Written by Rajesh Kumar Singh
CHICAGO (Reuters) – United Airlines on Tuesday forecast stronger-than-expected earnings in the current quarter, after its earnings beat Wall Street estimates in the fourth quarter thanks to strong travel demand and improved pricing power.
Shares of the Chicago-based airline rose about 4% in after-hours trading.
United said it is seeing strong and widespread demand for travel across all geographies.
In the December quarter, sales of its premium and basic economy seats rose 10% and 20% year over year, respectively. Corporate bookings are up 7% from last year.
The company said accelerating demand trends put it on track for double-digit pre-tax margins in 2025, up from 7.3% a year ago.
United and rival U.S. airlines are also benefiting from a sharp decline in airline seats in the domestic market, which has pushed up ticket prices and boosted industry profit expectations.
Airfare prices rose at their fastest pace in 21 months in December due to a combination of limited seat supply and strong demand for holiday travel.
United's total revenue per available mile, a proxy for pricing power, rose 1.6% year over year in the December quarter. It expects further improvements in pricing power in the current quarter.
Earlier this month, rival Delta Air Lines (NYSE:) described the industry's capacity discipline as a “constructive” backdrop, which is expected to help drive record profits for the company in 2025.
United expects adjusted earnings of 75 cents per share to $1.25 per share in the quarter ending in March. Analysts expect the company to report quarterly earnings of 54 cents per share, according to LSEG data.
For all of 2025, United expects adjusted earnings of $11.50 to $13.50 per share. That compares to the $12.85 per share Wall Street analysts expected.
Its adjusted earnings in the December quarter were $3.26 per share, compared to analysts' expectations of $3.00.
United will discuss its financial results via a phone call with analysts and investors on Wednesday morning.
