By Rajesh Kumar Singh
CHICAGO (Reuters) -United Airlines Holdings on Tuesday forecast stronger-than-expected earnings in the current quarter, after reporting a narrower-than-expected loss in the first quarter, on robust demand for travel.
Shares gained 4.3% in extended trading.
The Chicago-based carrier, which has been hit by Boeing’s ongoing safety crisis, also slashed its total aircraft delivery estimates for this year to 66 from 88 estimated in February.
It had to ground its Boeing 737 MAX 9 fleet following a January mid-air cabin panel blowout on an Alaska Airlines flight, resulting in a $200 million hit in the first quarter.
The Jan. 5 incident has put a big question mark over certification of the larger variant MAX 10, which was due for deliveries this year and was to be the cornerstone of United’s fleet. It has also raised doubts about Boeing’s ability to meet aircraft delivery commitments this year.
United received just seven planes in the first quarter, compared with 23 a year ago, according to the planemaker’s delivery data.
The delivery delays have reduced its aircraft utilization, leaving the company overstaffed. United has paused pilot hiring for May and June and offered voluntary unpaid leave to its pilots.
It now expects to take deliveries of on average 100 narrowbody aircraft per year between 2025 and 2027. This includes 35 Airbus A321neo jets that it will secure from aircraft lessors.
United reported robust demand for domestic and transatlantic flights, along with a pickup in corporate travel spending. Last week, rival Delta Air Lines forecast the highest second-quarter revenue in its history.
United expects an adjusted profit in the range of $3.75 to $4.25 a share in the quarter through June. Analysts expected the company to report a quarterly profit of $3.76 a share, according to LSEG data.
Adjusted loss for the first quarter came in at 15 cents a share, narrower than analysts’ expectations of a loss of 57 cents per share. United reaffirmed its 2024 profit estimate of $9-$11 a share.
The company will discuss the results on a call with analysts and investors on Wednesday morning.
(Reporting by Rajesh Kumar Singh in ChicagoEditing by Matthew Lewis)
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