United Airlines seat demand snapping back faster than expected
Business travel 'continues to be significantly depressed'
United Airlines announced that customers are hitting the skies faster than expected – well before the peak of the summer travel season kicks off.
The airline said that domestic leisure yields on tickets purchased since the beginning of the month for travel during the second quarter have "reached levels similar to 2019," according to a regulatory filing. Ticket yields refer to the process that allocates a certain number of seats per flight at a discounted rate, full fare, frequent flier miles and last-minute sales.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS INC. | 41.50 | +0.46 | +1.12% |
During that same time, yields on tickets purchased for domestic leisure travel have exceeded 2019 levels, a trend the airline projects will continue during the summer travel season.
However, the airline cautioned that demand for business travel "continues to be significantly depressed" although bookings "are starting to recover."
A United Airlines passenger pushes a luggage cart past closed check-in kiosks at San Francisco International Airport on July 8, 2020 in San Francisco, California. As the coronavirus COVID-19 pandemic continues, United Airlines has sent layoff warning
The Chicago-based carrier, which lost over $7 billion in 2020, expects to report positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter as it recovers from what it says was "the most disruptive crisis in aviation history."
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Meanwhile, chief executives of major U.S. airlines are hoping that with more Americans getting the COVID-19 vaccine, the carriers will be able to capitalize on the busy summer travel season.
"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, the truth is that COVID-19 has changed United Airlines forever," United Airlines CEO Scott Kirby said in January. "The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that's better, stronger and more profitable than ever."
To date, about 39.3% of Americans are fully vaccinated, according to the Centers for Disease Control and Prevention (CDC).