United Airlines Holdings, Inc. (NASDAQ: $UAL) is an airline holding company that moves cargo and people throughout North America and to destinations worldwide. The company was founded on December 30, 1968, and is headquartered at the Willis Tower in Chicago, Illinois.
On April 16, 2024, it reported its first-quarter 2024 financial results, delivering better-than-expected revenue and earnings despite the continued impact of the Boeing 737 MAX 9 grounding.
First-Quarter Financial Results Exceed Expectations
United Airlines Holdings reported a Q12024 pre-tax loss of $164 million, a $92 million improvement over the same quarter last year. On an adjusted basis, the company posted a pre-tax loss of $79 million, a $187 million improvement compared to Q12023. It reported a loss per share of $0.38 and an adjusted loss of $0.15, better than forecast.
These results reflect the approximately $200 million impact from the Boeing 737 MAX 9 grounding, without which United would have reported a quarterly profit.
“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.
The company generated $2.8 billion in operating cash flow and $1.5 billion in free cash flow during the quarter. United expects full-year 2024 adjusted diluted earnings per share of $9 to $11.
Capacity and Revenue Performance
United Airlines Holdings’ capacity was up 9.1% in the first quarter compared to the same period in 2023. Total operating revenue increased 9.7% to $12.5 billion, exceeding the consensus Estimate as TRASM (total revenue per available seat mile) grew 0.6% year-over-year.
The company saw particular strength in its Atlantic and Domestic markets, with PRASM (passenger revenue per available seat mile) increasing 11% and 6%, respectively, compared to the first quarter of 2023. United’s business demand also saw a double-digit percentage increase quarter-over-quarter versus pre-pandemic levels.
Fleet Updates and Operational Highlights
United Airlines Holdings has made several adjustments to its long-term fleet strategy, including converting a portion of Boeing MAX 10 orders to MAX 9 aircraft from 2025 through 2027. The company also agreed to lease 35 new Airbus A321neo aircraft expected in 2026 and 2027.
Due to manufacturing delays, United now anticipates receiving 61 narrowbody aircraft and 5 widebody aircraft in 2024, down from the 101 narrowbody deliveries previously expected. The company expects a small number of aircraft previously scheduled for the second quarter to be pushed into the third quarter, with minimal impact on its capacity plans.
Operationally, United achieved its second-best first-quarter on-time departure performance in the company’s history. The airline also set a record for the highest first-quarter consolidated seat factor at 84.1%, with March achieving the highest seat factor in the month’s history.
Customer Experience and Network Expansion
United Airlines Holdings continued to invest in enhancing the customer experience, including adding larger overhead bins to 50 regional aircraft, launching TSA PreCheck Touchless ID at select airports and partnering with the United Spinal Association to improve accessibility for customers traveling with personal wheelchairs.
The airline also announced several new international routes and restarted summer-seasonal service on popular routes to Europe earlier in the year.
Sustainability and Community Engagement
United Airlines Holdings remains committed to its sustainability initiatives, with more than 115,000 customers contributing nearly $500,000 to the airline’s UAV Sustainable Flight Fund to support start-ups focused on decarbonizing air travel. The company also announced the addition of eight new corporate partners to the fund, bringing total capital commitments to over $200 million.
In the first quarter, United employees volunteered over 8,600 hours at non-profit organizations and donated 9 million miles to charities through the Miles on a Mission program. The company was also named the inaugural recipient of the Humanitarian Force for Good Award by Air Transport World.
United Airlines Holdings 2024 Guidance
United expects adjusted diluted earnings per share of $9 to $11 for 2024, indicating continued profitability and strong performance. The company’s fleet adjustments and network expansions position it well to capitalize on opportunities and deliver value for shareholders.
Despite the ongoing impact of the Boeing 737 MAX 9 grounding, United’s solid first-quarter performance and forward-looking guidance show its ability to adapt and thrive in the dynamic airline industry. The company’s focus on operational excellence, customer satisfaction and sustainability initiatives reinforces its position as a leader in the global aviation landscape.
Recently, United Airlines Holdings appointed Michelle Freyre, an Estée Lauder executive, to its Board of Directors, citing her extensive brand strategy experience as a valuable addition to the airline’s leadership.
United Airlines Holdings Stock Performance
At the close of trading on Wednesday, UAL shares were up 17.45% to $48.74. This surge in the share price reflects the positive market sentiment surrounding the company’s strong first-quarter results, exceeding analyst expectations.
The stock’s technical indicators are also suggesting a bullish trend. The Relative Strength Index (RSI) of 62 indicates strong buying momentum from investors, while the Bullish Harami candlestick pattern on the 4-month price chart further reinforces the bullish outlook for the stock.
Should You Consider Buying United Airlines Holdings Stock in 2024?
United Airlines Holdings’ impressive first-quarter results and strong operational and financial performance suggest the company is well-positioned for a solid year ahead. The airline’s strategic initiatives, including fleet adjustments and network expansions, also position it to capitalize on growth opportunities.
Their focus on enhancing the customer experience and driving sustainability efforts aligns with evolving industry trends, which could translate into long-term shareholder value. Given the company’s positive outlook, reflected in its full-year earnings guidance and the stock’s current bullish technical indicators, United Airlines appears to be an attractive investment option for 2024.
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