A United Airlines Boeing 737 Max 9 lands at San Francisco International Airport.
Justin Sullivan | Getty Images
United Airlines on Tuesday cut its plane delivery expectations for the year due to delays Boeingthe latest airline to face growth challenges due to manufacturer safety crisis.
United expects to receive just 61 new narrow-body planes this year, down from 101 expected at the start of the year, and contracts for up to 183 planes in 2024.
“We have adjusted our fleet plan to better reflect the reality of what manufacturers are able to deliver,” CEO Scott Kirby said in an earnings release. “And we will use those planes to take advantage of an opportunity that only United has: profitably grow our midcontinent hubs and expand our highly profitable international network from our best-in-class coastal hubs.”
United said it plans to lease 35 Airbus A321neos in 2026 and 2027, turning to rival Boeing for new planes as the U.S. manufacturer faces curbs on its production and increased federal scrutiny. In January, United said it would eliminate Boeing’s as-yet-uncertified Max 10 from its fleet plan. The airline said it had converted some Max 10 planes to Max 9s.
It lowered its annual capital spending estimate from about $9 billion to $6.5 billion.
United is also facing a safety review by the Federal Aviation Administration, which has impeded some of its planned growth. A spokesperson told CNBC earlier this month that the carrier will have to postpone planned service from Newark, New Jersey, to Faro, Portugal, and service between Tokyo and Cebu, Philippines.
United earlier this month postponed its investor day, scheduled for May, “because our entire team is focused on cooperating with the FAA to review our safety protocols and it would simply send the wrong message to our team to have an exciting investor day focused primarily on financial results.”
The airline said it would have posted 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 Federal Aviation Administration temporarily grounded those jets after a door plug exploded minutes later Alaska Airlines flight, triggering a new safety crisis for Boeing and slowing deliveries of its planes to customers including United, Southwest and other.
The airline reported a net loss of $124 million, or a loss of 38 cents per share, in the first quarter, compared with a loss of $194 million a year earlier, or 59 cents per share. Revenue increased nearly 10% in the first quarter compared to the same period a year earlier to $12.54 billion, with capacity growing more than 9% year-over-year.
Here’s what United reported in the first quarter compared to what Wall Street expected, based on average estimates compiled by LSEG:
- Loss per share: 15 cents adjusted versus an expected loss of 57 cents
- Income: $12.54 billion versus the expected $12.45 billion
The airline expects to post earnings of between $3.75 and $4.25 in the second quarter, beating analysts’ estimates of about $3.76 per share. Airlines make most of their profits in the second and third quarters, during the peak travel season.
The airline also reiterated its full-year earnings forecast of $9 to $11 per share.
United shares rose more than 4% in after-hours trading Tuesday.
U.S. executives will hold a call with analysts on Wednesday at 10:30 a.m. ET.