United Airlines, while announcing a big first-quarter loss, said Wednesday it expected record revenue in the coming months, suggesting it had reached a pandemic turning point.
“The demand environment is the strongest in my 30 years in the industry,” airline chief executive Scott Kirby said in a statement. “We now see clear evidence that the second quarter will be a historic inflection point for our business.”
The airline posted a loss of nearly $1.4 billion for the first three months of the year. But it said it expects to collect 17% more revenue per seat per mile from April to June compared to the same period in 2019. The company also said it expects healthy profit in second quarter, despite high fuel prices.
United’s outlook, which he called “bullish,” sent the airline’s shares up more than 7% in after-hours trading. The airline cited a few reasons for its optimistic projection, including strong consumer demand, operating margins that are almost back to 2019 levels, a rapid rebound in business travel and the carrier’s expectation of a similar recovery in international travel. United said it expected a profit not just in the second quarter but for the full year.
The optimism comes as no surprise given the industry’s momentum this year. Last week, Delta Air Lines announced March as its best-selling month ever, breaking a record set in 2019 despite having 10% fewer seats available.
The spread of the Omicron variant of the coronavirus slowed demand early in the year, but airlines quickly recovered as consumers began to book flights in greater numbers. Searches for flights in the United States are up about 63% from a year ago, while searches for flights abroad are up more than 100%, according to Kayak, the travel booking site .
The number of people screened at airport security checkpoints over the past month is down just 10% from the same period in 2019, according to data from the Transportation Security Administration.
Appetite for travel has so far been unaffected by skyrocketing fares, driven largely by the cost of fuel. The price of an average round-trip domestic flight has risen 40% this year, from $235 to $330, according to Hopper, an airfare tracker app. The company said it expects rates to rise another 10% by June.
It is not yet clear whether the end of the mask requirement on planes this week will affect demand.
If United’s forecast for the next few months is confirmed, the carrier would offset its performance in the first three months of the year, when revenue fell about 21% and flight capacity fell about 19 % compared to the same quarter in 2019. .