UA UAL United Airlines Holdings Loading... : Bullish and Bearish Analyst Opinions

Delta and United are the best-positioned airlines. They have the strongest balance sheets, most diverse revenue streams, and most resilient business models. Despite high fuel costs, strong demand and pricing power protect margins. Both are buys.

United Airlines has overcome a $6 billion fuel cost spike and is raising guidance with a chance to grow earnings year-over-year, driven by incredibly strong travel demand, a successful brand-loyalty strategy (United Next), and robust corporate bookings up 30% in July. Additionally, airfares are still 13% lower in real terms than pre-COVID while operating costs (airport fees, maintenance, labor) have risen further, giving United room to continue raising fares. A new fare increase was implemented this week, reflecting strong consumer and the ability to recover inflationary costs.

United Airlines is managing a $6 billion fuel cost increase and still has a chance to grow earnings year-over-year, driven by strong demand (corporate demand up 30%), a brand-loyal customer base, product investments like Starlink and technology, and industry capacity discipline. Airfares remain 13% below pre-COVID real levels while costs push them higher, and the airline’s differentiation reduces commoditization risk, allowing it to outperform peers including four loss-making competitors.

United Airlines' partnership with Starlink delivers significantly faster in-flight connectivity, with customer satisfaction scores twice as high on Starlink-equipped flights, providing a key differentiator in an industry where the in-cabin experience is becoming the main competitive battleground among major U.S. carriers. As United plans to extend Starlink to its entire fleet, this offering makes the stock one to watch.

Delta and United are the leaders in the airline industry, benefiting from the K-shaped economy, strong premium and corporate travel, higher airfares, and better fuel cost normalization. Delta is a big beneficiary and has more confidence after Labor Day.

Delta Air Lines and other full-service carriers (United, American) are best positioned: premium and corporate demand is strongest, Delta owns a refinery that helps during fuel spikes, and industry-wide fare increases are stickier on the high end, while the exit of low-cost carriers like Spirit is lifting the entire fare structure.

Structural changes in the airline industry have made Delta and United secular growth winners rather than cyclical boom-bust stocks. The removal of ultra-low-cost carriers, pricing discipline, focus on premium offerings, credit card revenue, and reduced exposure to oil prices have improved consistency. With oil prices now falling, they can beat low forecasts and their P/E multiples could re-rate higher toward the S&P 500 average.

United Airlines is offering free Starlink Wi-Fi on its flights. Jason believes this will make United's product much more attractive, predicting a 50% increase in business travel on those routes. He is actively considering buying United stock (UAL) because of this first-mover advantage with high-speed in-flight internet.

United Airlines will be the first major U.S. airline to offer free Starlink Wi-Fi on flights, which will significantly increase business travel demand and customer preference. He estimates business travel could rise by 50%, making United stock a buy at current levels.

The four largest U.S. airlines—American, Delta, Southwest, and United—are engaging in a 'live and let live' coordinated pricing pattern that raises airfares on routes where they compete, indicating significant market power and reduced competitive pressure. This oligopolistic behavior suggests these carriers can sustain higher prices and profits than would exist under true competition.

United Airlines is growing faster in absolute terms than any airline in history, fueled by counter-cyclical investments like the largest aircraft orders during Covid, superior recruitment, and technology edge (Starlink, seatback entertainment, app). The company is investing nose-to-tail for all customers, creating a wider product gap versus peers, and is preparing for structurally higher oil while competitors manage by hope.

Delta and United are the best ways to play the US airline industry because the removal of irrational low‑cost carriers when oil was high makes these two network carriers the main beneficiaries; they can continue to raise ticket prices while a drop in jet fuel costs further boosts margins. American is a far third and not preferred.