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Airline Pricing Discipline Boosts United's Valuation
10 Jul
Summary
- United Airlines cut domestic flights to improve financial performance.
- Airline majors are adopting a strategy of removing lower-margin capacity.
- United Airlines trades at approximately 13 times this year's earnings.
Jim Cramer discussed United Airlines Holdings, Inc. (NASDAQ:UAL) on Mad Money, emphasizing the company's valuation and the improved discipline within the airline industry.
Early in 2026, United Airlines responded to flagging domestic demand by reducing flights that were not financially viable. Instead of lowering prices, the company opted to cut lower-margin capacity. This strategic playbook is reportedly being followed by all major airlines, significantly benefiting their business and improving price-to-earnings multiples.
United Airlines CEO Scott Kirby stated in late May that strategic changes have enabled the airline to better manage recent "curve balls." As the second half of 2026 begins, proof is needed that these strategies and more resilient business models are delivering tangible results. Both Delta and United provided weaker-than-expected second-quarter forecasts due to surging oil prices. Cramer believes they can surpass these lowered expectations in their next earnings reports. United Airlines currently trades at approximately 13 times its projected earnings for 2026, a multiple associated with high-quality cyclical stocks.
