United Airlines released its earnings report on Wednesday after markets closed, revealing that the company earned $15 billion in revenue for the most recent quarter, marking a 5.7% increase from the same period last year. Net income surged by 23% to reach $1.3 billion. Despite these positive figures, the report also highlighted concerns about declining demand in other areas.
In a related development, Amazon’s Prime Day 48-hour sales event recorded the largest U.S. e-commerce day so far in 2024.
The airline’s statement noted that for nearly two years, it has been expecting significant reductions in domestic capacity, which were recently announced by various U.S. airlines for this summer. The mid-August schedule changes marked an inflection point with a roughly 3-point decline in industry capacity growth rates.
United’s own capacity, measured in “available seat miles,” rose by 8.3% compared to the same quarter in 2023. However, the load factor, which indicates the percentage of available seating capacity filled with passengers, dropped to 84.2% from 86.4%, indicating slightly emptier planes.
United Airlines, similar to Delta Air Lines, expects that an increase in premium passengers flying in first and business class, along with gains in budget airfare, will help mitigate any downturns affecting the industry.
CEO Scott Kirby emphasized, “The revenue diversity advantages that we’ve built with our premium customers, Basic Economy customers, and domestic road warriors, along with the world’s best loyalty program and leading customer service, have propelled our margins to near the top of the industry.”