United Airlines Q12024 cargo revenue down 2%

United Airlines reported a two percent decline in cargo revenue at $391 million for the first quarter of 2024 compared to $398 million in Q12023.

United transported nearly 299 million pounds of cargo including approximately 10.3 million pounds of medical shipments and 263,000 pounds of military shipments, says an official release.

Cargo revenue tonne miles increased 17 percent to 852 million from 731 million in Q12023.

For Q4FY2023, United had reported a 15 percent decline in cargo revenue at $402 million on 17 percent increase in cargo revenue tonne miles at 894 million. For full year 2023, United had reported a 31 percent decline in cargo revenue at $1.5 billion compared to $2.1 billion in 2023 even as cargo revenue tonne miles increased four percent to 3.2 billion.

United reported a net loss of $124 million on operating revenue of $12.5 billion, up 10 percent, for the first quarter of 2024. "These earnings reflect the approximately $200 million impact from the Boeing 737 MAX 9 grounding, without which the company would have reported a quarterly profit. In the quarter, the company generated $2.8 billion operating cash flow and free cash flow1 of $1.5 billion. The company continues to expect full-year 2024 adjusted diluted earnings per share of $9 to $11."

Scott Kirby, CEO, United Airlines says: "We've adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver. And, we'll use those planes to capitalise on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs."

United has converted a portion of Boeing MAX 10 aircraft orders to Boeing MAX 9 from 2025 through 2027, and maintained the right to convert more Boeing MAX 10 into MAX 8 or MAX 9 as needed. The airline has also agreed to letters of intent with two lessors to lease 35 new Airbus A321neos with CFM engines expected in 2026 and 2027, the release added.

"Following the 737 MAX 9 grounding and the FAA's announced significant production capacity constraints on Boeing, the company now anticipates 61 narrowbody aircraft and five widebody aircraft to be delivered in 2024."

The January 5, 2024 incident, where a cabin panel blew out on an Alaska Airlines jet mid-air, has fueled uncertainty over certification of Boeing's larger variant, MAX 10, which was due for deliveries this year and was expected to be a centrepiece of United's fleet, Reuters reported.

Due to manufacturing and certification delays from prior years, by the end of 2023, the airline's contractual aircraft commitments for 2024 had increased to 183 narrowbody aircraft. At the beginning of 2024, these delays were anticipated to continue and the company expected 101 narrowbody deliveries, the release added.

"In the short run, the company expects a small number of aircraft previously scheduled to enter into service in the second quarter to be pushed into the third quarter, which is expected to have minimal impact on the company's capacity plans."