United Airlines Sees Uptick in Corporate Revenues as Business Travel Revival Continues
Skift Take
Key Points
- United Airlines saw a 13% increase in corporate revenues in the third quarter, with premium travel demand remaining strong.
- The airline reported $14.8 billion in revenue, a slight increase from last year, but experienced a 15% drop in net income.
- United announced a $1.5 billion share buyback program due to strong summer earnings and ongoing investments in their business.
Summary
United Airlines reported a 13% rise in corporate revenues during the third quarter, indicating a revival in business travel. While the carrier's total revenue increased to $14.8 billion, its net income fell by 15% compared to the previous year. The airline plans a $1.5 billion share buyback program, the first since the pandemic, thanks to robust summer earnings and strategic investments in its operations.
United Airlines said corporate revenues were up 13% in the third quarter and that demand for premium travel remained resilient.
The carrier reported a revenue of $14.8 billion, up 2.5% from the same time last year, and a net income of $965 million, a 15% decrease from last year. Revenues for premium seats were up 5% and revenues for basic economy increased 20%.
The uptick in corporate revenues comes as some airlines have enjoyed a revival in business travel over the past year. For the third quarter, Delta president Glen Hauenstein said corporate travel sales were up 7%, boosted by growth in coastal hubs.
United also said it would also implement a $1.5 billion share buyback program — the first since the pandemic — because of its strong earnings during the busy summer travel season.
“In the last four years, we’ve invested $22 billion in our product and nearly $10 billion in our people. Those investments have enabled higher profits and are now contributing to growing free cash flow,” said United Airlines CFO Michael Leskinen in an earnings release. “We’re now in a position to add a share repurchase program as we continue to invest in and deleverage our business.”
The carrier also said unit revenues for domestic travel were positive during August and September as the industry cut unprofitable capacity in the market. The glut of domestic seats has weighed down on the profits of major carriers like United and Delta Air Lines.
Recently, United announced a slate of new routes — including some offbeat destinations — in a bet that demand for international travel during the summer will carry into next year. Some of the new destinations include Ulaanbaatar, Mongolia; Nuuk, Greenland; and Palermo, Italy.
United is discussing third-quarter earnings in a call with analysts at 10:30 a.m. ET on Wednesday.
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Photo Credit: A United Airlines Airbus A320 at Boston Logan airport. BOSSHEP/Flickr Flickr / BOSSHEP
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