Its airline earnings season, and last week, Delta became the first US airline to report its Q1 2025 financial results. The results were exactly what we expected based on updated (lowered) guidance, and Delta management was rather upbeat, despite all the uncertainty right now.
United has now become the second major US airline to report its Q1 2025 financial results, and the airline has painted an outright rosy picture about its performance and outlook, even in the event that the United States goes into a recession. While Delta matched its results during the same quarter last year, United far exceeded last year’s results.
In this post:
United has strongest Q1 since start of pandemic
For Q1 2025, United has reported pre-tax earnings of $478 million, with a pre-tax margin of 3.6%. Adjusted pre-tax earnings were $391 million, with an adjusted pre-tax margin of 3%. Meanwhile United had record first quarter revenue of $13.2 billion (compared to $12.5 billion last year), and total revenue per available seat mile (TRASM) growth of 0.5% year-over-year.
United’s Q1 pre-tax margin was up 4.9% year-over-year (and 3.6% on an adjusted basis), beating Wall Street expectations. During the same quarter last year, United had a $164 million pre-tax loss, so that’s quite an improvement.
The company describes this as its best first quarter financial results since the start of the pandemic, despite a challenging macroeconomic environment.
Like other airlines, United is seeing a reduction in domestic economy demand, and unit revenue for domestic flights fell 3.9% compared to the same quarter last year. However, everything else is looking better than last year, with unit revenue from international flights increasing by 5.2%. United highlights how loyalty revenue increased 9.4%, premium cabin revenue increased 9.2%, and business revenue increased 7.4%.
Here’s how United CEO Scott Kirby described these results:
“Our strategy coming out of the COVID pandemic was simple: Build the best airline in the world to attract brand-loyal customers. The people of United Airlines have executed and built that airline. United Next is on track and we will continue to execute our multiyear plan that has allowed United to thrive in any demand environment. It has given us industry-leading margins in the good times and we expect to expand our lead further in challenging economic times. Our ability to win brand-loyal customers and the resiliency of our business is a competitive advantage, and we are accelerating our investments in our product, service, technology and experience to further expand that lead.”
United reducing capacity to deal with uncertainty
United has called the economy “impossible to predict,” though has also stated that booking trends are stable. In response to the current demand environment, United is removing 4% of scheduled domestic capacity starting in Q3 2025.
This basically seems to be the same narrative you’ll find at all airlines, where their biggest concern is what domestic demand will look like after the peak summer travel season (which ends around the middle of August).
United is also making adjustments to the utilization rate of its fleet, including ongoing reductions in off-peak flying on lower demand days. The airline expects to continue this approach into Q4 2025. As previously announced, United plans to retire 21 narrow body aircraft earlier than previously planned.
The company has left in place the guidance that was provided in January, of full year earnings of $11.50 to $13.50 per share. However, in the event of a recession, the company believes that earnings per share will be $7 to $9.
United’s CEO has argued that the company’s fundamental evolution coming out of the pandemic positions it to have industry leading margins in good times, and he even believes the airline will expand its lead further during challenging economic times. Of course time will tell if that proves to be true — he’s kind of vested in that being true. 😉
Bottom line
United has reported its Q1 2025 results, and the airline did pretty well, given everything that’s going on. United is keeping its initial guidance for the rest of the year, though has provided an alternative guidance in the event of a recession.
For now, United’s only major change to account for the uncertainty is that domestic capacity will be reduced by around 4% in Q3 2025, and the airline will retire 21 aircraft early, as previously announced. We’ll see how this all plays out, given the uncertainty caused by Trump’s tariff policies, and what impact that has on international demand.
What do you make of United’s Q1 2025 financial results?
Every flight I have been on to/from/within the US this year has been full. I think this narrative that flights are going out empty is ridiculous. I sure havent seen it...
Umm I’m all for economic prognostication. But can we talk flights and points for a bit too?
1. What AC is UA retiring? I assume/pray some old 738s?
2. Do we think all those new routes are gonna hold?
3. Any sense of point availability changes? Anecdotally, seems like consistent 15k domestic Y available even on day of. First / Biz not seeming to come available very often at saver rates last minute....
Umm I’m all for economic prognostication. But can we talk flights and points for a bit too?
1. What AC is UA retiring? I assume/pray some old 738s?
2. Do we think all those new routes are gonna hold?
3. Any sense of point availability changes? Anecdotally, seems like consistent 15k domestic Y available even on day of. First / Biz not seeming to come available very often at saver rates last minute. This tracks with their guidance.
4. Any thoughts on further service / food improvements or do we expect them to hold the course and/or dial back?
-G
There's been warnings about the growing levels of consumer debt and consumer debt defaults well before Biden got on stage and said he killed Medicare. What's coming has been a long time coming just like the "mortgage crisis" was 5-6 years in the making but flared up on a dime.
People on this thread, part of the Zoom class, seem to have no clue how a couple with two kids with a combined income of...
There's been warnings about the growing levels of consumer debt and consumer debt defaults well before Biden got on stage and said he killed Medicare. What's coming has been a long time coming just like the "mortgage crisis" was 5-6 years in the making but flared up on a dime.
People on this thread, part of the Zoom class, seem to have no clue how a couple with two kids with a combined income of $75K live, particularly if they want some luxuries in life like a yearly vacation.
Wow, again impressed with UA. Goes to show the difference that dynamic and innovative leadership can make in this industry.
1) Economic growth will be slower than expected this year. Tariffs are a terrible policy, and Trump is a disgrace. All that being said, there were rampant predictions of a recession during the Biden administration as well, and none came to fruition. There is a solid chance the US economy avoids a true recession, especially as Trump caves on tariffs. American consumers are resilient in general, and Baby Boomers are increasingly retired and on social...
1) Economic growth will be slower than expected this year. Tariffs are a terrible policy, and Trump is a disgrace. All that being said, there were rampant predictions of a recession during the Biden administration as well, and none came to fruition. There is a solid chance the US economy avoids a true recession, especially as Trump caves on tariffs. American consumers are resilient in general, and Baby Boomers are increasingly retired and on social security, pensions, and 401ks (which, while smaller, are still up meaningfully), meaning those people will continue to have the means to spend.
2) Spring has been weird in terms of demand. Summer outbound international will likely be strong, as it has been for years. Business travel should pick up in the fall as more certainty around tariffs emerge. The year can be salvaged for United, Delta and the rest.
>All that being said, there were rampant predictions of a recession during the Biden administration as well, and none came to fruition
Because Biden practiced sound financial policy, keeping interest rates high and ensuring full employment, at the cost of minor additional inflation on top of the COVID inflation shocks
>There is a solid chance the US economy avoids a true recession
Only if Trump stops touching the blanket tariff live wire, which...
>All that being said, there were rampant predictions of a recession during the Biden administration as well, and none came to fruition
Because Biden practiced sound financial policy, keeping interest rates high and ensuring full employment, at the cost of minor additional inflation on top of the COVID inflation shocks
>There is a solid chance the US economy avoids a true recession
Only if Trump stops touching the blanket tariff live wire, which there's no guarantee. He's still got massive blanket tariffs on China, and 10% tariffs on ALL other imported goods to the US. That was not paused, and it's going to hurt.
The CEO of Blackrock said last week that the US may already be in a recession. If that's the case, what exactly changes?
Consumer behavior has already been dealing with inflated prices for well over a year, so does consumer behavior completely change from what it already is today? People have tax refunds in hand and wages are at the highest they've ever been. I don't see how things do a complete 180 if a recession happens. Just my opinion.
@Alonzo
The difference is that under Biden, real (read: adjusted for inflation) wages were growing. So despite groceries, restaurants, hotels, etc. being more expensive, Americans were making enough to allow more discretionary spend on travel, eating out, etc thanks to the strong and rapidly growing economy.
With Trump's tariff games and tax cuts for the wealthy, if we go into a recession we'd experience both inflation caused by tariffs raising the cost of both...
@Alonzo
The difference is that under Biden, real (read: adjusted for inflation) wages were growing. So despite groceries, restaurants, hotels, etc. being more expensive, Americans were making enough to allow more discretionary spend on travel, eating out, etc thanks to the strong and rapidly growing economy.
With Trump's tariff games and tax cuts for the wealthy, if we go into a recession we'd experience both inflation caused by tariffs raising the cost of both inputs and finished goods, and the recession itself would cause wage stagnation and job losses. That's what's so dangerous about his and Navarro's fiscal policies. And unlike President Carter, Trump would have CAUSED the stagflation in his own term, not inherited it from the prior admin. To make matters even worse, he and Musk are doing their best to dismantle the social safety net whose raison d'être was to keep people housed and fed during the Great Depression.
@Dusty the data is not as clearcut as what you make it seem. If you compare real-adjusted wages vs 2019 (pre-COVID), then yes they are higher. However, if you compare real-adjusted incomes vs Jan '21 (when Biden took office), real wages were slightly down (look at the data w/ constant dollars) and ended basically flat:
https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-over-time-total-men-women.htm#
There's a good link that explains the dichotomy and how you can craft competing narratives with statistics: https://www.factcheck.org/2024/06/competing-narratives-on-real-wages-incomes-under-biden/
Regardless,...
@Dusty the data is not as clearcut as what you make it seem. If you compare real-adjusted wages vs 2019 (pre-COVID), then yes they are higher. However, if you compare real-adjusted incomes vs Jan '21 (when Biden took office), real wages were slightly down (look at the data w/ constant dollars) and ended basically flat:
https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-over-time-total-men-women.htm#
There's a good link that explains the dichotomy and how you can craft competing narratives with statistics: https://www.factcheck.org/2024/06/competing-narratives-on-real-wages-incomes-under-biden/
Regardless, for most of Biden's tenure, real incomes for Americans had, in fact, declined which is why economic sentiment was so terrible. The rebound in sentiment or return to baseline did not happen fast enough for it to matter for the '24 Election. What Trump is currently doing is absolutely terrible, but it's important to not craft a false narrative that things were all hunky-dory between 2020-2024 either - they absolutely weren't. Trump inherited an improving economy and is bungling it which is a whole different issue.
Also, it is probably worth mentioning that this slowdown is not unexpected or undesirable for the Trump administration given their policy. While I disagree with their approach and don't think it will work, they themselves expect and have stated as such) upheaval for a few quarters while supply chains adjust and manufacturing and investments allegedly start moving back to the US.
Do I think it will work? No - but judging their success / failure...
Also, it is probably worth mentioning that this slowdown is not unexpected or undesirable for the Trump administration given their policy. While I disagree with their approach and don't think it will work, they themselves expect and have stated as such) upheaval for a few quarters while supply chains adjust and manufacturing and investments allegedly start moving back to the US.
Do I think it will work? No - but judging their success / failure 1 month in when their alleged goals are to rebase currency exchange rates (for the RMB), re-negotiate trade agreements, and return manufacturing and investment spend to the US at a higher clip in the long-term with the pickup a year or so from today makes no sense. We can abjectly call it a failure if they retract or this doesn't look to happen mid-year next year, but saying so today is premature. The hit-rate for economists predictions is basically throwing darts at a board so while the consensus expectation is failure (as I agree), that historically isn't worth much.
@Jeremy
I understand the slowdown is expected. I understand their intent is to trash the US economy and take us back to working in sweatshops. I categorize it as a failure (even if that's their intent) because their messaging to the people is that they're going to bring back manufacturing and make America great again. America turning into Vietnam or Bangladesh does not make America great.
We have Trump's first term to look back...
@Jeremy
I understand the slowdown is expected. I understand their intent is to trash the US economy and take us back to working in sweatshops. I categorize it as a failure (even if that's their intent) because their messaging to the people is that they're going to bring back manufacturing and make America great again. America turning into Vietnam or Bangladesh does not make America great.
We have Trump's first term to look back on as well. Trump instituted a targeted tariff on washing machines to help out Whirlpool. What was the result? Washing machine AND dryer prices (dryers were not tariffed) rose 11% compared to all other appliances. Whirlpool did hire more workers, and LG opened a plant in the US, all in all creating about 1700-2000 new manufacturing jobs in the US. But was that worth it? The tariffs cost US consumers about $1.4 billion more than they would have otherwise paid, a cost of about $815k per new job created. The amount of jobs created was also a pittance, considering the US manufacturing sector employs 13 million people. And while it did bring a new factory to the US, we were already getting foreign companies to build factories here. Hyundai build a megaplant near Savannah, GA, in 2022, Kia built a plant in La Grange, GA in 2009, Volkswagen built a plant in Chattanooga, TN in 2011, and TSMC began building their plant in Arizona under Biden's CHIPS act in 2023.
So if your goal is to onshore things to the US, it was already possible through other, cheaper policy levers than instituting blanket tariffs that at the end of the day will raise prices for the American consumer, even after the onshoring has happened. So yes, my opinion based on past and more sensible tariff policy is that this will fail spectacularly and be a net negative for the average American.
@Jeremy
First, I'll repeat what your fact-check source clearly states: The start of Biden's term is not a good comparison point because the pandemic distorted the raw data. In January 2021, unemployment was almost 3% higher than in January 2020, and most of those who lost jobs were lower income/working class. High income email jobs remained, which in company with the stimulus checks seriously skewed the wage data. By Q2 2022, unemployment was back...
@Jeremy
First, I'll repeat what your fact-check source clearly states: The start of Biden's term is not a good comparison point because the pandemic distorted the raw data. In January 2021, unemployment was almost 3% higher than in January 2020, and most of those who lost jobs were lower income/working class. High income email jobs remained, which in company with the stimulus checks seriously skewed the wage data. By Q2 2022, unemployment was back where it had been in Q4 2019, and from that point you can clearly see a steady rise in real wages, which did eclipse 2019's real wages by 2023.
Second, your sources miss another key point. They don't show real wages by income percentile, which is honestly the biggest achievement Biden made. The bottom 10% income percentile saw a 13.2% real wage growth from 2019-2024. That's a BIG deal. That's the most vulnerable families in the country seeing real improvements to their lives. The next percentile, the 20-40%, saw a 5% real wage increase, which still outpaced the overall 4.1% inflation over the 2019-2024 period. The 40-60% percentile and 60-80% percentile did lag behind inflation, but as somebody in the 60-80% I'm already making enough that it was not noticeable.
More details on the percentiled real wage growth:
https://www.epi.org/publication/swa-wages-2023/
With regards to inflation itself and "economic sentiment", the raw data shows that once the economy had recovered from the supply shocks, the inflation we experienced was often regional and due to 3 main causes: housing costs first and foremost, which is due to poor state and municipal planning policies and not something the Federal government has involved itself in; eggs, due to bird flu wiping out over 100 million hens from 2022-24, again this caused very regional price shocks; and the cost of human labor went up as the economy got back to full employment (remember all the complaints about Uber pricing and expensive DoorDash/UberEats deliveries? I do).
Nor am I saying things were "hunky-dory" from 2020-2024, obviously with the
pandemic and supply chain shocks there were lots of issues from 2020 through to 2022. But consumer sentiment at the end of 2022 through 2024 speaks for itself. Americans were in fact spending record amounts on travel, dining out, and luxuries, beyond just the 2022 "revenge travel" phenomenon. If the economy wasn't good and Americans weren't actually doing well, they wouldn't have been traveling and eating out in excess of 2019 numbers if they couldn't afford groceries or gas.
@Dusty
Not true. When you say wages grew, you're acting like a family went from making 75k to 100k. They didn't. Income grew steadily but not dramatically. You guys are talking about small numbers that haven't made any real difference. Again, people aren't trading in shopping at their local grocery store to shop at Dollar General. They're just buying a bit less from the grocery store. People aren't buying a Toyota Corolla instead of a...
@Dusty
Not true. When you say wages grew, you're acting like a family went from making 75k to 100k. They didn't. Income grew steadily but not dramatically. You guys are talking about small numbers that haven't made any real difference. Again, people aren't trading in shopping at their local grocery store to shop at Dollar General. They're just buying a bit less from the grocery store. People aren't buying a Toyota Corolla instead of a pickup truck. They're buying an SUV.
Small changes. Not large, dramatic ones.
@Alonzo a 13% income increase for the bottom 10% earners is dramatic. And I will call your BS right now that no family making 75k before the pandemic suddenly had 10k or 15k in extra expenses because of the pandemic.
We have the economic data. Americans set record domestic travel numbers in 2024, breaking 2019 records. In March 2024, American international departure visitor rates (IE Americans leaving to visit other countries) was DOUBLE what it...
@Alonzo a 13% income increase for the bottom 10% earners is dramatic. And I will call your BS right now that no family making 75k before the pandemic suddenly had 10k or 15k in extra expenses because of the pandemic.
We have the economic data. Americans set record domestic travel numbers in 2024, breaking 2019 records. In March 2024, American international departure visitor rates (IE Americans leaving to visit other countries) was DOUBLE what it was in March 2019. Americans were absolutely doing well and were spending like they were. Nobody was going hungry because eggs went up $2 in California due to bird flu, nor were families going broke because burrito taxis.
>People aren't buying a Toyota Corolla instead of a pickup truck. They're buying an SUV.
SUVs are just as expensive as a pickup and far more expensive than a Corolla...
United on the up and up! Starting to leave Delta in the dust.
@UA-NYC
My recent move from American to United seems to be making an impact.
For UA to “Start leaving Delta in the dust”, they will have had to have done some very serious improving in the last year.
2024 World Rankings: DL = 21st. UA = 42nd.
2025 World Rankings will be announced at the Paris Airshow on Tuesday the 17th of June, 2025.
Aren't their flight attendants still waiting to get a new contract?
Yup nearly 4 years while Kirby has been receiving massive raises
yea because he actually does something instead of serve drinks and being rude about it...
Corporate travel budgets are the first thing to get cut in a recession. I don’t see airlines ending the year well.
Just waiting for Tim to appear
He's been banned from commenting for a while so you can move on and not worry about him anymore.
You don’t have to be afraid anymore :)
Some of y’all are just as insufferable. You can’t stand him but are perched awaiting his comments
It was fun enough for a quick laugh. But much better now. The guy has some serious mental issues and it’s incapable of being part of a rational community. He just bullies his way to what he thinks qualifies as “wining” an argument. It’s a win win situation: less shit and much better discussions in the comment section and he can use his free time to seek the help he clearly needs.
@Travelwithdavid:
Yes. I find that so weird. They moan about him, but can't seem to live without him. Very strange.
Thank you. It’s very strange indeed. I always say if they would simply ignore him he would disappear on his own. Personalities like his thrive off attention and they constantly feed into him so of course he’s going to continue.
With the US economy headed for a deep recession, the profit streak of Corporate America in Q1 is meaningless at this point, as the impact of the idiotic tariff policies had not come into play fully yet. Inbound travel to the US is falling off a cliff and both corporate and leisure travel in the US originating point of sale also seeing steep declines. By July 4th, the US will be in a recession and one with inflation.
With all of what you mentioned already here, I still have to question why are all of the flights I've been on full and fares still extremely high. TSA is still reporting high numbers of people going through security.
Travel into the US will continue to drop but all else I think changes very mildly. Low single digits imo.
Alonzo - don’t disagree but some of this is because passengers you saw have booked these trips far in advance and the moderation of demand will be more visible in the quarters to come.
Because this talk of a "recession" has been hyped by those of a certain political persuasion. If you're objective about what's going on, you will realize that any downturn will be shallow and fairly brief. Likely followed by solid growth.
As for the aircraft to be retired, this aspect of the story is pretty old actually. UA has over 1,000 active mainline jets, so retiring 20 of their oldest a/c was a pretty easy thing to do.
Typical, provincial, and stupid middle american response in denial of reality.
American Economy Warning!
Please be advised folks that the American economy is bound to suffer a significant downturn as from July, 2025.
My monthly pond hops end in June, therefore, Denver and the Springs will not enjoy my patronage until 2026.
I am so sorry to be aiding and abetting the U.S. economic downturn …. :-)