TLDR
- UAL closed at $74.07 on May 2, up 7.10%
- Cutting 35 daily flights from Newark Airport due to staffing and tech failures
- CEO Kirby blames “chronically understaffed” air traffic control
- FAA plans to hire 2,000 controllers in 2025 with financial incentives
- UAL stock is up 43.32% over 1 year but down 23.72% YTD
United Airlines Holdings Inc. (NASDAQ: UAL) shares jumped 7.10% to close at $74.07 on May 2. The company announces major flight cuts at its Newark Liberty hub.
United said it will cancel 35 daily round-trip flights because the airport can no longer handle its current volume amid a worsening air traffic control staffing shortage.
No Choice but to Cut Newark Flights
CEO Scott Kirby said United had “no other choice” but to scale back at Newark, citing tech failures and staff walkouts that have crippled air traffic operations. He blamed a “chronically understaffed” control tower and urged for immediate government intervention. Newark has faced widespread delays recently, with over 20% of FAA staff reportedly walking off the job.
United Airlines says it has ‘no other choice’ but to cancel flights from Newark airport – “Kirby blamed a “chronically understaffed” air traffic control facility and a lack of intervention as the root causes.”https://t.co/xV9u4q7oVo
— W. Gyude Moore (@gyude_moore) May 4, 2025
Kirby noted in a letter to customers that FAA technology failures caused dozens of flight diversions and widespread disruptions. United has long pushed for Newark to be reclassified as a “Level 3” airport, which would cap scheduled flights to match infrastructure limits.
FAA Ramps Up Hiring and Incentives
Transportation Secretary Sean Duffy said the FAA aims to hire 2,000 new air traffic controllers in 2025, offering bonuses up to $10,000 to attract staff to hard-to-fill locations. He emphasized that the agency is committed to rebuilding the system, both through staffing and modernized technology. Kirby expressed optimism that these steps could ease pressure on United’s operations.
United had already unveiled a three-point plan in March to cut delays by investing in staffing, technology, and facilities. The airline is also trimming its overall domestic schedule by 4% in July.
Stock Surges Despite Year-to-Date Drop
While UAL shares soared 7% on May 2, they remain down 23.72% year-to-date, underperforming the S&P 500’s 3.31% decline. However, the stock has delivered a strong 43.32% return over the past year and gained 178.25% over five years, handily beating the broader market.
Investors appear to be looking past near-term operational headaches, focusing instead on management’s proactive steps and the government’s hiring push as reasons for long-term optimism.
