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United Airlines (UAL) reported mixed 2Q25 results as EPS surpassed expectations while revenue narrowly missing estimates, reflecting strong cost control and operational efficiencies in the face of significant disruptions at Newark International Airport -- a major hub for UAL. The company also issued FY25 EPS guidance of $9.00–$11.00, aligning with consensus expectations but notably removing the recessionary-case guidance provided in 1Q25, signaling increased confidence in the macroeconomic environment. The company highlighted a robust demand recovery starting in July, with a 6-point acceleration in overall demand and a double-digit surge in business travel demand compared to Q2, suggesting a positive momentum shift heading into Q3.

• DAL set a high bar last week with a strong Q2 earnings report, beating both EPS and revenue expectations while restoring its FY25 guidance, reflecting operational resilience and robust demand. UAL’s performance, while solid, didn’t quite match DAL’s vigor. For instance, UAL’s total revenue per available seat mile (TRASM) declined 4.0% yr/yr, underperforming DAL’s 3.0% TRASM decline, highlighting relative weakness in pricing power.
• A significant drag on UAL’s results was a $218 mln financial hit from disruptions at Newark Liberty International Airport, which reduced Q2 margins by 1.2 percentage points. These disruptions, driven by air traffic control staffing shortages, equipment failures, and runway construction, forced UAL to cut 10% of its Newark schedule. CEO Scott Kirby expressed optimism about Newark’s recovery, noting that operational stability improved by June and that Federal Aviation Administration (FAA) interventions should prevent financial impacts in Q4.
• UAL’s TRASM performance deteriorated notably from Q1’s modest 0.5% increase. This downturn was primarily driven by a 5.9% increase in capacity, which outpaced demand growth and pressured yields in a soft domestic pricing environment. Domestic passenger revenue per available seat mile (PRASM) dropped sharply by 7.0%, reflecting competitive pricing pressures and an oversupply of seats.
• Internationally, PRASM weakened as well, with Europe down 3.5% and Latin America down 2.3%, impacted by currency fluctuations and uneven demand recovery. The Pacific region, however, emerged as a bright spot, with PRASM rising 2.9%, bolstered by strong demand for premium cabins and recovering travel to Asia.
• Capacity growth was a key factor in Q2, with available seat miles (ASMs) up 5.9% yr/yr, reflecting UAL’s aggressive network expansion to capitalize on demand recovery. However, this capacity surge contributed to the TRASM decline by diluting pricing power, particularly in domestic markets. To address this, UAL plans to moderate capacity growth in 2H25, targeting a low-to-mid-single-digit ASM increase for Q3 and Q4. This strategic pullback aims to tighten supply, stabilize yields, and drive TRASM higher, particularly in high-margin business and international segments.
• UAL’s FY25 EPS guidance of $9.00–$11.00, while in line with expectations, appears conservative given the Q2 EPS beat and the strong demand acceleration in July. However, Kirby noted that the guidance embeds a conservative outlook, with potential upside if demand trends -- particularly the double-digit business travel growth -- persist.

UAL delivered mixed 2Q25 results, but with Newark’s operational issues largely resolved and early Q3 demand showing significant strength, UAL’s conservative FY25 outlook offers potential upside, contributing to a favorable stock reaction as investors look past Q2 challenges toward a stronger second half.