United Airlines says it will slash domestic capacity and retire aircraft earlier than initially planned as it grapples with a macroeconomic environment that it says is “impossible to predict this year with any degree of confidence.”
The warning came as United became the second of the Big Three US airlines to release its First-Quarter financial results, following Delta and ahead of American Airlines, which is expected later this month.
Despite the “challenging economic times,” United sought to paint an upbeat picture of the quarter, describing it as its best Q1 in the last five years (which is, of course, just as the COVID-19 pandemic struck and decimated the airline industry).
Going into Quarter Three, which runs between July and September, United plans to remove four percentage points of scheduled domestic capacity and will also “make prudent adjustments to the utilization rate of its fleet.”
The airline said this will include reductions in off-peak flying during lower demand days.
Around 21 older Airbus A319 and A320 aircraft will be retired earlier than expected, but United still plans to take delivery of 7 Boeing 787 Dreamliners, 27 Boeing 737MAX jets, and 22 new Airbus A321neo and A321XLR planes, bringing a net increase to its total mainline fleet of 36 aircraft between Q1 2025 and Year End 2025.
Unlike Delta, the Chicago-based carrier did not say whether it had seen any drop in demand for domestic travel, although given the fact that the airline intends to cut capacity in this market, it’s probably safe to assume that this is the case.
Just like Delta, however, United says that international travel demands “remains strong,” and both its loyalty program and cargo business have so far proven resilient to economic uncertainty.
In the past two weeks, United also reported a 17% year-on-year increase in in forward bookings in premium cabins and a 5% year-on-year increase for international travel.
While Delta has warned of upcoming cost cuts and a deferral of big capital expenditures, United chief executive Scott Kirby said on Monday that his airline would be “accelerating our investments in our product, service, technology and experience.”
In an SEC filing, the airline warned investors that bookings had weakened but had stabilized over the last six weeks. If the US economy does enter a recession, however, United is “modeling an incremental 5 point reduction in our total operating revenue in 2Q 2025 through 4Q 2025.”
The A319/320 retirements in the April fleet plan match those from the January fleet plan, so that has not accelerated in the past three months.
Hold on to those ancient 767’s that need so much help! They should have been retired long ago.