a man and woman standing in front of a wall with airplanes

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:

  1. Investing in the business
  2. Paying down high-cost debt to strengthen the balance sheet
  3. 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.

“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…

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