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United Airlines (UAL) reported first quarter earnings after the bell that topped estimates on Tuesday, with its premium business partly blunting the effect of surging fuel costs, though the airline did trim its 2026 forecast.
Surging oil prices have hit airlines hard, with little relief from the on-again, off-again nature of the Strait of Hormuz closure and whether a ceasefire can be extended in the US-Israeli war with Iran.
United reported a $340 million increase in fuel expenses compared to the first quarter of 2025 due to the war.
Subsequently, United trimmed its full year adjusted EPS range to $7 – $11, from a previous $12-$14 that it saw in January, before the war started.
United shares fell over 3% in early trade.
Chicago-based United reported Q1 revenue of $14.6 billion versus $14.45 billion estimated, per Bloomberg consensus, up 10% from a year earlier. This is noteworthy, as CEO Scott Kirby said last quarter that 2026 would continue the “revenue momentum” for the airline.
United posted adjusted EPS of $1.19 versus $1.09 expected.
In terms of other metrics, United reported Q1 available seat miles hit 77.70 billion versus 77.85 billion expected, with passenger revenue per available seat mile rising 7.4% year over year to $0.1695.
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“Moments of uncertainty for the airline industry may also create opportunity for United,” CEO Scott Kirby said in the release. “We have demonstrated quarter after quarter that we are built to withstand disruptions, and this moment is no different. We’ll stay nimble in the short term while continuing to grow the airline and invest in our customers, product and people.”
United’s focus on premium customers helped deflect some of the fuel price effect.
“United’s diverse revenue streams remained resilient, including premium revenue up 14% compared to the first quarter of 2025, loyalty revenue up 13%, and revenue from Basic Economy up 7%. Business revenue also remained strong, at up 14% for the first quarter,” the airline said.
The company will, however, pull back five points’ worth of planned capacity to save costs for the rest of the year, with Q3 and Q4 capacity growth flat.
Last month, United unveiled the Relax Row, a first-of-its-kind in North America economy concept that converts three coach seats into a lie-flat, couch-like surface on long-haul widebody flights. Debuting next year, the product is positioned between United Economy and Premium Plus — an attempt to pull price-sensitive families and couples up the fare ladder without the first-class Polaris price tag.
Kirby and United are reportedly looking at other forms of growth. Earlier this month, reports surfaced that Kirby had pitched a potential tie-up with American Airlines (AAL) directly to the Trump administration during a February White House meeting, framing it as a “National Champion” strategy to take on subsidized foreign carriers.
American publicly rejected the chatter on April 17, saying it is “not engaged with or interested” in any merger talks and warning that such a deal would be bad for competition.
Analysts will press Kirby on American or whether JetBlue or another target is in play. United’s bitter rival, Delta (DAL), had its CEO predict more airlines would merge due to fuel costs and uncertainty, with some even going out of business.
Pras Subramanian is the Lead Transportation Reporter for Yahoo Finance. You can follow him on X and on Instagram.
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