Strong Air Travel Demand Continues for United; Sees Q4 Operating Margin Above Prepandemic Level

We’ve maintained our $57 fair value estimate for United Airlines following the company's third-quarter earnings release. The no-moat airline reported strong results, with adjusted EPS of $2.81 exceeding the FactSet consensus estimate by more than 20%. Compared with the third quarter of 2019 (before the pandemic), passenger revenue per available seat mile increased approximately 20% and 29% for domestic and international routes, respectively. While United operated with about 10% less capacity (available seat miles) compared with 2019, pricing remains very robust—yield was about 22% higher than 2019—and load factors were modestly higher across both domestic and international routes.