Earnings reports from major airlines have been rolling out this week, beginning with a huge beat from United Airlines on Monday. American Airlines and Southwest Airlines are both set to release their reports on Thursday, with JetBlue’s report expected to come next week. The industry as a whole is anticipated to have had a soft quarter due to rising fuel prices and cost concerns, with some airlines facing additional difficulties due to Boeing 737 Max 9 jets’ mechanical issues and weather-related flight cancellations and delays.
United Airlines’ fourth-quarter adjusted earnings dropped by 18.7% to $2.00 per share, although the revenue growth rate slowed for the third consecutive quarter, rising by 9.9% to $13.63 billion for the full year. On the other hand, analysts predicted the earnings to fall by 31% to $1.69 per share, while the revenue growth was expected to rise by 9.3% to $13.55 billion. Contrasting with these results, United Airlines expects a loss between 85 cents and 35 cents per share for the first quarter of 2024 and a fiscal year with earnings between $9 and $11 per share.
American Airlines’ earnings are also expected to decrease to 11 cents per share, with revenue declining by 1.3% to $13.01 billion, while Southwest Airlines is anticipated to improve to 12 cents per share from a loss of 38 cents per share and sales rising by 9.3% to $6.75 billion. JetBlue’s upcoming report on January 30 comes in the midst of a $3.8 billion buyout proposed by the company of Spirit Airlines, which was recently blocked by a federal judge, while analysts expect JetBlue to report a loss of 27 cents per share.
The broader airline industry, thus, faces a period of challenges and uncertainty that is further complicated by the effects of unpredictable weather. These developments are clearly reflected in the ongoing volatility of airline stocks, as demonstrated by United Airlines’ stock leaping more than 6.5% after the earnings report. This could indicate significant fluctuations in the stock prices of other major airlines following their respective earnings announcements.