United Airlines reports a 5.7% uptick in revenue for the second quarter of 2024, which was in line with guidance, but earnings per share of $4.44 beat estimates. Capacity rose 8.3% in the quarter although load factor was down two percentage points but yields improved thanks to better sales of premium and basic economy fares.
""The revenue diversity advantages that we've built with our premium customers, Basic Economy customers, and domestic road warriors, on top of the world's best loyalty program and leading customer service, have propelled our margins to near the top of the industry,"" said United Airlines CEO Scott Kirby. ""Looking forward, we see multiple airlines have begun to cancel loss-making capacity, and we expect leading unit revenue performance among our largest peers in the second half of the third quarter. United has long been preparing for the moment when industry wide domestic capacity would adjust - it's now clear that inflection point is just 30 days away.""
Total revenue per available seat mile, or TRASM, was down 2.4% but United cut costs per available seat mile, or CASM, by 4.8%% to $0.164.
In the second quarter, United took delivery of for Boeing MAX aircraft, and five aircraft A321neos, and expects 66 aircraft deliveries in 2024. This translates to total adjusted capital expenditures of less than $6.5bn for the year owing to the movement of certain PDPs related to deliveries in future years.
The airline generated net cash provided by operating activities of $2.9bn and $1.9bn of free cash flow in the quarter. In early July, United reduced its debt stack with the voluntarily prepayment of the remaining balance of the MileagePlus term loan, totalling $1.8bn, which the airline said further strengthens its balance sheet and reduces the airline's interest burden in the years ahead. The airline’s total debt and finance lease obligations of $26.6bn at quarter end.
United ended the quarter with trailing twelve months adjusted net debt to EBITDAR of 2.6x3. Looking ahead, United has reduced planned domestic capacity by approximately three points in the fourth quarter, compared to the company's previous plan.
""At United, we have been effectively managing costs, cash and capacity against a challenging industry backdrop because we're focused on doing what's necessary to hit our financial targets. Thank you to leaders across the company for embracing a 'no excuses' approach to running our business. It gives me confidence in our ability to achieve our $9-$11 EPS2 goal for 2024, despite the challenges the industry has faced this year,"" said Kirby.
United maintained its earnings guidance of $9 to $11 per share for the full financial year 2024.
United Airlines reports positive second quarter
