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United Airlines Holdings, Inc. (UAL)·Q1 2025 Earnings Summary

Executive Summary

  • UAL delivered its best first-quarter in five years: revenue of $13.21B, adjusted EPS of $0.91, adjusted pre-tax margin of 3.0%, all within prior guidance; GAAP diluted EPS was $1.16 as special items included $108M net gains from asset transactions .
  • Results modestly beat S&P Global consensus on revenue and adjusted EPS, while adjusted EBITDA was slightly below: Revenue $13.21B vs $13.18B*, EPS $0.91 vs $0.74*, EBITDA $1.26B vs $1.28B*; premium and international strength offset domestic main cabin weakness .
  • Guidance: Q2 2025 adjusted EPS $3.25–$4.25; FY 2025 maintained at $11.50–$13.50 (stable scenario) with a new recession scenario of $7.00–$9.00. UAL will remove 4 pts of scheduled domestic capacity starting 3Q25; FY25 adjusted CapEx lowered to < $6.5B (from < $7B in January) .
  • Stock reaction catalysts: resilient earnings within guidance despite macro softness; explicit bimodal FY framework; domestic capacity cuts; strong cash generation ($3.71B OCF, $2.31B FCF in Q1) and ongoing buybacks ($451M YTD) .

What Went Well and What Went Wrong

  • What Went Well

    • Premium and international outperformance: premium cabin revenue +9.2% YoY; Atlantic RASM +4.7%, Pacific RASM +8.5%; loyalty +9.4%, cargo +9.7% .
    • Cost discipline and cash flow: CASM down 3.4% YoY (CASM-ex +0.3%); OCF $3.71B, FCF $2.31B; net leverage to 2.0x; liquidity $18.3B .
    • Management tone/confidence: “United Next is on track… we expect to expand our lead further in challenging economic times,” CEO Scott Kirby; Starlink Wi‑Fi progress with FAA certification and first regional installs supporting product differentiation .

  • What Went Wrong

    • Domestic main cabin softness: domestic main cabin RASM down ~5% YoY; weakness magnified on off-peak utilization flights, prompting network and RM adjustments .
    • Load factor and domestic PRASM: consolidated load factor down 0.9 pts YoY to 79.2%; domestic PRASM -3.9% YoY as UAL prioritized peak “golden hours” and constrained off-peak flying .
    • Macro uncertainty and tariff/OEM risks: management highlighted weaker/stable macro, potential recession and tariff/OEM supply uncertainties; Q2 profit-sharing accrual headwind $150–$205M expected .

Financial Results

Performance vs prior quarters and estimates

MetricQ3 2024Q4 2024Q1 2025Q1 2025 Consensus*Surprise*
Revenue ($B)$14.84 $14.70 $13.21 $13.18+$0.03
GAAP Diluted EPS$2.90 $2.95 $1.16 ——
Adjusted Diluted EPS$3.33 $3.26 $0.91 $0.74+$0.17
Adjusted EBITDA ($B)$2.327 $2.335 $1.261 $1.278-$0.017
TRASM (¢)18.20 18.77 17.58 ——
CASM (¢)16.28 16.85 16.77 ——
CASM-ex (¢)12.26 12.89 13.17 ——
Pre-tax margin (GAAP)8.7% 8.9% 3.6% ——
Adj. pre-tax margin9.7% 9.7% 3.0% ——

Values marked with an asterisk (*) are retrieved from S&P Global.

YoY comps (Q1 2025 vs Q1 2024)

MetricQ1 2024Q1 2025YoY
Revenue ($B)$12.54 $13.21 +5.4%
GAAP Diluted EPS-$0.38 $1.16 NM
Adj. Diluted EPS-$0.15 $0.91 NM
TRASM (¢)17.50 17.58 +0.5%
CASM (¢)17.36 16.77 -3.4%
CASM-ex (¢)13.13 13.17 +0.3%
Avg fuel ($/gal)$2.88 $2.53 -12.2%

Segment revenue and PRASM trends (Q1 2025)

GeographyPassenger Revenue ($M)PRASM vs 1Q24ASMs (M)RPMs (M)
Domestic$7,182 -3.9% 41,810 33,557
Atlantic$1,736 +4.7% 12,027 8,917
Pacific$1,511 +8.5% 11,901 9,159
Latin America$1,431 +1.9% 9,418 7,883
International (Total)$4,678 +5.2% 33,346 25,959
Consolidated$11,860 -0.1% PRASM 75,155 59,517

KPIs

KPIQ3 2024Q4 2024Q1 2025
ASMs (M)81,541 78,298 75,155
Load factor85.3% 82.3% 79.2%
Avg fuel ($/gal)$2.56 $2.40 $2.53
OCF ($B)——$3.710
FCF ($B)——$2.312
Ending liquidity ($B)—$17.4 $18.3
Total debt ($B, GAAP)—$28.66 $27.66
Net leverage (x)2.7x 2.4x 2.0x
Share repurchase—$81M Q4 $451M YTD through Apr 10

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSQ2 2025—$3.25 – $4.25 Introduced
Adjusted EPS (Stable)FY 2025$11.50 – $13.50 (Jan call) $11.50 – $13.50 Maintained
Adjusted EPS (Recession)FY 2025—$7.00 – $9.00 New bimodal scenario
Adjusted CapExFY 2025< $7.0B (Jan call) < $6.5B Lowered
Domestic capacityFrom 3Q 2025—Remove 4 pts of scheduled domestic capacity New reduction
Profit sharing accrualQ2 2025—$150M – $205M New
Fleet retirements2025—Retire 21 aircraft earlier than planned New timing

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Brand loyalty and structural edgeDeclared domestic inflection; capacity rationalization; brand-led margin path Double-digit margin path reiterated; loyalty strength “Structural, permanent, irreversible” brand-loyalty advantage; resilience in weaker macro Positive, strengthening
Macro and demandDomestic PRASM improving late in Q3; Asia mixed Robust Q1 setup; corporate rebound Softer macro; domestic main cabin weakness; premium resilient Mixed; premium/intl offset domestic
Capacity/utilizationPrudent growth; gauge later benefits Build connectivity; gauge pause in ’25 Remove 4 pts domestic capacity 3Q; lower utilization; retire 21 aircraft Tightening domestic supply
InternationalAtlantic strong; Pacific headwinds normalizing Intl outperforms; strong margins Intl RASM positive; U.S.-origin strong; non‑U.S. origin modestly down Sustained strength
Technology/StarlinkSigned Starlink deal Accelerated Starlink timeline; digital enhancements FAA cert; first regional install; target United Express fleet by YE Execution progressing
Loyalty/MediaMileagePlus growth, Kinective ramp Loyalty +12% in 2024 Loyalty +9% YoY; co-brand spend +9% Solid momentum
Tariffs/OEM SupplyWide-body constraints supportive of intl CapEx with downward bias from OEM delays Tariffs risk monitored; Airbus U.S. assembly mitigates; Boeing majority Managed risk
Basic Economy/RMBasic volumes +21%; segmentation Maintain segmentation approach Opened more low-yield to reduce spill; expect lower yields but fuller planes Tactical shift

Management Commentary

  • Strategy and resilience: “United Next is on track and we will continue to execute our multiyear plan… It has given us industry‑leading margins in the good times and we expect to expand our lead further in challenging economic times.” – CEO Scott Kirby .
  • Demand mix: “Domestic main cabin RASMs were down 5% year-over-year… revenue gap on off-peak flights expanded… that’s why we are canceling more off-peak flying and lower utilization going forward.” – CCO Andrew Nocella .
  • Cost and execution: “We guide… with no‑excuses philosophy… actions, combined with lower fuel costs, enabled us to deliver on our guidance… CASM-ex up only 0.3% YoY.” – CFO Mike Leskinen .
  • Product/Tech: FAA certification for Starlink Wi‑Fi, first United Express aircraft installed; aim to have United Express fleet done by year‑end .
  • Cash returns: Repurchased ~$451M of shares YTD through Apr 10; $18.3B liquidity, net leverage 2.0x .

Q&A Highlights

  • Macro scenarios and FY guide: Management introduced a bimodal FY framework (stable vs recession), maintaining $11.50–$13.50 adjusted EPS in stable conditions and $7.00–$9.00 in recession, with further capacity reductions if needed and optional fuel tailwind not assumed .
  • Cost levers: 1Q CASM-ex likely best of year; pulled forward efficiencies; early retirement of 21 aircraft reduces maintenance expense trajectory .
  • Network/RM: Opening lower-fare inventory to reduce spill on domestic; off-peak flying curtailed; golden-hour focus maintained .
  • Capital allocation: Opportunistic buybacks balanced with deleveraging toward <2x net leverage; ~5.6M shares bought at ~$80 through Apr 10 .
  • Tariffs/OEM: Limited direct Airbus tariff exposure due to Alabama assembly; majority of future orders Boeing; watching geopolitical/tariff developments .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue $13.21B vs $13.18B*; Adjusted EPS $0.91 vs $0.74*; Adjusted EBITDA $1.26B vs $1.28B* – modest top-line and EPS beat, slight EBITDA miss as domestic main cabin softness and off-peak yields weighed on unit revenue while premium and international offset .
  • Q2 2025: Adjusted EPS guidance $3.25–$4.25 (company) vs consensus EPS $3.81*; consensus revenue $15.34B* (management noted bookings stabilized; intl positive RASM; domestic main cabin remains pressured) .
  • FY 2025: Company maintained adjusted EPS $11.50–$13.50 (stable) and introduced $7.00–$9.00 (recession); consensus EPS $10.81*, revenue $59.15B* .

Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

  • Resilient quarter with premium/intl offsetting domestic softness; execution and cost control delivered within guidance amid macro uncertainty .
  • Guidance credible but macro‑contingent; bimodal FY framework should reduce estimate dispersion; watch domestic demand elasticity and RM execution .
  • Tactical supply response (4‑pt domestic cut from 3Q) supports unit revenue; coupled with lower fuel, 2H earnings can track toward the “stable” FY range if bookings hold .
  • Strong liquidity, deleveraging to 2.0x and ongoing buybacks offer downside support; free cash flow generation remains robust .
  • Medium-term thesis: sustained international outperformance, product/tech (Starlink), loyalty monetization, and gauge benefits underpin structural margin expansion as macro normalizes .

Appendix: Additional Data

  • Non-GAAP items in Q1: $108M net gains (mainly aircraft sale-leaseback) impacted GAAP; adjusted metrics exclude special charges and unrealized investment losses .
  • Operational highlights: Best first-quarter on-time since 2021; load factor 79.2%; average fuel $2.53/gal; ASMs +4.9% YoY .