United shrugs off recession fears as workers ‘untethered from the desk’ fuel travel demand

by | Oct 19, 2022 | Business

United Airlines forecast another profit for the end of the year and said consumer appetite for travel is showing no signs of slowing down despite high airfares and concerns about the economy.Shares were up 7% in early afternoon trading on Wednesday.United’s CEO Scott Kirby said more flexible workplaces are changing travel patterns, allowing the airline to offset headwinds from a slowing economy.”Hybrid work allows every weekend to be a holiday weekend,” Kirby said in an interview Wednesday with CNBC’s “Squawk Box.” He said remote work is allowing travelers to fly on days they wouldn’t be able to before the pandemic, when they were in the office more often.”It wasn’t money that constrained people from travel. It was time,” Kirby said. “They’re untethered from the desk.”The Chicago-based carrier posted a third-quarter profit of $942 million, down 8% from three years ago, and $12.88 billion in revenue, which was ahead of analysts’ estimates and up 13% from 2019.A United Airlines Boeing 777-200 aircraftNicolas Economou | NurPhoto | Getty ImagesAdjusting for one-time items, United earned $2.81 per share, easily topping the $2.28 analysts polled by Refinitiv were expecting.The airline said it expects adjusted earnings per share of as much as $2.25 for the fourth quarter, far ahead of analysts’ estimates of 98 cents, according to Refinitiv. United said it expects its fourth quarter operating margin to be about 10% and above 2019 for the first time since the pandemic began.The strong summer travel season and sunny outlook for the rest of the year indicate consumers are willing to continue to spend on trips, a turnaround from early in the pandemic when Covid-19 restrictions devastated demand. Delta Air Lines last week said it brought in record revenue for the third quarter and forecast another profit for the fourth quarter.The upbeat outlooks from airline executives contrast with other sectors that have struggled this year, including parts of the retail industry and some streaming platforms that were beneficiaries of lockdowns early in the pandemic.Here’s how United performed in the third quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:Adjusted earnings per share: $2.81 versus an expected $2.28Total revenue: $12.88 billion versus expected $12.75 billion.U.S. airline executives have recently noted strong demand to E …

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