United Airlines announced healthy revenue and profits today, beating Wall Street estimates, but also announced it would initiate its first stock buybacks since before the pandemic, infuriating Sara Nelson and the union representing flight attendants.
United Airlines Beats Wall Street Expectations, Announces Stock Buybacks
It was a profitable 2024 third quarter for United, with revenue and profit that beat analyst expectations:
- Earnings per share: $3.33 adjusted vs. $3.17 forecast
- Revenue: $14.84 billion vs. $14.78 billion forecast
- Net income: $965 million (down 15% from a year ago)
Fares are also set to rise as budget carriers retreat. Chief Commercial Officer Andrew Nocella explained:
“We believe Q1 yield strength will be possible due to the significant schedule changes and business model changes that will continue to be implemented by low-margin airlines.”
Chief Executive Officer Scott Kirby emphasized that United has invested $32 billion in employees, customers, infrastructure, and technology since 2021. In an investor call and a letter to employees explaining its Q3 results, Kirby recounted how United has invested in its employees and infrastructure over the last four years.
“I’m proud of our creativity as we really try to do things that change the airline experience – from ConnectionSaver, Agent on Demand, the best app (by far) of any airline in the world, Starlink, eliminating delay codes to empower employees to do the right thing for customers, customer communication tools, Kinective Media, and the sexiest set of new international destinations in aviation history, just to name a few.”
He then recites United’s top three priorities, which he ranks as:
- Investing in the business
- Paying down high-cost debt to strengthen the balance sheet
- Shareholder returns
Per Kirby:
“We know that customer service and customer experience are a big reason why customers are choosing us and why we’re winning share everywhere we fly. And at United, our number 1 priority remains to invest in the business – including our people. Our second priority is to pay down high-cost debt and strengthen the balance sheet. And only after we’ve done those two things, our third priority is shareholder returns.”
All this leads to the announcement of a new share repurchase program.
“Like other leading airlines and companies, we are initiating a measured, strategic share repurchase program…Importantly, my commitment to you is that investing in our people and our business will always be my top priority even while we institute this share repurchase program.”
That includes buying back $1.5 billion worth of shares, the first such action since before the COVID-19 pandemic.
Shares of United are heading for their highest close today since February 2020.
Sara Nelson, Flight Attendants Union Outraged By Stock Buybacks
Sara Nelson, the President of the AFA-CWA union representing United flight attendants and often called the “world’s most powerful flight attendant,” quickly condemned the news of the stock buybacks.
HUGE Mistake @united! https://t.co/bacugMwr0I pic.twitter.com/OeAQVLLVa1
— Sara Nelson (@FlyingWithSara) October 15, 2024
“Stock buybacks are a sickness that hurts workers and consumers alike. The airline industry was rid of them, but a greedhead hedge fund broke the seal in its efforts to gain control of Southwest Airlines and now United Airlines management is following their lead to manipulate the stock and cheat workers and passengers…
“That money United just promised Wall Street belongs to Flight Attendants who worked throughout the pandemic and during this taxing recovery for all of us on the frontlines. United management could end the games and agree to the contract Flight Attendants have earned tomorrow. But instead, they are choosing to jump back in the greed pool with this century’s robber barons.
“Make no mistake, United Airlines Flight Attendants are ready to do whatever it takes to get the contract we deserve. “We will take this message directly to executives at United Airlines Headquarters at Willis Tower on Thursday. It’s time for United to pay us or face CHAOS!”
CHAOS is AFA’s trademarked strategy of intermittent strikes and other non-traditional work actions. Questioning stock buybacks is fair, but reducing them to pure greed is foolish.
My question, as a customer, is whether this news (both the increased profits and the stock buybacks) will noticeably decrease flight attendance morale until a new deal is reached.
In any case, we will soon see…
that little b***h
she really needs to stay in her lane
The old adage of “children should be seen and not heard” applies to Sarah Nelson
Many people call us FA’s coke machines and other derogatory names, completely dismissing the vital safety role we fill in this industry. Our careers are filled with many sacrifices and long hours, and are deserving of a contract that reflects this.
Kirby initiating a buyback when the face of the company (FA’s) are still waiting for fair compensation is insulting.
Trey, I totally understand that sentiment. It is high time for a new contract and the healthy profits and revenue make the case for a better FA contract. I wish you all the best in achieving that soon.
A lot of hyperbole from Nelson. I truly dislike the woman but United is screwing over the people that are the primary face of the company to passengers by not giving the FA’s a decent contract. Kirby is talking out of both sides of his mouth when the first priority he lists is investing in the company but hoses the flight attendants at the same time. I have a very, very low opinion of Kirby but at least he could be silent instead of going out of his way to anger the faces of his “Best Airline In The World”.
But the problem is that United has actually done more than offer the FA’s a ‘decent contract’, in fact they’ve offered them a contract that’s nearly identical to the recently ratified DL and AA contracts (plus a dollar of course), but even though thats industry leading, its not industry leading enough apparently. They want more…more, more, more. What would be amazing is if FA’s went out and actually did an incredible job to justify their demands rather than snatching trays away and grazing crotches.
@Bob
Please don’t tell lies on here when the union puts out a newsletter every month with updates, They have not offered any of that so stop telling lies
If FAs and Sara Nelson has confidence in the health of United Airlines, they should buy some stock as part of a balanced portfolio.
Sara Nelson is why the “C word” still has its uses.
Stock buybacks are not stock manipulation in any sense different than paying dividends. They do not hurt workers or customers unless you believe free cash flow should be returned to workers in raises or customers in lower prices rather than providing an ROI for shareholders (whose return is -18% in last 5 years). If you care about customers then you wouldn’t pull work stoppage BS. I am tired of unions saying “here’s what we want, give it all to us, or you’re the jerk, because we never request anything not fair.” She shows little understanding of economics, but a good one of Trump-like tactics.
Hi Dave,
If you pay attention you would understand that is literally not what she’s saying. She said United Airlines refused to offer even what American has been offered which is the new baseline. They are the frontline employees and they are clearly not negotiating in good faith when they can do stock buybacks but not take care of their frontline employees first. That is the major issue and many of the flight attendants are very upset. It’s not a great look to customers either approaching a holiday season with a strike vote in place that’s another reason why the issue is being highlighted
That’s not true at all. If Sarah is saying that they haven’t been offered the AA / DL deal plus a dollar, she’s either completely misinformed or flat out lying. This isn’t a monetary issue though, they want insane demands to work rules and work/life balance issues. They want extra staffing over an above what every other airline in the world has because their aging FA’s can’t keep up. If it was just higher salaries this would’ve been over a long time ago.
Can’t she be brought up on sedition or terrorism charges?
She needs some AD. Remind her who’s in charge.