US's biggest airline cuts flights as demand plummets on recession fears... throwing Americans' vacation plans into chaos
Flying to another state will soon get a bit trickier.
United Airlines is slashing its domestic flight schedule by four percent starting this year, citing softer demand for US travel.
The cuts come just as many Americans are preparing for long-awaited getaways and a potential economic downturn. It could mean fewer flight options and higher prices.
Despite the turbulence in domestic skies, the airline — which calls itself the largest airline in the US — reported surprisingly strong demand to fly overseas, especially in premium cabins.
Ticket sales to fly abroad rose five percent in the latest quarter.
The sales suggest a growing divide among travelers: richer flyers meant high-end luxury flights saw impressive growth in the segment.
Meanwhile, Americans with less cash to spend pulled back their spending habits.
During the first quarter of 2025, United posted a $387 million profit, reversing a $124 million loss in the same quarter last year and beating Wall Street’s expectations.
Domestic fliers will have fewer options, United Airlines announced
'We expect to expand our lead further in challenging economic times,' United's CEO, Scott Kirby, said during the earnings call about the profit boost.
The outlook for the major airliner remains on shaky ground as the company weighs recession risks.
In an unusual move, United posted two potential profit outlooks: one if America plunges into a recession, and another if current trends remain strong.
Fears of an economic downturn have persisted, with several major banks and big-name CEOs predicting the country is on the brink of recession.
To strengthen their bottom lines, corporations have been attempting to build an impenetrable moat around their profits with tighter loyalty offerings and perks.
United's customers have noted some in-flight and loyalty changes in recent quarters.
For example, customers saw a $170 price bump on the airline's popular credit card.
The company said its Chase-backed credit cards were getting more expensive, but the new prices touted better perks.
United CEO Scott Kirby reported a massive profit boost from last year - but domestic flights are slowing
'Yes, there are fee increases,' Richard Nunn, the CEO of United's MileagePlus loyalty program, said during the announcement.
'But we were very, very cognizant of ensuring that the value increments and the benefits that are delivered outweigh any increase in the cost of those cards.
The entry level Explore card fee rises from $95 to $150 a year, the Quest from $250 to $350 and the Club $525 to $695. United operates the largest passenger network in the world.
United also launched its Starlink high-speed, free Wi-Fi on a handful of planes.
The offering is hoping to entice more high-end customers to travel for work events and open their laptops in the sky.
In October, the company increased the requirements to achieve new levels in its loyalty programs.
For 2025, the thresholds for each of the four levels — silver, gold, platinum and 1K — increased by 20 to 25 percent, making customers spend more money with the airline and take additional flights to hit each tier.
