United Airlines to slash flights by 4% his summer due to softer demand, recession fears: ‘Impossible to predict'

Core Viewpoint - United Airlines is reducing its domestic flights by approximately 4% due to decreased demand and is forecasting lower-than-expected profits for the current quarter, with potential risks to its full-year outlook if the US economy enters a recession [1][4]. Financial Performance - The company reported stable forward bookings, with premium cabin bookings up 17% and international bookings up 5% year-over-year [2]. - United estimates that an economic recession could result in a 5-percentage-point decline in revenue, leading to an adjusted profit of $7 to$9 per share for the full year [2]. - In January, United had projected an adjusted profit of $11.50 to$13.50 per share for 2025, which it still expects to achieve if demand remains stable and fuel prices do not rise significantly [3][6]. Market Context - The ongoing trade war has negatively impacted global markets, affecting business and consumer confidence, which in turn has clouded the airline industry's outlook [5]. - Airline fares experienced a significant decline of 5.3% in March compared to the previous month, marking the steepest drop since September 2021 [5]. - United's shares have decreased by 31% this year and are down 43% from their 52-week high, with a 45% increase in short interest since mid-February, indicating bearish investor sentiment [6].