United Airlines, which announced a major loss in the first quarter, said Wednesday it expects record sales in the coming months, suggesting it had reached a pandemic turning point.
“The demand environment is the strongest it’s been in my 30 years in the industry,” the airline’s 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 17 percent more revenue per seat and per mile from April to June than the same period in 2019. The company also said it expects healthy profits in the second quarter, despite high fuel prices.
United’s outlook, which it described as “bullish,” pushed the airline’s shares up more than 7 percent in after-hours trading. The airline cited a handful of reasons for its rosy projection, including strong consumer demand, operating margins close to 2019 levels, rapidly recovering business travel and the airline’s expectation of a similar uptick in international travel. United said it expects profits not only in the second quarter but for the full year.
The optimism comes as no surprise given the industry’s momentum this year. Last week, Delta Air Lines reported March was its best sales month ever, beating a record in 2019 despite 10 percent fewer seats available.
The spread of the Omicron variant of the coronavirus slowed demand at the start of the year, but airlines recovered quickly as consumers began booking flights in greater numbers. Searches for flights within the United States are up about 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 in the past month was just 10 percent lower than the same period in 2019, according to data from the Transportation Security Administration.
Wanderlust has so far been unaffected by skyrocketing fares, largely driven by fuel costs. The price of an average domestic round-trip flight is up 40 percent this year, from $235 to $330, according to Hopper, an airline ticket tracking app. The company said it expected rates to rise another 10 percent by June.
It’s not yet clear whether the end of mask duty on aircraft this week will affect demand.
If United’s forecast for the coming months comes true, the airline would make up for its performance in the first three months of the year, when sales fell about 21 percent and flight capacity fell about 19 percent compared to the same quarter in 2019. .
