United Airlines has forecasted a first-quarter loss for 2024, citing the grounding of its Boeing 737 MAX 9 aircraft as the primary cause. The decision comes on the heels of increased scrutiny surrounding Boeing’s narrow-body airliner, following a recent incident on an Alaska Airlines plane. The incident involved a panel detaching mid-flight, resulting in a hole in the fuselage and necessitating an emergency landing.
While the January 5th incident did not result in any fatalities or serious injuries, it prompted US regulators to ground 171 jets from the 737 MAX 9 fleet with a similar configuration to the plane involved.
This move is expected to have a significant financial impact on United Airlines in the first three months of 2024.
According to AFP, in estimates accompanying the fourth-quarter earnings report, United Airlines indicated an anticipated adjusted loss ranging between 35 and 85 cents per share.
The airline reported a net income of US$600 million in the final quarter of 2023, representing a nearly 29% decrease from the same period in the previous year.
However, on an annual basis, United posted a substantial increase in net income, reaching US$2.6 billion in 2023, compared to US$737 million in 2022.
Despite the challenges faced in the fourth quarter, United Airlines exceeded analyst expectations, leading to a nearly six percent surge in the company’s shares during after-hours trading.
CEO Scott Kirby expressed confidence in the airline’s ability to weather these unpredictable challenges, stating, “Despite unpredictable headwinds, we delivered on our ambitious EPS target that few thought possible.”
Kirby remains optimistic about the future, asserting that United is well-positioned to capitalise on emerging trends and to achieve both short and long-term financial targets.
The grounding of the Boeing 737 MAX 9 fleet may present a temporary setback, but the airline aims to navigate through these challenges successfully and continue its positive trajectory in the aviation industry.
