Passengers are seen in the Delta Air Lines check-in area before their flight at Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia, United States, June 28, 2022.
Élie Nouvelage | Reuters
While the aviation industry has been in the spotlight lately for a host of safety issues, airline executives say there are no signs of demand for flights slowing.
United Airlines “As an airline and as an industry,” it will carry a record number of travelers this summer, the carrier’s chief commercial officer, Andrew Nocella, said Wednesday during an earnings conference call.
“Demand continues to be strong and we are seeing a record spring and summer travel season, with our 11 highest sales days in our history all occurring this calendar year,” said Ed Bastian, CEO of Delta Air Lines, in a phone call a week earlier. American airlines And Southwest Airlines report results on April 25.
Demand for air travel has held up despite persistent inflation that has weighed on household budgets, as well as a series of high-profile safety issues that have sparked congressional hearings and become the butt of jokes, from television late night at TikTok.
Scrutiny of the sector by the public and regulators increased after a door jam exploded in a Boeing 737 Max 9 in January. That triggered a new safety crisis for Boeing and slowed its deliveries of new planes to airlines.
United Airlines itself is under a safety review with 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, with new contracts giving pilots and other workers big raises after years of wage stagnation.
Still, demand for international travel and the rebound in business travel have helped boost international carriers. Delta and United’s second-quarter forecasts beat Wall Street estimates. And customers appear willing to pay for first class and other cabins above standard coaches, executives said.
Nocella said on Wednesday’s earnings conference call that the airline could further segment the front of the plane, much like United and other airlines have done with coaches. “A lot of teams are working on how to innovate more, provide more choice and monetize that choice on our behalf, obviously, going forward,” he said.
Delta, meanwhile, said premium revenue growth has outpaced sales of standard coach for years.
Delta, United and American announced upgraded first and business class cabins as well as more and larger lounges to accommodate a growing number of travelers willing to pay for more expensive tickets or elite status or high-fee rewards credit cards .
Delta is expected to open a new, more exclusive airport lounge level later this year.
Domestic and low-cost airlines are expected to report results in the coming weeks. Some of these carriers have struggled in recent months due to higher capacity, limited aircraft availability and higher costs.
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