United Airlines earns $1.3bn in Q3 2024

Abdullateef Fowewe

United Airlines has announced its third-quarter 2024 financial results, reporting pre-tax earnings of $1.3 billion and an adjusted pre-tax margin of 9.7%.

The airline achieved diluted earnings per share of $2.90, surpassing expectations with an adjusted EPS of $3.33 ahead of the third-quarter 2024 guidance provided at the start of the quarter of $2.75 to $3.25.

According to a statement, besides producing strong financial and operational results in the quarter, the airline also expected, revenue trends to improve as the industry reached an inflection point in the quarter with unprofitable capacity exiting the market.

Meanwhile, domestic unit revenue was positive year-over-year in August and September, demand continues to be strong for the United product: Corporate revenues were up 13% year over year in September, and in the quarter premium revenues continued to remain resilient and

were up 5% year over year and revenue from Basic Economy was up 20% year over year.

Reacting to the outcome, the Chief Executive Officer of United Airlines Scott Kirby, said, “I appreciate the entire United team coming together to take care of our customers by operating a safe and on-time airline this summer.

“As predicted, unproductive capacity left the market in mid-August, and we saw a clear inflection point in our revenue trends that propelled United to exceed Q3 expectations. A prosperous summer 2024 is just the beginning as our improved customer experience combined with United Next positions the airline at the top of the industry for the foreseeable future.”

However, under its capital allocation, the airline’s Board of Directors authorised a new share repurchase program for up to $1.5 billion of outstanding shares of common stock and warrants originally issued to the U.S.

Treasury under the CARES Act and Payroll Support Program, subject to a limit of $500 million in aggregate through year-end 2024. This amount represents approximately 7% per cent of the company’s market capitalisation based on the closing stock price on Oct 14, 2024, which is the first share repurchase program since the suspension of the previous program in 2020 due to the COVID-19 pandemic.

Also speaking, United Airlines CFO Michael Leskine, announced, “Unless suspended or terminated earlier by our Board of Directors, this program has no set expiration date and will therefore terminate when the company has completed all purchases authorised under the program.

“In the last four years, we’ve invested $22 billion in our product and nearly $10 billion in our people. Those investments have enabled higher profits and are now contributing to growing free cash flow.

“We’re now in a position to add a share repurchase program as we continue to invest in and deleverage our business. We are simultaneously targeting net leverage2 below 2x in the next few years. We intend this buyback to be the beginning of a consistent and disciplined return of capital that is paced by our ability to generate increasing levels of free cash.”