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    UAL
    Earnings call· Jun 2026(Q2 FY26)

    United Airlines Holdings Q2 FY26 earnings call UAL

    Jul 16, 2026 Source

    Executive summary

    United Airlines Q2 FY26 — Strong Revenue Growth Despite Fuel Headwinds

    United Airlines demonstrated strong financial performance in Q2 FY26, with robust revenue growth driven by brand loyalty and effective commercial strategies, despite significant fuel price increases. The company is accelerating investments in customer experience, including Starlink WiFi, and remains confident in its long-term margin targets, aiming for double-digit pretax margins in 2027. Management emphasized structural changes in the industry, particularly cost harmonization, as a primary driver of higher fares.

    Highlights

    5

    • Q2 total operating revenues increased 16% year-over-year to $17.7 billion.

    • TRASM was up 12.1% year-over-year, with minimal to no negative impact on demand from higher prices.

    • New co-branded credit card accounts reached a record level, up 22% year-over-year.

    • Contracted business revenues flown were up an impressive 27% year-over-year, with bookings up 30%.

    • Q2 Adjusted EPS of $1.99 was at the high-end of the guidance range of $1 to $2.

    Concerns

    4

    • A fuel price spike in July was equal to a $1.12 impact on EPS.

    • Fuel remains almost $6 billion higher for the full year compared to the outlook at the start of the year.

    • Q2 CASM-ex was up 6.1% year-over-year, reflecting pressure from labor deals and capacity reductions.

    • Pressure on unit costs in the first half of the year, driven by close-in capacity adjustments, will remain a headwind for the remainder of the year.

    Guidance & targets

    12
    CategoryTargetConfidence
    Q3 Adjusted EPS
    $2.50 - $3.50
    high materiality
    High
    Full-year Adjusted EPS
    $9 - $11
    high materiality
    High
    Q3 Fuel Recapture Rate
    80% - 90%
    medium materiality
    High
    Q4 Fuel Recapture Rate
    Full recovery
    medium materiality
    High
    Core CASM-ex
    2% - 3%
    medium materiality
    High
    Pretax Margins
    Double-digit
    high materiality
    High
    Pretax Margins
    Mid-teen
    high materiality
    High
    Net Debt
    Below 2 turns
    medium materiality
    High
    MAX 10 First Delivery
    Mid- to late 2027
    medium materiality
    Medium
    Starlink-equipped Aircraft
    Close to 1,000 aircraft
    medium materiality
    High
    Aircraft Retirements
    At least 80 aircraft
    medium materiality
    High
    Premium-configured A321 Fleet
    100 aircraft
    medium materiality
    High

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Total Operating Revenue
    Overall revenue performance was exceptional, demonstrating United's ability to quickly adjust to changing environments.
    		$17.7B16%——
    Domestic Passenger Revenue
    Strong performance in the domestic market.
    PRASM: 12.2% YoY
    		—20.3%——
    International PRASM
    International markets showed strong growth.
    		—12%——
    Pacific PRASM
    Pacific led the international regions in PRASM growth.
    		—14%——
    Atlantic PRASM
    Strong PRASM growth in the Atlantic region.
    		—12.1%——
    Latin PRASM
    Solid PRASM growth in Latin America.
    		—10.7%——
    Cargo Revenues
    Strong cargo performance, primarily yield-related.
    		—22.6%——
    Loyalty Revenue
    Reported increase, but with an out-of-period one-time adjustment that made the reported growth look lower than it would have been (over 13% without adjustment).
    		$11.3M———
    Premium Revenues
    Strong growth in premium offerings.
    Premium PRASM: 11.6% YoY
    		—16.4%——
    Polaris and Premium Plus RASM
    Even stronger RASM growth in the highest premium cabins.
    		—13.6%——
    Main Cabin RASM
    Second consecutive quarter of positive Main Cabin RASM after years of below-average performance.
    		—11.5%——

    Operational metrics

    26
    Adjusted EPS
    $1.99High-end of guidance $1-$2
    Q2 FY26

    Reported on a non-GAAP basis.

    Pretax Margin
    4.8%
    Q2 FY26

    Achieved despite a $2.3 billion year-over-year headwind from fuel.

    CASM-ex
    6.1%YoY
    Q2 FY26

    Reflected pressure from labor deals and capacity reductions, consistent with expectations.

    Fuel Recapture Rate
    50%
    Q2 FY26

    Of the increase in fuel expense.

    Fuel Price Spike Impact
    $1.12
    Q2 FY26

    Impact on EPS from recent fuel price spike.

    Fuel Cost Increase
    $6B
    FY26

    Higher for the year compared to outlook at the start of the year.

    New Co-branded Credit Card Accounts Growth
    22%YoY
    Q2 FY26

    Reached a record level for the second quarter.

    Credit Card Spend Growth
    14%YoY
    Q2 FY26

    Q2 card spend increase.

    MileagePlus Enrollments Growth
    9%Outpacing capacity by 5 points
    Q2 FY26

    Largest increase in membership in Chicago and New York.

    Contracted Business Revenues Flown Growth
    27%YoY
    Q2 FY26

    Led by technology, financial services, and professional services.

    Corporate Bookings Growth
    30%YoY
    Q2 FY26

    Led by technology, financial services, and professional services.

    Business Travel Load Factor Contribution
    0.5YoY
    Q2 FY26

    Increase in load factor contribution from business travel from all channels.

    Q3 Booked Yield
    5%YoY
    Q3 FY26

    At the same point in the booking curve.

    Q4 Booked Yield
    19%YoY
    Q4 FY26

    Currently tracking up.

    Passenger Share in Hubs Increase
    7From 2019
    Since 2019

    Largest increase of any airline from their respective hubs.

    Bay Area Share Gain
    3.4YoY
    Q1 FY26

    Best performing share gain for United.

    Main Cabin Fare vs 2024
    Minimally upvs 2024
    Q2 FY26

    Well short of inflation, which is up nearly 7%.

    Airfares vs Pre-pandemic (Real Terms)
    13%Lower vs pre-pandemic
    Q2 FY26

    Still lower in real terms compared to 2019.

    Airport Fees Increase
    60%
    Since COVID

    Increase in airport fees since the pandemic.

    Available Liquidity
    $19.6B
    Q2 FY26

    Ended the quarter with available liquidity.

    Debt Prepaid
    $1B
    Since Q2 FY26

    Of higher cost legacy aircraft debt and PSP debt.

    New Debt Raised
    $3.7B
    Q2 FY26

    Secured through private bank transactions to build extra liquidity.

    Highest Passenger Day
    640,000
    June 18

    One of the 10 highest passenger days in company history during Q2.

    Starlink-equipped Aircraft
    Close to 1,000
    End of 2026

    Accelerated rollout of free Starlink WiFi.

    Premium-configured A321 Fleet
    100
    End of 2026

    Anticipated fleet size.

    Aircraft Retirements
    At least 80
    FY27

    Plan to retire older, less fuel-efficient aircraft to renew and up-gauge the fleet.

    Industry KPIs

    8
    MetricValueDetails
    Fuel$3.69per gallon
    Casm ex6.1%%
    Capacity4%%
    Fleet mroAt least 80aircraft
    Unit revenue12.1%%
    Loyalty co brand22%%
    Demand indicators27%%
    Premium diverse revenue mix16.4%%

    Product announcements

    4
    ProductTypeDetails
    Relax Rowlaunch
    CRJ-450launch
    Premium 321 (XLR and Coastliner)launch
    Elevated 789 Studio Suiteexpansion

    Risks & headwinds

    3
    Fuel price volatilityQ2 FY26 and full-year FY26

    $1.12 EPS impact from recent spike; $6 billion higher for FY26 compared to initial outlook.

    Mitigation: Adjusted guidance policy to reflect current fuel prices; expected 80-90% recapture in Q3 and full recovery by Q4; proactive debt raise for liquidity.

    Unit cost pressureRemainder of FY26

    CASM-ex up 6.1% YoY in Q2.

    Mitigation: Focus on driving greater efficiency; gauge growth reaccelerating in 2027 to drive CASM-ex tailwind; capacity adjustments when necessary.

    Airport capacity constraintsIndefinite for Chicago/Newark; 2-3 weeks for SFO improvement; until October for SFO runway construction.

    Extended caps in Chicago and Newark; new FAA approach lowering rates in San Francisco.

    Mitigation: Up-gauging aircraft; striving to gain market share through creative measures; long-term focus on gauge growth in fleet plan.

    Q&A highlights

    7

    How will the expected Q3 RASM acceleration break down by region, and what are the contributions from Cargo and Other revenue?

    Andrew Nocella highlighted strength across the system, with Latin America expected to be a standout for PRASM growth in Q3 due to easier comps. Cargo revenues were strong due to yield, a trend expected to continue into Q3. Hawaii was noted as the only area with lower-than-expected yields.

    “Internationally, Latin America year-over-year will be the standout in Q3, considering it definitely has an easy comp, but the number for Latin in Q3 for PRASM growth year-over-year will be off the charts.”

    asked by Catherine O'Brien · answered by Andrew Nocella

    2 min read6 chapters

    Detailed Narrative

    01

    Fuel Price Volatility & Strategy

    United Airlines faced a significant fuel price spike in July, which management estimated impacted Q2 EPS by $1.12. In response, the company adjusted its guidance policy to reflect current fuel prices, expecting to recover 80-90% of the increase in Q3 and achieve full recovery by Q4. This proactive approach, coupled with strong revenue management, demonstrates the airline's resilience and adaptability to industry shocks, reinforcing the belief that the industry has structurally changed.

    02

    Operational Excellence & Customer Satisfaction

    The airline achieved top-tier operational performance in Q2 FY26, recording its best on-time departure rate since the pandemic and its lowest Q2 seat cancellation rate in company history. Notably, the Newark hub showed significant improvements, ranking #1 in on-time arrivals for June. These operational successes contributed to the highest second-quarter Net Promoter Score since the pandemic, indicating enhanced customer satisfaction.

    03

    Customer Experience & Loyalty Investments

    United is accelerating investments in customer experience, including the rollout of free Starlink WiFi, with close to 1,000 aircraft expected to be equipped by the end of 2026. Early customer feedback on Starlink is very positive, with WiFi satisfaction scores more than double those of other systems. These initiatives are central to building brand loyalty, which management believes will lead to stronger earnings during favorable periods and greater resilience during industry downturns.

    04

    Robust Demand & Revenue Management

    Demand remains robust across the network, with minimal negative impact from higher price points. Contracted business revenues flown were up 27% year-over-year in Q2, and corporate bookings increased 30%, led by technology and financial services. United has adjusted its revenue management posture to save more seats for close-in business demand, contributing to an expected acceleration in year-over-year RASM for Q3 and Q4, surpassing Q2 performance.

    05

    Fleet Modernization & Premiumization Strategy

    United plans to retire at least 80 older, less fuel-efficient aircraft in 2027, replacing them with newer, larger-gauge models. This includes the anticipated delivery of the first MAX 10 in mid-to-late 2027 and the rapid integration of premium-configured A321s (XLR and Coastliner) starting later this year and into 2027. This fleet strategy aims to enhance the premium product offering, increase premium seating faster than main cabin, and drive CASM-ex tailwinds.

    06

    Capital Structure & Investment Grade Pursuit

    Amidst heightened market volatility🌐, United proactively secured $3.7 billion in new debt at attractive fixed rates to bolster liquidity. The company has also prepaid approximately $1 billion of higher-cost legacy aircraft and PSP debt since the beginning of Q2. Management remains focused on achieving investment-grade credit rating metrics, with a target of reducing net debt to below 2 turns in 2027, demonstrating an improved financial position and disciplined capital management.

    AI-generated summary of the company’s earnings call. Not investment advice.