It’s earnings season once again and all eyes are on the US big three airlines. After Delta announcing a 2.3 billion dollar operating income with a 13.6% operating margin it was United’s turn to share its results. The big questions were, will United close the gap with Delta? Will United continue to experience growth in 2024’s first semester? Well let’s find out.
United Airlines Closes Q2 With a Double Digit Operating Margin
Although not as high as market leader Delta, United’s operating margin and overall financial results for 2024 Q2 are looking very good. The airline registered in all key performance indicators, with just some rare exceptions, growing figures compared to 2023.
The bottom line on the earnings statement says that United Airlines closed Q2 with a positive 12.9% operating margin. That is up from 10.8% in Q2 of 2023. For reference Delta’s, released just a week prior was 13.6%. That 12.9% operating margin helped raise the first semester figure to 7.4%, which is also higher than 2023’s, when it clocked in at 5.8%.
The net income for the quarter is a very healthy 1.3 billion USD, which marks a 250 million increase over 2023 Q2. The positive earning figures allowed the airline to lower its overall debt level.
Passenger Figures Up, Load Factor Suffering on International Flights
United achieved growth across the board. All global areas served saw some sort of growth over the prior year. With the pacific region achieving the highest growth rate over Q2 2023.
Overall Q2 saw United Airlines carry over 44 million passengers, up by 5.8% from 2023 at 41.9 million passengers. Looking at the first six months of 2024 the total passenger number goes up to 83.7 million passengers with a 6.3% growth over the same time frame of 2023.
That was possible thanks to an increase of seat capacity the airline deployed. It must be noted though that the rise in passengers was below the increase rate of new seats deployed. Meaning that somewhere the airline has more difficulty in filling its planes, and that is on international services.
While on domestic flights the load factor has remained pretty much stable, in Q2 2024 it was 86.4% vs 87% in 2023, on international flights it took quite a hit. Load factors on these services went down from 85.6% in 2023 to the current 81.6%.
Maybe with future statements we’ll have some deeper insights to whether this is something similar to what other carriers have been lamenting. Many airlines in Europe have lamented lower than expected figures on transatlantic services. Possibly everyone overestimated what this year’s growth might have been based on last year and there is just too much capacity for the demand. Possibly this is also hindering United Airlines on its international sectors too.
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