United Airlines Takes Flight to Double-Digit Margins in 2027
Good morning, and welcome to United Airlines Holdings' earnings conference call for the third quarter 2026. It has been an eventful year, but it is once again given us the opportunity to demonstrate how de-commoditizing and becoming a true brand loyal airline was a structural change for United that gives us resilience in volatile times, and I expect it will lead to strong results in a normalized environment.
Scott Kirby, Chief Executive Officer of United Airlines Holdings, kicked off the call by emphasizing the company's progress towards reaching double-digit pre-tax margins next year. Despite fuel prices remaining elevated throughout 2027, Mr. Kirby emphasized that the airline would not rely on hope to achieve this goal, but rather focus on things they can control.
"To be blunt, even though we are outperforming, the traditional way of looking at it would be hard," said Mr. Kirby. "Though in fairness, I have been pleasantly surprised at the industry's ability this year to raise yields and pass through much of the increase in fuel prices." However, he emphasized that United would not assume this trend would continue.
One key differentiator for United Airlines is its investment in products, service, and technology. Mr. Kirby highlighted the company's new Starlink system as a truly differentiating RASM (Revenue per Available Seat Mile) tailwind in 2027. With over half of United departures currently on Starlink-equipped aircraft, the airline expects to reach 61% by the end of 2026, 87% by June 1st, and be available fleet-wide by the end of 2027.
This strategic investment in technology is expected to provide a significant competitive advantage for United Airlines. By leveraging Starlink's high-speed internet capabilities, the airline aims to enhance its customers' experience, increase revenue, and drive growth in an increasingly competitive market.
In addition to its focus on technology, United Airlines has also made significant investments in products and service. The company's efforts to improve its brand loyalty have paid off, with employees delivering strong results and making United the leading airline around the globe.
As the airline looks to the future, Mr. Kirby emphasized that it would continue to prioritize resilience and adaptability in volatile times. With a clear vision for growth and a focus on things they can control, United Airlines is well-positioned to achieve its goal of double-digit pre-tax margins next year.
