United Airlines Anticipates First-Quarter Loss Amidst Boeing 737 Max 9 Grounding
United Airlines expects to report a loss in the first quarter due to the Federal Aviation Administration (FAA) grounding of its Boeing 737 Max 9 aircraft. The decision comes after an incident involving Alaska Airlines Flight 1282 malfunctioning in flight. United, which has the largest fleet of these airlines with 79 planes, expects to trade between 35 cents and 85 cents in the first three months of this year. The blackout is expected to last until January 26, which will result in many flight cancellations on United and Alaska Airlines.
Read More: The lone In-N-Out in Oakland to shut down permanently
United’s estimate shows the economic impact of land use; Home prices (excluding gas) are expected to increase by mid-digit percentages in the first quarter compared to the previous year. Three percentage points of this increase is attributed to Max grounding. Despite these challenges, United expects its domestic revenue to continue in the first quarter.
The latest announcement comes after a strong holiday season for United, although the airline faced flight disruptions due to January’s winter storm. United shares rose more than 6% in after-hours trading.
In the final quarter of 2023, United reported revenue of $600 million, down nearly 29% year over year. But revenue rose nearly 10% to $13.63 billion, beating analysts’ expectations. Taking into account one-time items, United earned $2 per share in the fourth quarter, compared with $2.46 a year earlier.
United achieved its full 2023 adjusted earnings per share target of $10.05. Going forward, the airline expects full-year 2024 adjusted earnings per share to be in the range of $9 to $11, according to analysts’ expectations.
United executives are expected to answer questions about Boeing’s grounding compensation during the meeting. Alaska Airlines and Boeing are also scheduled to announce their results in the coming weeks.
FAA grounded 171 planes, including 79 United Airlines Boeing 737 Max 9 planes, after Alaska Airlines’ emergency door collapsed in flight. airplane flight. United said it expects the planes to be grounded by Jan. 26. The FAA also requested additional reviews of 136 older 737-900ER models, which have the same door design as the 737 Max 9s, stating that safety considerations would restore flight time. these planes. Boeing pledged to strengthen its inspection process in response to the incident.
