United Airlines Announces First-Quarter 2024 Financial Results; Exceeds Revenue and EPS Expectations

United Airlines Announces First-Quarter 2024 Financial Results; Exceeds Revenue and EPS Expectations

PR Newswire

CHICAGO, April 16, 2024

First-quarter diluted loss per share of $0.38; first-quarter adjusted diluted loss per share(1) of $0.15 – ahead of expectations

Updates fleet plan – allowing for a more consistent delivery schedule of approximately 100 narrowbody aircraft yearly 2025 through 2027

Achieved second-best first quarter on-time departure performance(2) in the company’s history

CHICAGO, April 16, 2024 /PRNewswire/ — United Airlines (UAL) today reported first-quarter 2024 financial results. The company had a pre-tax loss of $164 million, a $92 million improvement over the same quarter last year; adjusted pre-tax loss(1) of $79 million, a $187 million improvement on an adjusted basis over the same quarter last year. These earnings reflect the approximately $200 million impact from the Boeing 737 MAX 9 grounding, without which the company would have reported a quarterly profit. In the quarter, the company generated $2.8 billion operating cash flow and free cash flow(1) of $1.5 billion. The company continues to expect full-year 2024 adjusted diluted earnings per share(3) of $9 to $11.

United delivered strong financial and operational performance in the quarter. The demand environment remained strong with a double-digit percentage increase in business demand quarter over quarter, as compared to pre-pandemic. Additionally, the company was able to take advantage of a number of opportunities to adjust domestic capacity which drove meaningful improvements in first quarter profitability. Atlantic and Domestic markets both saw large passenger revenue per available seat mile (PRASM) increases year over year, with 11% and 6% growth respectively.

“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,” said United Airlines CEO Scott Kirby. “We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver. And, we’ll use those planes to capitalize 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.”

Fleet Update

United 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 including:

   -- 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. 
   -- Have 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. 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 5 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.

First-Quarter Financial Results

   -- Capacity up 9.1% compared to first-quarter 2023. 
   -- Total operating revenue of $12.5 billion, up 9.7% compared to 
      first-quarter 2023. 
   -- TRASM up 0.6% compared to first-quarter 2023. 
   -- CASM down 0.6%, and CASM-ex1 up 4.7%, compared to first-quarter 2023. 
   -- Pre-tax loss of $164 million, with a pre-tax margin of (1.3)%; adjusted 
      pre-tax loss1 of $79 million, with an adjusted pre-tax margin1 of (0.6)%. 
   -- Net loss of $124 million; adjusted net loss1 of $50 million. 
   -- Diluted loss per share of $0.38; adjusted diluted loss per share1 of 
      $0.15. 
   -- Average fuel price per gallon of $2.88. 
   -- Ending available liquidity of $16.9 billion. 
   -- Total debt and finance lease obligations of $27.2 billion at quarter end. 
   -- Trailing twelve months adjusted net debt1 to adjusted EBITDAR1 of 2.7x.

Key Highlights

   -- Reached milestone of 200 new and retrofit aircraft featuring United's 
      signature interior featuring bigger bins, seatback screens at every seat 
      and Bluetooth connectivity. 
   -- United and the International Brotherhood of Teamsters announced a 
      tentative agreement for a four-year contract extension, covering the 
      airline's 9,700 aircraft technicians. 
   -- Opened an expanded Flight Training Center -- a new, 150,000-square-foot 
      building in Denver with 12 additional full-motion flight simulators to 
      train the next generation of world class pilots. 
   -- Announced MileagePlus(R) pooling, making United the first airline to 
      allow customers to share and redeem miles in one linked account, 
      providing additional value to loyalty members, their friends and loved 
      ones. 
   -- Announced the addition of Rosalind Brewer and Michelle Freyre to United's 
      Board of Directors. 
   -- Named among Fortune's Most Admired Companies list, recognized as having a 
      strong reputation within and across industries.

Customer Experience

   -- Announced the addition of larger overhead bins to 50 regional aircraft 
      for an 80% increase of space for carry-on bags, becoming the first U.S. 
      airline to offer the enhancement. 
   -- Partnered with the Transportation Security Authority (TSA) to launch TSA 
      PreCheck Touchless ID at O'Hare International Airport and Los Angeles 
      International Airport, providing an expedited security experience to 
      customers. 
   -- In collaboration with the United Spinal Association and Numotion, 
      launched a new filter in the booking path to enable customers traveling 
      with a personal wheelchair to filter aircraft that can accommodate their 
      device, and for eligible customers, the ability to request a refund of 
      the fare difference in cases where the accommodating trip would be more 
      expensive. 
   -- Began utilizing generative AI on united.com to expedite customer search 
      and in the airline's industry-leading flight status notification system, 
      further enabling real-time flight status updates to customers. 
   -- Customer satisfaction for the quarter with onboard WiFi and inflight 
      entertainment systems (IFE) achieved its highest rating since 2022 for 
      on-time flights, with WiFi and IFE ratings improving six points year over 
      year on the consumer satisfaction scale, Net Promoter Score. 
   -- United was awarded the 'Best Business Class Rose' by Business Traveller 
      as part of its Cellars in the Sky Awards.

Operations

   -- Achieved the second best on-time departure for any first quarter in the 
      company's history2. 
   -- Achieved the second best on-time arrival and departure metrics amongst 
      U.S. airlines for the second quarter in a row -- a position held for the 
      last six months straight. 
   -- Set the record for the highest first quarter consolidated seat factor 
      ever at 84.1%, with March achieving the highest seat factor in the 
      month's history. 
   -- Set the record for the greatest number of days carrying over 500,000 
      passengers in the company's first quarter history at 16 days.

Network

   -- Announced upcoming services to three new destinations, with flights 
      between Marrakesh, Morocco and New York/Newark; Cebu, Philippines and 
      Tokyo-Narita; and Medellin, Colombia and Houston, becoming the first U.S. 
      airline to serve Marrakesh and Cebu. United also announced new service 
      from the airline's Guam hub to Tokyo-Haneda, launching in May. 
   -- Announced increased service on three routes, adding a second 
      summer-seasonal flight between Porto, Portugal and New York/Newark, a 
      second year-round flight between Hong Kong and Los Angeles starting in 
      October, and extending the second flight between Seoul, South Korea and 
      San Francisco to year-round. 
   -- Announced the return of service between Shanghai and Los Angeles, with 
      four weekly flights beginning at the end of August, and increasing to 
      daily service in late October. 
   -- Restarted summer-seasonal service earlier in the year on popular flights 
      like Washington D.C. to Lisbon, Portugal; Barcelona, Spain; and Rome, 
      Italy. 
   -- Inaugurated service to Tulum, Mexico from Houston and New York/Newark at 
      the end of March; with services from Chicago and Los Angeles starting in 
      the second quarter, announcing an additional inaugural service between 
      Georgetown, Guyana and Houston also in the second quarter. 
   -- Operated United's largest quarterly domestic schedule by available seat 
      miles, including operating the airline's largest Florida schedule in 
      company history with the addition of three new non-stop routes and a year 
      over year increase of 19% to the popular wintertime destination.
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