United Airlines announced a loss of $124 million in the first quarter, attributing it to the grounding of all Boeing 737 Max 9s for three weeks following an incident involving an Alaska Airlines Max jetliner in January. The airline stated that it would receive fewer new planes from Boeing this year than anticipated and has started leasing Airbus jets to supplement its fleet.
Despite the financial setback, United Airlines highlighted strong demand for air travel, particularly within the United States and across the Atlantic. The company projected a better-than-expected profit for the second quarter, leading to a 5% increase in its shares during after-hours trading.
During the first quarter, United faced operational challenges, including safety concerns such as a piece of aluminum skin falling off a plane, a tire detaching during takeoff, and an engine fire. The Federal Aviation Administration increased its oversight of the carrier in response to these incidents.
The temporary grounding of its 79 Max 9 aircraft in January resulted in significant flight cancellations and disruptions for United Airlines, leading to a $200 million cost that impacted its quarterly financial performance.
While Alaska Airlines received $160 million in compensation from Boeing for the Max 9 grounding, United Airlines did not disclose details of its negotiations with the aircraft manufacturer. Due to Boeing's production delays, United now expects to receive only 61 Max jets this year, prompting the airline to adjust its fleet plan and seek alternative solutions.
United Airlines plans to lease 35 Airbus jets to address the shortage of aircraft, with deliveries scheduled for 2026 and 2027. The airline has also requested Boeing to provide additional Max 9s in place of some of the Max 10s it had originally ordered.
CEO Scott Kirby emphasized the need to align the fleet plan with the manufacturing constraints, acknowledging the impact on operations and financial performance. Excluding special items, United reported a loss of 15 cents per share, surpassing analysts' expectations.
Revenue for the quarter increased by nearly 10% to $12.54 billion, exceeding Wall Street estimates. United Airlines forecasts earnings between $3.75 and $4.25 per share for the second quarter, outperforming the average analyst prediction of $3.73 per share.
