United Airlines has taken an unusual step by issuing two profit forecasts, warning that the US economy could enter a recession and potentially cutting profits. The airline plans to control costs and keep planes flying as needed, dialing back flying plans if demand wobbles.
The carrier’s CEO, Scott Kirby, expressed confidence in the company’s ability to achieve its outlook despite growing economic uncertainty. United reported a first-quarter adjusted profit of $0.91 per share, beating Wall Street expectations. However, analysts warn that airlines will bleed red in a recession.
Despite this, United’s shares surged over 5% during an earnings call, before turning negative. The airline’s moves are seen as a counter to rival warnings about growth and profits at risk due to Trump’s tariffs. Analysts say the macroeconomic environment is impossible to predict, but United’s guidance approach is considered fluid.
United’s plan to reduce flying by four percentage points starting in the third quarter aims to keep profits coming in during an economic downturn. The carrier expects an adjusted profit of $3.25-$4.25 per share for the current quarter, beating analyst estimates.
Source: https://finance.yahoo.com/news/united-airlines-unsure-economy-offers-182932996.html