TLDR
- United Airlines reported best first-quarter results in five years with adjusted earnings of 91 cents per share
- Shares rose 6% in premarket trading, recovering some of the 31% loss year-to-date
- Forward bookings remain stable with premium cabin bookings up 17% and international reservations up 5%
- United is reducing domestic capacity by 4% starting in Q3 and retiring 21 aircraft earlier than planned
- Company maintains original 2025 guidance of $11.50-$13.50 EPS if demand remains stable, but warns of $7-$9 EPS if recession occurs
United Airlines reported its best first-quarter financial results in five years, beating profit expectations despite ongoing economic uncertainties. The carrier’s shares jumped nearly 6% in premarket trading on Wednesday.
The Chicago-based airline reported adjusted first-quarter earnings of 91 cents per share on record revenue of $13.2 billion, up 5.4% from the same period last year. Analysts had expected earnings of 74 cents per share.
United’s stock has fallen 31% this year as fears of recession and trade tensions weighed on the airline sector. However, Wednesday’s gains suggest investors were reassured by the company’s performance.
Strong Premium and International Demand
Premium cabin revenue rose 9.2% compared to the same quarter last year, while business revenue grew 7.4%. Basic economy revenue also increased 7.7% year-over-year.
International travel showed strength with Atlantic revenue per seat-mile up 4.7% and Pacific routes up 8.5% from last year. The airline reported that forward bookings for high-margin premium cabins rose 17% over the past two weeks.
International reservations increased 5% during the same period. These metrics helped lift shares of industry peers, with American Airlines up 1.6%, Delta Air up 3.4%, and Southwest Airlines rising 2.6%.
United CEO Scott Kirby stated, “Our strategy coming out of the COVID pandemic was simple: Build the best airline in the world to attract brand-loyal customers.” He added that the airline’s United Next strategy would allow it to thrive in any demand environment.
Capacity Adjustments and Economic Uncertainty
Despite the positive results, United is taking a cautious approach to capacity management. The airline announced it will remove 4 percentage points of scheduled domestic capacity starting in the third quarter.
It will also reduce “off-peak flying on lower demand days,” with these adjustments expected to continue through the fourth quarter of 2025. The company previously announced plans to retire 21 aircraft earlier than planned.
United warned that its financial forecast depends on the macro environment, which it described as “impossible to predict this year with any degree of confidence.” If a recession occurs, the airline projects a 5-percentage point drop in revenue.
This would translate to a full-year adjusted profit of $7 to $9 per share, down from its January forecast of $11.50 to $13.50 per share. The airline still expects to hit its full-year forecast if demand remains stable and fuel prices stay around current levels.
TD Cowen analysts noted, “The prepared remarks encouragingly note demand has stabilized over the past 6 weeks. That factor combined with favorable fuel leads the company to believe it can achieve its initial FY25 EPS guidance.”
This stands in contrast to rival Delta Air Lines, which withdrew its full-year outlook last week, citing “stalled” demand growth due to economic uncertainty.
Operational Excellence
United reported that it flew the largest schedule by available seat miles in its history during the first quarter. The airline carried a record average of more than 450,000 passengers per day, including nearly 90,000 international passengers.
The carrier also achieved its best on-time arrival and departure rate for a first quarter since 2021. It cut its seat cancellation rate in half compared to the first quarter of 2024.
Total revenue per available seat mile rose 0.5% from a year ago. Cargo revenue increased 9.7%, and loyalty revenue rose 9.4% from last year.
United’s performance reflects its ability to navigate the challenging economic landscape while continuing to invest in customer experience. The company emphasized that it is “accelerating investments in product, service, technology and experience.”
United executives will discuss these first-quarter financial results in a conference call on Wednesday at 10:30 a.m. Eastern time.
The airline’s resilience comes against a backdrop of trade tensions and tariff concerns. Trump’s trade policies have raised worries about a potential global recession, making customers more hesitant to spend on travel.
In February, United Airlines noted these concerns in a filing with the Securities and Exchange Commission, stating that “any deterioration in global trade relations, such as increased tariffs or other trade barriers, could result in a decrease in the demand for international air travel.”
For the second quarter, United estimates earnings of $3.25 to $4.25 per share, maintaining its position of cautious optimism in an uncertain economic environment.
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