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United Airlines Cuts 2024 Aircraft Delivery Forecast Amid Boeing Delays

By Nithya Bose in Business News, posted April 18, 2024

United Airlines has significantly reduced its aircraft delivery expectations for 2024, facing setbacks from Boeing amid ongoing production and certification delays.

United had planned to incorporate up to 183 new narrow-body aircraft next year but has now adjusted that number to 61.

The reduction comes as Boeing grapples with safety reviews and production limitations.

Scott Kirby, CEO of United Airlines, said: “We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver.

“And, we’ll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs.”

The revised strategy includes leasing 35 Airbus A321neos for 2026 and 2027 as United seeks alternatives to Boeing's constrained production.

The shift also includes swapping orders from Boeing’s yet-to-be-certified Max 10 model to the Max 9.

Financially, this recalibration has led United to lower its annual capital expenditure from approximately $9 billion to $6.5 billion.

These changes unfold while the airline navigates a safety review by the Federal Aviation Administration (FAA), which has impacted planned expansions.

This includes delayed services from Newark to Faro, Portugal, and between Tokyo and Cebu, Philippines.

Amid these operational challenges, United postponed a planned investor day this month, stating that the focus remains on collaborating with the FAA to enhance safety protocols rather than celebrating financial achievements.

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Despite these setbacks, United reported a first-quarter revenue increase of nearly 10 percent to $12.54 billion, reducing its net loss from the previous year.

However, a $200 million impact from the temporary grounding of Boeing 737 Max 9 jets in January after a safety incident affected their quarterly earnings.

United anticipates earnings between $3.75 and $4.25 per share for the upcoming second quarter, slightly above analysts' expectations.

The airline also confirmed its full-year earnings projection, ranging from $9 to $11 per share.

These developments came as United’s stock increased by over 4 percent in after-hours trading, reflecting investor optimism despite the current challenges.

United will discuss these adjustments and its plans further in an analyst call scheduled for Wednesday morning.

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