United Airlines has taken the unusual measure of offering not one but two possible profit projections, stating that its perspective for 2025 remains achievable, but also warning that a recession could almost halve its profit forecast.
The airline said on Tuesday it expects an adjusted profit of $ 11.50 to $ 13.50 per share if the current environment remains stable. Full year’s gains could fall to up to $ 7 per share if the US economy has recession.
United shares rose 5.2% after closing the regular trading session in New York, a sign of relief that the airline expects to profit even in an economic recession. United shares fell about 32% this year until the closing of Monday, more than triple from the fall of S&P 500 in the same period. Airlines Rivals American Airlines and Delta Air Lines were also discharged on Tuesday.
“Even in their low scenario, they talk about $ 2.6 billion in profits,” said George Ferguson, an analyst at Bloomberg Intelligence, who added that he has never seen a company offer a prospect of multiple scenarios before. “This is a good scenario of low. This doesn’t look like a horrible environment for me.”
The high expectations of the air industry for growth and profits this year have been in doubt as President Donald Trump’s trade war shakes consumers, companies and markets. Delta withdrew her financial guidance last week to 2025 due to global commercial uncertainty and confidence in decline between consumers and companies, which resulted in “stagnant” revenue growth. Frontier Airlines controller has also removed its profit forecast for the year due to the hazy economic environment.
The rapid changes in Trump’s trade policy – imposing tariffs on countries and products before granting relief shortly thereafter – made it difficult for companies to provide demand and profits accurately.
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The macroeconomic environment “is impossible to predict this year with any degree of confidence,” United said in an investor update by reporting the financial results of the first quarter.
United’s decision to offer two profit forecasts highlights the importance of “thinking in terms of multiple scenarios for internal planning and not just sticks to usual,” said Mohamed El-Erian, president of Queens’ College, Cambridge, and Bloomberg Opinion columnist in a post on social networks.
Although volatile commercial policy has fueled concerns about demand, United said reserves remain stable. Premium booth sales over the past two weeks have increased by 17%, while internationals have grown 5% year by year. The company’s adjusted profit in the first quarter of 91 cents per action exceeded the expectation of Wall Street of 74 cents.
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United also said that the adjusted profit in the current quarter will be $ 3.25 to US $ 4.25 per share compared to an average of $ 3.97 from the estimates of analysts compiled by Bloomberg.
Still, profound cuts of jobs by the government and changes in border policies by the Trump administration have already affected reserves for domestic travel. United said it will reduce its flights by four percentage points from the third quarter and will continue to cut some flights on low demand days in the fourth quarter. The company had already announced that it would retire 21 aircraft before planned.
US airlines are now waiting to see if the late imposition of some tariffs will soothe concerns and avoid a deceleration on profitable premium and long -distance international flights.
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