United Airlines’ Strategy for Success: What’s Next in 2025?
United Airlines has marked another year of strong financial growth in 2024, taking a major step toward achieving double-digit pre-tax margins. During the airline’s earnings call, CEO Scott Kirby credited the success to the “United Next” strategy, which has helped the carrier navigate industry-wide challenges. The airline’s executives also discussed external factors affecting operations, such as FAA staffing issues, aircraft delivery delays, and policy changes under the incoming Trump administration.
United Airlines’ Financial Performance in 2024
United Airlines ended 2024 with impressive financial results. The airline reported a net income of $3.1 billion and total revenues of $57 billion, highlighting a year of strong performance. A key milestone was the carrier’s record-breaking passenger count of 173.6 million, reflecting a 5.3% year-over-year (YoY) increase.
The airline also achieved its best revenue day on the Sunday after Thanksgiving, surpassing its previous record by 25%. This financial success is attributed to United’s strategic expansion and fleet modernization efforts.
Industry Challenges and Market Trends
Structural Changes in the Airline Industry
CEO Scott Kirby pointed out that the airline industry is experiencing long-term structural shifts, particularly in aircraft availability. Widebody aircraft supply shortages are expected to last until at least 2030, impacting the international market.
Additionally, the growth of ultra-low-cost carriers (ULCCs) is slowing down. Unlike the early 2010s, when these carriers expanded by 15-20% per year, today’s industry landscape is different. The cost of operating in major hubs like New York, Chicago, and Los Angeles has made it difficult for low-cost carriers to sustain profitability.
FAA Staffing and Air Traffic Control Issues
A key challenge highlighted in the earnings call was FAA staffing shortages, particularly in air traffic control (ATC). United Airlines’ President Brett Hart revealed that even on clear weather days, 66% of United’s delays were due to ATC staffing and technology issues. This has significantly impacted flight schedules and operational efficiency.
Fleet Expansion and Aircraft Delivery Challenges
United Airlines continued its fleet expansion under the United Next plan, adding 1,406 aircraft by the end of 2024. The airline took delivery of 81 new aircraft, including 71 narrowbody and 10 widebody jets, with total capital expenditures (CapEx) remaining under $7 billion.
However, United had initially planned to add 100 new aircraft but had to scale back due to delivery delays. Despite these setbacks, Chief Commercial Officer (CCO) Andrew Nocella emphasized that the airline remains on track with its long-term growth strategy.
Confidence in Boeing 737 MAX 10
United Airlines remains optimistic about the Boeing 737 MAX 10, which is expected to play a crucial role in the airline’s future expansion. Chief Financial Officer (CFO) Mike Leskinen stated that Boeing is making significant progress, and United is “becoming more bullish” on the aircraft’s certification and delivery timeline.
Policy Expectations from the Trump Administration
With Donald Trump returning to the White House in 2025, United Airlines executives believe that his administration will have a positive impact on the airline industry. CEO Scott Kirby mentioned that Trump has a deep understanding of aviation and airspace management.
Kirby also revealed that he had already spoken with Sean Duffy, the new Transportation Secretary, who is committed to improving ATC infrastructure and ensuring the FAA has the necessary resources to manage airspace effectively.
United Airlines expects the new administration to implement pro-business policies that reduce regulatory burdens and promote economic expansion, benefiting both airlines and passengers.
A Strong Year with Optimistic Outlook for 2025
United Airlines wrapped up 2024 with record-breaking revenues and passenger numbers, despite external challenges such as FAA staffing issues and aircraft delivery delays. The airline’s United Next strategy has positioned it for continued growth, with a focus on expanding its fleet and maintaining strong financial performance.
Looking ahead to 2025, United Airlines is optimistic about industry trends, government policies, and fleet expansion, setting the stage for continued profitability and market leadership.
