United Airlines posts better third-quarter results as cuts outpace capacity crisis

United Airlines (UAL+1.10%) presented its third quarter results Earlier this week, it beat expectations in both revenue ($14.8 billion) and profit ($1.3 billion). Despite having its busiest September ever, the airline attributed its blockbuster quarter to sales efforts fewer Seats.

“United's 2024 domestic capacity was designed with the expectation that the industry would seriously shed unprofitable capacity in the fourth quarter,” Chief Commercial Officer Andrew Nocella said on the company's earnings call Wednesday. “As a result, United grew slower than most during the first three quarters of the year when capacity dynamics were less favorable, but importantly, our timing was right and we aligned our growth to the quarter in which industry conditions would be best.”

Earlier this year, airline executives began to worry about this Leave money on the table because there was too much “capacity” or seating for sale. Cheap airlines that existed suddenly have to start As more premium brands seek market share, they were particularly at risk. So cutting that capacity would help drive up ticket prices. (This effect will be particularly pronounced if the holiday flying season rolls around.)

United said it carried 474,000 passengers daily last month, its busiest September on record. It now expects the dynamic to lucratively reverse.

“Much of the revenue challenges we saw in the third quarter were driven by weak returns for domestic leisure customers booking trips far away,” Nocella said on the call. “If we look at the first quarter, we are selling exactly these tickets at significantly higher returns.”