Jim Cramer Talked About These 6 Airline Stocks

2. United Airlines Holdings, Inc. (NASDAQ:UAL)

Number of Hedge Fund Holders: 54

Highlighting that United Airlines Holdings, Inc. (NASDAQ:UAL) stock has risen over the past month, Cramer also noted its management’s comment on capacity management.

“United is up an astounding 159%… Let’s consider the case of United Airlines, best performer. When the company reported second-quarter results in July, they noted that the capacity had grown 8% year-over-year that quarter, reflecting the industry-wide trends. But they also said that they believed that that trend was ending. United explained that the industry would be removing unprofitable capacity in the second half of the year, especially in the fourth quarter. In October, when United reported… CEO Scott Kirby… very proudly said, I’m gonna quote it, ‘The inflection we spoke about on our last call has happened and we’re seeing unprofitable capacity begin to exit the market, leading to the expected domestic yield improvement.’ The company’s chief commercial officer, Andrew Nocella then added, ‘United’s domestic capacity in 2024 was shaped with the expectation that the industry would remove unprofitable capacity in earnest in Q4. As a result, United expanded slower than most during the first three quarters of the year when capacity dynamics were less favorable. But importantly, our timing is right, tilting our growth to the quarter where the industry conditions would be the best.’ I can’t believe that these guys are saying this stuff.”

United Airlines (NASDAQ:UAL) operates as a major provider of air transportation services, offering both passenger and cargo services. According to the airline, domestic passenger revenue per available seat mile (RASM) showed a slight year-over-year improvement in both August and September, marking a significant recovery from earlier in the quarter when it had been down by 4%.

Management attributed this positive shift to the maturation of capacity added in 2022 and 2023, which helped drive the improved RASM results. Looking ahead, management expressed optimism regarding United’s performance in Latin America, citing the ongoing capacity rationalization by low-margin airlines in the region. They expect this trend to benefit the airline’s operations in the coming quarters.

Additionally, United Airlines (NASDAQ:UAL) management noted that revenue trends also improved across most geographic areas, helped by the industry’s capacity rationalization and a decline in fuel prices, which provided some relief to cost pressures.