Travelers at LaGuardia Airport in New York on June 30, 2022.
Leslie Josephs | CNBC
While the airline industry has been in the spotlight recently for a variety of safety issues, there are no signs of demand for flights slowing, according to airline executives.
United Airlines “As an airline and as an industry,” the airline will carry record numbers of travelers this summer, Andrew Nocella, the airline’s chief commercial officer, said in an earnings conference call Wednesday.
“Demand continues to be strong and we are experiencing a record spring and summer travel season with the 11 busiest days in our history, all occurring this calendar year,” Delta Air Lines CEO Ed Bastian said on his company’s conference call a week earlier. American Airlines And Southwest Airlines Report results on April 25th.
Demand for air travel remained stable despite persistent inflation straining household budgets and a spate of high-profile security issues that triggered congressional hearings and became the butt of jokes from late-night television to TikTok.
Public and regulatory scrutiny of the industry increased after a door plug flew out of one Boeing 737 Max 9 in January. That sparked a new safety crisis at Boeing and slowed deliveries of new planes to airlines.
United Airlines itself is undergoing a safety review by the Federal Aviation Administration after several incidents this year, including a tire falling off one of its older Boeing 777s.
Airlines, which make most of their money in the spring and summer, are also grappling with higher fuel and labor costs as new contracts give pilots and other workers big raises after years of stagnant wages.
Still, demand for international travel and the recovery in business travel have helped boost global airlines. Both Delta and United’s second-quarter forecasts beat Wall Street estimates. Customers appear willing to pay above standard coach for first class and other cabins, executives said.
Nocella said on Wednesday’s earnings call that the airline could further segment the front of the plane, similar to what United and other airlines have done with coach. “There are many teams working to drive further innovation and provide more and more choice and of course monetize that choice on our behalf in the future,” he said.
Delta, meanwhile, said premium motorcoach sales growth has outpaced standard motorcoach sales for years.
Delta, United and American have announced upgraded first and business class cabins, as well as more and larger lounges, to accommodate the growing number of travelers willing to pay high fees for higher-priced tickets or elite status or rewards credit cards.
Delta is expected to open a new, more exclusive airport lounge level later this year.
Domestic-oriented airlines and budget carriers are expected to report results in the coming weeks. Some of these airlines have struggled in recent months due to increased capacity, limited aircraft availability and higher costs.
Don’t miss these exclusives from CNBC PRO
Source link
2024-04-17 21:46:06
www.cnbc.com
