Core Viewpoint - The analysis compares United Airlines (UAL) and Copa Holdings (CPA), highlighting UAL's struggles due to domestic demand slowdown and CPA's growth driven by increased air travel demand post-pandemic. Given the current market conditions, CPA appears to be the more favorable investment option [18][19]. United Airlines (UAL) - UAL is experiencing a tariff-induced slowdown in domestic air travel demand, with soft domestic travel in Q1 2025, while international revenues remain strong, particularly in long-haul travel, with Atlantic unit revenues up 4.7% and Pacific revenues up 8.5% year-over-year [3]. - UAL has provided earnings per share (EPS) guidance for 2025, expecting adjusted EPS between $11.50 and $13.50 in a stable market, and between $7 and $9 in a recessionary environment [4]. - To address weak demand, UAL plans to reduce scheduled domestic capacity by 4 points starting Q3 2025. Labor costs increased by 12.8% in 2024, and delivery delays of Boeing 737 MAX jets have impacted fleet plans [5]. - UAL expects to receive multiple Boeing 737 MAX jets in 2025, with total capital expenditures projected to be less than $6.5 billion [6]. - A decline in fuel costs and a $1.5 billion share buyback plan announced in October 2024 are positive developments for UAL, which has repurchased shares worth $451 million through April 10 [7]. - UAL has consistently beaten earnings estimates, with an average beat of 10.3% over the past four quarters [8]. - The Zacks Consensus Estimate for UAL's 2025 sales indicates a 3% year-over-year increase, while EPS is expected to drop by 5.9% [15]. Copa Holdings (CPA) - CPA is benefiting from improved air travel demand post-pandemic, with a projected capacity growth of 7-8% year-over-year for 2025 and an expected operating margin of 21-23% [9]. - The liquidity position of CPA is strong, ending Q1 2025 with cash and cash equivalents of $916.3 million, significantly higher than its current debt of $232.4 million [10]. - CPA has also consistently beaten earnings estimates, with an average beat of 5.5% over the past four quarters [11]. - The Zacks Consensus Estimate for CPA's 2025 sales implies a 4.5% year-over-year increase, with EPS expected to rise by 14.3% [17]. - CPA's stock performance has outpaced UAL, gaining in double digits year-to-date, while UAL's stock has declined significantly due to domestic demand issues [12]. Conclusion - The analysis concludes that UAL is facing significant challenges due to market uncertainty and a slowdown in domestic air travel, while CPA is positioned for growth due to favorable market conditions and strategic initiatives. Therefore, CPA is considered a better investment choice compared to UAL at this time [18].