Oct 20, 2022 - Economy

Fliers defy economic slowdown

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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