Airline execs: It’s about to be a hot travel summer

Shares of United Airlines rose 17% yesterday, turning in their best day in three-and-a-half years. And, while the airline posted earnings and revenue after Tuesday’s bell that came in above expectations, a large portion of this rise can be attributed to its forward-looking guidance.

In other words – the magic 8-ball says travel demand, which has remained high despite lingering inflation and recently publicized safety issues, is about to go even higher.

• United Airlines will carry record numbers of travelers this summer, the company’s Chief Commercial Officer Andrew Nocella said on its earnings call yesterday.
• And this hot travel summer extends beyond just United. “Demand continues to be strong, and we see a record spring and summer travel season with our 11 highest sales days in our history all occurring this calendar year,” Delta Air Lines CEO Ed Bastian said on his company’s earnings call last week.

But it’s not all sunshine and rainbows. Boeing’s woes are starting to reverberate throughout the industry. United Airlines would have turned a profit in Q1 had it not taken a $200 million hit due to the temporary grounding of Max 9 jets in January following an in-flight door plug blowout, while shares of Southwest – famously a one-airplane company (the Boeing 737) – fell ~15% in March after adjusting guidance downward due to uncertainty about new plane deliveries.

👀 Looking ahead…Strong demand for international trips and rebounding corporate travel have major airlines leaning into more premium experiences. While United recently announced upgraded first- and business-class cabins – along with Delta and American – Nocella said on Wednesday’s earnings call that the airline could further segment the front of the plane (where the fancy people sit).

• And, as any savvy traveler knows, premium experiences start when you get to the airport – not after boarding. Delta is slated to open a new, more exclusive tier of airport lounge later this year.