United Airlines Charts a Dual Flight Path Amid Economic Turbulence

United Airlines (UAL) beat first-quarter expectations with adjusted earnings of $0.91 per share, topping analyst estimates of $0.74.

Revenue hit a record $13.2 billion, a 5.4% year-over-year increase, marking the company’s strongest Q1 performance in five years. Despite a 3.8% dip in domestic revenue, United’s focus on premium international routes paid off: high-margin premium cabin revenue rose 9.2%, while international revenue per seat-mile jumped 8.5% on Pacific routes and 4.7% on Atlantic routes.

The carrier’s premium strategy—bolstered by a revamped Polaris business class and increased investment in loyalty programs—helped drive margin growth. First-quarter adjusted pre-tax margin climbed to 3.6%, up from negative 0.6% a year earlier. Total revenue per available seat mile (RASM) rose 0.5%, even as capacity expanded nearly 5%.

Two Scenarios, One Strategy
In a rare move that underscores the economic uncertainty plaguing the markets, United issued dual forecasts for full-year 2025. Under a stable economy, the airline expects earnings between $11.50 and $13.50 per share. If the U.S. enters a recession, that estimate drops sharply to a range of $7 to $9 per share.

This “bimodal” approach, as United describes it, is rooted in forward booking trends and macroeconomic unpredictability—particularly the impact of new tariffs under President Trump’s trade agenda. A recession scenario assumes a five-percentage-point decline in operating revenue between the second and fourth quarters and no additional relief from fuel prices. Capacity cuts would also deepen, with United already planning a 4% domestic reduction starting in Q3.

CEO Scott Kirby emphasized that the airline’s long-term strategy, built on premium service and operational efficiency, positions United to “thrive in any demand environment.” The company is retiring 21 aircraft earlier than planned and trimming off-peak flying to preserve margins.

Resilience in the Face of Recession Fears
Shares of United Airlines climbed as much as 6.5% in after-hours trading following the Q1 report, continuing a rebound after a rough start to the year. UAL stock is down 31% year-to-date but remains up 61% over the past 12 months. Analysts from Bank of America (BAC) and Barclays praised the results and management’s transparency, calling the company well-positioned thanks to its strong balance sheet, premium customer base, and disciplined capacity management.

While other carriers—such as Delta Air Lines (DAL)—have withdrawn their full-year guidance, United has leaned into clarity. The airline’s candid acknowledgment of possible downside risk is being hailed by market watchers. Economist Mohamed El-Erian called the dual-scenario forecast a model of thoughtful corporate planning in uncertain times.

With stable bookings over the past two weeks, including a 17% jump in premium cabin sales and a 5% rise in international reservations, United is leaning on its strengths. The airline carried a record 450,000 passengers per day in Q1, including nearly 90,000 international travelers, and recorded its best first-quarter operational performance since 2021.

Whether the economy stabilizes or tips into recession, United appears determined to stay airborne.

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