United Airlines CEO cautions against US crisis from flights over Russia.
United Airlines CEO Says US in “Business Recession” but Consumer is Strong
ISTANBUL (Reuters) – The United States is in a “business recession” but the consumer is “strong”, Scott Kirby, chief executive of United Airlines, the world’s largest carrier, told reporters at an aviation conference in Istanbul on Monday.
According to Kirby, leisure air travelers are returning faster and stronger than business travelers, indicating a strong demand for leisure travel. He also noted that premium leisure demand is much higher than before, while business demand has not fully recovered yet.
Despite the current economic slowdown, Kirby remains optimistic about the future of the airline industry. As global airlines bounce back from the pandemic, they forecast profits to more than double in 2023, buoyed by strong travel demand. However, Kirby also warned of challenges such as supply chain disruptions and a talent crunch.
The Changing Landscape of the Airline Industry
Kirby believes that airlines will not be able to operate the way they did pre-pandemic. While supply chains are improving, the bar is getting raised as every airline around the world tries to grow. “You can’t run your airline like it’s 2019… the world really has changed,” Kirby said.
He also raised concerns over competing carriers flying over Russia, stating that it could potentially lead to a crisis if an airline lands in Russia with prominent US citizens on board. Russia has barred US airlines and other foreign carriers from flying over its airspace, in retaliation for Washington banning Russian flights over the US in March 2022 after Moscow sent troops into Ukraine.
United Airlines was forced to temporarily suspend flying over Russian airspace, joining other major US carriers. This has impacted the airline’s ability to offer competitive non-stop flights to India and other places. Kirby expressed disappointment, stating that even with the extra time, they cannot fly the other routes non-stop.
Conclusion
Despite the challenges faced by the airline industry, Kirby remains optimistic about the future. He believes that the industry will continue to evolve and adapt to the changing landscape, and that airlines will find new ways to meet the needs of their customers.
- Leisure air travelers are returning faster and stronger than business travelers
- Premium leisure demand is much higher than before
- Business demand has not fully recovered yet
- Airlines forecast profits to more than double in 2023
- Supply chain disruptions and a talent crunch are major challenges
- The airline industry will not be able to operate the way it did pre-pandemic
- Competing carriers flying over Russia could potentially lead to a crisis
As the airline industry continues to evolve, it will be interesting to see how airlines adapt to the changing landscape and find new ways to meet the needs of their customers.
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