CHICAGO, September 2 — United Airlines Holdings closed at $114.83 on August 26, up just 2.69% year to date, a fraction of Delta Air Lines’ 20.64% gain over the same stretch. The gap persists even as U.S. airline fares rose 25.5% year over year in July, per government data. The bottom line: United is the cheapest major U.S. carrier with real earnings power, and the market is pricing in doubt about whether its pricing gains hold.
CEO Scott Kirby told Reuters he expects further gradual fare increases in the first half of 2027 if demand holds. He frames the hikes as structural catch-up: airport fees have climbed roughly 60% since COVID, and maintenance costs are “off the charts.” Kirby’s key defense of current pricing: “Airfares are down still 13% in real terms compared to where they were in 2019.” United’s second-quarter revenue hit $17.672 billion, up 15.99% year over year, with total revenue per available seat mile up 12.1%.
Chief Commercial Officer Andrew Nocella said the airline saw “minimal to no negative impact on demand from higher price points.” Management believes it can recover 80-90% of the fuel increase in Q3 and 100% by Q4. The stock trades at 11x forward earnings against Delta’s 13x — a discount that looks steep next to United’s own 2026 EPS guidance of $9 to $11.
Delta earns its premium through diversification; non-ticket revenue accounted for 61% of its total, and the carrier reaffirmed full-year EPS of $6.50 to $7.50 while raising its dividend 15%. United carries $26.5 billion of debt, though management says it is “right on the precipice” of investment-grade metrics.
Analysts’ average price target for UAL is $161.28, implying meaningful upside if fuel costs ease and Kirby’s 2027 pricing scenario materializes. American Airlines Group trades as the sector’s cautionary tale. Shares closed at $13.84, down 60.37% over the past decade.
Q2 revenue grew 16.28%, yet the carrier guided full-year EPS to a range of negative $0.65 to positive $0.65. Its balance sheet shows shareholders’ equity of negative $3.972 billion and roughly $34.7 billion in total debt. CEO Robert Isom conceded “the current fuel curve has dampened our near-term expectations,” though he maintained that “the price of air travel remains a bargain.” American’s CEO echoed Kirby’s broader point on fares even as his own airline struggles.
The question for United investors is whether the stock’s discount is a bet against fuel recovery — or a fair price for leverage and jet-fuel exposure in a volatile market. Watch next: United’s Q3 guidance and whether fuel-cost recovery lands at the 100% mark management has projected for Q4.
