A couple of weeks ago, Delta reported its financial results for 2024, and forecasted that 2025 would be the company’s best year in history. Well, now United has revealed its results for 2024, and has issued a similar forecast. It’s interesting to look at some of the details of the carrier’s performance.
In this post:
2024 was a record year for United Airlines
United has revealed the details of its 2024 financials, and it was a blockbuster year for the carrier, as the company had both record revenue revenue and income. In terms of full year 2024 financial results:
- United had operating revenue of $57.1 billion, a 6% increase compared to the $53.7 billion operating revenue in 2023
- United had operating income of $5.1 billion, a 21% increase compared to the $4.2 billion operating income in 2023
- United had an operating margin of 8.9%, a 14% increase compared to the 7.8% operating margin in 2023
- United had pre-tax income of $4.2 billion, a 23% increase compared to the $3.4 billion pre-tax income in 2023
- United had earnings per share of $9.45, a 20% increase compared to the $7.89 earnings per share in 2023
United notes some impressive year-over-year improvements for the fourth quarter of 2024. Premium revenue was up 10%, corporate revenue was up 7%, basic economy revenue was up 20%, loyalty revenue was up 12%, and cargo revenue was up 30%.
Since United is increasingly in Delta’s league, it’s worth noting that in 2024, Delta had operating revenue of $57 billion, operating income of $6 billion, and pre-tax income of $5.2 billion.
So while Delta was still more profitable than United in 2024, there’s no denying that United is trending in a better direction than Delta. For example, while Delta had record revenue in 2024, the carrier made a slightly lower profit than in 2023. That’s a different story than United, which saw a 20%+ increase in profit compared to the previous year. Of course past performance is no guarantee of what will happen in the future.
Here’s what United CEO Scott Kirby had to say about the company’s performance:
“United had a unique strategy coming out of COVID and our people have delivered for customers leading to a structurally and permanently changed industry. 2024 was a strong year across the board for United as we’ve become the leading global airline and we enter 2025 with demand trends continuing to accelerate which puts us on the path to double-digit pre-tax margins.”
Speaking of Kirby, during today’s earnings call, he once again made the point that United is “the best airline in the history of aviation.” That’s… quite a claim.
United Airlines expects double digit margins in 2025
Even more impressive than United’s 2024 results are the carrier’s predictions for 2025. The airline expects the first quarter will see a year-over-year increase in revenue per air seat mile. Bigger picture, United is expecting a double digit pre-tax margin for the year.
When you consider that United had revenue of over $57 billion in 2024, and that should be even higher in 2025, that suggests that United is hoping for a pre-tax profit of north of $6 billion. Interestingly Delta is also hoping for a pre-tax profit of $6 billion this year.
So Delta and United have very similar financial projections. Could this be the year where United finally becomes more profitable than Delta? I guess we’ll see.
While I realize airline executives have to give projections of performance, the airline industry is incredibly fragile, so there are all kinds of things that could change. The one major challenge that United faces with profitability is that flight attendants still don’t have a new contract.
That’s long overdue, and it’s embarrassing that the airline is achieving record profits, all while dragging its feet on a new contract. So assuming that gets ratified in 2025, that could impact United’s profitability.
I’d also note that United is a bit more exposed when it comes to ultra long haul flying than Delta, and that’s both a blessing and curse, especially with a Trump presidency. United has historically been the strongest US carrier to Israel, India, and across the North Pacific.
So I could see this going either way. If the situation in Israel stabilizes, or if Russian airspace were to reopen, United would likely benefit from that more than other US airlines. Meanwhile if we see less international trade (like if we see widespread tariffs), that could be bad for international demand. Only time will tell how this plays out.
One thing is for sure — United’s stock has had an absolutely wild year, and is up over 180% in the past 12 months. No, it’s not 180% of what it was 12 months ago, but it’s literally up 180%. On the one hand, United has done an impressive job catching up with Delta. On the other hand, one needs to have amnesia to think that airlines are a good long term investment.
That’s not because anything airlines do wrong, but rather because it’s just such an impossible, cyclical industry. Even with United’s impressive performance in 2024, it’s worth noting that the carrier’s cost per air seat mile (16.7 cents) exceeded the carrier’s passenger revenue per air seat mile (16.66 cents).
So the airline made money on its loyalty program, and some other revenue opportunities, but hardly from actually flying passengers. Personally, I’d very much consider these to be the “best of times,” but I guess we’ll see…
Bottom line
2024 was a record year for United, with the company reporting revenue and profit. United has been trending upwards, and the airline expects even more revenue and profits in 2025. Admittedly there’s a lot that can change, especially with the current political climate, so only time will tell how this plays out.
How do you see 2025 going for United, especially in comparison to Delta?
first, AA and UA should be making as much as DL; AA and UA both fly more ASMs than DL.
Scott Kirby gets a huge amount of credit for addressing the revenue shortfalls that caused UA to underperform DL.
UA is doing very well on passenger revenue; AA has yet to fix its problems.
that said, costs are very different. UA is not playing in the same league as DL or AA in...
first, AA and UA should be making as much as DL; AA and UA both fly more ASMs than DL.
Scott Kirby gets a huge amount of credit for addressing the revenue shortfalls that caused UA to underperform DL.
UA is doing very well on passenger revenue; AA has yet to fix its problems.
that said, costs are very different. UA is not playing in the same league as DL or AA in terms of costs. It is important to note that UA has the most open labor contracts among the big 4 which means its labor costs are most likely to increase. Even in profit sharing, DL will pay out twice as much profit sharing as UA will. The difference in labor costs between DL and UA is very likely $1 billion/year plus one-time settlement costs for UA that will exceed $500 million. $1 billion difference in labor costs is not insignificant.
In terms of irregular items that impacted the bottom line, DL’s CrowdStrike event was the most costly in the industry far more than what the MAX 9 grounding cost UAL or ALK.
In terms of fleet and revenue growth, UA is not getting aircraft at anywhere near the rate they expected and also need to retire aircraft which they are doing - as I said they would; according to UA’s latest fleet plan, they are retiring at least 25 A320CEO aircraft according to their latest fleet plan. They expect to receive less than 10 787s and are not planning to retire any widebodies. AA will possibly receive more new 787s in 2025 than UA but less narrowbodies. UA’s total fleet will grow by about 60 aircraft in 2025 with AA and DL adding 15-20. DL is receiving more widebodies than either AA or UA but is using a fairly significant percentage of its new deliveries to retire 767s and is using its Airbus narrowbodies to retire 757s and A320s.
AA and DL simply have younger and more efficient aircraft and that advantage will grow relative to UA.
UA's stock price puts it in line with its earnings with DL; their net profits pretty closely are aligned to their market cap relative to DL.
Consequently, UA stock is not expected to grow as fast as DL's in 2025 which is also expecting a record 2025.
DL and UA are clearly leading the industry but there is no realistic models that show that UA will overtake DL in terms of overall net profitability and a good reason is because of the DL/Amex relationship which AA is now going to replicate to a degree with Citi. UA is years from getting a lucrative credit card contract.
btw, DL has loaded schedules to TLV again. UA?
Obviously, United is more premium than Delta.
I would like to see United’s earnings adjusted (hypothetically) for the additional labor costs it will incur when they finally settle with the AFA. Therein continues to be the ‘apples to oranges’ when people compare Delta’s earnings to United’s with Delta F/As already getting paid on the ground and in the air with superior pay schedules. Time will tell. Any prognosticators out there who’d like to take a stab at what the ‘adjusted income’ post-settlement...
I would like to see United’s earnings adjusted (hypothetically) for the additional labor costs it will incur when they finally settle with the AFA. Therein continues to be the ‘apples to oranges’ when people compare Delta’s earnings to United’s with Delta F/As already getting paid on the ground and in the air with superior pay schedules. Time will tell. Any prognosticators out there who’d like to take a stab at what the ‘adjusted income’ post-settlement might look like? Where is Tim Dunn?
United execs said in their earnings call today that they expect significant headwinds on their costs when they settle with all of their labor groups. Delta paid those costs quite some time ago. American is catching up. Southwest also is now paying those costs even without the revenue bump that they need
Will it be the most profitable year ever once they pay their staff?
Stating these are the best of times, that they don't make money on flying passengers, and that you would need amnesia to invest long term, while also saying United should invest long term in their FAs is wild.
@ Sel, D. -- American flight attendants got pay raises, despite American's margins being much worse. Delta's flight attendants are paid much better. Do you think United shouldn't be willing to negotiate a new contract for flight attendants, despite pilots getting massively lucrative new contracts? Do you think that will help make United the best airline in the history of aviation?
How do you write so many articles a day? The mind boggles lol
It'll be exciting to see how generous the profit-sharing will surely be for their frontline staff, like agents, flight attendants, etc.!!!!!! United Rising!!!!!
j/k(?)
Nope apparently the flight attendants received 5% profit sharing while the company is it getting record profits. How embarrassing
it's almost like AFA negotiated what they currently have... how embarrassing for AFA...
It’s almost like United can come to an agreement any time they want and give their flight attendants a contract.
How shtty of United