Speaking at JP Morgan's Industrials Conference on March 11, 2025, United Airlines CEO Scott Kirby said the airline is “at the low end of our guidance range”, citing weakness from government and consumer leisure travel.
In response, the company is retiring 21 aircraft early, which will be cash positive in 2025. “We had to spend $100 million on engine overhaul this year alone,” said Kirby. “For those airplanes, it will be CASM positive. Those are our most expensive aircraft. We built a plan with optionality and flexibility. If we see short term headwinds, we can make short term responses.”
He added: “Those 21 aircraft sort of correlates with what we've seen from government. We've already started the process of where that capacity is coming out. A lot of it is transborder, a big drop in Canadian traffic going into the US. So, it's going to come out in government markets where we've seen less demand.”
Kirby added that the company is cancelling red eye flights as it heads into April, adding that utilisation flying is “generally unprofitable at airlines — even in good times and it's really unprofitable in bad times.”
He said the company will instead focus on taking more leisure bookings going forward.
Kirby noted that “there's going to be a lot less low cost carrier capacity” with these airlines pulling capacity out of large cities where they can't compete with larger US airlines. “Maybe they'd be better at competing in Akron, Orlando, if they had lower labour costs, but they can never compete in the New York metro area, in Chicago Airport, or in Los Angeles,” he said. “Airports are just too expensive. The airport authorities have killed the low-cost carrier business model in big cities.”
In addition, United triggered JP Morgan’s trading rule on March 10, 2025, after shares fell 30% in 30 days. Analysts Jamie Baker and James Kirby said the drop is often followed by potential gains over the subsequent 180 trading days.
United follows American, which triggered the ‘D3030’ rule earlier in March. Over the past five days, American’s shares have continued to drop just over 7%.
Excluding COVID, the rule has been triggered 29 times since the early 90s where it was followed by gains over the 180 days.
“Will lightning strike a 30th time?” the analysts said. “No guarantees, but the analysis is compelling to us: a 71% probability of a minimum 50% potential return, with an average bounce of 103%.”
On March 10, 2025, Kirby had detailed three steps that could “finally” fix the Federal Aviation Administration (FAA) in a LinkedIn post. He claimed 68% of United's delays were due to air traffic control restrictions.
He said the number and highest near-term priority was to “get the full air traffic controller workforce back to full staffing”. Long-term, Kirby said the air traffic control systems “desperately” need greater technology investment to update the “antiquated” systems and infrastructure. Finally, Kirby said the FAA needs a “long overdue investment in facilities”, claiming that roughly 92% of the FAA's facilities and equipment budget it spent to “patch together the old existing towers, centres, radars, and other equipment, rather than to upgrade”.
The United boss did say he was encouraged by new US secretary of transportation Sean Duffy, the FAA, and the Department of Transport's “sincere commitment” to addressing the challenges the FAA faces.
A week prior, Fitch had upgraded United to BB, from BB-, with a positive outlook. The upgrade reflected United's reduced debt balanced in 2024 of 8% compared to the year prior, resulting in a net debt to EBITDAR leverage of 3.7x. The rating agency said United's network investment and loyalty programme offerings have “solidified” its marketing position.