United to cut flights as domestic demand disappoints but international and premium travel drives profits

United Airlines is planning to cut flights starting this summer to match disappointing domestic travel demand while bookings for pricier, international trips remain strong.

The carrier warned Tuesday that a recession could drive down profits this year, but said that booking trends are stable, and maintained its current full-year earnings forecast.

The company left in place expectations issued in January for adjusted earnings per share of $11.50 to $13.50, but said that in a recession it would expect to earn between $7 per share and $9 per share on an adjusted basis.

“The Company’s outlook is dependent on the macro environment which the Company believes is impossible to predict this year with any degree of confidence,” it said in a securities filing.

United plans to trim domestic capacity by about 4% starting in the third quarter. Rival Delta Air Lines is also slowing its growth plans this year.

United CEO Scott Kirby said the airline “will continue to execute our multiyear plan that has allowed United to thrive in any demand environment.

“It has given us industry-leading margins in the good times and we expect to expand our lead further in challenging economic times,” he said in an earnings release.

For the first quarter, United swung to a $387 million profit, or $1.16 a share, from a $124 million loss, or a loss of 38 cents a share, a year earlier. Adjusted earnings of 91 cents per share, which excludes one-time gains related to aircraft sale-leasebacks, outpaced Wall Street’s expectations of 76 cents per share.

Unit revenue for domestic flights fell 3.9% from last year during the first quarter, while unit sales from international routes rose more than 5%. Revenue of $13.21 billion was up more than 5% from a year ago, and came in slightly below the $13.26 billion that analysts expected, according to LSEG. Capacity was up almost 5% from the first quarter of 2024.

United shares were up more than 5% in afterhours trading.

Future bookings over the last two weeks have been stable, United said, adding that premium-cabin bookings are up 17% from the same point last year and international up 5%, though the carrier didn’t provide a figure on domestic coach-cabin demand.

United said it expects to post second-quarter adjusted earnings per share of $3.25 to $4.25, in line with estimates, citing the strong demand for premium-cabin bookings and international travel.

Here is what United reported quarter ended March 31 compared with what Wall Street expected, based on estimates compiled by LSEG:

• Earnings per share: 91 cents adjusted vs. 76 cents expected
• Revenue: $13.21 billion vs. $13.26 billion expected

The latest trend shows how profitable airlines like United and Delta are capitalizing on demand from travelers willing to pay more for pricier seats and other higher-end products, even has economic concerns weigh on consumer sentiment amid President Donald Trump’s trade war, mass government layoffs and other factors.

Delta last week said it couldn’t reaffirm its full-year outlook citing uncertainty in the market.