United Airlines Earnings: Premium Segment Helped Weather Fuel Price Shock

Key Morningstar Metrics for United Airlines Holdings

• Fair Value Estimate
  : $102.00
• 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 16.0% more revenue and 12.0% higher yields on 3.5% more capacity in the second quarter, while fuel costs rose 84.0% and structural costs increased 6.1% compared with 2025, resulting in 17.0% less operating profit. Premium ticket sales gained 16%, while basic seats generated 11% more revenue.

Why it matters: United has joined Delta in offering industry-leading segmentation of travel, allowing it to outearn most of the industry. Its fortunes are tied to continued demand for premium travel experiences from well-heeled consumers and price-insensitive business travelers.

• Travel demand so far in 2026 closely resembles the overall volume of early 2025, with merely 0.5% more travelers passing through security by the end of June. United’s premium-ticket sales continue to outpace economy-ticket sales, and ticket prices are on the rise industrywide, following the fuel cost spike.
• Management indicated its expectations for a return to moderate capacity growth in the second half of 2026 are improving, and it would appear that travelers have not begun to balk at persistently higher fares.

The bottom line: We have increased our fair value estimate for no-moat United’s shares to $102 per share from $95, reflecting a near-term rebound in profit due to abating fuel costs, as well as United’s 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 $8.4 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.