United Airlines Earnings: Premium Seats Offset Economy Cabin Weakness

Key Morningstar Metrics for United Airlines Holdings

• Fair Value Estimate: $98.00
• Morningstar Rating: ★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High

What We Thought of United Airlines Holdings’ Earnings

United Airlines Holdings UAL earned 8% less operating profit on 5% more revenue and capacity in the fourth quarter of 2025 compared with 2024. Annual salaries increased 5.8% since 2024, while fuel costs dropped 3.0% despite the firm burning 5.0% more gallons. Premium cabin sales rose 11% versus 2024, while main cabin revenue fell 5%.

Why it matters: United Airlines is doing well, having established similar premium segmentation and loyalty offerings to Delta’s. As long as premium customers remain loyal and not too frugal, we think these airlines can continue to prosper, sharing the bulk of industry profits.

• Travel demand in 2025 closely resembled overall volume in 2024, and market worries about a recession resulting from April 2025 announcements of new tariff policies all but disappeared as the summer travel season shaped up to closely match last year’s record pace.
• Nonetheless, 2025 saw weaker consumer confidence and some price competition with unprofitable leisure airlines, which led to United’s total revenue growing 3.5% in the year, a little more than half the rate of its 6.1% capacity growth.

The bottom line: We have increased our fair value estimate for no-moat United’s shares to $98 per share from $62, reflecting its industry-leading revenue yield, which we believe may persist in the medium term as unprofitable competing flight capacity exits the US domestic network.

• Even with our forecast of nearly $9.4 billion in EBITDAR in 2026, United’s shares seem overvalued, as we do not anticipate that market conditions will allow the airline to maintain such outsize profits indefinitely.