United: Q1 Corp. Travel ‘Strong Across the Board’

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United Airlines’ managed corporate travel in the first quarter was up 14 percent year over year, United chief commercial officer Andrew Nocella said during a Wednesday morning earnings call. 

Nocella did not specify whether he was referring to corporate bookings or revenue, and United did not immediately respond to a request for clarification.

“Yields for managed travel grew faster than non-managed travel due to stronger close-in pricing and refined discounting guidelines,” Nocella said. “The strength of the business traffic rebound is a nice development for an airline like United.”

The increase in corporate travel came during a quarter that is typically the carrier’s “most challenging financially,” Nocella noted, and where “post-pandemic Q1 seasonality worsened due to decreases in corporate business.”

Despite that, “corporate was strong across the board” during the quarter, domestically and around the globe, Nocella said. “We saw nine of our top 10 corporate booking days this year in our history. The strongest industries were professional services, tech and industrials. But every sector was up in the numbers this year. Q1 corporate is really important to us, and the fact that Q1 is gaining strength, corporate is really very good for our outlook for future Q1s.”

FAA, Aircraft Delivery Delays

United CEO Scott Kirby addressed the U.S. Federal Aviation Administration’s recent increased oversight of the carrier. “We welcome the FAA’s engagement, and we are embracing this review as an opportunity to take our safety culture standards to an even higher level,” Kirby said. 

Through the FAA safety review, certain certifications will be delayed, United president Brett Hart said, and the carrier expects a “small number” of aircraft scheduled for delivery in the second quarter to be delayed, though this will have a “minimal impact to our 2024 capacity plans.”

Further, Boeing’s “repeated delivery delays” has created an “impractical bow wave” of deliveries that United had to address, United CFO Mike Leskinen said. The carrier in 2024 now expects to take delivery of 61 narrowbody aircraft and five widebody aircraft, compared with the “contractual deliveries of 183 narrowbody aircraft at year-end and the 101 aircraft we were planning for at the start of the year,” he added.

United also converted a portion of its Boeing 737 Max 10 orders scheduled through 2027 to Max 9s, Leskinen said. The carrier also plans to lease 35 new Airbus A321neos scheduled for delivery in 2026 and 2027. With those changes, United expects to take delivery of about 100 narrowbody aircraft on average each year during the 2025 through 2027 period, and has “the ability to fly some of our older aircraft longer,” he added. 

United Q1 Metrics

United reported first-quarter passenger revenue of more than $11.3 billion, up 10.1 percent year over year. Total revenue was more than $12.5 billion, representing a 9.7 percent increase compared with a year prior. 

Domestic first-quarter passenger revenue was more than $6.9 million, up 6.6 percent versus Q1 2023 on increased capacity of 0.5 percent. International passenger revenue was up 16 percent on increased capacity of 21.1 percent. Total network capacity grew 9.1 percent year over year.

The carrier reported a Q1 net loss of $124 million, down from the loss of $194 million in Q1 2023. United executives said that the grounding of the Boeing 737 Max 9 aircraft in January cost the carrier about $200 million, and without that grounding the airline would have been profitable during the first quarter.

RELATED: United Q4 performance

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