United Airlines Soars to New Heights with Strong Q4 Earnings
The airline industry is experiencing a remarkable resurgence, and United Airlines is leading the charge. On Tuesday, the Chicago-based carrier announced a forecasted profit for the current quarter that exceeded Wall Street estimates, sending its shares soaring by 4% in after-hours trading.
Robust Travel Demand Drives Growth
United Airlines is witnessing a broad-based demand for travel across all geographies, with sales of its premium and basic economy seats increasing by 10% and 20% year-over-year, respectively. Corporate bookings also saw a significant 7% rise from the previous year. This surge in demand has put the airline on track to achieve double-digit pre-tax margins in 2025, a substantial improvement from 7.3% last year.
Industry-Wide Capacity Discipline Boosts Earnings
The reduction in airline seats in the domestic market has driven up ticket prices, bolstering the industry’s earnings outlook. United and its rival U.S. carriers are reaping the benefits of this capacity discipline, which has led to a record profit forecast for 2025. Airline fares rose at their fastest pace in 21 months in December, thanks to a combination of limited seat supply and strong holiday travel demand.
Pricing Power on the Rise
United’s total revenue per available seat mile, a key indicator of pricing power, increased by 1.6% year-over-year in the December quarter. The airline expects further improvements in pricing power in the current quarter, driven by its ability to command higher fares.
Strong Profit Forecast for Q1 and FY2025
United expects an adjusted profit in the range of 75 cents to $1.25 per share in the quarter through March, surpassing analysts’ expectations of 54 cents per share. For the full-year 2025, the airline forecasts an adjusted profit of $11.50 to $13.50 per share, compared to Wall Street analysts’ expectations of $12.85 per share.
Earnings Call Scheduled for Wednesday
United will discuss its financial results on a call with analysts and investors on Wednesday morning, providing further insight into its strong performance and future outlook.
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