Here's Why Shares in United Airlines Flopped Today

Shares in United Airlines (NASDAQ: UAL) were down as much as 11.4% today due to market volatility and investors digesting Delta Air Lines' (NYSE: DAL) earnings report and commentary the day before.

A challenging environment

United Airlines will report its first-quarter 2025 earnings on April 16, and if Delta's earnings are any indication, United's management is highly likely to report deteriorating conditions.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Both airlines had already alerted the market to the uncertainty created by tariffs negatively impacting bookings. For example, in early March, Delta Air Lines management told investors that its first-quarter revenue growth would come in closer to 4% compared to previous guidance for growth of 7% to 9%. Ultimately, Delta's revenue growth came in at 3.3%.

Delta's CEO Ed Bastian said "uncertainty around global trade" meant that growth had "stalled" with consumers and corporate travel negatively impacted. On a brighter note, he claimed that its international, premium, and loyalty-based revenue displayed "greater resilience."

Delta declined to update its full-year guidance due to the uncertain market conditions.

What it means for United Airlines investors

Delta's commentary on international and premium travel holding up provides some comfort, but the weakness in Delta's main cabin revenue is highly likely also reflected in United's outlook.

Image source: Getty Images.

However, long-term investors were given more comfort as Delta's management said it would reduce capacity growth in the second half of the year in response to market conditions. That's a positive sign as it indicates an industry acting in a disciplined manner when a slowdown occurs.

Investors' primary near-term concern is stabilizing the trade conflict so the air travel industry can continue recovering from the lockdown periods.

Should you invest $1,000 in United Airlines right now?

Before you buy stock in United Airlines, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Airlines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,884!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $700,739!*

Now, it’s worth noting Stock Advisor’s total average return is 820% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.