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United Airlines Reports $14.5b Operating Revenue for Q3 2023

  • Airlines
  • 8 min read

United Airlines (UAL) has announced its Q3 2023 Financial Results, including $14.5 billion in operating revenue. Here is the brief:

United Airlines Reports $14.5b Operating Revenue for Q3 2023
Boeing and United Airlines announced the carrier is expanding its 787 Dreamliner fleet, exercising options to order 50 787-9 airplanes and securing an additional 50 options. (Image: Boeing)

United reported quarterly pre-tax income of $1.5 billion, pre-tax margin of 10.3 %, and diluted earnings per share of $3.42. The airline also reported pre-tax income of $1.6 billion on an adjusted basis, pre-tax margin of 10.8%, and diluted earnings per share of $3.65.

  • United had record-setting profits in both the Atlantic and Pacific regions
  • Pre-tax income increased 29% y-o-y; on an adjusted basis increased 37%
  • Delivered strong operational performance, with September being best on-time performance of the year
  • Increasingly powerful segmentation strategy proving to be a competitive advantageUnited

United Revenue Close to High End of Expected

In the third quarter, United Airlines saw a significant increase in revenue. United reported a growth rate of 12.5% compared to the same period last year. This achievement marked a record revenue quarter, close to the high end of the company’s expectations. The domestic demand for United Airlines remained strong and steady during the quarter. This resulted in a 9% increase in revenue compared to the previous year. August and September saw a notable rise in last-minute bookings, surpassing the demand levels from the previous year.

United Third-Quarter Financial Results

  • Capacity up 15.7% compared to third-quarter 2022.
  • Total operating revenue of $14.5 billion, up 12.5% compared to third-quarter 2022.
  • TRASM down 2.8% compared to third-quarter 2022.
  • CASM down 3.6%, and CASM-ex up 2.6%, compared to third-quarter 2022.
  • Pre-tax income of $1.5 billion, with a pre-tax margin of 10.3%. Adjusted pre-tax income of $1.6 billion, with an adjusted pre-tax margin1 of 10.8%.
  • Net income of $1.1 billion, adjusted net income of $1.2 billion.
  • Diluted earnings per share of $3.42, adjusted diluted earnings per share1 of $3.65.
  • Average fuel price per gallon of $2.95.
  • Trailing twelve months adjusted net debt to adjusted EBITDAR of 2.5x.

High Profits in Atlantic and Pacific

In terms of international operations, United Airlines reported record-high profits in both the Atlantic and Pacific regions. Revenue in the Atlantic region grew by 15% compared to the third quarter of 2022 and 70% compared to the same period in 2019. Additionally, despite a 24% decrease in capacity compared to the third quarter of 2019, United Airlines surpassed the revenue levels from that period in the Pacific region. The company also experienced the second-highest domestic revenue quarter in its history, indicating a solid profitability in the domestic market.

United’s Customer-Centric Strategy

United Airlines’ success can be attributed to its customer-centric strategy. The airline offers a wide range of services tailored to individual preferences. Premium products, such as the premium economy cabin, have been in high demand. Revenue growth has exceeded capacity expansion since its introduction in 2019. Premium product revenue witnessed a substantial 20% year-over-year increase in the third quarter. It accounted for more than half of the total passenger revenue. United’s introduction of the Basic Economy option has also proven to be a successful competitive offering. It enjoyed a 50% increase in revenue compared to the previous year.

Loyalty Pays Well

The airline’s loyalty program, MileagePlus, continues to bring significant benefits. United Airlines recorded a new trend of enrolling more MileagePlus members during the third quarter, setting a new record. The number of new members almost doubled compared to the same period five years ago. Spending across the U.S. card portfolio has shown double-digit growth. The third quarter saw the highest number of miles redeemed for award travel in the history of the program.

“Thank you to our extraordinary United team who delivered a record-setting operational performance for our customers in August and September,” said United Airlines CEO Scott Kirby. “Our strategy to diversify our revenue streams, capitalize on growth opportunities, and constantly innovate to enhance our products for our customers is paying off. Our United Next strategy is working and we remain on track to hit our financial targets.”

United Quarterly Highlights

  • United Airlines pilots, represented by the Air Line Pilots Association International (ALPA), have ratified a new four-year contract with the company.
  • Recently, the company promoted Michael Leskinen to Executive Vice President and Chief Financial Officer. The airline also promoted Josh Earnest to Executive Vice President of Communications and Advertising and Terri Fariello to Executive Vice President of Government Affairs and Global Public Policy.
  • United Airlines has introduced a new United First® seat, equipped with a wireless charging station in each armrest and 13-inch seatback screens for domestic flights.
  • The airline has opened two new United Club℠ locations in Denver, including their largest club to date – a spacious 35,000 sq. ft. facility that offers a modernized United Club experience.
  • United Airlines has announced the United Airlines Ventures Sustainable Flight Fund, which has an increased investment capacity of nearly $200 million. Additionally, the program has added eight new corporate partners within five months of its launch.
  • The company has launched the United Military Pilot Program. This unique program allows full-time, active-duty military pilots to receive conditional job offers as First Officers with United Airlines.

Enhanced Customer Experience

  • United Airlines achieved a significant milestone by becoming the first U.S. airline to incorporate braille inside aircraft cabins, making it more accessible for visually impaired passengers.
  • United Airlines introduced new amenity kits to enhance the travel experience of premium customers in international, transcontinental, and Hawaii markets. Additionally, passengers flying with United Polaris can now enjoy upgraded bedding provided by Saks Fifth Avenue.
  • United Airlines’ dedication to technological innovation was recognized as the World Aviation Festival awarded them the prestigious World’s Best Airline App. This recognition highlights the airline’s commitment to making the journey smoother and more convenient for travelers.
  • For four consecutive years, United Airlines was named Favorite International Airline by Trazee Travel. Furthermore, their MileagePlus program was awarded Favorite Frequent-Flyer Program for the sixth year in a row, showcasing its popularity and customer satisfaction.
  • In collaboration with Sesame Workshop, renowned for creating Sesame Street, United Airlines has developed a new Children’s Travel Kit. This partnership aims to make air travel a more enjoyable and engaging experience for young passengers.

United Operations Sets Records

  • In a single quarter, the company set a new record by carrying more than 482,000 passengers on average per day, achieving the highest daily average of revenue passengers ever.
  • United Airlines accomplished the highest number of daily mainline departures (2,621) and widebody departures (324) in its history during the last quarter.
  • United Express completed all flights without cancellations for 30 days in a single quarter, setting a new record.
  • United Airlines achieved the second-highest seat occupancy rate in the third quarter, surpassed only by the third quarter of 2022.

Network Growth Domestic and International

  • United Airlines has seen a notable increase in the number of domestic markets it flies to, with a total of 436 in the current quarter, up from 367 in the same period last year.
  • The airline has experienced significant growth in the Denver market, achieving the highest number of mainline departures in over two decades. This growth includes a 10% increase in seat capacity compared to the previous year and daily departure expansion on more than 20 routes.
  • United Airlines has recently announced a major international expansion focused on Asia. The airline plans to introduce the first nonstop service from the continental U.S. to Manila, daily flights from the continental U.S. to Hong Kong, Tokyo-Narita, and a second daily flight to Taipei.
  • In another significant development, United Airlines will resume daily nonstop service from San Francisco to Beijing.
  • To cater to college football fans, the airline has added 127 new nonstop flights to select cities this fall, aiming to facilitate travel to games.

United Community Initiatives

  • United Airlines has recently invested in Electric Power Systems, a company specializing in battery technology for various aerospace applications.
  • In a show of support for Maui Disaster Relief efforts, United transported over 110,000 lbs. of relief supplies. Additionally, United and MileagePlus members generously donated 55 million miles to aid relief efforts in Maui through the Miles on a Mission program.
  • United Airlines organized over 100 volunteer events for their 3rd Annual September of Service initiative. More than 2,200 employees contributed over 7,300 hours, which amounts to an impact of over $232,000. The volunteers were involved in various activities, including packing 304,000 meals, repurposing 12,000 amenity kits, collecting nearly 350 lbs. of trash, and installing 6.24 kW of solar energy in communities worldwide.
  • In collaboration with DonorsChoose.org, United pledged $1.25 million to support aviation and STEM (science, technology, engineering, and mathematics) projects in classrooms across their seven hub markets and beyond.
  • United Airlines partnered with Sesame Workshop during National Preparedness Month to help children in need worldwide. They matched up to one million miles raised for the nonprofit organization behind Sesame Street, which has a global impact.

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