The Association of Flight Attendants-CWA ( AFA
) has issued a statement after United Airlines announced a stock buyback following its Q3 results announcement, saying that the move was a “huge mistake.”
Making a mistake
On October 15, Sara Nelson, the president of AFA, and Ken Diaz, the president of the 
United Airlines
Master Executive Council (MEC) of AFA, issued a joint statement condemning United Airlines’s announcement of a stock buyback program on the same day.
“United Airlines management just made a huge mistake! Stock buybacks were banned in connection with COVID relief, and it allowed airlines to invest in the operation and new contracts.”
Photo: Vincenzo Pace | Simple Flying
Nelson and Diaz added that all employee groups have contracts except the carrier’s flight attendants. The pair mentioned the strike by Boeing’s machinists, represented by the International Association of Machinists and Aerospace Workers (IAM) District Lodge 751 and District W24, saying that the two unions walked off the job because shareholder capitalism “nearly destroyed this once great pillar of aviation.”
United Airlines cabin crew members approved a strike vote, with 99.9% of voters saying yes to the action and 90.21% participating in the ballot on August 28. Then, Diaz said that the carrier’s flight attendants deserved an industry-leading contract, adding that the strike authorization vote showed the union’s members were ready to do whatever it took to get it.
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The inflight workers cannot walk off the job just yet.
Calls to resume negotiations
The joint statement on October 15 reiterated that the airline’s flight attendants have approved a strike authorization vote as United Airlines has continuously delayed contract negotiations.
“It’s well past time for Scott Kirby [the chief executive officer (CEO) of United Airlines – ed. note] to send decision makers to the table and stop the delay tactics. The company currently has concessions on the table when no other work groups at any airline have agreed to concessions.”
Nelson and Diaz stated that the money United Airlines promised Wall Street in the form of stock buybacks belonged to its flight attendants, who worked through the pandemic and during this difficult recovery period for those on the frontlines.
Photo: Vincenzo Pace | Simple Flying
Throughout the past few years, the number of unruly passenger reports in the United States has skyrocketed. According to data from the Federal Aviation Administration (FAA), while in 2019, there were 1,161 reports about passenger-related incidents, as of October 6, 2024, the regulator has received 1,641 reports about unruly travelers during the year, showing a clear increase in such events.
“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.”
AFA concluded by saying that this message would be brought directly to the airline’s headquarters at Willis Tower in Chicago, Illinois, and the US, threatening that either United Airlines would pay them or there would be CHAOS.
The CHAOS acronym deciphers “create havoc around our system,” with AFA using the system for the first time in May 1993. The union described it as strategy that is underpinned by intermittent strikes and other non-traditional work actions.
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Under the new rules, crewmembers could be terminated if they fail to provide a doctor’s note within 72 hours of calling sick.
Quarter exceeding expectations
Meanwhile, Kirby said that the carrier appreciated its employees coming together to take care of its customers during the summer and Q3. The CEO added that with unproductive capacity leaving the market in mid-August, the airline saw a clear inflection point in its revenue trends, which propelled United Airlines to exceed its expectations for the quarter.
“A prosperous summer 2024 is just the beginning as our improved customer experience combined with United Next positions the airline at the top of the industry for the foreseeable future.”
The airline ended the three-month and nine-month period with revenues of $14.8 billion and $42.3 billion, respectively. While expenses growth outpaced revenue growth, United Airlines finished Q3 with a net profit of $965 million.
The airline’s net profit was $2.1 billion during the first nine months of 2024, representing a 7.2% increase year-over-year (YoY).
Photo: Kevin Hackert | Shutterstock
With the carrier’s Q3 results announcement, United Airlines said that its board approved a new share repurchase program for up to $1.5 billion of its shares of common stock and warrants issued to the US Treasury under the CARES Act
and Payroll Support Program (PSP).
The first tranche was subject to a $500 million limit until the end of the year, representing around 7% of the airline’s market capitalization based on the closing stock price of $63.53 on October 14.
The following day, the airline’s shares opened at $64.18, peaked at $65.02, and closed at $64.05.
Speaking about the share buybacks, Michael Leskinen, the chief financial officer (CFO) of United Airlines, commented that since 2020, the airline has invested $22 billion into its product and $10 billion in its people, enabling higher profits.
The investments have resulted in growing free cash flow, and the company is now in a position to repurchase its stock as it continues to invest and deleverage its business.
“We are simultaneously targeting net leverage below 2x in the next few years. We intend this buyback to be the beginning of a consistent and disciplined return of capital that is paced by our ability to generate increasing levels of free cash.”
In addition to the $1.5 billion stock buyback program, the carrier repurchased 2 million shares of its common stock in connection with the exercise of roughly 6.4 million warrants issued to the US Treasury under the CARES Act and PSP.
Photo: Q world | Shutterstock
With an average price of $39.99, United Airlines spent around $79.88 million to repurchase 2 million of its shares during Q3.
Under the $1.5 billion program, the airline said that it could repurchase its shares on the open market or through private transactions, as well as accelerated repurchase agreements, depending on its capital needs, share price, market conditions, and other factors.
Throughout the first nine months of 2024, United Airlines spent $3.7 billion on capital expenditures (adjusted), compared to $5.7 billion (adjusted) during the same period in 2023.
The airline added that its full-year capital expenditures should be less than $6.5 billion, with its estimated Q4 adjusted diluted earnings per share (EPS) in the range of $2.50 to $3.
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The airline had an adjusted pre-tax earnings of $1.4 billion.