United Airlines just posted another profitable quarter, but the results say as much about strategy and restraint as they do about revenue.
United Delivers Solid Q3, But Faces Pressure To Make It Stick
United Airlines reported Q3 2025 adjusted earnings per share of $2.78, topping guidance and consensus, even as its $15.2 billion revenue missed expectations by a narrow margin. That’s the headline, but the real story lies underneath the numbers: premium demand, operational discipline, and the question of how durable this momentum really is.
Premium Lift, But Not Without Frictions
Let’s start with what’s going right: United is riding the wave of premium passengers and loyalty strength. Premium cabin revenue was up around 6%, and loyalty revenue rose about 9%. That’s exactly where airlines need margin these days.
But overall revenue growth was modest. Operating revenue climbed just 2.6%. That gap between premium performance and broad topline growth is a warning flag: demand is not uniformly strong.
Costs remain a challenge. Fuel prices eased, but higher labor expenses, infrastructure spending, and capacity growth all pressured margins (it is my understanding that United is already beginning to factor costs from a yet-ratified flight attendant contract into its guidance, though I expect that will be clarified in today’s earnings call). United’s capacity increased roughly 7%, putting downward pressure on unit revenue across markets.
Operationally, the airline still struggles with Newark-related constraints, something that continues to impact schedule efficiency and delay recovery. Despite those issues, on-time performance has improved compared to 2024, which is no small feat given summer congestion and Air Traffic Control staffing shortages.
The Balancing Act Going Forward
United is leaning into premium cabins, expanding lounges, and betting that loyalty and service differentiation will carry it through economic headwinds. But the airline’s path forward demands consistency, not just quarterly wins.
- United projects Q4 adjusted earnings per share (EPS_ between $3.00 and $3.50, which strikes me as a very ambitious goal that will test whether premium demand can hold through winter.
- Retention is strong (like Delta, United argues once customers fly in the premium cabin, they tend not to go back) but that dependency makes downturns riskier if corporate or luxury leisure travel dips.
- Fleet growth, new routes, and airport expansion all add complexity. Small operational cracks could erode the progress United has made since its pandemic recovery. Sometimes, I think the aricraft and engine delays are a blessing in disguise, but United is well-positioned to moderate growth by accelerating or decelerating aricraft retirement in the months and years ahead.
Still, there’s reason for optimism. United continues to outpace peers on international revenue, driven by transatlantic and Pacific demand, and is executing one of the most ambitious fleet modernization programs in the industry. For now, that combination of network breadth and premium product keeps it ahead.
United CEO Scott Kirby places the focus squarely on brand loyalty:
“We’ve invested in customers at every price point: Seatback screens, an industry-leading mobile app, extra legroom, a lie-flat United Polaris seat, and fast, free, reliable Starlink on every plane by 2027. Our customers value the United experience, making them increasingly loyal to United. Those investments over almost a decade, combined with great service from our people, have allowed United to win and retain brand-loyal customers, leading to economic resilience even with macro economic volatility through the first three quarters of the year and significant upside as the economy and demand are improving in the fourth quarter.”
But the next economic downturn will truly be a test of that thesis…
CONCLUSION
United’s Q3 earnings show an airline that’s both confident and cautious, profitable in the present, but aware of the fragility that comes with growth. The results prove United can outperform expectations, but the next challenge is making it repeatable in the slower winter months. The margins are fine: now United just has to sustain them.
I’ll let the actual airline analysts debate the nuances of quarterly earnings reports, but, on a macrolevel, between the shutdown, the general economic strife from tariffs, and conflicts overseas, these are very real headwinds for every airline (and quite frankly, every business, these days, unless you are literally getting special treatment from Dear Leader via market manipulation, insider trading, and special deals with the admin.)
first, the current government shutdown started on October 1 which is after the 3rd quarter which UA just reported.
second, all of the macroeconomic impacts which you cite affected all airlines and yet DL, the only other airline that has reported, beat UA by a substantial margin in total net profits even though UA flies 10% more capacity.
third, as hard as it is for some to accept, UA’s massive growth plan is not economically viable because UA as a high cost airline cannot keep throwing capacity into the market unless it can generate revenues higher than what it is receiving now – and that level of demand just isn’t there in any region.
UA saw capacity increases and RASM declines in every global region including domestic. UA has made it clear that it thinks it is its job to eliminate every other competitor except DL; no company with 20% of the capacity of any market can inflict wounds on 80% of the rest of an industry w/o hurting themselves.
fourth, this had little to nothing to do with AA and UA’s battle in Chicago. If likely is partly the result of UA’s spring meltdown at EWR in the spring; UA quickly refilled seats but did so at lower yields. WN is regaining its footing in revenue and UA has probably not been as successful at picking up traffic from WN esp. at DEN. And Latin America is clearly about shorthaul traffic, very likely an attempt to gain share from NK and B6.
UA and its fans simply have to accept that their high growth strategy doesn’t work – something some of us said all along would be the case.
DL simply outperformed UA and still grew but on a more measured basis.
I expect that UA will have no choice but to start retiring aircraft in much greater numbers and slow its growth or see its finances continue to deteriorate.
I’m with you, Tim. And, legitimately concerned for not just airlines, but the larger domestic and global economy. My doubt is whether any business can ‘perform’ its way out of the very real headwinds of these wealth-killing tariffs. Sure, the big dog can bail out Argentina, but, unless he’s just gonna sick the military on us citizens, there’s gonna be real problems domestically if there isn’t relief, soon. The bottom 90% is getting crushed; few entry-level jobs for new graduates; the false promises of AI replacing everyone. Fortunately, for now, aviation is a source of jobs for folks, and most of those roles cannot be simply replaced by software (unless robotics really steps it up). Time will indeed tell on all this.
I hate to say this given our arguments on other blogs due to what I see as your shilling, but I actually think a lot of your analysis here is quite valid.
We have to wait to see what the rest of the industry reports, but WN expects RASM in Q3 to range between -2 to 2% while B6 expects to be on the upper-range of a 1.5 to 4% decline in PRASM. UA’s PRASM declined 5%. If that holds for the other airlines, there’s a chance that is among the worst if not the worst in the industry.
Sure there was a fair bit of capacity added by UA that the field did not, but economic metrics are quite healthy – Q3 GDP growth is projected at ~3%+ while consumer spending tracks up ~0.3-0.4% after inflation YoY. So those PRASM / yield declines are in what frankly are healthy economic growth conditions.
Fuel savings are doing a lot of help for UA’s comparison vs Q3 2024. Given their fuel usage, YoY fuel savings are generating ~$200M in impact for their net income which means w/o them net income would be down ~20% vs PY.
All this is fine and overall the result for UA is solid, but there are troubling signs.
Jeremy,
I DEBATE lots of people but I argue w/ no one.
Thank you for agreeing w/ my assessment.
Fuel price reductions have subsidized labor cost increases for most of the last 3 years. Since DL has been the carrier that has pushed labor costs up the most post covid and also has a refinery, you have to wonder if there is a play coming up that will uniquely position DL. Just wondering….
and Billy Bob,
revenue metrics are only part of the profit numbers. Yes, AA could have better revenue metrics including RASM change but still lose money.
no, United did not deliver a strong 3rd quarter.
Their RASM was down in every region as much if not more than DL on more capacity.
UA’s grow, grow, grow strategy is costing UA itself even though they will tell you that they are trying to put everyone else out of business.
When your revenue metrics and profits go down, your strategies are not working.
Tim, I think United had a strong quarter…even though there are weak spots that I pointed out. Ultimately, profit exceeded expectations, even on lower revenue, and the bifurcation in the US airline industry continues, with UA + DL continuing to pull ahead. Could it have been stronger? Yes. Will we see a profit hit if the FA contract can finally be ratified? Yes. But it was strong, both in absolute and comparative terms.
Matthew,
I’m sorry but UA didn’t have “weak spots” but their entire system showed revenue weakness driven by overcapacity. Given UA is run by an exec team that has a strong revenue background, they knew exactly the risks they were taking w/ a high growth strategy and they are seeing the results that many of us expected would happen. Remember, there were signs of this in the 2nd quarter but some of it was attributed to the EWR mess.
and DL and UA may be leading the industry but UA has fallen back so far in 2025 relative to DL in terms of profits. DL’s net income year to date through the 3rd quarter is $3.8 billion to $2.3 billion for UA; DL has grown its profits in 2025 $1 billion more than UA.
UA is simply not in the same league as DL in terms of finances and the gap is widening, not narrowing.
UA’s high growth strategy is not working and many of the things they are doing are not premium revenue focused but share growth and network expansion- MAXs across the Atlantic and beyond NRT plus the increased share of basic economy passengers. UA has said for years that it is on a mission to inflict pain on carriers that they perceive as weaker than them but the damage is being done to UA’s finances.
You don’t have to believe me; just look at their share performance – down 5% as of 1.20 ET which is improved from over 9% earlier. Analysts see too much capacity which harms industry profits. Although AA hasn’t said anything else, their shares are down about as much as UAL along w/ B6.
and Stan,
UAL has done better than the industry but investors have a long history of what works and what doesn’t for airlines. and I have never understood the idea that one airline is better than another from a network standpoint for a single person.
Large networks are good for corporate revenue because a single airline can do so much but a single passenger is never going to come close to benefitting from the size of UA’s international network any more than they can take advantage of DL’s much larger domestic network. Nobody flies from multiple hubs to multiple cities internationally or domestically.
let’s see what other airlines report but I expect that UA’s revenue metrics will be at the low end of the industry; while other airlines have pulled back on capacity to improve their financial performance, UA has kept adding capacity at a very strong pace and it is biting them.
DL is the only other airline that has reported so far but their capacity growth was much more restrained and it supported their stronger finances.
@Tim Dunn
Your analysis, if correct, is a great argument to pick Delta as an investor.
And, if you are correct, then United’s lower RASM and superior route network means people should choose United as a passenger.
I half agree with you Tim, this was not a strong quarter, not a weak one either just quite flat. Their standout performance here was cost – they are still reducing CASM-Ex. Revenue was meh (so was DL’s when you strip out their oil refinery) – DL definitely outperformed UA domestically though. DL got ahead of itself when they claimed they were 60% of profits because that’s turned out to be false lol. But to say UA’s strategy isn’t working doesn’t quite make sense either, they are still a strongly profitable airline and it appears they are closing some gaps though I think this quarter that gap was maintained.
first, Andy, costs only matter if you cover them with more revenue. Airlines reduced their unit costs by growing capacity but the reality is that UA’s RASM fell faster than its CASM which is why their profit fell.
second, DL strips out the refinery and it isn’t a money maker or loser of any significance right now. It is a low cost hedge against fuel cost imbalance.
and third, I believe DL’s statement about percent of profits is on a yearly basis – which hasn’t been closed yet. Even if it was just this quarter, DL most likely did earn 60% of industry profits this quarter and likely will for the year.
1990,
this isn’t a macroeconomic story but a company-specific management of it.
UA has focused on growth including its intention to grow its MAX flights across the Atlantic; there is nothing premium about a 7.5 hour flight on a domestic configured aircraft.
I expect that AAL and LUV will report better revenue metrics than UAL on lower growth.
and let’s not forget that UAL has more open (amendable labor contracts than any other of the big 4) which saves them hundreds of millions of dollars in labor costs.
UA’s margin would be even lower if it had settled w/ all of its labor groups.
AAL is projected to lose money in Q3. Are you trying to say thats better than making a profit?
Premium cabin revenue should remain consistent
Those who fly in premium cabins tend to be recession resistant. They have extra money that they can spend, and their money is not likely to run out during a recession. These are not your paycheck to paycheck people flying up front
As is known well, UA’s priorities are assertive growth, market share gains, and investing in volatility. The veteran giant airline’s fourth-quarter forecast suggests that management believes their bet is paying off. But investors seem skeptical that capacity growth without commensurate pricing power is the right path.
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