United Airlines said Tuesday that it will cut domestic flights by around 4% from this summer due to soft demand.
The Chicago-based airline forecasts lower profits than expected for the current quarter, warning of negative risks to the full-year outlook if the US economy falls into a recession from an ongoing trade war.
United said its financial forecasts depend on the macro environment, adding that “it’s impossible to predict with confidence this year.”
The company reported stable advanced bookings over the past two weeks, with premium cabins rising 17% and an internationally up 5% year-on-year.
“The company’s expectations have become bimodal. The US economy may remain weak but stable or the US may fall into a recession,” he said.
United estimates that the economic recession will lead to a 5% percentage point decline in revenue, converting its $7 per share of $9 per share to $9 per share.
In January, adjusted earnings were forecast for 2025 between $11.50 and $13.50 per share. The company expects it will reach its estimate if the demand environment is stable and fuel prices remain at current levels.
United’s move comes days after Delta and Frontier Airlines retract their full-year forecasts.
President Trump’s trade war rattles global markets and hits business and consumer trust. Travel is a discretionary item for many consumers and businesses, and increasing economic concerns have clouded the outlook for the aviation industry, causing stock sales.
The decline in consumer demand has also undermined the industry’s pricing capabilities. Airline fares fell 5.3% in March, the first monthly drop since September 2021, according to data from the U.S. Labor Bureau.
United stocks fell 31% this year, down 43% from 52 weeks. Indications of bearish investors’ sentiment include a brief interest in the company’s stocks rising 45% since mid-February.
With post wire
