United Airlines' corporate travel demand accelerated in the third quarter, particularly in September, executives said Wednesday on an earnings call.
"From a corporate point of view, we see corporate traffic accelerating," United CEO Scott Kirby said. "That's United's bread and butter, [and] we've been waiting for that to happen for a while. It's particularly important in Q1, and we think it's going to happen in Q1, and that creates a great setup for us."
Chief commercial officer Andrew Nocella said that corporate demand acceleration in September occurred across all regions and is expected to continue into the fourth quarter. Kirby stated that the coastal U.S. hubs were stronger than the interior hubs, and that the professional services, financial services and tech sectors are growing the fastest.
"Contracted corporate revenues were up 13 percent [year over year] in September, at 95 percent of 2019 revenues, which is 13 points higher than July and August," Nocella said. For the quarter, corporate revenue increased 6 percent year over year. "United is centered in the largest business markets as corporate demand expands, and we expect a material tailwind."
Nocella added that third-quarter load factor for managed business was down nearly 2.5 points from 2019 levels, but the company anticipates "slow but steady gains" into 2025. He also noted that the acceleration of return-to-office policies was driving corporate traffic revenue growth "and creating a great setup for 2025," he said. "We've seen eight of the top 10 biggest post-pandemic corporate revenue booking days since the start of September, including the biggest day in United's history."
United Q3 Metrics
United reported third-quarter passenger revenue of nearly $13.6 billion, up 1.6 percent year over year, on total revenue of more than $14.8 billion, up 2.5 percent from Q3 2023. Net income was $965 million, down 15.1 percent from the prior year.
Capacity increased 4.1 percent year over year for the quarter. The average fuel cost was $2.56 per gallon. The only fourth-quarter guidance the carrier shared was for adjusted diluted earnings per share of $2.50 to $3.
In the third quarter, United took delivery of 17 Boeing Max and three Airbus A321neo aircraft, according to United CFO Mike Leskinen. In the fourth quarter, the carrier expects to take delivery of 19 narrowbody and three widebody aircraft.
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