United Sees Strong Demand But Is Cautious on Capacity Options

Photo: Karam Sodhi/AviationSource

LONDON – Despite reporting improving trends in leisure and business travel demand, United Airlines is increasingly cautious of adding capacity back too quickly. 

The U.S. major airline has lowered its planned first-quarter capacity from down 17% versus 2019 to down 19% versus 2019, largely due to high fuel prices and uncertainty determined by the COVID-19 pandemic.

“We don’t know if there’ll be another [COVID] variant or how severe it will be, but when you look at this trend, it’s clearly showing that each variant is having a smaller and smaller impact on the business,” United executive VP and chief commercial officer Andrew Nocella said. 

“We have adjusted capacity for the remainder of the year to make sure we can recapture 100% of the price of oil,” he explained. “We continue to remain cautious on capacity. We are following geopolitical events very, very carefully, and we’ll make the right decisions for our network and our business.”

Regarding the recovery, “there is very strong leisure demand,” said Nocella. “People want to get back out, they want to connect, they want to see their friends and family, and, in fact, they actually want to start traveling for business.”

During the spring break period, the Chicago-based carrier expects to transport more than 18 million people, operating more than 3,800 flights per day on average.

“Business demand is about 70% [of 2019 levels],” added Nocella. “We expect business traffic will continue to grow closer and closer to 2019 levels, with another step up occurring in the fall when the kids go back to school.”

United is forecasting its full-year 2022 capacity to be “down high single digits” versus 2019. At the start of 2022, the Chicago-based airline anticipated operating 5% more capacity in 2022 versus 2019.

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