United Airlines CEO Talks Travel Demand
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Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk.
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News. I would love to welcome in Scott Kirby, the CEO of United Airlines. And Scott, it's really tremendous to see not only what you did, but also the fact that you see significant upside to the fourth quarter. And I want to just start there. Where do you see the acceleration in demand?
You know, actually, you look across the full year, the first three quarters were really good for United in a lot of macro volatility that happened for the aviation industry. That demonstrates the resilience of our revenue diverse brand loyal business model. But you look to the fourth quarter, it's even more exciting because as the economy is starting to get back to a solid footing, at least for aviation, demonstrates a lot of upside. We think we're going to be able to grow earnings for the full year, even in this environment. So it really is creating value for all of our customers, all the way from basic economy to winning much higher market share and the brand loyal customers. Really is a great resilient strategy when times are difficult, but a lot of upside as the economy recovers here in 4Q.
I guess I want to drill into the economy because, Scott, earlier in the year had been the economy section that had struggled the most. I'm just wondering how much it's picking up, whether you've had to discount tickets to bring people in to compete or whether consumers are willing to absorb higher prices and just take their trips.
Yeah. Well, as we've talked about before, Lisa, the airline industries are a pretty good real-time indicator of the economy. And we saw for much of the first half of the year economic stress and ticket prices were lower as a result of that. But as we got into the third quarter, bookings at least for future travel, the economy started to pick up, bookings started to pick up. And as we finished the quarter, we've set records each of the last several weeks on Most corporate revenue that we've ever booked in a single week and a number of records, particularly in business travel, really kind of strong across the board, though. Internationals come back stronger. The period has extended. Premium is obviously stronger than main cabin.
But really, we've seen improvement, you know, as we've moved through the third quarter, kind of across the board on revenue streams with the biggest strength in the corporate segment.
And that's actually something that we see across the board, particularly because there are all these deals. So people have to actually get on a plane and go see some of their clients.
What is the current demand outlook for United Airlines?
I am wondering, are you seeing international travelers, tourists come back to the United States? I know that was kind of a soft spot and sort of a tell in terms of the international reputation of the country.
Well, our business is about 80% U.S. point of sale, but we have and we saw a drop in international traffic earlier in the year. It's not quite back to last year's levels, but it has recovered and it's close to last year's level. So we did see a dip, but even that has come back and we think that's on the trend to getting back to normal pretty soon.
Are you planning to keep capacity pretty much the same? Are you planning to expand or cut back? I know that it was constrained earlier this year just because of demand. But as demand picks up, are you going to bring more planes on deck?
Well, we've been growing in absolute growth, actually faster, I think, than any airline in the world has ever grown for several years in a row. And that's worked really well for United, and that's been successful.
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