United bullish on network returning to pre-pandemic normal

United Airlines sees demand, including business travel, continuing to recover beyond the 'summer surge' US carriers are experiencing.

United Airlines, the most optimistic among US legacy carriers on how quickly demand on its route network will return to pre-COVID-19 levels, has reported a steady climb in demand already underway that it believes will continue beyond the summer leisure travel surge.

"We aren't through the end of the tunnel yet, but we clearly see the light at the end of the tunnel,” CEO Scott Kirby said this week during a Wolfe Research investor event. "I suspect by the time we're in September, we're going to see a big ramp-up in business traffic across the country.”

Chicago (ORD)-based United’s outlook is the most bullish in the US. Rival American Airlines, for example, predicts a fall off in demand starting in September once the summer leisure surge ends. 

Kirby pointed to US government guidance that relaxed mask-wearing requirements for anyone who has been vaccinated against COVID-19 as a turning point that is driving more personal interaction, including business travel.

United is seeing more “close-in [booked] travel during the midweek, not over a weekend,” Kirby said—strong indications of business trips. 

Kirby said United’s data showed business travel down 80% from 2019 levels two weeks ago. "Last week, it was down 75%, which may not sound that big, but mathematically that's a 25% improvement in just a few weeks,” he said. "It's pretty impressive.”

Like most US carriers, United is seeing strong demand for leisure flying through the summer season. In United’s case, leisure demand for the summer is actually exceeding 2019 levels, Kirby said. 

"The company continues to expect domestic leisure yields for summer travel to exceed 2019 levels,” United said in a recent regulatory filing. “Business demand continues to be significantly depressed, though bookings for business travel are starting to recover.”

United is confident that international routes will bounce back quickly as travel restrictions are relaxed. “While we don't know the exact timing when all that will ultimately come into fruition, we're clearly on the road to recovery,” Kirby said. “I think demand will be back at 100%.”

 Photo credit: United Airlines