Fliers defy economic slowdown
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.
- 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.