Travel demand ‘strongest it’s been’ in 30 years: United CEO

Business

(NewsNation) — Airlines are expected to add more flights and profit this year as they bounce back from the travel slump created by the COVID-19 pandemic.

Even after a first-quarter loss, United Airlines CEO Scott Kirby recently announced he is optimistic about the future, saying the current travel demand is at the strongest it’s been in 30 years.

“I am proud of the United team that once again managed to overcome the challenges of the quarter and prioritized high operating reliability for our customers by gradually adding back capacity,” Kirby said in a statement.

United reported a net loss of $1.4 billion in the first quarter of 2022, but the company expects to have a 17% increase in total revenue per available seat mile over its 2019 earnings. That would be the strongest second-quarter revenue guidance in company history, the airlines said in a news release.

Other airlines are seeing similarly high projections:

  • Delta Airlines returned to profitability in March, with CEO Ed Bastian saying the bounce-back was due to increased demand when omicron faded. “As our brand preference and demand momentum grows, we are successfully recapturing higher fuel prices, driving our outlook for a 12 to 14% adjusted operating margin and strong free cash flow in the June quarter,” Bastian said in a news release.
  • At American Airlines, they’re expecting a profitable second quarter based on current demand trends and expected fuel prices. “The work we have accomplished over the past two years — simplifying our fleet, modernizing our facilities, fine-tuning our network, developing new partnerships, rolling out new tools for customers and team members, and hiring thousands of new team members — has us very well-positioned as the industry continues to rebound,” CEO Robert Isom said.

The pandemic was a major roadblock for the travel and hospitality industries and a Gallup poll found half of American adults who flew once a year before the pandemic were not comfortable doing so in 2020.

But now, with pandemic protocols being eased and the vaccine widely available, people are starting to travel again. Daily Transportation Security checkpoint travel numbers are increasing. On April 22, 2021, there were 1,521,393 checkpoints recorded, compared to 2,293,242 on that day in 2022. That’s a far jump from the 123,464 checkpoints done on April 22, 2020.

Recently, a federal judge in Florida struck down the mask requirement in airports and during flights. Several airlines have said they are offering options, and even refunds, to those worried about flying now that other passengers aren’t required to wear face coverings.

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