United Airlines Reports Improved First-Quarter 2024 Financial Results

Wednesday, April 17, 2024

United Airlines announced its first-quarter 2024 financial outcomes today, revealing a pre-tax loss of $164 million, an improvement of $92 million from the previous year’s corresponding quarter. The adjusted pre-tax loss stood at $79 million, marking a substantial $187 million enhancement on an adjusted basis from the same period last year. These figures include an impact of approximately $200 million due to the grounding of Boeing 737 MAX 9, without which the company would have recorded a profit for the quarter. During this quarter, United Airlines generated $2.8 billion in operating cash flow and achieved free cash flow of $1.5 billion. The company maintains its full-year 2024 adjusted diluted earnings per share guidance of $9 to $11.

United exhibited robust financial and operational performance in the quarter, buoyed by a strong demand environment that witnessed a double-digit percentage rise in business demand compared to pre-pandemic levels. Moreover, strategic adjustments in domestic capacity contributed significantly to the first-quarter profitability surge. Both Atlantic and Domestic markets saw substantial year-over-year increases in passenger revenue per available seat mile (PRASM), with growth rates of 11% and 6% 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 Summary

United has revised its long-term fleet strategy to align with future airline needs and manufacturing timelines. The adjustments aim to optimize aircraft deliveries over the next few years, including:

• Converting some Boeing MAX 10 orders to MAX 9 from 2025 to 2027, with flexibility to convert more as required.
• Signing letters of intent with two lessors to lease 35 new Airbus A321neos with CFM engines expected in 2026 and 2027.

Due to prior manufacturing and certification delays, the airline’s 2024 aircraft commitments increased to 183 narrowbody aircraft by the end of 2023. However, ongoing delays and production constraints now anticipate 61 narrowbody and 5 widebody aircraft deliveries in 2024. Some aircraft initially planned for the second quarter may be delayed to the third quarter, but this is not expected to significantly affect capacity plans.

First-Quarter Financial Highlights

United saw a 9.1% capacity increase compared to Q1 2023, with operating revenue up 9.7%.
TRASM rose by 0.6%, while CASM decreased by 0.6% (CASM-ex1 increased by 4.7%) compared to Q1 2023.
The pre-tax loss was $164 million (adjusted pre-tax loss1 of $79 million), and the net loss was $124 million (adjusted net loss1 of $50 million).
Ending available liquidity stood at $16.9 billion, with total debt and finance lease obligations at $27.2 billion.
Other Key Updates

United achieved the milestone of 200 new and retrofit aircraft featuring upgraded interiors.
Signed a tentative agreement for a four-year contract extension with the International Brotherhood of Teamsters.
Opened an expanded Flight Training Center in Denver and announced MileagePlus® pooling.
Enhanced customer experiences include larger overhead bins, TSA PreCheck Touchless ID, and improved accessibility for customers traveling with personal wheelchairs.
Operational achievements include record seat factors and on-time performance metrics.
Network expansions cover new destinations and increased services on existing routes.
United’s sustainability efforts, employee initiatives, and community contributions continue to grow.

Earnings Call and Outlook

UAL will discuss its first-quarter results and outlook on April 17. The company’s Investor Update and conference call will provide additional details on its financial and operational plans for 2024 and beyond, subject to risks and uncertainties outlined in the press release.

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