United Airlines continues to post solid financial gains, numerous revenue headwinds ahead in 1Q2015

United Airlines continues a trajectory of improved fundamentals as changes undertaken in 2014 to shore up revenue that include re-banking and seasonal adjustments reach a full scale in 2015.

The airline sustained profitability for 4Q2014 and CY2014, and plans to keep its capacity growth at rates less than GDP despite the sharp decline in oil prices that has continued into 2015. Similar to rival Delta, United plans to use any extra cash generated from lower energy costs to accelerate balance sheet delivery and increase shareholder returns.

After enjoying a solid performance in its domestic entity throughout much of 2014, United observed some softness in the US domestic market near the end of 4Q2014 that is lingering into the beginning of 2015. The slowing US demand and several other factors are driving projected flat unit revenue growth for United in 1Q2015, but capacity discipline along with a favourable cost performance should help blunt some of the anticipated revenue pressure.