United Airlines provided an optimistic earnings forecast for the fourth quarter, projecting earnings between $3 and $3.50 a share, surpassing analysts’ expectations of $2.86 per share. This comes after a challenging start to 2025, but the carrier remains resilient as it expands its flying capacity while many of its competitors have reduced their growth plans.
In the third quarter, United ramped up its capacity by 7% compared to the previous year. However, the airline reported a decline in unit passenger revenue, with a 3.3% drop for domestic travel and a 7.1% decrease for international routes. Notably, revenue from United’s loyalty program saw a 9% increase, underscoring the importance of customer retention and brand loyalty in its business strategy.
CEO Scott Kirby emphasized the company’s long-term investments such as enhanced technology, updated cabin interiors, complimentary inflight Wi-Fi, and new lounges that are helping to attract and maintain a loyal customer base. Kirby expressed confidence in the airline’s ability to navigate macroeconomic challenges, pointing towards expected improvements in demand as the economy stabilizes in the fourth quarter.
For the third quarter, United Airlines surpassed earnings expectations with adjusted earnings per share of $2.78, compared to the forecast of $2.62. However, the airline’s revenue of $15.23 billion fell slightly short of the $15.33 billion anticipated by Wall Street analysts. Despite a 2.6% year-over-year increase in revenue, net income slightly decreased by 1.7%, resulting in $949 million, or $2.90 a share. After accounting for one-time expenses, the adjusted net income stood at $909 million.
As United Airlines competes with Delta Air Lines, it is actively working to attract affluent travelers willing to pay more for premium services. The airline’s expansion into diverse global destinations, such as Greenland and Mongolia, is a part of its strategy to enhance its global network. Additionally, revenue from premium cabins rose by 6% in the latest quarter, compared to a 4% year-over-year increase in revenue from basic economy sales.
While the spring and early summer months saw airlines, including United, reduce their earnings forecasts due to fluctuating passenger demand and an oversupply of flights impacting fares, the current outlook for the fourth quarter remains hopeful. The airline’s commitment to strategic growth and customer experience may position it well for sustained success as demand recovers.