A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport.
Justin Sullivan | Getty Images
United Airlines on Tuesday lowered its aircraft delivery expectations for the year as it struggles with delays Boeingthe latest airline to face growth challenges due to the plane maker’s safety crisis.
United expects to receive just 61 new narrow-body aircraft this year, down from 101 it expected at the start of the year, and contracts for up to 183 planes in 2024.
“We have adjusted our fleet plan to better reflect the reality of what manufacturers can deliver,” CEO Scott Kirby said in an earnings release. “And we will use these aircraft to capitalize on an opportunity that only United has: to profitably grow our Mid-Continent hubs and expand our highly profitable international network from our best-in-class coastal hubs.”
United said it plans to lease 35 Airbus A321neo aircraft in 2026 and 2027, turning to Boeing’s rival for new planes as the U.S. manufacturer faces production curbs and increased federal scrutiny. In January, United announced it was removing Boeing’s not-yet-certified Max 10 from its fleet plan. The airline said it has converted some Max 10 aircraft to Max 9 aircraft.
It lowered its estimate of annual capital spending to $6.5 billion from about $9 billion.
United also faces a safety review from the Federal Aviation Administration that has prevented some of its planned growth. A spokeswoman told CNBC earlier this month that the airline must postpone its scheduled flight from Newark, New Jersey, to Faro, Portugal, as well as the flight between Tokyo and Cebu, Philippines.
Earlier this month, United postponed its investor day scheduled for May “as our entire team is focused on working with the FAA to review our safety protocols and focusing on an exciting investor day would simply send the wrong message to our team.” primarily on financial results.”
The airline said it would have reported a profit for the quarter if not for a $200 million hit from the temporary grounding of the Boeing 737 Max 9 in January.
The FAA temporarily grounded those jets after a door plug burst through a few minutes later Alaska Airlines flight, which sparked a new safety crisis for Boeing and slowed deliveries of its planes to customers like United, southwest and other.
The airline reported a first-quarter net loss of $124 million, or a loss of 38 cents per share, compared with a loss of $194 million, or 59 cents, a year earlier. Revenue rose nearly 10% to $12.54 billion in the first quarter compared to the same period last year, with capacity increasing more than 9% year over year.
Here’s what United reported in the first quarter compared to Wall Street’s expectations, based on average estimates from LSEG:
- Loss per share: 15 cents adjusted versus an expected loss of 57 cents
- Revenue: $12.54 billion versus expected $12.45 billion
The airline expects second-quarter profit between $3.75 and $4.25, above analysts’ estimates of about $3.76 per share. Airlines generate most of their profits in the second and third quarters, during peak travel seasons.
The airline also reiterated its full-year earnings forecast of $9 to $11 per share.
Shares of United rose more than 4% in after-hours trading on Tuesday.
United executives will hold a call with analysts on Wednesday at 10:30 a.m. ET.
Don’t miss these exclusives from CNBC PRO
Source link
2024-04-16 21:03:17
www.cnbc.com
