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 12 months because it struggles with delays Boeingthe newest airline to face growth challenges attributable to the plane maker’s safety crisis.
United expects to receive just 61 latest narrow-body aircraft this 12 months, down from 101 it expected at first of the 12 months, and contracts for as much as 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 brand new planes because 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 security review from the Federal Aviation Administration that has prevented a few 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, in addition to 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.” totally on financial results.”
The airline said it might 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 couple of minutes later Alaska Airlines flight, which sparked a brand 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 lack of $124 million, or a lack of 38 cents per share, compared with a lack of $194 million, or 59 cents, a 12 months earlier. Revenue rose nearly 10% to $12.54 billion in the primary quarter in comparison with the identical period last 12 months, with capability increasing greater than 9% 12 months over 12 months.
Here’s what United reported in the primary quarter in comparison with Wall Street’s expectations, based on average estimates from LSEG:
- Loss per share: 15 cents adjusted versus an expected lack 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 within 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 greater than 4% in after-hours trading on Tuesday.
United executives will hold a call with analysts on Wednesday at 10:30 a.m. ET.
