United Airlines offers an upbeat outlook on improved pricing power

By Rajesh Kumar Singh

CHICAGO (Reuters) – United Airlines on Tuesday forecast a stronger-than-expected profit in the current quarter, after its earnings topped Wall Street estimates in the fourth quarter on robust travel demand and improved pricing power.

The Chicago-based airline’s shares were up about 4% in after-hours trading.

United said it is witnessing a strong and broad-based demand for travel across all geographies.

In the December quarter, sales of its premium and basic economy seats were up 10% and 20% year-on-year, respectively. Corporate bookings rose 7% from a year ago.

The company said accelerating demand trends have put it on the path to double-digit pre-tax margins in 2025, up from 7.3% a year ago.

United and rival U.S. carriers are also benefiting from a sharp reduction in airline seats in the domestic market, which has driven up ticket prices and bolstered the industry’s earnings outlook.

Airline fares rose at their fastest pace in 21 months in December on a combination of a limited supply of seats and strong holiday travel demand.

United’s total revenue per available seat mile, a proxy for pricing power, was up 1.6% year-on-year in the December quarter. It expects further improvements in pricing power in the current quarter.

Earlier this month, rival Delta Air Lines (NYSE:) termed the industry’s capacity discipline a “constructive” backdrop, which is expected to help produce a record profit for the company in 2025.

United expects an adjusted profit in the range of 75 cents a share to $1.25 per share in the quarter through March. Analysts expect the company to report a quarterly profit of 54 cents a share, according to LSEG data.

For the full-year 2025, United forecast an adjusted profit of $11.50 to $13.50 per share. That compares with $12.85 per share expected by Wall Street analysts.

Its adjusted earnings in the December quarter came in at $3.26 a share, compared with analysts’ expectations of $3.00.

United will discuss its financial results on a call with analysts and investors on Wednesday morning.