United Airlines soars above tariff concerns, posting record first-quarter revenue of $13.21 billion and turning last year’s losses into a $387 million profit despite challenges in the domestic market.
At a Glance
- United Airlines reports best first-quarter financial performance in five years with $13.21 billion in revenue
- Company does not expect significant impact from tariffs on aircraft prices as most orders are from US-built Boeing jets and Alabama-assembled Airbus planes
- Airline plans to reduce domestic capacity by 4% and retire 21 aircraft early as domestic markets underperform
- International travel remains strong with Atlantic revenue up 4.7% and Pacific revenue up 8.5% year-over-year
- United maintains full-year earnings forecast of $11.50-$13.50 per share, with alternative recession scenario of $7-$9 per share
Tariff Concerns Minimal for United’s Aircraft Procurement
United Airlines executives have reassured investors that potential tariffs imposed by the US government will have little impact on their aircraft procurement strategy. The airline’s order book is dominated by Boeing aircraft manufactured domestically, while most of their Airbus A321neo jets are assembled at facilities in Alabama, insulating them from significant tariff exposure.
“We are closely monitoring the potential impact on prices we would pay for aircraft, but we don’t currently anticipate a meaningful direct impact from tariffs relating to aircraft purchases,” said Brett Hart, United’s President. “As a reminder, Boeing accounts for the majority of our future total order book and most of our Airbus 321neo are produced in Alabama.”
CEO Scott Kirby has characterized the tariff issue as “a pretty minor issue for us” and even suggested that trade tensions could create opportunities to strengthen supplier relationships, particularly with Airbus, despite some components being imported for US assembly.
Record Financial Performance Despite Market Challenges
United reported impressive financial results for the first quarter of 2025, achieving its best first-quarter performance in five years. The airline posted a net profit of $387 million, or $1.16 per share, compared to a loss during the same period last year. Revenue reached a record $13.21 billion, representing a 5.4% increase year-over-year.
The airline’s adjusted earnings per share of 91 cents exceeded Wall Street’s expectations of 76 cents. This strong performance comes despite challenges in the domestic market, where unit revenue fell 3.9% in the first quarter. United generated $3.7 billion in operating cash flow and $2.3 billion in free cash flow, ending the quarter with available liquidity of $18.3 billion.
Strategic Adjustments to Market Conditions
In response to weaker domestic performance, United plans to reduce domestic flight capacity by 4% in the third quarter and retire 21 aircraft earlier than previously scheduled. CEO Scott Kirby identified domestic and Canadian markets as the weakest regions for the airline, with Canadian bookings down 9% and Europe-originating bookings to the US down 6% compared to last year.
“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,” said United CEO Scott Kirby. “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.”
Despite domestic weaknesses, international travel remains robust with Atlantic RASM (Revenue per Available Seat Mile) up 4.7% and Pacific RASM up 8.5% year-over-year. Premium bookings have increased 17%, and overall international bookings are up 5% from last year.
Operational Improvements and Customer Experience
United achieved its best on-time arrival and departure rates for a first quarter since 2021 and reduced its seat cancellation rate by half compared to the first quarter of 2024. The airline also reported its highest customer satisfaction scores for a first quarter, with notable improvements in pilot communication, inflight entertainment options, and the check-in experience.
Premium cabin revenue grew 9.2%, business revenue increased 7.4%, and Basic Economy revenue rose 7.6% year-over-year. The airline continues to expand its network, including restarting service to Tel Aviv and launching a nonstop flight between New York/Newark and Dominica. United is also adding six additional gates at Chicago O’Hare to support operational growth.
The airline received FAA certification for Starlink WiFi and plans to offer what it calls “the fastest WiFi in the sky.” Additionally, United announced updates to its Family of Cards from Chase and continues to invest in future technologies through its corporate venture capital unit, which recently invested in a direct carbon capture startup, Heirloom.
Future Outlook
United Airlines maintained its full-year adjusted earnings per share forecast of $11.50 to $13.50 but provided an alternative forecast of $7 to $9 per share in the event of a U.S. recession. The company acknowledged the difficulty in predicting the macroeconomic environment with confidence this year but remains optimistic about its competitive positioning.
“The Company’s outlook is dependent on the macro environment which the Company believes is impossible to predict this year with any degree of confidence,” United stated in its earnings release. Despite this uncertainty, United’s focus on premium services and international routes appears to be providing some insulation from domestic market weaknesses.
United Airlines has received recognition as a top employer and was named to Fortune’s list of Most Admired Companies for the fourth consecutive year, reflecting its successful business strategy and operational improvements despite ongoing economic uncertainties.
