United CEO: Business demand for air travel won’t return until 2024
United Airlines CEO Scott Kirby on Thursday said that he doesn’t expect the demand for business travel to return to pre-pandemic levels until 2024.
Kirby said in a holdings call that in his personal opinion, which he acknowledged is not the consensus generally, business travel will make a full comeback.
“We are, as you and me, we are social creatures and I think business demand is going to come back. I don’t think it’s coming back immediately. I think demand sort of starts to recover in earnest end of next year, beginning in 2022, and business demand getting back to normal is, I would guess, 2024. But I think it will come back to normal,” he said.
He remained hopeful that business travel can be a driving revenue stream for the airline in the future.
“Business travel is incredibly important to United. And it was our bread and butter before. I think it will be our bread and butter in the future. It’s going to be a few years before it comes back in earnest” he said.
United, which has been devastated by the coronavirus pandemic, lost $1.8 billion in the third quarter. Delta Air Lines reported earlier this week that it lost $5.4 billion in the third quarter.
Kirby also said, expressing hope that business travel will rebound, that it’s human nature to want to connect with others in person.
“I’ve been fond of saying the first time someone loses a sale to a competitor who showed up in person is the last time they try to make a sales call on Zoom,” he said.
Airlines for America, the industry group that represents the major U.S. airlines, also warned in September that the industry won’t fully rebound to pre-pandemic levels until 2024.
Kirby told employees on Oct. 1 that the company is moving forward with furloughing about 13,000 people but left the door open to reversing the process if Congress and the administration can reach a deal on a coronavirus relief package.
The airline industry has lobbied for a $25 billion injection from Congress to extend the Payroll Support Program. The program, which prohibited airlines from laying off employees until Oct. 1, allocated $25 billion in aid as part of the $2.2 trillion CARES Act passed in March.
President Trump indicated last week, after halting coronavirus relief talks until after the election, that he wants to help the airlines, but negotiations are stalled between Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin.