The Future of United Airlines: Breaking Records & Overcoming Challenges
United Airlines executives recently discussed the company’s financial performance and future outlook during its 2024 earnings call. CEO Scott Kirby highlighted that 2024 was a strong step toward achieving double-digit pre-tax margins, largely driven by the airline’s “United Next” strategy. The call also touched on industry-wide challenges, including FAA staffing shortages, Boeing’s 737 MAX 10 certification process, and potential policy changes under the incoming Trump administration.
Strong Financial Performance and Growth Strategy
United Airlines reported a solid financial year in 2024, with a net income of $3.1 billion and total revenues reaching $57 billion. The airline also carried a record-breaking 173.6 million passengers, a 5.3% increase from the previous year. Executives credited this growth to strategic fleet expansion, network optimization, and strong post-pandemic travel demand.
CEO Scott Kirby emphasized that the United Next strategy is the driving force behind the airline’s success, allowing it to maintain a competitive edge. The airline has been upgrading its fleet, expanding routes, and focusing on operational efficiency to improve profit margins.
Industry Challenges and Structural Changes
Widebody Supply Constraints
Kirby pointed out that the global airline industry faces a shortage of widebody aircraft, which is expected to continue until at least 2030. This constraint has increased demand for narrowbody aircraft, making them a more viable option for international routes.
“Widebody supply, both airframe and engine, is even more challenging than narrowbody.” — Scott Kirby
Changing Market Dynamics for Low-Cost Carriers
Kirby noted that ultra-low-cost carriers (ULCCs) are struggling to maintain rapid growth as they did in the early 2010s. In major cities like New York, Chicago, and Los Angeles, high operational costs make it difficult for budget airlines to sustain profitability.
“The business model just does not work because the governments in those entities have priced low-cost carriers out of the market.”
This shift means airlines are now focusing on competitive strengths rather than aggressive expansion.
External Challenges Impacting United Airlines
FAA Staffing Issues and Air Traffic Control Delays
United Airlines executives acknowledged ongoing FAA staffing shortages, particularly among air traffic controllers (ATC). Brett Hart, President of United Airlines, stated that in 2024, even on clear weather days, 66% of United’s delays were caused by ATC-related issues.
Despite these challenges, United Airlines recorded its best revenue day ever on the Sunday after Thanksgiving, surpassing its previous record by 25%.
Boeing 737 MAX 10 Certification and Aircraft Deliveries
United Airlines remains optimistic about Boeing’s progress with the 737 MAX 10. CFO Mike Leskinen stated that Boeing is making significant improvements, and the airline is increasingly confident in the aircraft’s future.
“Boeing is starting to make some real progress in improving their business. We are becoming more bullish on the [737 MAX 10].”
However, aircraft delivery delays have impacted United’s expansion plans. The airline initially planned to receive 100 aircraft in 2024, but only 81 will be delivered—71 narrowbody and 10 widebody aircraft—with total capital expenditures staying under $7 billion.
Expectations from the Trump Administration
CEO Scott Kirby also discussed the potential impact of Donald Trump’s administration on the airline industry. He expressed optimism, stating that Trump understands aviation and U.S. airspace challenges. Kirby has already spoken with new Transportation Secretary Sean Duffy, who is committed to improving the FAA and ATC operations.
“I have a lot of confidence in this administration and that they are focused on doing things that unlock American innovation and entrepreneurialism.”
United Airlines is hopeful that new policies will ease regulatory burdens, improve air traffic control efficiency, and boost overall airline industry growth.
United Airlines had a remarkable year in 2024, achieving record-breaking revenue and passenger numbers. The company is on track to reach double-digit pre-tax margins, thanks to its United Next strategy and ongoing fleet upgrades. However, challenges such as FAA staffing shortages and aircraft delivery delays remain obstacles.
Despite these hurdles, United remains bullish on its future, especially with potential industry-friendly policies under the Trump administration. With strong demand trends continuing into 2025, the airline is well-positioned for further success in the coming years.
