Just like many consumers, the airline industry has benefited from the low price of oil.
Continue Reading Below
“Over the course of the last couple years it’s generated a ton of profits in cash for the airline industry as a whole, and so that’s been very positive. It’s frankly allowed us to reinvest in the business in a significant way,” United Airlines CEO Oscar Munoz told the FOX Business Network’s Maria Bartiromo.
Munoz responded to claims that long TSA lines plaguing airports across the country were an unintended consequence of baggage fees.
“The bag fees have been in place for some time, A. B, over the course of last summer we had a record amount of travelers and we got through TSA lines fairly quickly. And so, what has changed since then is some governmental changes in how they manage TSA, and we have to sort of regroup and rework,” said Munoz.
He said terrorism concerns were a factor weighing on the industry in Europe.
“We are seeing some softening and ever since the tragic Brussels event, we’ve clearly seen some of that. As our seasonal summer program works up we’re actually not seeing as much of a drop off since, so we’re hopeful,” said Munoz.
On the other hand, Munoz was more optimistic about Asia, and China in particular.
“We are long on China, it is a terrific business market for us, it’s expanding greatly and anytime there’s a billion people, there’s people that are going to want to fly,” Munoz said.
Munoz said he was happy to return to his CEO post after receiving a heart transplant in January.
“What brought me back is the great spirit of the United family. The outreach and outpouring of affection to me and my family was terrific and that’s the energy we’re capturing so we deliver caring service to all our customers,” said Munoz.
He also said he feels consolidation has made the industry stronger.
“I used to be in the railroad industry for a long time and consolidation there over the many years I think did help the business and economic model. It allows us, again, to generate some funds we can reinvest in the business, there’s plenty of competition, truly. And I think all of that combined makes for a better product for our customers,” Munoz said.
Munoz predicted that consolidation will continue, “There is a lot of capacity out there and eventually I think you’ll see some more consolidation.”