UPDATE 2-United Airlines offers an upbeat outlook on improved pricing power

Adds more details from earnings release, background in paragraphs 3-9

By Rajesh Kumar Singh

CHICAGO, Jan 21 (Reuters) - United Airlines UAL.O on Tuesday forecast a stronger-than-expected profit in the current quarter, after its earnings topped Wall Street estimates in the fourth quarter on robust travel demand and improved pricing power.

The Chicago-based airline's shares were up about 4% in after-hours trading.

United said it is witnessing a strong and broad-based demand for travel across all geographies.

In the December quarter, sales of its premium and basic economy seats were up 10% and 20% year-on-year, respectively. Corporate bookings rose 7% from a year ago.

The company said accelerating demand trends have put it on the path to double-digit pre-tax margins in 2025, up from 7.3% a year ago.

United and rival U.S. carriers are also benefiting from a sharp reduction in airline seats in the domestic market, which has driven up ticket prices and bolstered the industry's earnings outlook .

Airline fares rose at their fastest pace in 21 months in December on a combination of a limited supply of seats and strong holiday travel demand.

United's total revenue per available seat mile, a proxy for pricing power, was up 1.6% year-on-year in the December quarter. It expects further improvements in pricing power in the current quarter.

Earlier this month, rival Delta Air Lines DAL.N termed the industry's capacity discipline a "constructive" backdrop, which is expected to help produce a record profit for the company in 2025.

United expects an adjusted profit in the range of 75 cents a share to $1.25 per share in the quarter through March. Analysts expect the company to report a quarterly profit of 54 cents a share, according to LSEG data.

For the full-year 2025, United forecast an adjusted profit of $11.50 to $13.50 per share. That compares with $12.85 per share expected by Wall Street analysts.

Its adjusted earnings in the December quarter came in at $3.26 a share, compared with analysts' expectations of $3.00.

United will discuss its financial results on a call with analysts and investors on Wednesday morning.

(Reporting by Rajesh Kumar Singh
Editing by Marguerita Choy and Aurora Ellis)

((rajeshkumar.singh@thomsonreuters.com; +1-313-484-5370; Reuters Messaging: rajeshkumar.singh.thomsonreuters.com@reuters.net))