United Airlines stock has been on a tear

As the rest of the airline industry tries to figure its way back from a capacity crisis, United Airlines (UAL+2.79%) is already heading down the runway towards a brighter future. The carrier’s stock climbed 39% in October.

Both it and Delta Air Lines spent the earlier part of the year dive-bombing on the territory of their budget-airline rivals. Even American Airlines (AAL+1.12%), which has been struggling to regain the trust of its key business-class constituency, is getting in on the action: American shares are up 19% in that stretch; Delta stock is up 15%. United may have gotten a jump because it somehow began reducing supply at the same time that it was expanding into the lower end of the market.

“United’s domestic capacity in 2024 was shaped with the expectation that industry would remove unprofitable capacity in earnest in Q4,” chief commercial officer Andrew Nocella said on the company’s earnings call last month. “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 was right, tilting our growth to the quarter where the industry conditions would be the best.”

In a research note after the company’s earnings period, TD Cowen (TD-0.48%) analyst Tom Fitzgerald said that the carrier has been making all the right moves.

“United is reaping the benefits of the prudent investments it has made across the business over the last several years,” he wrote. “With momentum in corporate traffic, the RASM benefit from maturating international capacity, and domestic share gains from industry laggards poised to continue, we feel confident that margins keep moving higher.”

Touches like adding Starlink wi-fi to its planes portend further good news to come, Fitzgerald says.

“We believe 2025 will be an exciting year for United,” he wrote.