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United Airlines posted earnings Wednesday after markets closed. The company told investors that revenue was $15 billion for the most recent quarter, up 5.7% from the same time last year. Net income was $1.3 billion, up 23% from the same time last year. But those positive developments were overshadowed by some gloomy notes about sagging demand elsewhere in the release.
“For nearly two years, the airline has been anticipating significant domestic capacity reductions recently announced by a variety of U.S. airlines this summer and mid-August is an inflection point, with published schedule changes showing an approximately 3 point decline in industry capacity growth rate,” said a statement accompanying the numbers.
United’s own capacity, termed “available seat miles,” was up 8.3% from the same quarter in 2023. But as an example of why the carrier is sounding the alarm, its planes were flying just a little bit emptier over that same span. Its “load factor” (the number of revenue-generating passenger miles flown divided by the number of available seat miles) sank to 84.2% from 86.4%.
Like Delta Air Lines, United says that it expects its premium passengers flying first and business class, as well as incursions in the budget-airfare space, will help offset any industry-wide downturns.
“The revenue diversity advantages that we’ve built with our premium customers, Basic Economy customers, and domestic road warriors, on top of the world’s best loyalty program and leading customer service, have propelled our margins to near the top of the industry,” CEO Scott Kirby said.