United Airlines: Record Revenue Fails to Offset Fuel Costs in 4Q26 Outlook

United Airlines sold more airline seats than ever but earned less. However, 3Q26 revenue rose 17.4% to $17.9bn, while adjusted EPS fell to $2.54 from $2.78. The 4Q26 guide of $0.50 to $1.50 lands well under the $1.76 the Street had. Delta told us how this quarter would go. United confirmed it, and United has no refinery. AirInsight Consensus for United Airlines was $2.57 to $2.59 depending on the source. This is a small miss; however, 24/7 Wall St. notes it ended four straight quarters of beats. Nevertheless, the miss is not the story. Revenue rose $2.65bn. Fuel took $1.85bn. Other adjusted operating costs took another $895m, leaving adjusted operating profit down $91m. That split comes from View from the Wing and ties to the reported totals. Demand did its job. Additionally, unit revenue was up about 16% on capacity growth of 1.3%. This was the best since the pandemic, according to United Airlines' own account, with a record 49.5 million travelers. Pricing held. The fuel bill ate it. GAAP EPS of $3.14 looks better, but it isn't. It includes $294m of sale-leaseback gains, up from $75m a year ago. Management does not expect to repeat them. Quote GAAP profit growth, and you are quoting aircraft sales. Fuel is where 4Q26 turns. United Airlines expects $4.80 a gallon against $3.90 in 3Q26, up 23% in one quarter. Additionally, on roughly 3Q volumes, that is about $1.1bn of extra fuel before any revenue offset. However, that is our arithmetic, not United's. Management told the market the Street's fuel assumption was about $1.00 a share too optimistic. The guide midpoint of $1.00 is 43% under consensus. Revenue growth is guided above 20%, up from 17.4%. In July, United said it would recover most of its added fuel through revenue in 3Q and all of it in 4Q. In 3Q, the added revenue covered the added fuel, but profit still fell. The 4Q guide says full recovery isn't happening. Quartz also reports United cut its full-year forecast. We could not find the new range. The baselines don't reconcile either: Quartz cites $9 to $11 from July, while an April report had $7 to $11 after a cut from $12 to $14. The investor update will settle it. AirInsight United Airlines grew faster. Additionally, it earned about $390m less before tax. Delta's refinery was worth 13 cents a gallon in 3Q26. Moreover, it is guided to about 40 cents in 4Q26. That explains part of the gap. However, the published numbers don't let us size it. What they do show is Ed Bastian's point on Delta's call. Namely, 'you cannot grow your way out of it' is now beside the fastest-growing carrier among the big three. Available liquidity was $17.7bn at quarter-end. The revolver went from $3bn to $5bn on October 16. Moreover, one outlet printed that $5bn as liquidity, but that is incorrect. Additionally, net leverage is 2.4 times, and total obligations are $26.4bn. Furthermore, free cash flow was -$153m a year ago, versus -$1.84bn now. Meanwhile, United Airlines is still spending. Starlink is on more than 640 aircraft and about half its flights. The fleet is planned to be completed by end-2027. The call is today. The investor update includes the numbers the release skipped: 4Q26 capacity, full-year EPS, capex. Additionally, we have not seen the stock reaction. For United Airlines, 2H26 capacity was capped at 2% growth in April. Will 2027 be cut? Moreover, United Airlines is the largest MAX 10 customer. It has told Boeing it does not want the current flight-management software on new aircraft. What happens to its MAX deliveries? American reports Thursday. There is no refinery there either.

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