United Airlines Cites ‘Strongest Environment We’ve Ever Seen’ As Demand And Fares Rise


United Airlines got a lift Tuesday from a strong outlook, including higher unit revenue projections, and from the Federal Aviation Administration’s move to approve the return of its Boeing

777 fleet, grounded for more than a year. The aircraft accounts for 10% of United’s fleet.

The outlook and FAA decision were both announced late Monday. United shares closed Monday at $43.54. In Tuesday morning trading, shares had risen about 6%.

“We’re pretty pleased by where we are,” United Chief Commercial Officer Andrew Nocella said Tuesday at a Bank of America

investor conference. “Everything is really strong. We often talk about ‘Is this the strongest environment we’ve ever seen?’ Absolutely.”

United now expects current quarter total revenue per available seat mile to be up 23% to 25% over the same quarter in 2019, an improvement from previous guidance of a 17% increase, according to the Securities & Exchange Commission filing Monday. Capacity is down 14% from two years ago, compared with the prior estimate of down 13%. Cost per available seat mile will be up between 16% to 17%, compared with previous guidance of about 16%

“Our biggest concern right now is selling out for the summer,” Nocella said. “Across all U.S. airlines, we don’t want to run out of supply this summer.” He said that while bookings “we have seen in domestic (are) not as strong as they were a month ago,” international bookings, particularly in the trans-Atlantic, are surging. “If you’re planning to go to Europe this summer, buy your ticket now,” he said.


Nocella was not questioned about potential passenger resistance to rapidly rising fares as oil prices rises. Travel booking app Hopper said Tuesday that during the Memorial Day weekend, domestic airfare will average $394 round-trip, a 28% increase compared to the same weekend in 2019, while international airfares will average $917 round-trip, up 2% compared to 2019

As he catalogued United hubs, Nocella saw strength in most of them. In technology, “our recovery out of San Francisco the last four or five weeks has been incredible; that has got to be in relation to tech coming back,” he said. In Houston, “energy is looking really good;” Chicago “looks good too; industrials (are) good.” And in the New York-London market, United now offers seven daily departures, taking advantage of a strong financial services market.

The widely anticipated FAA announcement, late Tuesday, enables the return of 52 Pratt & Whitney-powered Boeing 777s that were grounded after an engine failure in February 2021. “Late last night, the FAA issued the final paperwork on our Pratt & Whitney-powered triple sevens,” Nocella said. “We expect to fly the aircraft again within the next week,” Nocella said. Thirty to 35 aircraft will be scheduled by July, he said.

Besides rising fares, problems for commercial aviation include the short staffing at the Jacksonville air traffic control center and the looming pilot shortage. After an FAA-airline meeting last week, hopes exist that the Florida flight holdups will be addressed. As for pilots, Nocella said United’s high proportion of higher-paid widebody flying attracts an ample supply of pilots.

Besides Jacksonville, “Newark (is) a good example of an airport running near full capacity if not full capacity,” Nocella said. But that problem is not new.


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