MIAMI – United Airlines (UA) released its first-quarter earnings for 2019, signaling stable financial performance and sizable profits.
The airline emphasized that it “minimized customer impact from challenging operational events,” likely a reference to the Boeing 737 MAX grounding and the lengthy government shutdown earlier in the year.
While concerns arising from the Boeing debacle shook the industry, United still managed to fly the most revenue passengers ever for a first quarter in its history.
United also achieved one of the highest mainline on-time departures rates among all United States carriers, second only to Delta Air Lines (DAL).
As a result, total passenger revenue increased by 7.
In regard to financials, the Star Alliance member reported adjusted pre-tax revenue of $389 million, with a 4.1% adjusted pre-tax margin that is 200 basis points higher than last year’s first quarter.
Furthermore, United experienced its second consecutive quarter of adjusted pre-tax margin growth, and more is anticipated to come.
The company now remains confident that it can reach its 2019 and 2020 adjusted diluted earnings per share targets, which it estimated to be between $10 and $12 and $11 and $13, respectively.
In response to the earnings, United Chief Executive Officer Oscar Munoz stated that “We delivered another strong financial quarter in which we made important progress on our customer investments while making strategic decisions to manage our costs and producing pre-tax margin growth that we expect will lead our peers.”
Munoz did not mention the grounding of the 737 MAX flit, of which he is one of the largest operators in the United States. Even if the airline makes its best efforts to minimize costs, its grounded 737 MAX fleet will likely weigh on the company financially.
Nevertheless, United looks to counteract these losses by expanding their service from four hubs to 18 cities in 12 different states and one province. On top of this, United has announced that 11 new domestic routes.
The American carrier also announced the addition of the Bombardier CRJ 550, offering an enhanced experience to customers on key regional routes and signaling a greater focus on its domestic operations.
The airline ordered 50 planes, which will join the airline to enhance its commuter/connecting network. United is set to be the launch customer, with the order count to be labeled as “50 spacious, 50-seat Bombardier CRJ550 aircraft.”
Abroad, United is expanding its services at a rapid rate, commencing nonstop seasonal service between San Francisco and Amsterdam.
The carrier also filed an application to operate six daily, nonstop flights to Tokyo Haneda Airport from six different hubs. The maneuver would open up a large revenue stream from its Asian operations.
These earnings serve as an important stepping stone for an airline that has been plagued by operational obstacles and bad publicity in recent years. United’s stock (UAL) is currently up 4.59% to $89.08 per share.