United Airlines reported an upbeat first quarter, despite ongoing economic uncertainty related to an escalating trade war and mass layoffs within the federal government.
The carrier posted $13.2 billion in revenue and a net income of $387 million. However, United did something unusual — instead of pulling its 2025 guidance like Delta Air Lines, the company released a split forecast. One forecast reaffirmed United’s 2025 outlook and the other provided a set of projections in the event of a recession.
If there’s a recession, United said it expected a 5-point decrease in operating revenue for the year and adjusted earnings per share to slide down to a range of $7 to $9.
But, executives provided a relatively rosy outlook in a call with analysts Wednesday morning.
“Regardless of the economic path ahead, we expect our financial results to be resilient. We believe that the long-term earnings power of our company hasn’t changed,” said Michael Leskinen, United chief financial officer, during the call.
Here are five takeaways from United’s call:
1. Premium and International Are Strong
During the first quarter, premium cabin unit revenues were up mid-single digits, according to United chief commercial officer Andrew Nocella.
“So far, we’ve seen no deterioration in high-end consumers’ willingness to purchase a premium experience,” Nocella said. “We attribute this to the fact that the economic uncertainty has a larger impact on more budget-minded discretionary travelers than those seeking a premium experience.”
Delta reported similar results on premium cabin revenues last week, with international revenues up mid-single digits for the first quarter.
United also noted that it is still seeing high demand for international travel. Nocella said the carrier is seeing an uptick in demand for international travel from U.S.-based travelers, but there has been a “modest decline” from non-U.S. travelers. Bookings from Europe are 6% lower compared to last year, and bookings from Canada decreased 9%.
“For United, U.S. origin demand has more than compensated for these reductions,” Nocella said.
2. Domestic Weakness
While premium and international travel demand have continued to increase, domestic travel is seeing some softness.
Nocella said domestic main cabin revenue per available seat mile — a key profitability metric for airlines — was down 5% compared to last year. He added that the weakness was felt more in off-peak flights.
Domestic premium cabin revenues were also flat for the quarter.
In response to the softness, United said it would trim its domestic schedule by 4% for the third-quarter.
However, Nocella noted that the uptick in premium and international revenues offset the shortfalls of domestic.
“There’s a tremendous amount of uncertainty in the economy right now, and we’ve already seen a reduction in demand and correspondingly in revenue, but we’ve seen stability at that lower demand level in the last 6 weeks,” Leskinen said.
3. ‘Brand Loyal Customers’
The phrase “brand loyal” was said 36 times during United’s earnings call, and the carrier is bullish that “brand loyal customers” will help it withstand a recession.
“For United, specifically, 2 big picture themes have been confirmed: First, United’s performance is strong even in this weak environment because we’ve won the battle for brand loyal customers; and second, because we’ve won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United’s never had before,” said CEO Scott Kirby.
Kirby noted that United and “one other airline” — presumably Delta — have built up their brand loyalty post-pandemic.
“When I say that there’s been a structural permanent irreversible change, what I mean is that United has won brand loyal customers, and they are sticky, lifelong customers,” Kirby said.
Nocella said United’s market share in its hubs at Chicago O’Hare and Denver have increased significantly.
“We’ve got those customers a co-brand credit card as well to make sure they’re incredibly sticky, and they stay with United indefinitely — that was our plan all along,” Nocella said, referring to local customers in Chicago.
4. Business Travel Remains Flat
Business travel also softened during the first quarter, but United executives said they didn’t expect a decline in business travel to have a significant impact on the carrier’s bottom line.
Nocella said business travel now has less of an impact on United’s revenue makeup compared to pre-pandemic. Business travel now makes up eight points less of United’s passenger revenues.
Delta also reported a similar trend in business travel for the first quarter. Delta president Glen Hauenstein described business travel trends as “choppy” as companies scale back travel due to economic uncertainty.
5. The Effect of Tariffs
Kirby didn’t seem to be too concerned about the impact of the Trump administration’s tariffs affecting United’s ability to grow its fleet.
“We’re in a different position than others,” Kirby said, noting that United is one of Boeing’s biggest customers and most of its Airbus deliveries would come from the company’s factory in Mobile, Alabama.
Delta CEO Ed Bastian said last week that the Atlanta-based carrier would not accept any Airbus deliveries with a tariff.
“Let’s take a breath, and we’ll work these things out,” Kirby said. “But we view this as an opportunity to kind of work with Airbus. Again, we have much less exposure, so it’s easier for us to work with them. We’re not going to — we don’t need to make any definitive statements about what we will or won’t do at this moment in time.”
Kirby’s comments come as Boeing and Airbus are assessing how to navigate a trade war. Airbus CEO Guillaume Faury said in February that the tariffs could force the plane maker to prioritize deliveries to non-U.S. customers.
Bloomberg reported Tuesday that the Chinese government told state-owned plane makers to halt Boeing deliveries in response to the trade war between the U.S. and China. The U.S. levied 145% tariffs on Chinese imports, and China retaliated with a 125% tariff on U.S. products.
Airlines Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance.
Read the full methodology behind the Skift Travel 200.
