New York, United States – United Airlines warned Monday that it expects losses in the first quarter of 2024 due to the grounding of its Boeing 737 MAX 9 aircraft, while beating analyst expectations for the fourth quarter.
The US airline’s decision to ground its 737 MAX 9 fleet came amid heightened scrutiny of Boeing’s narrow-body airliner following a recent scare on an Alaska Airlines plane when a panel blew off in mid-flight, leaving a hole in the fuselage and forcing an emergency landing.
While there were no fatalities or serious injuries in the January 5 incident, US regulators grounded 171 jets from the 737 MAX 9 fleet with the same configuration as the plane involved in that drama.
In estimates published Monday alongside its fourth quarter earnings, United said it expects an adjusted loss of between 35 and 85 cents per share in the first three months of 2024, citing the likely financial impact of its decision to ground its fleet of Boeing 737 MAX 9’s.
In the final quarter of 2023, the US airline reported net income — or profits — of $600 million on operating revenues of $13.6 billion. This was down almost 29 percent on the same period a year ago.
But on an annual basis, United reported net income of $2.6 billion last year on revenues of $53.7 billion, up sharply from annual profits of $737 million in 2022.
The company’s shares jumped almost six percent in after-hours trading after its earnings were published.
“Despite unpredictable headwinds, we delivered on our ambitious EPS target that few thought possible,” United Airlines CEO Scott Kirby said in a statement, referring to the company’s better-than- expected earnings-per-share results.
“Looking ahead, we expect these trends to continue and United is incredibly well positioned to capitalize on them and to deliver on our short and long-term financial targets,” he added.