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United Airlines says hybrid working could help to keep travel demand surging, despite US airfares rising by 43% over the last year

Oct 19, 2022, 17:42 IST
Business Insider
United's results had been "by most metrics, the best operational quarter in our history," CEO Scott Kirby said.StudioPortoSabbia/Shutterstock
  • Air ticket prices are soaring, but United Airlines doesn't see travel demand falling away soon.
  • Hybrid working will allow more people to travel for leisure, the airline said in its Q3 results.
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Inflation might have caused the price of an airline ticket to surge, but United Airlines doesn't see demand for flying falling away anytime soon, and cites hybrid working as a key reason.

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

"Despite growing concerns about an economic slowdown, the ongoing COVID recovery trends at United continue to prevail and we remain optimistic that we'll continue to deliver strong financial results in the fourth quarter, 2023 and beyond," Scott Kirby, United CEO said in a statement released alongside the airline's Q3 results.

There are three "durable trends" for air travel demand that United believes is "more than fully offsetting any economic headwinds, the airline said in its results.

One is the fact that demand for travel is still recovering from the pandemic, another is a lower availability of seats caused by external supply challenges. In addition, "hybrid work gives customers the freedom and flexibility to travel for leisure more often," the airline said.

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Some analysts travel predict demand at some peak times over the holidays could surpass 2019 levels. However, flexible working could enable travelers to avoid the queues, by choosing more flexible flights.

United's results had been "by most metrics, the best operational quarter in our history," Kirby said.

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

The airline saw its total revenue per available seat mile — referred to as TRASM — increase by more than 25% on 2019.

It's not the only airline to forecast surging demand, and revenues, after a summer of travel chaos, mass delays, and cancellations. Last week Delta posted similar returns.

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It's also a good market for private aviation. Operators are enjoying surging demand for bookings as super-rich clients switch to private planes in order to avoid the long queues and baggage mishaps witnessed 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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