United Airlines Breaks Passenger Records Despite Surging Prices
United Airlines saw strong demand from travelers in the second quarter despite higher ticket prices caused by surges in the price of fuel, executives said Thursday (July 16) during an earnings call.
“In the quarter, United carried 10 of our highest passenger days in company history, with the highest being over 640,000 customers carried on June 18,” United Airlines President Brett J. Hart said during the call.
Mike Leskinen, executive vice president and chief financial officer at United, said during the call: “United has not seen a measurable demand impact based on the higher fares. In fact, if you zoom out to consider price inflation for travel over the last 10 and 20 years, airfare stands out as a tremendous value. Our customers increasingly desire a better travel experience, and we believe they will continue to pay reasonable prices for it.”
The airline saw growing demand across categories. The total revenue per available seat mile (TRASM) was up 12.1% year over year, indicating strong demand for its products, Andrew Nocella, executive vice president and chief commercial officer at United Airlines, said during the call.
“We observed minimal to no impact on demand from higher price points, a trend we see continuing,” Nocella said.
In terms of passenger revenue per available seat mile (PRASM), domestic was up 12.2% year over year and international was up 12.0%, according to a Thursday news release.
PRASM was up 11.6% year over year in the premium category and 11.5% in the main cabin, Nocella said during the call.
“This is the second quarter in a row where we’ve seen main cabin PRASMs positive after years of below-average performance at an industry level.”
Contracted business revenues were up 27% year over year, with the technology, financial services and professional services sectors leading the way, Nocella said.
“These same positive business demand trends continued into early July and we expect to continue for the remainder of the year,” Nocella said.
Overall, United Airlines CEO Scott Kirby said during the call, “Demand remains robust as we expect both 3Q and 4Q TRASM to grow faster than 2Q’s 12%.”
