United Airlines Holdings — Financial Profile

United Airlines Holdings — Financial Profile

United Next Growth Strategy, MileagePlus Securitization, and International Expansion

Financial Profile and Credit Analysis

Prepared by DWU AI

An AI Product of DWU Consulting LLC

February 2026

DWU Consulting LLC provides specialized municipal finance consulting services for airports, transit systems, ports, and public utilities. Our team assists clients with financial analysis, strategic planning, debt structuring, and valuation. Please visit https://dwuconsulting.com for more information.

Changelog

2026-02-23 — Initial publication.

Introduction

United Airlines Holdings stands as the second-largest U.S. airline by operating revenue, commanding a sophisticated global network and pioneering financial innovation through its MileagePlus loyalty program securitization. With $57.1 billion in total operating revenue for fiscal year 2024 — a 6.2% increase year-over-year — United demonstrated resilience and growth across its operations, carrying a company-record 173.6 million passengers with a 5.3% year-over-year increase. More significantly, United's United Next strategic initiative has become the industry's most ambitious fleet modernization program, with over 700 aircraft on order valued at more than $60 billion, signaling management's confidence in long-term travel demand recovery.

United's strategic differentiation lies in three core elements: (1) operational scale and hub dominance across the world's most important markets — Chicago (ORD), Newark (EWR), Houston (IAH), and Denver (DEN) — providing unparalleled connectivity to corporate centers and international gateways; (2) the pioneering MileagePlus securitization program, which converted frequent-flyer miles into $6.5 billion in bonds, fundamentally changing how airlines finance themselves; and (3) aggressive international expansion under United Next, targeting 40+ new international routes in 2025 and establishing United as a global carrier comparable to international legacy carriers. This profile examines United's financial structure, business model, credit dynamics, and strategic positioning in the competitive post-pandemic airline landscape.

Company Overview

History and Corporate Structure

United Air Lines was founded in 1926 as a holding company for several regional carriers, making it one of the oldest commercial airlines. The airline was a titan of the industry until competitive and operational challenges in the early 2000s. The landmark 2010 merger with Continental Airlines created United Airlines Holdings, combining United's transcontinental network with Continental's hub dominance at Newark (EWR), Houston (IAH), and Guam (GUM). Headquartered in Chicago, Illinois, United operates under IATA code UA and ICAO code UAL.

United is a founding member and major hub carrier in the Star Alliance, the world's largest airline alliance by passenger volume, encompassing Lufthansa, ANA (Japan), Singaport Airlines, and 25+ other carriers. This alliance provides formidable global reach and revenue opportunities through codesharing and joint operations.

As of 2024, United employs over 60,000 team members across its flight operations, maintenance, customer service, and administrative functions. The airline has navigated significant operational challenges including the 2019 Boeing 737 MAX grounding (which affected United heavily) and the 2020 pandemic, emerging stronger through disciplined cost management and strategic capital allocation.

Market Position and Scale

United is the second-largest U.S. airline by revenue and third by capacity (behind Delta and American). The airline carries approximately 173.6 million passengers annually across a network spanning 300+ destinations in 50+ countries. United's international network is particularly strong, with significant exposure to Europe, Asia, and Latin America. The airline's market share in key international markets rivals international carriers like Lufthansa and British Airways.

Financial Performance

FY2024 Results Overview

United's financial performance in 2024 reflects recovery from pandemic-era challenges and the benefits of disciplined revenue management and cost control:

Metric	FY2024	Change
Total Operating Revenue	$57.1 billion	+6.2% YoY
Operating Income	~$5.1 billion	Strong growth
Net Income (GAAP)	$3.1 billion	Record
Operating Margin	~8.9%	Healthy margin
Passengers Carried	173.6 million	+5.3% YoY, record
Total Assets	$76.3 billion	Fleet investment
Total Liabilities	$62.0 billion	Debt reduction
Shareholder Equity	$14.3 billion	Recovery

United's operating margin of 8.9% is healthy by historical airline standards and reflects strong pricing discipline and operational efficiency. The airline's net income of $3.1 billion places it in the upper tier of global airlines and demonstrates the profitability potential of a well-executed global strategy.

Revenue Growth and PRASM Analysis

United's PRASM (passenger revenue per available seat mile) of 16.66 cents reflects the airline's focus on international premium markets and corporate travel. While lower than Delta's 21.37¢, United's PRASM is strong relative to American Airlines (16.93¢) and reflects disciplined yield management.

The 6.2% revenue growth in 2024 outpaced capacity growth, indicating genuine demand expansion and pricing power — a key metric for assessing airline health. This growth was driven by:

• Transatlantic Growth: United overtook Delta in transatlantic passenger count for the first time in 2024, reflecting successful competitive positioning and expanded service.
• Asia-Pacific Expansion: New routes to Tokyo, and enhanced service to Shanghai, Osaka, and other Asian hubs.
• Domestic Capacity: Deployment of new aircraft on domestic transcontinental and regional routes, expanding accessible markets.
• Premium Revenue: Polaris business class pricing and premium cabin demand remained strong despite broader travel softness in Q4 2024.

Hub Strategy and Network

Chicago (ORD) — Largest Hub by Operations

Chicago O'Hare (ORD) is United's most important hub and, in 2024, became the world's busiest single-airline hub by number of flights — surpassing Delta's Atlanta dominance by flight count (though ATL carries more passengers due to aircraft mix). United operates approximately 1,000+ daily departures from ORD, serving 300+ destinations domestically and internationally. ORD's location in the geographic center of the United States provides optimal connectivity for transcontinental and international routing.

ORD's strategic importance is immense: (1) the hub is central to corporate travel from Chicago, Midwest industrial centers, and North American supply chains; (2) it is a major transatlantic gateway competing with Delta's Atlanta; (3) it provides connecting opportunities for passengers traveling between West Coast and Europe; and (4) it enables operational efficiency through crew and aircraft utilization.

Newark (EWR) — Gateway to New York Metropolitan Area

Newark Liberty International Airport serves the New York metropolitan area — the wealthiest market in the United States with premium business travel demand. United controls the majority of terminal capacity at EWR and uses it as a transcontinental and transatlantic hub. New York's financial industry, corporate headquarters, and tourism drive premium cabin demand.

EWR's slot constraints limit growth but provide insulation from low-cost carrier competition. United's transatlantic network from EWR includes nonstop service to London, Paris, Brussels, and other European hubs, competing directly with Delta and American.

Houston (IAH) — Latin American Gateway

Houston's geographic position makes it the optimal hub for Latin American connections. United operates 200+ daily flights from IAH, serving Central America, South America, and the Caribbean. This hub is particularly valuable for corporate travel and oil industry professionals connecting to Latin American operations.

Denver (DEN) — Mountain West Hub

Denver serves as United's secondary hub connecting the Mountain West (skiing, tourism) to both coasts and international markets. DEN has emerged as a major technology hub with growing corporate travel demand.

San Francisco (SFO) — Asia-Pacific Gateway

United's San Francisco hub is the gateway to Asia-Pacific markets, including Tokyo, Shanghai, Osaka, and other Asian centers. SFO provides access to California's technology industry and serves tourists traveling to Asia.

International Focus City — Washington Dulles (IAD)

Dulles serves as a focus city for government travel (State Department, Defense Department, Congress) and international corporate business. While smaller than major hubs, it provides premium demand and slot-restricted capacity.

MileagePlus and Innovative Loyalty Financing

Program Scale and Structure

United's MileagePlus program is the airline's most valuable asset, with an estimated valuation exceeding $20 billion. The program has approximately 100+ million members and generates substantial annual revenue through miles sales, co-brand credit cards, and premium awards.

The Landmark 2020 Securitization

In 2020, United executed a transformational financial innovation: it securitized its MileagePlus loyalty program, borrowing $6.5 billion through bonds secured by future MileagePlus revenue (miles sales, credit card partner fees, and award bookings). The bonds carried a coupon of 4.875%, reflecting the risk profile of loyalty program cash flows.

This securitization was unprecedented in scope and reflects the innovative financing culture of the airline industry during pandemic-era stress. The transaction worked by

• Creating a Special Purpose Vehicle (SPV): A legally separate entity established to issue bonds and manage loyalty program cash flows.
• Pledge of Cash Flows: United contractually pledged future MileagePlus cash flows to the SPV, creating a lien on these revenues.
• Bond Issuance: The SPV issued bonds backed by these pledged cash flows, with ratings reflecting the stability of loyalty program economics.
• Rating and Coupon: The 4.875% coupon was substantially higher than United's general corporate debt, reflecting the risk of loyalty program performance.

The brilliance of this structure is that United obtained $6.5 billion in cash (used for pandemic survival) while spreading repayment over 12+ years. Loyalty program cash flows are relatively stable compared to airline operations, making this debt serviceable even during industry downturns.

Co-Brand Credit Card Partnership

United's MileagePlus co-brand credit cards (Chase and Bank of America partnerships) generate significant annual revenue through sign-up bonuses, annual fees, and interest income from revolving balances. Chase MileagePlus is among the most popular premium airline credit cards, with millions of cardholders.

Program Economics and Redemption

United manages MileagePlus redemption carefully to maximize economic value. Like Delta, United uses dynamic award pricing where the miles required for specific flights fluctuates based on demand. This has reduced the perceived value of miles (a point of customer criticism) but maximizes the program's profitability.

United Next Strategy — Transformational Growth Plan

Aircraft Orders and Fleet Modernization

United Next is perhaps the most ambitious fleet modernization program in commercial aviation history. The program includes:

Boeing 737 MAX: Orders for 250+ aircraft to replace older 737-700/800 and some 757s, providing 15-20% lower fuel burn per seat.

Airbus A321neo/neo LR: Narrow-body wide-range aircraft enabling transcontinental and Europe-U.S. flights with narrow-body economics. These aircraft reduce costs and expand market coverage.

Boeing 787 Dreamliner: Wide-body international aircraft for long-haul international routes, replacing 767s and 777s with better fuel efficiency and range.

Total Order Book Value: Estimated 700+ aircraft valued at $60 billion+, representing a multi-year capital commitment reflecting management confidence in structural air travel demand.

Polaris Business Class and Premium Investment

United Next includes major investment in premium cabin products. Polaris business class features direct-aisle-access seats (versus center cabin), enhanced catering, premium bedding, and amenities comparable to international carriers. United is rolling out Polaris to additional aircraft and routes, signaling commitment to premium market positioning.

International Expansion — 40+ New Routes in 2025

United has announced 40+ new international routes launching in 2025, including:

• New European destinations from ORD, EWR, and IAD
• Enhanced Asia-Pacific service including additional routes to Tokyo, Shanghai, and new destinations in India
• Expanded Latin American connectivity
• New Caribbean and Central American destinations

This international expansion reflects United's strategic bet that premium international markets offer superior returns to domestic capacity additions and that traveler demand will support new transatlantic and transpacific service.

Hiring and Labor Capacity

United Next requires substantial hiring to support fleet expansion and operations growth. The airline has hired 10,000+ pilots from 2022-2025 and continues recruiting flight attendants, ground crew, and maintenance technicians. This hiring program ensures operational capacity and stability in the tight labor market.

International Network and Competitive Position

Transatlantic Leadership — Historic Achievement in 2024

For the first time, United carried more transatlantic passengers than Delta in 2024 — a historic achievement and indicator of competitive repositioning. This reflects:

• United's aggressive route expansion on the transatlantic
• Competitive pricing and premium product positioning
• Star Alliance partnerships (Lufthansa codeshare on key routes)
• EWR's slot-protected access enabling schedule consistency

This transatlantic leadership is strategically significant as transatlantic routes command premium fares and attract high-value business travelers. Overtaking Delta (historically transatlantic market leader) signals United's emergence as a truly global carrier.

Asia-Pacific Gateway Leadership

United operates the most extensive U.S. carrier service to Asia from the West Coast. Key gateways include:

Tokyo Narita and Haneda: United operates nonstop service from multiple hubs (SFO, ORD, EWR). Haneda, as Tokyo's primary international airport, is critical for passenger connectivity and premium demand.

Shanghai (PVG): United operates nonstop service from Newark and San Francisco, providing key access to China's largest business hub.

Mumbai (BOM) — Emerging Asian Hub: United's nonstop Newark-Mumbai service (launched 2024) at 15+ hours is the longest regularly scheduled U.S. flight and serves both business travelers and Indian diaspora.

Other Asian Hubs: Osaka, Singapore, Bangkok, and other Asian destinations provide secondary connectivity.

Star Alliance Partnership Leverage

United's membership in the Star Alliance provides codeshare access to Lufthansa's European network, ANA's Japan network, and Singapore Airlines' Southeast Asia network. This creates a virtual global network without equivalent capital investment.

Balance Sheet, Leverage, and Credit Profile

Debt and Leverage Reduction

United's balance sheet has improved substantially from pandemic-era distress:

Total Debt: $28.656 billion in 2024, down from peak of approximately $31-32 billion in 2021

Total Assets: $76.3 billion

Total Liabilities: $62.0 billion

Shareholder Equity: $14.3 billion

Debt-to-Equity Ratio: 2.26x (improved from 4.75x in 2020)

This improvement reflects several years of strong cash generation and debt reduction. However, United's leverage remains elevated relative to Delta and reflects the substantial debt incurred during the pandemic.

Interest Coverage Ratio

United's interest coverage ratio of 3.97x (operating income / interest expense) indicates the airline generates sufficient operating income to cover interest payments 3.97 times over. This is healthy but below Delta's coverage and indicates limited margin for adverse events.

Credit Rating Analysis

Airline	Total Debt	Debt-to-Equity	Est. S&P Rating
Delta	$22.77B	1.88x	BBB- (Investment Grade)
United	$28.66B	2.26x	B+ (High Yield)
American	$30.48B	Negative	B (High Yield)

United's estimated S&P rating of B+ (high-yield / "junk" grade) reflects elevated leverage and dependence on continued strong operations. The rating provides less financial flexibility than Delta's BBB- but is respectable within the high-yield category. Path to investment grade likely requires 2-3 additional years of debt reduction and sustained profitability.

Competitive Analysis and Positioning

vs. Delta Air Lines

Delta leads on balance sheet strength (investment-grade rating, lower debt, higher equity), loyalty program monetization (SkyMiles generates more cash), and hub profitability (ATL dominance). United leads on international route breadth and recent transatlantic market share gains. United's aggressive United Next strategy suggests confidence in capturing market share from Delta through premium product and international route expansion.

vs. American Airlines

United outperforms American on operating margins (8.9% vs. lower for American), leverage metrics (2.26x D/E vs. negative equity for American), and international positioning. American is more challenged with higher debt burden and recent strategic missteps in corporate travel partnerships.

Domestic Dominance

United's ORD hub is the largest by flight count, and the airline operates 25%+ market share in key domestic markets (Chicago, Houston, Denver, Newark). This provides pricing power and network efficiency.

Strategic Priorities and Outlook

United Next Delivery and Execution

The success of United Next depends entirely on execution: delivering aircraft on schedule, integrating new aircraft into operations, training crew, and capturing expected efficiency gains. Boeing delivery delays pose risks.

Debt Reduction Toward Investment Grade

United will likely maintain focus on balance sheet improvement, targeting investment-grade rating within 3-5 years. This requires sustained operating profitability and continued debt paydown.

International Premium Revenue Capture

United's strategy prioritizes international premium routes and business travel markets. Success depends on competing effectively against Delta (stronger balance sheet, brand) and international carriers (Lufthansa, British Airways, etc.).

MileagePlus Optimization

The securitized MileagePlus debt is fixed-rate and long-term, providing financial stability. United will focus on growing miles sales and credit card partnerships to maximize loyalty program cash flows.

Key Risks and Challenges

Boeing Delivery Delays

United's United Next strategy depends on timely delivery of 737 MAX and 787 aircraft. Continued delays would compress fleet modernization timeline, increase maintenance costs, and delay expected efficiency gains.

High Leverage vs. Peers

United's debt burden of $28.7B is $6B higher than Delta's and indicates limited financial flexibility in a recession. Debt reduction must remain a priority.

Labor Cost Pressures

United negotiated a new pilot contract in 2023 with significant wage increases. Flight attendants and ground crew will likely demand similar increases, potentially compressing margins despite revenue growth.

Transatlantic Competition Intensifying

United's recent transatlantic market share gains have attracted competitive response from Delta and American, likely compressing yields as capacity increases outpace demand growth.

Macroeconomic Sensitivity and Q1 2025 Weakness

Q4 2024 showed signs of travel softness, particularly in premium cabins. Recession would compress pricing and demand, reducing operating income 40-50%.

Conclusion

United Airlines has executed an impressive recovery and is pursuing an aggressive growth strategy through United Next, international expansion, and premium cabin investment. The transatlantic leadership milestone achieved in 2024 indicates competitive strength and strategic positioning. However, the airline's elevated leverage relative to Delta and dependence on continued strong operations and Boeing execution create risks. For investors, United offers exposure to aggressive growth strategy with operational execution risk and credit risk. For credit investors, high-yield positions in United provide attractive yields relative to investment-grade peers but require comfort with cyclical airline industry dynamics.