A slight year-on-year dip in passenger volumes comes after Spirit Airlines’ recent collapse.
American Airlines and United Airlines see no drop in demand from high fuel prices as they fly into the busy summer travel season.
The chief executives of both carriers highlighted, during an investor conference hosted by financial firm Bernstein on 27 May, continuing strong travel demand, especially for premium products, despite oil prices that remain significantly higher than in February before the Iran war.
“I feel great about demand overall,” says Robert Isom, CEO of American. “No doubt there is a K-shaped aspect to demand right now, but it is clear that, no matter what end of the spectrum you’re at, people want to travel”.
A “K-shaped” economy is one where high-income households are benefitting — the rising leg of the K — while the lower-income cohort feels more of the pressure from inflation and high energy costs — the falling leg of the K.
Isom and United CEO Scott Kirby spoke just days after the US Memorial Day weekend that is the symbolic start of summer travel in the US. The number of travellers and crews passing through Transportation Security Administration (TSA) checkpoints over the six days spanning the holiday was down nearly 1% year-over-year to roughly 16.1 million, agency data shows.
The number of seats departing US airports over the same period were flat year-over-year, schedule data from Cirium Diio shows.
United on Tuesday said the airline carried record passenger volumes on three separate days of the long weekend holiday.
The reduced Memorial Day travel rush likely results from the 2 May shutdown of Spirit Airlines. The discounter flew 2% of all seats departing US airports in April, Cirium Diio data shows.
Competitors, including Allegiant Air, American, Breeze Airways, Frontier Airlines, JetBlue Airways, Southwest Airlines and United, have added flights to fill some of the gap left by Spirit, but most of those do not begin until July or later.
American saw an “immediate blip” — or jump — in bookings following Spirit’s collapse, Isom says. That bump has since evened out to an “across-the-board improvement where we compete directly”.
Kirby, who has long espoused that the ultra low-cost carrier model does not work in the USA, says the segment is no longer “that dramatic” of a competitive issue for United. He expects discounters will continue shifting their networks away from major high-cost and toward lower-cost and secondary airports.
The post American and United report strong demand as summer starts, despite pricier fares first appeared on FlightGlobal.