Home BUSINESS News Travel Demand Remains Strong, Airlines Say

Travel Demand Remains Strong, Airlines Say

Travel Demand Remains Strong, Airlines Say


The pandemic-related travel boom shows little sign of tapering off, despite persistent inflation and a murky economic outlook, airlines say.

For the quarter ended Sept. 30, American Airlines posted earnings of $483 million, or 69 cents a share, compared with $169 million, or 25 cents a share, a year ago. Analysts surveyed by FactSet were expecting earnings of 54 cents a share.

American’s revenue surged 50% to $13.46 billion, topping Wall Street expectations of $13.37 billion. 

The airline said it isn’t anticipating a slowdown and projected fourth-quarter revenue to be 11%-to-13% higher than the same period in 2019. 

“We continue to believe that 2023 demand for air travel will be robust. We currently see no signs of demand slowing as we move into the new year,” Chief Financial Officer

Derek Kerr

said Thursday.

The optimistic outlook follows a challenging summer. Carriers cut back on flying to operate more reliably after stumbles early in the summer, and airline executives have said those efforts helped cut down on cancellations and delays. 

With deliveries of new planes hitting snags, a shortage of pilots at smaller regional carriers, and logjams in training newly hired workers, airline executives have said growth remains constrained—something that they said could continue to prop up fares in the coming months. 

American said overall capacity in the third-quarter was 9.6% lower than in the same period in 2019. It plans to ramp up some in the final months of the year, but said it’s planning a “prudent” level of expansion and continuing to insulate its operation from shocks. American said its flight capacity next year could be at or slightly below 2019 levels. 

“What we’re trying to do is build in at least a little buffer in a number of areas right now,” American Chief Executive Officer

Robert Isom

said during a conference call Thursday. 

Alaska Air Group Inc.

on Thursday also reported better-than-expected revenue, but surging fuel costs squeezed profits. The company also said nonfuel costs for the full year will rise more than it previously expected due to new labor agreements.

Still, passengers have so far been willing to pay higher ticket prices, and flights have been full, generally allowing carriers to make up for soaring fuel prices and the rising cost of labor as they continue to rebuild their ranks. 

The question for airlines is how resilient the appetite for vacations and other trips will be. Ticket prices have eased some after a rapid run-up last spring, but fares are still pricier than in 2019, and consumers meanwhile are paying more for many other goods. Economists surveyed by The Wall Street Journal expect the U.S. economy to enter a recession sometime in the next year, and they anticipate that employers will cut some jobs as the economy contracts. 

Airline executives said they believe they are on a different trajectory. 

“While we are mindful of macroeconomic headwinds, the travel industry is experiencing a countercyclical recovery,”

Delta Air Lines Inc.

Chief Executive

Ed Bastian

said last week

Travelers are adjusting their habits, but in ways that have resulted in more trips and increased demand for higher-end seats, airline executives have said.  September and October are typically a travel trough—too late for summer vacations, but too early for holiday visits. This year has been different, executives at Delta, United and American have said. 

“With hybrid work, every weekend could be a holiday weekend. That’s why September, a normally off-peak month, was the third-strongest month in our history,”

United Airlines Holdings Inc.

Chief Executive

Scott Kirby

said this week

People are extending weekend trips another day or two rather than rushing back to be at their desks Monday morning, airline executives said. Many are blending business and personal trips. Other off-peak periods are also seeing more demand: United said bookings for the time between Thanksgiving and Christmas are tracking higher than 2019 levels. 

American said that about 45% of its revenue in the third quarter came from travelers who were combining business and leisure trips, offsetting more traditional corporate travel that hasn’t fully bounced back. 

—Will Feuer contributed to this article.

Write to Will Feuer at Will.Feuer@wsj.com

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