Oct 20, 2022 - Economy

Fliers defy economic slowdown

Hope King

Illustration of an airplane's contrail forming a smiley face — Illustration: Annelise Capossela/Axios

Economic worries aren't grounding fliers.

Driving the news: Three of the biggest airlines in the world — American, United and Delta — are expecting stronger profits this quarter than previous estimates, according to their latest earnings reports.

"We continue to believe that 2023 demand for air travel will be robust," American Airlines CFO Derek Kerr told analysts this morning.
"We currently see no signs of demand slowing as we move into the new year. But as always, we will continue to keep a close eye on the macroeconomic environment," he said.

Why it matters: Airlines were among the hardest hit during the pandemic, and the industry is still trying to recover amid an economic slowdown.

But consumer demand for new views and experiences has helped carriers make more money even with less capacity (or fewer seats) by charging higher fares.

Details: United expects operating margins to exceed 2019, while American estimates adjusted profits to be as much as 3x expectations.

Delta says it expects demand to continue to grow as international markets further reopen.

What to watch: Remote work acceptance has led people to take more trips, United CEO Scott Kirby told analysts.

"This is not pent-up demand. It’s the new normal," he added.

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Fliers defy economic slowdown

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