Wole Shadare 
United Airlines (UAL) has reported second quarter 2024 financial results. The company had pre-tax earnings of $1.7 billion, with a pre-tax margin of 11.6 per cent; adjusted pretax earnings.
The company also achieved diluted earnings per share of $3.96; and adjusted diluted earnings per share1 of $4.14, in line with second-quarter 2024 guidance provided at the start of the quarter.
The company continues to expect full-year 2024 adjusted diluted earnings per share2 of $9 to $11. For nearly two years, the airline has been anticipating significant domestic capacity reductions of $1.8 billion, with an adjusted pre-tax margin of 12.1 per cent.
The company expects the pre-tax margin to be near the top of the industry recently announced by a variety of U.S.
airlines this summer and mid August is an inflexion point, with published schedule changes showing an approximately 3-point decline in industry capacity growth rate.
The airline expects three critical revenue diversity advantages that propelled it to the top of the industry during this challenging period to further accelerate.
The first, premium revenue, grew 8.5 per cent in the second quarter versus the same quarter last year. The second, Basic Economy revenue, grew 38 per cent year-over-year during the quarter.
The third, market share among domestic road warriors, increased during the quarter year-over-year.
“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 in – dustry-wide domestic capacity would adjust – it’s now clear that inflexion point is just 30 days away,” Kirby added.
United has also continued to strategically manage the business in the face of industry-wide challenges. United reduced costs and delivered CASM of down 4.8 per cent and better-than-expected CASM-ex1 of up 2.1 per cent.
The airline also generated net cash provided by operating activities of $2.9 billion and $1.9 billion of free cash flow1 in the quarter.
In early July, the company voluntarily prepaid the remaining balance of the high cost MileagePlus term loan, totalling $1.8 billion, which further strengthened its balance sheet and reduced the airline’s interest burden in the years ahead.
The airline ended the quarter with trailing twelve months adjusted net debt to EBITDAR of 2.6×3. Looking ahead, United has also reduced planned domestic capacity by approximately three points in the fourth quarter, compared to the company’s previous plan – reflecting the airline’s firm commitment to taking action to adjust to current trends.
“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.
