Airlines predict record summer travel, more demand for first class

Multiple airlines are reportedly anticipating carrying a record number of travelers this summer, including an increased demand in first class tickets.

United Airlines said Wednesday after reporting that it suffered $200 million in losses in the first quarter that it’s expecting a turnaround this summer.

“As an airline and as an industry,” United expects to “set another record for passenger numbers come June, July and August — the peak travel months for the season — the carrier’s Chief Commercial Officer Andrew Nocella told investors.

To achieve this, more than 273 million Americans would have to take vacations this year, according to Investopedia, citing data from Transportation Security Administration checkpoints between May 31, 2023, and Sept. 17, 2023.

The record-setting figure for 2023 means that nearly one-third, or 32.8% of all US households passed through TSA checkpoints last year in what was dubbed a “revenge” travel season.

In another positive sign for the future of travel, customers appear willing to pay up for first class and other cabins above standard coach, executives said, according to CNBC.

Nocella said on the earnings call Wednesday that as a result, United is mulling further segmentation at the front of its planes, as it did when it implemented “preferred seating” options and perks for its MileagePlus members.

“You have many teams of people working on how to further innovate and provide more and more choice and to monetize that choice on our behalf, obviously, in the future,” Nocella said.

Alaska Airlines is similarly predicting a strong peak this summer — despite recent setbacks stemming from its infamous mid-air door blowout at 16,000 feet in January, CNBC earlier reported.

The Seattle-based carrier has prepped for the coming months by expanding its capacity roughly 3.5% over the past 12 months — which positioned it to forecast second-quarter and full-year earnings well ahead of estimates on Thursday.

Though Alaska Airlines reported earlier this month that it lost “approximately $160 million” in its first quarter in pretax profit in the wake of the fuselage blowout, Boeing — which built the 737 MAX 9 that malfunctioned on that fateful Flight 1282 from Portland, Ore. — repaid the sum.

Boeing said that it would give Alaska Airlines the $160 million it lost as part of an “initial payment” for “financial damages” resulting from the near-disastrous flight on Jan. 5 that ultimately led to a three-week grounding of Boeing’s 737 MAX 9 planes.

United also blamed that nearly month-long period on its own $200 million losses in the latest quarter, though Boeing hasn’t said that it would repay the Chicago-based airline — which was forced to cancel hundreds of flights and pause pilot hiring.

As Boeing faces a May 28 deadline from the Federal Aviation Administration to develop a comprehensive plan to address quality-control issues, the government agency is also probing United after several incidents this year, including a tire that fell from one of its older Boeing 777s, CNBC reported.

However, the setbacks didn’t seem to sway COO Nocella’s belief that it’s going to be a busy summer for United.

Delta Air Lines CEO Ed Bastian also said on his company’s earnings call last week, “Demand continues to be strong, and we see a record spring and summer travel season with our 11 highest sales days in our history all occurring this calendar year,” CNBC earlier reported.

Delta’s second-quarter forecasts also outpaced Wall Street estimates.

And in another display of travelers’ willingness to splash out on travel perks, Delta revealed plans to debut “premium” airport lounges back in February, touting that the high-end spaces will feature full-service brasseries, markets and dedicated wellness areas.

American Airlines and Southwest Airlines are both set to report their latest earnings results on April 25.