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United Airlines plans to fly less and warned of lower profits in a cautious update after it posted a first-quarter profit for the first time since the coronavirus pandemic. The Chicago-based airline said it would put fewer seats in the air than planned in the second half of the year and reduce flights at off-peak times. The airline also offered two sets of guidance for 2025, saying the macroeconomic environment was “impossible to predict this year”. Airlines’ fortunes are closely tied to the wider economy because tickets are often a discretionary expense and consumers will refrain from buying them if they are worried about inflation or the possibility of unemployment. Economists, including Federal Reserve officials, have warned US tariffs have hurt consumer sentiment and could push up inflation. In a “stable environment”, United expects to earn between $11.50 and $13.50 a share, the same guidance it issued in January. But in a “recessionary environment”, the range falls between $7 and $9 a share. “The macro environment is so muddied that . . . United offered up two scenarios, leaving it up to investors to choose their own adventure,” said Omair Sharif, president of forecasting group Inflation Insights. United said if the US entered a recession it expected to bring in 5% less revenue than if it dodged a slowdown. The carrier’s move to trim capacity in the second half of the year echoes Delta Air Lines’ decision last week to do the same. Raymond James analyst Savanthi Syth estimated that, based on United’s preliminary schedules, it would reduce its year-over-year growth from 8 per cent in the first half to 3 per cent by the fourth quarter. Limiting flying helps airlines control costs and keeps fares higher by tightening the supply of available seats. Ahead of the earnings report, Evercore ISI analyst Duane Pfennigwerth said that if United were to slow its plans to grow it would “represent a positive surprise” for investors.<br/>

Dozens of former student pilots who say they racked up tens of thousands of dollars in debt for tuition are suing United Airlines and its flight school in the Arizona desert, saying it didn’t have enough teachers or aircraft to properly train and graduate its students. The federal lawsuit accuses United and the school, United Aviate Academy, of falsely promoting a well-equipped, intensive training program that would put students on a path to becoming commercial pilots after a year. In reality, the students said in an amended complaint filed last week, their flight time was limited due to the staffing shortages and frequent staff turnover. In some cases, students were teaching other students, according to the lawsuit. Some of the students said they ultimately left the program when it became clear they would not finish training after a year. But many of them alleged in the lawsuit that they were wrongly expelled from the school for “taking too long to advance” through the program. Around the time of the pandemic, United purchased the pilot school in the Phoenix suburb of Goodyear to address a critical problem facing the industry: not enough pilots. Airlines have complained about the shortage for years, but they made it worse during the COVID-19 outbreak by encouraging pilots to take early retirement when air travel collapsed in 2020. In a statement, Chicago-based United said it couldn’t comment on specific allegations, citing the ongoing lawsuit, but it defended its pilot school. “We have the highest confidence in the rigorous curriculum and flight training program provided at United Aviate Academy and are proud of the school’s hundreds of graduates,” the statement said. The lawsuit claims the school had an enrollment cap of 325 students “to ensure sufficient resources.” Instead, according to the complaint, there were more than 380 students enrolled in the program in March 2024.<br/>

Star Alliance member Singapore Airlines (SIA) will transform its SilverKris and KrisFlyer Gold lounges at Singapore Changi Airport Terminal 2 over the next two years, investing S$45m to elevate the on-ground customer experience at its main hub. Renovations will begin on 15 April 2025, progressing in phases, with completion expected around mid-2027. The revamped lounges will boast 50% more space and seating capacity, and feature upgraded facilities, signature elements from SIA’s flagship lounges at Changi Airport Terminal 3, and an enhanced variety of food and beverage options. “This significant investment underscores Singapore Airlines’ unwavering commitment to elevating the end-to-end travel experience for our customers. Building on the success of our Terminal 3 lounges, we are extending our signature hospitality and thoughtfully curated offerings to Terminal 2,” said Yeoh Phee Teik, senior vice president customer experience at Singapore Airlines. “This upgrade reaffirms our continued dedication to providing a seamless, world-class experience that meets the high expectations of our discerning customers,” he added.<br/>

Air New Zealand said on Wednesday it expects lower earnings in the 2025 financial year, citing uncertainty regarding its global engine maintenance delays and related compensation levels. The carrier expects earnings before taxation in the range of NZ$150m ($88.50m) to NZ$190m in 2025, compared with NZ$222m it had reported in 2024. The country's flagship carrier is still reeling from engine-related maintenance issues, started in 2023 when Pratt & Whitney removed more than 1,000 engines from Airbus planes, which led to the grounding of Air New Zealand planes intermittently. Earlier this year, the airline had flagged that up to 11 of its aircraft could remain grounded at times in the second half of fiscal 2025, which would further bite into the firm's full-year earnings. This is not the first time that engine issues have substantially affected the carrier's operations. They had impacted the company's bottom line in fiscal 2024. However, Air New Zealand failed to provide a proper timeframe as to when this persistent issue will be resolved, saying "these discussions continue to be complicated." "The airline is engaged in ongoing negotiations with engine manufacturers regarding appropriate levels of compensation for unserviceable engines, and accurate timeframes for engine returns," the carrier said. The company said it expects compensation recognised in the second half of the year to be around NZ$35m to NZ$40m.<br/>

Air New Zealand is expecting to make $20m in six months from travel credits that customers won't use. The airline told the NZX on Wednesday it expects its full-year underlying profit to be down as much as a third compared to last year given a "substantial" drop in the compensation it expects to get from engine manufacturers for its grounded aircraft. The national carrier estimates earnings before taxation for the 2025 financial year to be within a range of $150m to $190m, compared with $222m last year. Air New Zealand said it expected to make $20m from "credit breakage" in the second half of its financial year - money from prepaid airfares, travel vouchers and other credits that customers have not used and now probably will not. The airline counts the credits as revenue when it is confident they will not be redeemed or they have expired. Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, said the pandemic led to mass cancellations and many people opted for credits instead of refunds at the time. "Some may have forgotten these, moved or found travel plans unfeasible especially with Air New Zealand's reduced capacity limiting booking options." He said the $20m was probably more than Air New Zealand had been expecting. "It's a material amount of their earnings for the period. Check your Air New Zealand Airpoints or credits you have with them, roll them over if possible, and do it quickly before they expire. Use them if you can, transfer them to someone else if you can or use them to buy in store if you've got Airpoints, but $20m in credit breakage expected in the second half of this year is a decent chunk of consumer money about to be worthless."<br/>