During United Airlines' Q4 earnings call, CEO Scott Kirby said its strategic changes made after the Covid-19 pandemic were successful and have the potential to be long-lasting.
Those moves include increased international service, selling more basic economy seats on domestic routes and growing capacity in the U.S. by flying larger aircraft -- a plan that will continue through the end of this decade as United takes delivery of more Airbus A321neos.
"Our outlook has always been based on a realistic view of how the economics of the industry were going to change and how those changes had the potential to drive structural, permanent and irreversible changes in the entire industry," Kirby said. "Our 2024 plan developed from that vision, and our results were the culmination of years of thoughtful planning, bold action and strategic investment."
For a couple of years now, Kirby has been talking about the financial challenges that low-cost carriers face, including the high demand for premium seats since the pandemic, a big advantage for United over the LCCs. Further, United's high investment in its hubs and increased sales of basic economy fares have struck a blow against LCCs. A permanent one, according to Kirby, who said budget airlines can't operate profitably in United's hubs.
Kirby added that budget airlines "will always be able to be more profitable than United in point-to-point, low-cost airports."
"It really is a transformed industry, and United more than anyone is leading the way," Kirby said. "We have seven great hubs. We got well ahead of the curve in investing for the future, and we're focusing all of our efforts and growth in our hubs, where we have the competitive advantage. The combined virtues of our size and our innovative culture make us a competitive juggernaut."
International flying soars
Chief commercial officer Andrew Nocella said United's plan during the pandemic was to "double down on international flying, and it's proven to be the right move."
"United's international capacity was clearly the star of the quarter in terms of growth in revenue per available seat mile (RASM) relative to Q3. As a result, international margins continued to outpace domestic margins in 2024," Nocella said.
Breaking down the regions, Q4 passenger revenue was up 9.5% for Europe, 6.8% for Atlantic, 11.2% for Pacific and 9.5% for Latin America. Middle East/India/Africa was down 11%.
The best Thanksgiving ever
In the fourth quarter, United said premium revenue was up 10%, corporate revenue was up 7% and revenue from basic economy was up 20% year over year. Nocella said the Sunday after Thanksgiving was United's best revenue day in history, shattering the former record by 25%.
United's Q4 revenue was $14.7 billion, a 7.8% increase. Net income was $985 million for the quarter, $3.15 billion for all of 2024.
Kirby thanked employees for the company's performance and said United will pay out $713 million in profit sharing as a result.