United Airlines Cuts Profit Outlook as Jet Fuel Climbs Toward $5
United posted record third-quarter revenue but forecast a weak fourth quarter, expecting jet fuel to average about $4.80 a gallon.
United Airlines took in more revenue in the third quarter than in any quarter in its history, but rising jet fuel costs are eating into its profits. On Tuesday the Chicago-based carrier issued a fourth-quarter forecast that falls well short of analysts’ expectations and puts its earlier full-year target out of reach.
In an investor update filed with the Securities and Exchange Commission, United said it expects adjusted earnings of 50 cents to $1.50 a share for the October-to-December quarter. The forecast assumes jet fuel will average about $4.80 a gallon, up from $3.90 in the third quarter. Wall Street had been looking for roughly $1.75 to $1.76 a share, according to analyst consensus figures cited by GuruFocus and by CNBC.
What happened
According to United’s earnings release, operating revenue rose 17.4% from a year earlier to $17.9 billion, an all-time quarterly record. The airline carried a record 49.5 million customers during the quarter. United said its unit revenue growth was its strongest since the pandemic, with passenger revenue per available seat mile, a standard airline measure of pricing power, up 16.1%.
Costs climbed even faster. Fuel spending rose almost 62% to $4.84 billion. The company paid an average of $3.90 a gallon, compared with $2.43 in the same quarter of 2025. Adjusted pretax margin narrowed to 6.2%, which Rallies.ai, a financial news aggregator, said was down from 8% a year earlier. Its report also said the added fuel spending equaled nearly 70% of the quarter’s revenue gain.
United reported net income of $1.03 billion, or $3.14 a diluted share, up from $949 million a year earlier, Briefs Finance reported. Excluding special items, the airline earned $833 million, or $2.54 a share. That was 3 cents below the $2.57 analysts had expected, according to LSEG data cited by Briefs Finance. GuruFocus said adjusted earnings per share were down 8.6% from a year earlier.
Why it matters
United is among the most closely watched U.S. airlines, and its results show the problem facing the whole industry this year. Travelers are still booking even as fares rise, but fuel is getting more expensive faster than carriers can pass the cost on. Jet fuel prices jumped after U.S. strikes on Iran in late February, Quartz reported earlier this year. United has since cut its profit targets several times.
The fourth-quarter forecast all but ends hopes of hitting the full-year range United gave in mid-July, which called for adjusted earnings of $9 to $11 a share. CNBC calculated that even the top of the new fourth-quarter range would bring 2026 adjusted earnings to no more than $7.22 a share, Briefs Finance reported.
The fuel assumption itself is a big factor. In its investor update, United said its $4.80-a-gallon estimate, based on the Gulf Coast jet fuel futures curve as of Oct. 16, is about 45 cents above what analysts’ consensus assumes. The airline said that gap is worth roughly $1 a share in quarterly earnings, and that each 1-cent change in the fuel price moves fourth-quarter earnings by about 2.5 cents a share.
Demand holds up
Demand has stayed firm despite the higher costs. United’s release showed gains across most of its revenue streams compared with a year earlier:
- Premium cabin revenue up 17%
- Loyalty program revenue up 17%
- Basic Economy revenue up 16%
- Contracted business travel revenue up 26%
- Cargo revenue up 23%, with record third-quarter volume
Scott Kirby, United’s chief executive, credited staff in the release, saying that “our employees met the challenge of our ever-changing environment.” The company said fourth-quarter revenue growth should speed up to more than 20% from a year earlier, which would set another record.
What comes next
United scheduled a call with analysts for Wednesday to discuss the results. It expects to spend about $7.5 billion on capital projects this year. The company said it had $17.7 billion in available liquidity at the end of the quarter, along with $26.4 billion in debt and finance lease obligations. It also expanded its revolving credit facility, a standing line of bank credit, from $3 billion to $5 billion on Oct. 16.
United is also pressing ahead with growth plans. These include Starlink satellite Wi-Fi, now on more than 640 aircraft, and what it called its largest-ever international expansion, with 10 new destinations planned for summer 2027, subject to government approval. Whether those plans deliver the expected returns will depend heavily on where fuel prices go in the coming months.
