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‘It Pays to Travel,’ Say Airlines’ Third Quarter Earnings Calls

In October third-quarter earnings calls, four major U.S. airlines (United, Delta, JetBlue and American) all reported a return to profitability despite flight schedules that have been affected by pilot shortages, weather and air traffic control.

United Airlines said that its third-quarter results, “solidly beat expectations.”

“Looking forward through the end of the year, the airline expects the strong Covid recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” United’s release on the earnings statement said.

“The company believes there are three durable trends for air travel demand that are more than fully offsetting any economic headwinds: air travel is still in the Covid recovery phase, hybrid work gives customers the freedom and flexibility to travel for leisure more often, and external supply challenges will limit industry supply for years to come.”

United said its third-quarter operational performance was, “one of the best of any third quarter in the company’s history.”

The airline pointed to its new United Club at Phoenix Sky Harbor International Airport, its purchase of 200 four-seat electric aircraft for 2026 delivery and its Business Blueprint corporate customer platform as highpoints on its performance.

Similarly, Delta Air Lines reported, “a strong September quarter with record quarterly revenues and a double-digit operating margin. “The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international,” said Ed Bastian, Delta’s chief executive officer on the call.

“With strong demand and a return to best-in-class operational performance, we are ahead of our plan for the year on profitability…We’re working towards full network restoration by summer of 2023.”

The airline pointed to the launch of Delta business, an “all-encompassing travel brand…featuring premium benefits” and Delta Premium Select enhancements for the onboard experience as high points affecting business travelers.

American Airlines also reported a return to profitability in its third-quarter earnings call, stating that it had flown a “schedule that was more than 25% larger than its closest competitor as measured by total departures.”

American’s CEO Robert Isom said on the call that, “Demand remains strong and it’s clear that customers in the U.S. and other parts of the world continue to value air travel and the ability to reconnect post-pandemic. American has the youngest, most fuel-efficient fleet among U.S. network carriers and we are well-positioned for the future because of the incredible efforts of our team.”

Finally, JetBlue also recorded a return to profitability saying that it, “continues to unlock consumer benefits by providing customers with more choice as a true third competitor in the Northeast.”

“For the third quarter, we reached an important milestone in our recovery as we generated our first quarterly adjusted profit since the start of the pandemic. Looking ahead, we expect our profitability to carry through to another solid quarter of mid-single-digit, pre-tax margins in the fourth quarter, and we’ll look to expand on that further in 2023 as we continue to restore our earnings power,” said Robin Hayes, JetBlue’s CEO.

Hayes also pointed to the impending merger with Spirit (barring governmental interference, broadly seen as unlikely) as an engine for that profitability.

On a global level IATA (International Air Transport Association) reported data for August 2022 that showed “continued momentum in the air travel recovery.”

Total traffic in August 2022 was up 67% compared to August 2021, reported the agency. Globally, traffic is now at 73.7% of pre-crisis levels.

“The Northern Hemisphere peak summer travel season finished on a high note. Considering the prevailing economic uncertainties, travel demand is progressing well. And the removal or easing of travel restrictions at some key Asian destinations, including Japan, will certainly accelerate the recovery in Asia. The mainland of China is the last major market retaining severe Covid entry restrictions,” said Willie Walsh, IATA’s director general.

Capt. Chesley “Sully” Sullenberger Warns Against Pilot Inexperience

In a recent editorial in The Hill, “miracle on the Hudson” Capt. Chesley “Sully” Sullenberger along with Capt. Joseph G. DePete, president of the Air Line Pilots Association, International warn against impending moves by airlines to reduce or diminish requirements for pilot and first officers. “

“To be an effective leader on the flight deck, one must be the master of the aircraft,” the authors write. “This includes each of its component systems; its crew, passengers and cargo; and the constantly changing environment that surrounds it. Whether during an extraordinary emergency or routine conditions, safety is paramount for airline pilots—and the ability to ensure safety starts with training and experience. Unfortunately, not everyone in our industry shares this view.”

Sullenberger and DePete go on to cite a bid by regional airline SkyWest Airlines to fly to its rural and small community routes under a different set of safety regulations with less-experienced pilots.

“The airline received government contracts under one set of rules, but to avoid the higher safety standards, it’s asking—midflight—to change the rules. This airline’s bait-and-switch scheme must also be rejected by the Department of Transportation,” write the pilots.

In a recent cover story Smart Meetings reported aviation expert and consumer advocate William McGee, senior fellow for aviation, American Economic Liberties Project saying that,  “Overwhelmingly the problems (summer airline chaos) are the airlines’ faults. It’s about shortage of pilots. We gave them $54 billion, with one caveat. Make sure you keep your staffing up. They found a loophole. They encouraged early retirements, so now there’s a shortage of pilots.”

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