A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport.
Justin Sullivan | Getty Images
United Airlines on Tuesday cut its aircraft-delivery expectations for the yr because it grapples with delays from Boeing, the most recent airline to face growth challenges due to the plane-maker’s safety crisis.
United expects to receive just 61 latest narrow-body planes this yr, down from 101 it said it had expected originally of the yr and contracts for as many as 183 planes in 2024.
“We have adjusted our fleet plan to higher reflect the truth of what the manufacturers are capable of deliver,” CEO Scott Kirby said in an earnings release. “And, we’ll use those planes to capitalize on a chance that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our greatest within the industry coastal hubs.”
United said it plans to lease 35 Airbus A321neos in 2026 and 2027, turning to Boeing’s rival for brand new planes because the U.S. manufacturer faces caps on its production and increased federal scrutiny. In January, United said it was taking Boeing’s not-yet-certified Max 10 out of its fleet plan. The airline said it has converted some Max 10 planes for Max 9s.
It lowered its annual capital expenditure estimate to $6.5 billion from about $9 billion.
United can also be facing a Federal Aviation Administration safety review, which has prevented a few of its planned growth. A spokeswoman told CNBC earlier this month that the carrier may have to postpone its planned service from Newark, Latest Jersey, to Faro, Portugal, and repair between Tokyo and Cebu, Philippines.
United earlier this month postponed its investor day, which was scheduled for May, “because our entire team is targeted on cooperating with the FAA to review our safety protocols and it will simply send the flawed message to our team to have an exciting investor day focused totally on financial results.”
The airline said it will 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 blew out minutes into an Alaska Airlines flight, sparking a latest safety crisis for Boeing and slowing deliveries of its planes to customers including United, Southwest and others.
The airline posted a net lack of $124 million, or a lack of 38 cents a share, in the primary quarter compared with a $194 million loss, or 59 cents, a yr earlier. Revenue rose nearly 10% in the primary quarter compared with the year-earlier period to $12.54 billion, with capability up greater than 9% on the yr.
Here’s what United reported in the primary quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:
- Loss per share: 15 cents adjusted vs. a lack of 57 cents expected
- Revenue: $12.54 billion vs. $12.45 billion expected
The airline expects to post earnings of between $3.75 and $4.25 within the second quarter, ahead of analysts’ estimates of about $3.76 a share. Airlines make the majority of their profits within the second and third quarters, during peak travel season.
The carrier also reiterated its full-year earnings forecast of between $9 and $11 a share.
United’s shares were up greater than 4% in after-hours trading on Tuesday.
United executives will hold a call with analysts at 10:30 a.m. ET on Wednesday.