United Airlines cuts 2024 plane delivery plan as Boeing crisis leads to delays – CNBC

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United Airlines cuts 2024 plane delivery plan as Boeing crisis leads to delays – CNBC

“We have adjusted our fleet plan to better reflect the reality of what manufacturers are capable of delivering,” CEO Scott Kirby said in an earnings release. “And we will use these aircraft to capitalize on an opportunity that only United has: profitably growing our mid-continent hubs and expanding our highly profitable international network from our industry-leading coastal hubs.”

United has announced plans to lease 35 Airbus A321neos in 2026 and 2027, turning to rival Boeing for new planes as the U.S. maker faces production caps and increased federal oversight. 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 9s.

It lowered its annual capital spending estimate to $6.5 billion from about $9 billion.

United also faces a safety review from the Federal Aviation Administration, which has prevented some of its planned growth. A spokeswoman told CNBC earlier this month that the carrier will have to postpone its planned service from Newark, New Jersey, to Faro, Portugal, as well as its service between Tokyo and Cebu, Philippines.

United earlier this month postponed its investor day, which was scheduled for May, “because our entire team is focused on working with the FAA to review our safety protocols and that would just send the wrong message to our team by organizing an exciting investor day. mainly on financial results.

The airline said it would have reported a profit for the quarter without the $200 million impact from the temporary grounding of the Boeing 737 Max 9 in January.

The FAA temporarily grounded the planes after a door jam exploded minutes into an Alaska Airlines flight, triggering a new safety crisis for Boeing and slowing deliveries of its planes to customers. including United, Southwest and others.

The airline reported a net loss of $124 million, or a loss of 38 cents per share, in the first quarter, compared with a loss of $194 million, or 59 cents, a year earlier. Revenue rose nearly 10% in the first quarter from the same period a year earlier to $12.54 billion, with capacity up more than 9% year-over-year. .

Here’s what United reported in the first quarter compared to what Wall Street expected, based on average estimates compiled by LSEG:

  • Loss per share: 15 cents adjusted versus expected loss of 57 cents
  • Income: $12.54 billion against $12.45 billion expected

The airline expects to post profit of between $3.75 and $4.25 in the second quarter, ahead of analysts’ estimates of around $3.76 per share. Airlines make most of their profits in the second and third quarters, during the peak tourist season.

The carrier also reiterated its annual profit forecast of between $9 and $11 per share.

Shares of United rose more than 4% after hours Tuesday.

United executives will hold a call with analysts Wednesday at 10:30 a.m. ET.

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