United Airlines (UAL), renowned Chicago-based carrier, recently shared its first-quarter report, showcasing an impressive turn towards profit. The airline recorded an adjusted profit of 91 cents per share, bucking industry trends, with revenue growth of over 5% year-over-year, translating to a record $13.21 billion. The stellar performance can be attributed largely to increased demand for international flights and premium seats.
Specifically, the revenue from premium cabin sales witnessed a 9.2% increase year-on-year. Further boosting the results was a 5.2% increase in international passenger revenue per available seat mile (PRASM), with a notable 8.5% increase seen in the Pacific market.
Discussing the healthy results, Chief Commercial Officer Andrew Nocella stated that "the high-end consumer, the more wealthy consumer, the one that takes the global vacations, the one that wants to sit in a premium seat seems to be less impacted so far,". He expressed that these trends align with United's brand and customer acquisition strategy.
Echoing this sentiment, CFO Mike Leskinen affirmed that "with a real mix shift in our premium cabins, we have less corporate and we have more premium leisure" and that this segment of the business is showing remarkable resilience, demonstrating a beneficial market shift for United.
Despite the broader market decline, United shares surged close to 6% in early trading Wednesday and even though they later pared back some gains, the international flight segment's success effectively offset declines in the U.S domestic sector. In fact, due to the "uncertain macroeconomic environment", United reported a 3.9% fall in domestic PRASM from a year ago. As a strategic response, the airline intends to reduce scheduled domestic capacity by 4 points starting in the third quarter.