United Airlines turned a profit in the second quarter of 2025, but investors appear unsatisfied with the pace of progress.
United Airlines Reports Q2 2025 Profit, But Guidance Tempers Enthusiasm
United Airlines posted strong second-quarter earnings, surpassing Wall Street expectations on profit, but falling slightly short on revenue. Management expressed cautious optimism for the remainder of the year, updating guidance and pointing to improving trends in business and international travel. But there are unanswered questions that have left investors wondering and UAL stock dropping in after-hours trading.
- Profit Beats Expectations: United reported adjusted earnings per share of $3.87, ahead of analyst expectations around $3.81. Net income, however, dropped to $973 million compared to $1.3 billion in Q2 2024.
- Revenue Misses Slightly: Revenue totaled $15.2 billion, up 1.7% year-over-year but just under the $15.3 billion analysts anticipated.
- Strong Operational Metrics: The airline delivered its best post-pandemic Q2 for on-time departures and low cancellation rates. United highlighted strong performance at key hubs, including Newark, San Francisco, and Los Angeles, though that does not take into account the meltdown over the weekend in Newark
- Premium Travel Leads the Way: Revenue from premium cabins increased 5.6%. Loyalty program revenue rose 8.7%, and cargo revenue was up 3.8%. Basic economy grew 1.7%.
- Business Travel Rebound: In early July, business bookings jumped double digits, and total bookings rose six points. CEO Scott Kirby said the world was “less uncertain” than during the first half of the year.
- Full-Year Outlook Narrowed: United dropped its two-scenario forecast and now expects full-year adjusted EPS between $9 and $11. While this midpoint aligns with current analyst estimates, it is lower than United’s original range of $11.50 to $13.50.
- Q3 Forecast Underwhelms: United expects third-quarter adjusted earnings of $2.25 to $2.75 per share, slightly below consensus estimates of around $2.60.
- Debt Reduction Milestone: United paid off its $6.8 billion MileagePlus-backed loan, leaving its loyalty program debt-free. Liquidity ended the quarter at $18.6 billion with $27.1 billion in total debt.
United Airlines CEO Scott Kirby said:
“Our second-quarter performance was more proof that the United Next strategy is working. I am extremely proud of the team for executing a strong operation and navigating through a volatile macroeconomic period, while still growing earnings and pre-tax margin for the first half of the year. Importantly, United saw a positive shift in demand beginning in early July, and, like 2024, anticipates another inflection in industry supply in mid-August. The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year.”
However, warning signs are present. New labor contracts remain unsigned and domestic demand is weaker than originally forecast (domestic passenger revenue per seat mile dropped 7%). Even demand to Europe appears to be slowing, with United’s Europe unit revenues down 2.2% versus the same period in 2024.
CONCLUSION
United Airlines is in solid financial shape and outperforming on many key metrics, including premium revenue and operational reliability. However, a cautious outlook for Q3 and full-year earnings per share has left investors lukewarm. While the long-term trajectory remains positive, especially with business and international demand improving, markets appear to be looking for stronger signals of upside. United is executing well, but for now, the enthusiasm is measured.
image: United Airlines
Note they paid off the debt on the frequency flier program.
Subtle indication of how valuable it is compared to the rest of the business.
there are several key numbers.
First, their domestic capacity expansion is hurting their performance with falling load factors and yields. The idea that UA can bully smaller carriers out of the marketplace and grow overnight the domestic network it neglected for years come at major costs.
UA did take a $561 million charge for settling the FA contract. That is the first of many major hits they will take to settle earnings.
and the EWR mess is going to be a drag on earnings into the third quarter. Yields are clearly weak to/from EWR while loads are returning to normal. UA has lost hundreds of millions of dollars in NYC business to DL mostly but also to AA at LGA and JFK.
Really? They took the $560 million charge in this past quarter even though it hasn’t passed yet? Did it pass already?? News to me…
see the breakout of the charges in the financial detail.
They didn’t say it was specifically for retro but it was a little larger than what AA paid in retro to its FAs but proportionately less considering the longer time the UA FAs have waited – in line w/ what some FAs have said that they aren’t getting full retro. Still a half billion is quite significant.
and, yes, they can reverse the charge if the proposed contract fails.
Given the revenue weakness, they are throwing in labor contract settlements trying to avoid their earnings decline being blamed on finally settling w/ labor.
That’s not a significant drop. Compare it to the Covid drops if you want to see significant. No one will care about Trump years from now he’s a puppet. Despite all the stupid sky is falling posts people are still traveling like crazy which we already knew would happen and will continue to happen.
‘And speaking of ‘bullying’ I see no mention of the most “premium “of all bullies !
F’ing Wall Street, man. “Oh no! The Financials weren’t perfect in every metric. The company must be in trouble!”
This is why everything in the country gets ens**ttified.
They’ll probably undo all the meal upgrades they just put in place over this.
as much as some want to whitewash UA’s relatively small decline in its earnings, it is a publicly traded company that plays in a market where results matter and are measured in percentages.
UA is adding more domestic capacity any of the big 4 airlines and the market is not absorbing that capacity very well. UA’s domestic revenue was down even though they increased domestic capacity by 7%.
and DL is aggressively growing into the international marketplace faster than UA is – based on DL’s announcements of ATL-DEL, ATL-RUH, ATL-TLV and SEA-HKG already for the next year – so DL is cutting UA’s lead in the global marktplace.
If you add up UA’s rising labor costs, the revenue cuts from FAA imposed EWR capacity cuts and domestic market weakness, UA’s goal to match DL’s profit margins probably reached their weak in 2024.
In the last two years it seems that UAL had prioritize international expansion over domestic routes resumption. Given UAL is now stronger financially, it is high time for UAL to increase domestic flying from her 7 hubs, protect the turf and push out ULCC.
Tim, It is news to everybody that Delta would restore SEA-HKG service.
yeah, it is LAX-HKG that DL is (re)starting.
and UA is a larger domestic airline than international – just like every other metric.
the lights finally went off in Scott Kirby’s head that UA had failed to grow its domestic network and credit card contracts are much more tied to domestic than international revenues. It typical Kirby fashion, UA is trying to do too much too fast and doing it on the cheap (underpaid labor) w/ resources that can’t support it (EWR) and they are getting caught.
AA and DL didn’t grow their domestic networks to the size they are overnight – and AA and DL STILL generate well over $1 billion more in domestic revenue per quarter than UA.
and the point remains that what I said several years ago is being borne out which is that it is easier for DL to grow into UA’s international strength markets than it is for UA to grow into the domestic market where there are many more players.
Tim, you typed your reply very fast….
Many airlines shrink their wide-body fleet during COVID-19 but not UAL. UAL took full advantage of this opportunity and “steal” international market share from competitors two years later, mostly at the expense of American Airlines. Now, many more UA narrow-body planes have updated interior, it is time to do battle with ULCC, AA and Southwest in Chicago and Denver.
Last year, Alaska and UAL capacity were constrained by Boeing 737 max door plug incident. It has the largest impact on 1st quarter and some lingering effect into 2nd quarter.
Tony,
yes, UA held onto widebody aircraft during covid while AA and DL retired aircraft – for DL the 777 fleet and some 767s and AA their 767 and A330 fleets.
DL long ago replaced all of the aircraft it retired and did it with much more fuel efficient aircraft. AA has not fully replaced all of the aircraft it retired.
In the marketplace, UA grew but largely by adding new capacity to existing cities, including shifting much of its capacity outside of the west coast to E. Asia other than to Tokyo to the west coast because of Russian airspace restrictions.
UA retreated from several markets that DL added including LAX-BNE and LAX-AKL. DL IS growing its international network in places where UA has had an advantage which has major strategic implications.
and AA and DL’s domestic systems are still more than $1 billioin/quarter higher in revenue/quarter.
DL is growing its international network at a faster pace than UA and DL is seeing better results while DL is not giving up its lead in the domestic market.
and UA has grown since covid supported by lower labor costs because of open labor contracts.
the industry has more than lapped the MAX 9 grounding.
and DL is retiring half of more of the new number of aircraft it is receiving.
DL has a much more fuel efficient international fleet while there is little difference in domestic cost efficiency.
lol you can never make Tim happy, “UAL neglected its domestic network” – they are clearly addressing this now. “DL is gaining on UA internationally and can take them on” – you mean DL neglected international while UAL did that domestically. DL is launching routes like LAX-HKG, or BNE where it has no partners so limited connecting traffic and expensive to operate – must be so easy for them to compete lol.
UAL did a fine job this quarter given the macro, you just seem scared that they might actually be doing well.