United, American Airlines play down travel demand concerns

United, American Airlines play down travel demand concerns

United, American Airlines play down travel demand concerns

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Sept 7 (Reuters) – United Airlines Holdings Inc (UAL.O) and American Airlines Group Inc (AAL.O) on Wednesday tried to ally concerns about shopper demand, saying there was no slowdown in post-summer travel bookings.

US carriers have been witnessing the strongest travel demand because the pandemic. Over the four-day Labor Day weekend, 8.76 million passengers made their approach by US Transportation Security Agency (TSA) checkpoints, surpassing 2019 ranges. learn extra

The travel demand, nevertheless, tends to chill down after Labor Day, which historically marks the top of the US summer season. With youngsters returning to highschool, household holidays usually sluggish down, leaving carriers principally reliant on enterprise vacationers.

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Patrick Quayle, senior vp at United Airlines, advised Cowen’s annual transportation convention that travel bookings, to this point, have outlined that historic development as there was no drop off in ticket gross sales between August and September.

“It doesn’t seem that summer season has come to an finish,” he mentioned. “It’s that sturdy.”

Encouraged by “a powerful demand surroundings,” the Chicago-based provider on Wednesday revised up its income estimate for the present quarter. It now expects whole working income within the quarter by September to be up 12% from the identical interval in 2019, up from a previous forecast of 11%.

United additionally lifted the forecast for adjusted working margin on the again of enhancements in non-fuel working prices.

American Airlines Chief Executive Robert Isom, who additionally spoke on the convention, mentioned leisure bookings are holding up “sturdy.”

“We proceed to see income and expense and monitoring margins as we anticipated,” Isom mentioned. “That’s excellent news.”

Shares of United Airlines had been up 3.75% at $37.93 within the afternoon commerce, whereas these of American had been up 2.8% at $13.59.

The airline trade, which is going through hovering gasoline and wage payments, has been counting on sturdy shopper demand to mitigate inflationary stress with increased fares.

But buyers and analysts usually are not certain carriers may have the identical pricing energy as soon as shopper demand slows down. Adding to the concern, company travel – the trade’s money cow – has not recovered to the pre-pandemic ranges.

Isom mentioned American’s income from company bookings has recovered to simply 75% of 2019 ranges. United’s Quayle mentioned whereas company bookings are nonetheless under the pre-pandemic degree, increased ticket costs have pushed up income from enterprise travel.

As corporations name their workers again to workplace, the 2 carriers anticipate additional enhancements in company bookings. In the meantime, they’re relying on a sustained restoration in worldwide travel demand.

Isom mentioned American’s transatlantic income has exceeded 2019 ranges. United is seeing strong demand in Asia Pacific as properly.

“Whenever nations cut back the entry necessities or remove entry necessities, we see actually, actually strong demand,” Quayle mentioned.

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Reporting by Rajesh Kumar Singh in Chicago and Aishwarya Nair in Bengaluru Editing by Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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