United Airlines, while announcing a big loss in the first quarter, said on Wednesday it expected record revenue in the coming months, suggesting it had reached a pandemic tipping point.
“The demand environment is the strongest in my 30 years in the industry,” airline CEO Scott Kirby said in a statement. “We are now seeing clear evidence that the second quarter will be a historic turning point for our business.”
The airline reported a loss of nearly $1.4 billion for the first three months of the year. But it said it expected to collect 17 percent more revenue per seat and per mile from April to June than in the same period in 2019. The company also said it expected a healthy profit in the second quarter, despite high fuel prices. .
United’s outlook, which he described as “bullish,” sent the airline’s shares up more than 7 percent in after-hours trading. The airline cited several reasons for its optimistic projection, including strong consumer demand, operating margins that are almost back to 2019 levels, a rapid recovery in business travel, and the airline’s expectation of a similar rebound in flights. international travel. United said it expected a profit not just in the second quarter but for the full year.
The optimism is not surprising given the industry’s momentum this year. Last week, Delta Air Lines reported that March was its best sales month ever, beating a record set in 2019 despite having 10 percent fewer seats available.
The spread of the Omicron variant of the coronavirus slowed demand earlier in the year, but airlines quickly recovered as consumers began to book flights in greater numbers. Searches for flights within the United States are up 63 percent from last year, while searches for flights abroad are up more than 100 percent, according to Kayak, the travel booking site.
The number of people screened at airport security checkpoints over the past month is down just 10 percent from the same period in 2019, according to data from the Transportation Security Administration.
So far, the appetite for travel has been unaffected by skyrocketing fares, which have been driven in large part by the cost of fuel. The price of an average roundtrip domestic flight has risen 40 percent this year, from $235 to $330, according to Hopper, an airfare-tracking app. The company said it expected rates to rise another 10 percent by June.
It is not yet clear whether the end of the mask requirement on planes this week will affect demand.
If United’s forecast for the coming months is confirmed, the airline would offset its performance during the first three months of the year, when revenue fell 21% and flight capacity fell 19% compared to the same quarter in 2019.