United Airlines' first-quarter business travel revenue increased 14 percent year over year with "strength across all verticals," company executives said Wednesday during the carrier's quarterly earnings call. That demand has remained even as United has raised fares to account for rising jet fuel prices, they said.
"Just in the last week or so, our yields are now up 20 percent year over year," said United EVP and chief commercial officer Andrew Nocella. "But even more importantly ... business traffic is over the last two weeks, up 25 percent, business revenue up 25 percent. ... So these price points are being absorbed and passed through and volumes are increasing."
United CEO Scott Kirby said the carrier would continue to hike fares as part of its strategy to mitigate fuel costs, even if that means lower overall demand.
"Our goal is to do whatever it takes to recover 100 percent of the increase in jet fuel prices as quickly as possible and to achieve double-digit pretax margins next year," Kirby said. To do so, he continued, "yields need to increase by about 15 percent to 20 percent," and executives assume fuel prices may remain elevated for some time.
"As yields increase, there will be an elasticity effect on demand that we're estimating will lead to less overall demand," Kirby said. "While we haven't actually seen that decline yet, Econ 101 makes us believe it's coming."
As such, Kirby said United would limit year-over-year capacity growth in the third and fourth quarters to be flat to an increase of 2 percent. For next year, "if jet fuel remains elevated compared to our pre-war levels, as we think it might, we'd once again expect to require less capacity growth in 2027 than we were planning just two months ago," he said.
First-quarter premium-class revenue increased 13.6 percent year over year on a 4.4 increase in capacity, Nocella said, noting "it is clear that consumers continue to seek elevated experiences." He did add that business travel demand softened in the final week in March, amid talk of lengthy wait times at airport security lanes during the shutdown of the U.S. Department of Homeland Security, but said traffic since has fully rebounded.
M&A? Shhh
Kirby during the call volunteered that he wouldn't discuss any reports of "consolidation rumors."
Bloomberg this month reported that Kirby pitched a potential merger with American Airlines to President Donald Trump and other senior administration officials. American on Friday said it was "not engaged with or interested in any discussions regarding a merger with United."
U.S. Transportation Secretary Sean Duffy this week told Reuters the prospect of a merger was "interesting," but added, "I suppose if Scott wants it to happen, he's got to do a little more selling on why it's good for the American consumer."
United Q1 Metrics
United's first-quarter passenger revenue increased 11 percent year over year to $13.2 billion. Overall revenue was up 11 percent to $14.6 billion. Net income was $699 million compared with $387 million one year prior.
Q1 capacity as measured in available seat miles increased 3.4 percent year over year. Domestic capacity increased 2.2 percent while international capacity rose 4.9 percent.
United's average per-gallon first-quarter fuel cost was $2.78, up from $2.53 in the first quarter of 2025. The carrier projects a second-quarter fuel price of about $4.30 per gallon.
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