United Airlines Delivers Solid Q2 Beat, Raises Confidence for Full-Year Recovery

United Airlines reported better-than-expected second-quarter earnings on Wednesday, reinforcing the bullish tone set by Delta Air Lines last week and offering reassurance to investors about the airline sector’s resilience. Though revenue narrowly missed estimates, strong cost control, improved operational performance, and encouraging demand trends in July are helping offset earlier macroeconomic headwinds. Management expressed confidence in a strong second half of the year, raising the low end of its 2025 profit forecast and signaling momentum across both business and leisure segments.

United posted adjusted earnings per share of $3.87, ahead of the $3.81 consensus estimate, and within the company’s prior guidance range of $3.25 to $4.25. Total revenue for the quarter came in at $15.2 billion, up 1.7% year over year but slightly below Wall Street’s estimate of $15.35 billion. Net income declined 26% to $973 million, or $2.97 per share, while adjusted net income reached $1.3 billion. Notably, the airline delivered a Q2 pre-tax margin of 8.2% and an adjusted margin of 11%, showing operational strength despite some lingering cost pressures.

United’s updated full-year earnings outlook now calls for adjusted EPS of $9.00 to $11.00, versus its April forecast which had outlined a wide range of outcomes from $7.00 to $13.50 depending on macro conditions. The revised forecast brackets the current Street consensus of $10.04, signaling that while some uncertainty remains, the worst-case recession scenario has likely been taken off the table. For the third quarter, United expects EPS between $2.25 and $2.75, in line with analyst expectations, though toward the lower end of what would normally be considered a seasonal high point.

Key demand commentary was encouraging. CEO Scott Kirby highlighted a six-point acceleration in booking trends since early July, coupled with a double-digit pickup in business travel. Kirby attributed this rebound to “less geopolitical and macroeconomic uncertainty” and anticipates an inflection point in both industry demand and supply patterns by mid-August—mirroring trends from 2024. This commentary mirrors Delta’s positive tone last week and suggests a more constructive environment for full-service carriers heading into the fall.

The composition of revenue was notable as well. Premium cabin revenue rose 5.6% year over year, basic economy grew 1.7%, cargo gained 3.8%, and loyalty program revenue jumped 8.7%. While unit revenue fell 4%, driven largely by a 7% drop in domestic passenger revenue per seat mile, international weakness was more modest—Europe unit revenue fell 2.2%. Meanwhile, total capacity rose 5.9% year over year, while cost per available seat mile (CASM) rose just 0.6%, reflecting solid cost control amid inflationary pressures.

Operational performance was a bright spot. United posted its best post-pandemic Q2 on-time departure and cancellation rates, with Newark Liberty International Airport (EWR) outperforming all New York City airports in June. This is particularly notable given ongoing FAA-imposed flight caps at Newark due to air traffic controller shortages. The carrier estimates that Newark issues shaved 1.2 percentage points from Q2 pretax margin, and sees a 0.9-point drag in Q3. Still, United continues to invest in schedule stability and coordination with regulators.

On the balance sheet, United repaid its $6.8 billion MileagePlus-secured financing using only cash, leaving the loyalty program unencumbered. Liquidity at quarter-end stood at $18.6 billion, with trailing twelve-month net leverage at 2.0x. Free cash flow totaled $1.1 billion for the quarter, and United repurchased $200 million in stock during the period—$600 million year-to-date.

Headwinds do remain. Tariff uncertainty and fuel prices could still swing results in either direction, and United’s domestic pricing power is still under pressure. Additionally, any deterioration in business travel or global macro conditions could weigh on yields. The Newark capacity constraint also remains a lingering operational hurdle.

Nevertheless, United’s Q2 performance underscores the strength of its diversified business model, with multiple revenue levers—premium, loyalty, and international—and a disciplined approach to cost and capital. With travel demand inflecting and recession fears receding, the airline appears well positioned for a stronger back half of 2025. As CEO Kirby put it, “The world is less uncertain today than it was during the first six months of 2025, and that gives us confidence about a strong finish to the year.”

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