Business travel demand has “plateaued”, but revenue continues to rise thanks to strong demand and capacity constraints, according to United Airlines (NASDAQ: UAL) CEO Scott Kirby.
Major companies, many in tech, have announced plans to cut back on spending, like business travel, or even lay off workers. San Francisco is one of United’s major hubs, along with Newark, New Jersey, Houston, Washington D.C. and its home base of Chicago.
“It feels like business travel, and this probably is indicative of pre-recessionary kind of behavior, has plateaued even though our total revenues are still going up,” Kirby told the media.
Kirby said United isn’t seeing a recession in its data but forecast a “mild recession induced by the Fed.”
In October, United forecast another profit for the last three months of the year thanks to strong demand. At the same time a lack of available aircraft and trained pilots have driven up airfare across the industry, helping return airlines to profitability.
United’s Kirby reiterated that hybrid work models are shifting travel patterns to give workers that “have always had plenty of disposable income” the ability to travel since they’re not “tethered to their desks.”
Last week, announced a strategic equity investment in Natron Energy, a battery manufacturer whose sodium-ion batteries have the potential to help United electrify its airport ground equipment like pushback tractors and operations at the gate.
UAL shares gained 35 cents to $45.38.
