The airline will cut some flights in the coming months as a result of economic uncertainty.
A United 787-9 Dreamliner (Photo: AirlineGeeks | William Derrickson)
United is scaling back its capacity plans in response to softening demand and economic headwinds.
The Chicago-based airline stated it will reduce domestic capacity by 4% from its original plan starting later this year. This also includes retiring 21 aircraft earlier than expected, a move announced in March.
During a recent earnings call, airline leadership said they are targeting less profitable flights, such as red-eye services.
In addition, routes that are heavily reliant on government travel are being reduced. Last month, United CEO Scott Kirby said government-related travel is down by approximately 50%.
United is also canceling more off-peak flights and reducing narrowbody fleet utilization by 2%, the carrier’s commercial chief, Andrew Nocella, shared. The focus is on maintaining capacity during peak travel times or “the golden hours” – between 7 a.m. and 8 p.m.
“As we would expect in times of economic weakness, we saw the weakness magnified on off peak flights,” he added. “For example, the revenue gap on domestic flights departing prior to 7 AM or after 8 PM outside of the golden hours is usually 30% lower. But in Q1, that gap expanded to 40% lower. That’s why we are canceling more off peak flying and lower utilization going forward. Weakness in the main cabin was somewhat offset by premium performance.”
Nocella said fourth-quarter schedules are still being developed.
United cited a weakening macroeconomic environment that is driving both market volatility and softer travel demand. However, executives emphasized that the airline’s performance remains strong even in this challenging climate due to its success in winning brand-loyal customers.
“United’s performance is strong even in this weak environment because we’ve won the battle for brand loyal customers,” said CEO Scott Kirby. “And because we’ve won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United’s never had before.”
In a rather rare move, the company provided two earnings scenarios for 2025. If current demand trends hold steady, United expects to achieve its original full-year earnings guidance of $11.50 to $13.50 per share.
In a recession scenario with an additional 5% drop in revenue, earnings are projected at $7 to $9 per share. Executives stressed that even the downside scenario would represent United’s first-ever profitable performance through a recession.
A United Airbus A320 (Photo: Shutterstock | Wenjie Zheng)
United reported strong international performance in Q1, with positive unit revenue across all international entities. The Pacific region was highlighted as particularly strong. Domestic demand, especially in the main cabin, remains more challenged.
“Periods of economic softening are part of the business cycle,” Kirby noted. “Our priority is pretty simple and it hasn’t changed. Win the brand loyal customers because that gives us the best margins in good times and that lead can grow even larger during lean times.”
 (imgl9125).jpg)
Receive a daily dose of the airline industry's top stories along with market insights right in your inbox.
More airlines are cutting service to Mexico’s Tulum International Airport. Soon after its opening in December 2023, several airlines from…
Low-cost carrier Breeze is expanding service to two new cities: Fort Lauderdale, Florida, and Salisbury, Maryland. Starting Oct. 1, Breeze…
Low-cost Dominican Republic-based airline Arajet has announced it is expanding in the U.S. with a nonstop service route between Boston…
