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Tag: United Airlines Holdings Inc

  • Elon Musk says Twitter has had ‘massive’ revenue drop as advertisers pause spending

    Elon Musk says Twitter has had ‘massive’ revenue drop as advertisers pause spending

    Twitter has suffered a “massive drop in revenue” because of advertisers pausing spending on the social media platform, Elon Musk, the new owner of the company, said Friday without providing numbers.

    In a tweet, the Tesla, Twitter, and SpaceX CEO cast blame on “activist groups pressuring advertisers.” He said Twitter hasn’t changed its content moderation strategy, and added the company has done “everything we could to appease the activists.”

    Musk didn’t specify how much revenue the company has lost from the pullback, or how he was able to attribute that loss to pressure from activist groups.

    Musk reiterated his views Friday in an interview at the Baron Investment Conference.

    “We’ve made no change in our operations at all,” Musk said at the event. “And we’ve done our absolute best to appease them and nothing is working. So this is a major concern. And I think this is frankly an attack on the First Amendment.”

    Twitter has fired or laid off approximately 50% of its employees since he took over on Oct. 28.

    In recent days, a number of companies said they would temporarily pause their advertising spending on Twitter to see how things would change there under Musk’s ownership. Tesla competitors General Motors and Audi, and food titan General Mills are among the companies that have paused Twitter spending.

    United Airlines suspended its advertising on Twitter earlier this week, a spokesperson for the carrier said on Friday. The airline is still posting on the platform. It appeared to be the first U.S. passenger airline to say it suspended advertising on Twitter. Airlines separately provide customer service on Twitter, which United is also not suspending, the spokesperson said, declining to provide further detail on the decision.

    Ad giant IPG advised clients to temporarily pause their Twitter media plans, though it’s unclear how many clients are taking IPG agencies’ advice.

    Twitter informed employees Thursday evening that it would begin laying off staff members, according to communications obtained by CNBC. Twitter’s content moderation team is expected to be among those job cuts, Reuters reported, citing tweets by employees.

    Musk in a tweet Friday, addressed the layoffs, saying: “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day. Everyone exited was offered 3 months of severance, which is 50% more than legally required.”

    CNBC has not confirmed this with former Twitter employees.

    CNBC has also learned that deep cuts were made to Twitter’s global marketing team which handles, among other things, reporting and metrics around ad performance, sales performance and spam.

    Earlier this week Musk, who now calls himself “Chief Twit,” met with a group of leaders of civil society organizations to address concerns about hate speech and election-related misinformation on the platform.

    Since Musk took the helm, online trolls and bigots raided Twitter, and hate speech has surged on the platform. Musk also tweeted out, then deleted, an unfounded and anti-LGBTQ conspiracy theory about a home invasion and assault on Paul Pelosi, husband of Speaker of the House Nancy Pelosi.

    Some of the organizations represented in the hourlong Zoom call on Tuesday have now co-signed an open letter to top Twitter advertisers urging them to suspend their ad spending if Musk fails to enforce the company’s safety standards and community guidelines.

    Despite Musk’s claims of a recent revenue slump, Twitter’s ad spending had been on the decline before his takeover of the company was complete, and before civil society organizations began pressuring brands, according to ad analytics platform MediaRadar.

    Advertisers on Twitter increased between April and May, around the time that Musk’s plan to take Twitter private was announced, before it began to decline, according to data from MediaRadar. But the average number of advertisers on the platform fell from 3,900 in May to 2,300 in August. It had 2,900 advertisers in September.

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  • United Airlines says travel demand is stronger than recession pressures; shares rally

    United Airlines says travel demand is stronger than recession pressures; shares rally

    United Airlines Holdings Inc. stock rallied after hours Tuesday after the airline said it expected the travel rebound to weather a shakier economy in the months ahead and reported third-quarter results that beat expectations.

    “Looking forward through the end of the year, the airline expects the strong COVID recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” company executives said in a statement.

    That backdrop — along with tighter flight networks and changes in how people work — helped justify the airline’s more upbeat forecast for the fourth quarter. United Airlines
    UAL,
    +3.19%
    said it expected adjusted fourth-quarter operating margin of around 10%, the first time the figure would end above pre-pandemic 2019 levels.

    United also forecast adjusted fourth-quarter earnings per share of between $2.00 and $2.25, well above FactSet forecasts for 98 cents per share. The carrier also said it expected a 24% to 25% gain in total fourth-quarter unit revenue — a much-watched industry metric that measures sales as spread out across an airline’s flight capacity — when compared to the same period in 2019.

    Adjusted fourth-quarter unit costs were seen up between 11% and 12%, and roughly 15% for the full year, when compared to the respective periods in 2019.

    For the third quarter, United reported net income of $942 million, or $2.86 per share, compared with $473 million, or $1.44 per share, in the prior-year quarter.

    On an adjusted basis, the company earned $2.81 per share, compared with a $1.02 per-share loss in the quarter a year ago and $4.07 in 2019. Revenue was $12.877 billion, compared with $7.75 billion a year ago and $11.38 billion in 2019.

    Analysts polled by FactSet expected adjusted earnings of $2.28 per share, on revenue of $12.743 billion.

    Shares jumped 7% after the market’s close. American Airlines Group Inc.
    AAL,
    +3.79%    ,
    which reports earnings on Thursday, rose 3.6% after hours.

    United, in its earnings release, also called out three demand trends that it said were “more than fully offsetting any economic headwinds.” It said that “Air travel is still in the COVID recovery phase, hybrid work gives customers the freedom and flexibility to travel for leisure more often, and external supply challenges will limit industry supply for years to come.”

    The carrier said it expected total flight capacity, a measure of available seats on flights, to be down between 9% and 10% for the fourth quarter and down around 13% for the full year, when compared to 2019 levels.

    United reported as analysts look for cracks in the travel industry’s rebound and holiday demand, after eager travelers this summer ran into flight delays and cancellations, insufficient staffing and severe weather. Airfares and fuel costs are more expensive — a function of strong demand and thinner supplies. Aircraft supply is tight, some executives have said. Airlines have also tried to bulk up flight crews, particularly pilots, after encouraging buyouts in 2020, as the pandemic left the industry without passengers and burning through cash.

    Delta Air Lines Inc.
    DAL,
    +3.34%
    last week said it expected fourth-quarter sales to grow from pre-pandemic levels, as demand for travel, after two years of pandemic-related restraint, holds up against rising prices.

    “The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international,” Delta CEO Ed Bastian said in its earnings release.

    Raymond James analyst Savanthi Syth, in a research note last week, said she expected United to see similar momentum, helped by corporate travel and international demand.

    She said American and JetBlue Airways Corp.
    JBLU,
    +1.90%
    should benefit to a lesser degree, “due to large corp and transatlantic exposure at the former and large coastal-city exposure at the latter.” JetBlue reports earnings on Oct. 25.

    Delta’s international-unit revenue growth outpaced that in its domestic business for the first time since the pandemic started. Leisure travel to Europe helped propel results, as did strong demand for Delta’s premium-class seats. Bastian said he expected Delta’s flight network to be fully restored by summer next year.

    “Demand has not come close to being quenched by a hectic summer travel season,” he said on Delta’s earnings call. “At the same time, industry supply is constrained by aircraft availability, regional pilot shortages and hiring and training needs.” 

    Delta rose 3% after the bell on Tuesday.

    United Airlines stock is down 15% so far this year. By comparison, the S&P 500 Index
    SPX,
    +1.14%
    is down 22% over that time.

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  • Delta invests in electric air taxi startup Joby, plans last-mile airport service

    Delta invests in electric air taxi startup Joby, plans last-mile airport service

    A Joby Aviation Electric Vertical Take-Off and Landing (eVTOL) aircraft outside the New York Stock Exchange (NYSE) during the company’s initial public offering in New York, U.S., on Aug. 11, 2021.

    Michael Nagle | Bloomberg | Getty Images

    Delta Air Lines, which has watched competitors map future plans with electric vertical takeoff and landing aircraft startups, is joining the growing list of airlines looking to make short trips to and from airports faster and easier.  

    The carrier is investing $60 million in startup Joby Aviation, which is planning to build and operate an electric vertical takeoff and landing aircraft, or eVTOL, effectively an air taxi.  

    Delta will also have an exclusive five-year partnership with Joby operating eVTOLs as part of the Delta network.

    Delta CEO Ed Bastian envisions moving passengers to and from airports quicker and with less hassle.

    “We’ll flash them an opportunity to enhance that experience by taking a Joby vehicle from someplace close to their home or their business right into the airport experience and cut out 50%, if not more, of their travel time on the ground.”

    Initially, Joby and Delta will target eVTOL service to and from airports in New York City and Los Angeles, though the companies envision the service growing to other airports around the country and eventually overseas.

    “The airport routes are the cornerstone routes for any city building really valuable infrastructure that is close to the terminal and can save customers time is critical,” Joby founder and CEO JoeBen Bivert told CNBC.

    Delta’s deal with Joby means the three legacy airlines in the U.S. have all taken stakes with eVTOL startups.  

    American Airlines has invested $25 million in Vertical Aerospace and ordered 50 aircraft from the U.K. based company.

    United Airlines has two eVTOL investments and aircraft orders. One for $15 million with Eve Air Mobility while ordering 200 aircraft. The other for $10 million with Archer Aviation and an order for 100 Archer eVTOLs.

    In the last year, eVTOL stocks like Joby have struggled as investors moved away from pre-revenue companies.

    When will that day come for Joby and other eVTOL companies? It depends on when their aircraft are certified and enter commercial service.  

    Some are targeting 2024, but Joby CEO Bivert won’t commit to a launch date. “There are pieces within our control and there are pieces that are not in our control, so I can’t give you a firm date,” he said.

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