United Airlines announced plans for a $1.5 billion share buyback as the airline reported better-than-expected earnings for the third quarter of the year. The company is forecasting strong results for the final quarter of 2024, with expected earnings of $2.50 to $3.00 per share. This is an improvement from the $2.00 per share earned in the same quarter the previous year and higher than the $2.68 per share estimated by analysts. The share buyback is a positive sign of financial stability for the airline, as it would be the first since before the Covid-19 pandemic.
In the third quarter, United Airlines reported revenue of $14.84 billion, a 2.5% increase from the previous year, surpassing analysts’ expectations. Net income for the quarter was $965 million, a 15% decrease from the previous year. The airline saw positive domestic unit revenue in August and September, as airlines reduced flight capacity, which in turn increased fares. United’s corporate revenue rose by 13% in the quarter, premium revenue by 5%, and sales from basic economy tickets increased by 20%.
United Airlines is focusing on expanding its international routes, with plans for new flights to destinations like Mongolia, Senegal, Spain, and Greenland. The airline is optimistic about international travel demand and is adjusting its routes to cater to this demand. Adjusting for one-time items, United reported an earnings per share of $3.33, exceeding Wall Street forecasts and United’s own estimates from July. The company’s expansion plans reflect confidence in the future of travel and the industry’s recovery from the impact of the pandemic.
Receiving over $50 billion in government aid during the pandemic, U.S. airlines were prohibited from share repurchases and dividends. With the gradual recovery of the travel industry, airlines like Southwest Airlines and United Airlines are now announcing share buyback programs to showcase financial stability and growth. United CEO Scott Kirby emphasized that investing in employees and the business remains a top priority even as the share repurchase program is initiated. The airline industry continues to navigate challenges, such as the impact of production issues at Boeing due to a monthlong machinist strike.
United Airlines’ strong financial performance in the third quarter highlights the airline’s resilience and ability to adapt to changing market conditions. The company’s strategic initiatives, such as the share buyback program and international route expansion, demonstrate a commitment to long-term growth and recovery. With positive domestic unit revenue and strong corporate and premium revenue in the quarter, United Airlines is well-positioned for continued success in the airline industry. Executives will provide further insights on the company’s performance and future prospects during the upcoming call with analysts, addressing questions on demand for the rest of the year and into 2025.
