United Airlines Forecasts Sustained International Travel Demand

It’s the yin and the yang of the travel industry these days.

United Airlines says it expects continued strong demand for international routes, but as a result, the company believes costs will rise in the coming quarter.

Those costs include everything from the airline fares themselves to fuel to labor to the war in the Middle East, which could impact United’s extensive international network.

"Even in a tough industry environment, we're producing strong absolute results while producing the best relative results in our history," CEO Scott Kirby said last week on a third-quarter earnings call.

"From basic economy, which allows us to compete profitably on price on the low end and all the way up to Polaris on long-haul international, United is able to give our customers the real choice they want,” Kirby continued.

Despite the apparent dichotomy of the situation, United has added more routes to Asia and placed an order for more than 100 long-haul jets.

It’s hard to ignore the growth. United has even increased capacity on international routes by 22 percent.

But it could end up costing consumers.

Passengers could pay more in airfares for international routes as United tries to keep up with the rising demand.

"We're really bullish on international," Andrew Nocella, United's chief commercial officer, said. "We've come a long way. It's very profitable. And there's a lot more to come." 

United is also bullish on its Basic Economy offerings on domestic routes.

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