results for our customers, maintained unwavering focus on safety, and produced excellent financial results for our shareholders.”

Strategic Fleet Management

United announced adjustments to its long-term fleet plan to better align with future needs and manufacturer production schedules.

These adjustments will create a smoother and more moderate aircraft delivery trajectory in the coming years.

  • 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.
  • Agreed to letters of intent with two lessors to lease 35 new Airbus A321neos with CFM engines expected in 2026 and 2027.
  • 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.

The 737 MAX 9 grounding and the FAA’s announced significant production capacity constraints on Boeing created an impact. As a result, the airline now anticipates 61 narrowbody aircraft and 5 widebody aircraft to be delivered in 2024.

A United Airlines jet with Sustainable Flight logo
Photo Credit: United Airlines

Key Highlights of Q1

  • Achieved a milestone of 200 new and retrofitted aircraft featuring United’s signature interior with increased bin space, personal seatback screens, and Bluetooth connectivity.
  • Reached a tentative agreement with the International Brotherhood of Teamsters for a four-year contract extension covering 9,700 aircraft technicians.
  • Opened an expanded Flight Training Center in Denver, featuring additional flight simulators to train future pilots.
  • Pioneered MileagePlus® pooling, allowing customers to share and redeem miles in a single linked account, enhancing value for loyalty members and their loved ones.
  • Welcomed Rosalind Brewer and Michelle Freyre to the Board of Directors.
  • Earned recognition on Fortune’s Most Admired Companies list, highlighting the company’s strong reputation.

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By Len Varley - Assistant Editor 4 Min Read
4 Min Read
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