Quiver Quantitative - United Airlines (NASDAQ:UAL) (UAL) has reported its first-quarter financial results for 2024, surpassing revenue and earnings per share expectations despite enduring a pre-tax loss of $164 million. The stock is up 4% after hours. This loss marks a significant improvement over the previous year, buoyed by an operational cash flow of $2.8 billion and free cash flow of $1.5 billion. These figures include the financial impact of approximately $200 million due to the Boeing (NYSE:BA) 737 MAX 9 grounding. Without this setback, United would have noted a profit for the quarter. The airline has reaffirmed its full-year earnings forecast, projecting an adjusted diluted EPS of between $9 and $11.
During the quarter, United Airlines experienced robust growth in business demand and took strategic actions to adjust domestic capacity, which significantly enhanced its profitability, particularly in the Atlantic and Domestic markets. These markets witnessed impressive year-over-year increases in passenger revenue per available seat mile (PRASM), with the Atlantic up by 11% and Domestic by 6%. CEO Scott Kirby highlighted the airline's operational excellence and strategic adjustments in fleet management as key drivers of this quarter's success. United’s proactive fleet strategy included converting some Boeing MAX 10 orders to MAX 9 and incorporating new Airbus A321neos to better align with future operational needs and manufacturer delivery schedules.
Market Overview: -United Airlines navigates a challenging environment with rising fuel costs and aircraft delivery delays. -Strong demand, particularly in business travel, boosts first-quarter performance.
Key Points: -Exceeded analyst expectations with Q1 adjusted pre-tax loss of $79 million. -Double-digit year-over-year growth in business travel demand. -Significant passenger revenue per available seat mile (PRASM) increases across markets. -Fleet adjustments made to address delivery delays and optimize network. -Commitment to sustainability initiatives through the UAV Sustainable Flight Fund.
Looking Ahead: -Continued impact from the Boeing 737 MAX 9 grounding on operations. -Rising fuel costs pose a potential challenge. -Focus on operational efficiency and strategic capacity management for continued success.
Financially, United reported a total operating revenue of $12.5 billion, marking a 9.7% increase from the first quarter of 2023. The airline's capacity was up by 9.1%, and while the total revenue per available seat mile (TRASM) saw a modest rise of 0.6%, the cost per available seat mile (CASM) decreased by 0.6%. The adjusted figures reflect a narrower pre-tax loss and an adjusted net loss, underscoring the airline's resilient performance amid challenging conditions.
United's strategy for customer experience enhancement and operational efficiency continues to bear fruit. The airline has introduced new interiors across 200 aircraft, expanded its Flight Training Center, and innovated in customer service with initiatives like MileagePlus® pooling and TSA PreCheck Touchless ID. These improvements are reflected in high customer satisfaction scores and operational performance, positioning United well for continued recovery and growth in the competitive airline industry.
This article was originally published on Quiver Quantitative