Hybrid work could keep travel demand high

  • Airline ticket prices are soaring, but United Airlines does not anticipate a rapid decline in travel demand.
  • The hybrid work will allow more people to travel for leisure, the airline said in its third-quarter results.
  • United’s third quarter results were among the best operating quarters in its history, said CEO Scott Kirby.

Inflation may have caused the price of an airline ticket to rise, but United Airlines does not see demand for flights declining anytime soon and cites hybrid work as a key reason.

The average price Americans paid for a round-trip flight increased nearly 43% in the 12 months to September, according to the Bureau of Labor Statistics Consumer Price Index.

“Despite growing concerns over an economic slowdown, ongoing COVID recovery trends at United continue to prevail and we remain optimistic that we will continue to deliver solid financial results in the fourth quarter, 2023 and beyond,” said Scott Kirby, CEO United in a statement released alongside the airline’s third quarter results.

There are three “enduring trends” for air travel demand that United believes are “more than completely offsetting any economic headwinds,” the airline said in its findings.

One is the fact that travel demand is still recovering from the pandemic, another is the reduced availability of seats caused by external supply problems. Plus, “hybrid work gives customers the freedom and flexibility to travel for pleasure more often,” the airline said.

Some travel analysts predict that demand at some peak times during the holidays could exceed 2019 levels. However, flexible working could allow travelers to avoid queues by choosing more flexible flights.

United’s results had been “by most metrics, the best operating quarter in our history,” Kirby said.

United made a profit of $ 942 million during the three months to September 2022. It has seen revenues grow more than 13% over the same period in 2019 and expects its adjusted pre-tax margin to exceed 9% by the end of the year.

The airline saw its total revenue per available seat mile, dubbed TRASM, increase by more than 25% compared to 2019.

It is not the only airline to predict an increase in demand and revenues after a summer of travel chaos, mass delays and cancellations. Delta posted similar returns last week.

It is also a good market for private aviation. Operators are enjoying the growing demand for reservations as super-wealthy customers switch to private planes to avoid long lines and baggage accidents attended by commercial airline passengers during the summer.

United did not immediately respond to Insider’s request for further comment, which came outside of standard business hours.

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