Business travel continues to rebound for US-based carriers United Airlines and American Airlines, as both reported record-breaking quarterly earnings for the second quarter on Thursday.
United Airlines reported business demand at 75 per cent of volume levels in the same period of 2019 and 80 per cent of revenue.
United EVP and chief commercial officer Andrew Nocella said during an earnings call that the recovery rate of international business travel "still looks really good” despite the recent travel disruption in Europe and the daily passenger cap implemented at Heathrow Airport earlier this month.
Nevertheless, Nocella expressed caution and said "with the economy potentially worsening, business travel recovery is something we'll be watching carefully”.
And while the company is "pleased with the revenue trends" well into the third-quarter booking curve, "we're not counting on a material rebound in business bookings in the quarter to meet our [total revenue per available seat mile]," Nocella added.
United reported a profit in the quarter ending June 30, with net income of $329 million on revenue of $12.1 billion, which was up 6 per cent compared with Q2 2019.
Passenger revenue was $10.8 billion, up 3.3 per cent from 2019 levels, and the highest Q2 revenue in the company's history, according to United. Q3 operating revenue is expected to be up about 11 per cent versus 2019.
American Airlines, meanwhile, reported business travel revenue had "fully recovered" compared with 2019 as the carrier posted the highest quarterly revenue in its history.
Business revenue was 110 per cent recovered for the month of June and largely driven by unmanaged or lightly managed accounts, according to an earnings presentation.
American Airlines produced second-quarter revenue of $13.4 billion, an increase of 12.2 per cent versus the same period in 2019.
"That's a record for any quarter in our company's history," said American CEO Robert Isom. "These results were achieved while flying 8.5 per cent less capacity than we did in 2019."
The carrier reported second-quarter net income of $476 million, up from $19 million a year earlier and the first time since the pandemic's start the carrier posted a profit without US government aid.
Revenue from small and midsize businesses as well as customers combining business and leisure were "continuing to outpace the recovery of our managed corporate revenue," Isom said. The majority of this revenue growth "has come directly through our website, bypassing traditional channels."
The unmanaged business segment is between 125 per cent and 130 per cent recovered to 2019 levels, while contracted corporate business is about 75 per cent to 80 per cent recovered.
Second-quarter 2022 passenger revenue was $12.2 billion, up from $6.5 billion one year prior. Domestic capacity for the period was down 6.6 per cent compared with the second quarter of 2019, while international capacity was down 12.1 per cent.
Both carriers pointed to capacity constraints due to staff shortages. American Airlines’ Isom said the carrier will "limit capacity to the resources we have and the operating conditions we face".
United’s Nocella added regional operations remain strained and the airline has cut services to “17 or 18” regional markets due to a lack of regional jets.