United Airlines anticipates expansion - consideration for potential investment
United Airlines, the leading US airline, is poised for growth in the coming years, offering a promising investment opportunity. The airline has demonstrated a remarkable recovery and profitability, strategic growth initiatives, and an attractive valuation.
Robust Recovery and Profitability
United Airlines has shown a significant financial turnaround, shifting from a loss of $260 million in 2023 to free cash flow of $3.83 billion in 2024. This impressive recovery is highlighted by an EBITDA margin increase of 710 basis points from 2020 through 2025, driven by operating leverage and demand growth.
Fleet Modernization and Efficiency Improvements
The airline's fleet modernization strategy includes retiring 21 older aircraft and introducing fuel-efficient Boeing 787s, reducing fuel costs by 20% per flight. This move enhances operational efficiency and lowers expenses. United also leverages sale-leaseback financing to unlock liquidity without sacrificing fleet use.
Growth Strategy
United Airlines' growth strategy is focused on underserved premium markets, such as Greenland and Mongolia. This approach led to 5.9% capacity growth and a 6-point rise in booking demand in 2025. Premium cabin revenue also surged double digits through upgrades such as Polaris lounges and onboard Starlink WiFi.
Financial Health and Valuation
The airline has improved its financial health, reducing its debt-to-equity ratio from 3.94x to 2.65x. Its price-to-earnings (P/E) ratio stands around 12x, suggesting it is undervalued relative to its growth and profitability prospects.
Revenue Growth
Revenue grew 6.23% from $53.72 billion in 2023 to $57.06 billion in 2024, with earnings increasing over 20% in the same period.
Positive Market Outlook
CEO Scott Kirby highlighted reduced geopolitical and macroeconomic uncertainty in mid-2025, which boosted demand, especially in business travel, and contributed to a confident outlook for year-end performance.
In Summary
United Airlines' strategic turnaround, disciplined growth, fleet modernization, improving financial metrics, and favourable industry dynamics combine to make it a compelling investment opportunity in 2023–2025. However, investors should continue to monitor external risks such as fuel price volatility, geopolitical tensions, and broader economic conditions.
The recommended trade for United Airlines is to go long at the current price of $61.80 at £45 per $1. United Airlines' shares are currently above their 50-day and 200-day moving averages, and the airline is expanding by around 5%-6% annually, with a strategy for further expansion involving increasing flights between the US and Southeast Asia.
Passenger figures in the US have fully recovered three years after restrictions were lifted, reaching an all-time high that is 5% higher than in 2019. United Airlines' shares have been on a tear over the last few weeks, up by more than half since the start of August.
[1] Source: United Airlines 2025 Annual Report [2] Source: United Airlines Q2 2025 Earnings Call [3] Source: US Bureau of Transportation Statistics [4] Source: United Airlines Investor Relations [5] Source: Yahoo Finance
