United Airlines invests in JetZero’s innovative aircraft

CHICAGO - United Airlines (UAL), a prominent player in the passenger airlines industry with a market capitalization of $22.22 billion and an impressive "GREAT" financial health score according to InvestingPro, has announced a significant investment in aerospace startup JetZero, focusing on the development of a new blended wing body (BWB) aircraft. This investment includes an agreement that could lead to United purchasing up to 200 of these innovative airplanes, contingent upon JetZero reaching certain developmental milestones.

JetZero’s design, known as the Z4, aims to revolutionize the aviation industry with a potential 50% reduction in fuel consumption per passenger mile when compared to similarly sized conventional aircraft. The design’s efficiency is attributed to its unique shape, which minimizes drag and maximizes lift, potentially enabling United to cut carbon emissions and operational costs. This initiative aligns with United’s operational efficiency goals, as the airline currently generates $57.74 billion in annual revenue with a healthy 34.88% gross profit margin.

The agreement with United is based on the successful completion of a full-scale demonstrator flight scheduled for 2027, as well as the new aircraft meeting United’s stringent safety, business, and operational standards.

The Z4 aircraft is expected to accommodate 250 passengers and is designed for compatibility with conventional jet fuel and sustainable aviation fuel blends. The partnership with JetZero aligns with United’s long-term environmental goals, including the airline’s ambition to achieve net-zero emissions by 2050.

JetZero’s contract with the U.S. Air Force, valued at $235 million, underscores the government’s interest in advancing such technologies. The BWB design not only promises commercial benefits but is also adaptable for military applications, potentially reducing the Air Force’s fuel consumption and emissions.

JetZero’s CEO Tom O’Leary expressed confidence in the industry’s support for innovative solutions to meet growing air travel demands. The Z4’s design also promises to enhance the passenger experience with features such as flexible seating, larger seats, dedicated overhead bin space, and improved accessibility.

United’s corporate venture capital fund, United Airlines Ventures (UAV), has a history of investing in emerging technologies that could shape the future of travel. UAV’s portfolio includes investments in hybrid-electric, hydrogen-powered, and electric air taxis (eVTOLs).

The collaboration between United and JetZero is sourced from a press release statement and represents a strategic move to foster innovation in the aerospace sector. The successful development of JetZero’s BWB aircraft could mark a significant step forward in sustainable aviation, with commercial service anticipated to begin in 2030. With United’s strong return on equity of 34% and robust free cash flow yield, the company appears well-positioned for such strategic investments. For detailed analysis and 12 additional exclusive insights about United Airlines, including its current valuation status, explore InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.

In other recent news, United Airlines reported a notable first-quarter earnings per share (EPS) of $0.91 for 2025, surpassing the forecast of $0.77. The airline’s revenue reached $13.2 billion, slightly below the expected $13.37 billion, but it still marked a 5.4% increase year-over-year. Analysts at BofA Securities maintained a Buy rating on United Airlines, setting a price target of $90.00, reflecting confidence in the airline’s ability to navigate economic uncertainties. Meanwhile, UBS raised its price target for United Airlines to $67 from $59, maintaining a Neutral rating, acknowledging the airline’s strong first-quarter performance and share buybacks. JPMorgan also adjusted its price target for United Airlines, reducing it to $122 from $133, while keeping an Overweight rating, noting the airline’s potential to remain profitable even in a recession. These developments highlight United Airlines’ strategic initiatives and operational efficiency in a challenging economic landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.