{"id":16502,"date":"2023-04-19T17:56:32","date_gmt":"2023-04-19T17:56:32","guid":{"rendered":"http:\/\/lynettelockhart.com\/client\/united-airlines-warns-of\/"},"modified":"2023-04-19T17:58:39","modified_gmt":"2023-04-19T17:58:39","slug":"united-airlines-warns-of","status":"publish","type":"post","link":"http:\/\/lynettelockhart.com\/client\/united-airlines-warns-of\/","title":{"rendered":"United Airlines warns of macro risks, says ready to act if economy softens further"},"content":{"rendered":"\n

CHICAGO (Reuters) – United Airlines Holdings Inc on Wednesday said macroeconomic risks have increased following turmoil in the banking industry last month that led to a sharp, brief drop in business travel demand.<\/p>\n

CEO Scott Kirby said while the company “feels good” about its full-year profit outlook, it stands ready to act if the economy softens further.<\/p>\n

United expects to return to profit in the second quarter and has forecast a four-fold jump in profit this year.<\/p>\n

The Chicago-based carrier said it saw an eight percentage point drop in business travel demand compared to 2019 in the immediate aftermath of Silicon Valley Bank’s failure.<\/p>\n

Although the impact lasted just two weeks and bookings have recovered, the company suggested its earnings outlook could be at risk if the economy slips into a deep recession or has a hard landing.<\/p>\n

“Our base case, therefore, remains a mild recession or soft landing,” Kirby said on an earnings call. “But we agree that the tail risk is higher than normal.<\/p>\n

He said United has a lot of flexibility in managing its capacity. That coupled with improvements in its balance sheet will help it deal with a downturn, Kirby said.<\/p>\n

It is also seeking to keep a lid on non-fuel operating costs by minimizing flight cancellations. The company has forecast operating expenses excluding fuel to be flat this year.<\/p>\n

“We can’t control what happens at the macro economy, but we can and are doing a great job of controlling our costs,” Kirby said. <\/p>\n

Pent-up travel demand as well as constrained airline capacity due to shortages of aircraft, spare parts and labor have, thus far, allowed the airline industry to avoid the fallout from a slowdown in the broader economy.<\/p>\n

“The macroeconomic weakness is being offset with the counter trend of consumer spending continuing to rebalance back to services,” Kirby said.<\/p>\n

\n

(Reporting by Rajesh Kumar Singh; Editing by Cynthia Osterman)<\/p>\n

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CHICAGO (Reuters) – United Airlines Holdings Inc on Wednesday said macroeconomic risks have increased following turmoil in the banking industry last month that led to a sharp, brief drop in business travel demand. CEO Scott Kirby said while the company “feels good” about its full-year profit outlook, it stands ready to act if the economy […]<\/p>\n","protected":false},"author":8,"featured_media":16503,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[1213],"tags":[],"class_list":["post-16502","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-u-s-business"],"jetpack_featured_media_url":"http:\/\/lynettelockhart.com\/client\/wp-content\/uploads\/Reuters_Direct_Media\/USOnlineReportBusinessNews\/tagreuters.com2023binary_LYNXMPEJ3I0RB-VIEWIMAGE.jpg","_links":{"self":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/16502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/comments?post=16502"}],"version-history":[{"count":1,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/16502\/revisions"}],"predecessor-version":[{"id":16504,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/posts\/16502\/revisions\/16504"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media\/16503"}],"wp:attachment":[{"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/media?parent=16502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/categories?post=16502"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/lynettelockhart.com\/client\/wp-json\/wp\/v2\/tags?post=16502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}