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United Airlines’ Q4 profit and outlook for early 2023 topped Wall Street estimates thanks to strong travel demand and high fares. Consumers’ appetite for air travel and willingness to pay higher fares has helped airlines return to profitability despite higher costs for fuel, labor and other expenses tied to ramping their networks back up. Meanwhile, aircraft delivery delays and training backlogs have constrained airlines’ growth, keeping fares high. United reported an $843m profit for the last three months of 2022, a 31% increase compared with three years earlier, on revenue of $12.4b. That revenue was almost 14% higher than the same period in 2019, before the pandemic, despite flying 9% less, helping it post a profit despite a 21% increase in unit costs from three years earlier. The quarterly update is another sign of a strong year-end for airlines, despite severe winter storms and disruptions during the popular holiday travel period.<br/>

United Airlines Tuesday forecast at least a four-fold jump in full-year profit for this year and reported fourth-quarter earnings that topped Wall Street estimates on robust travel demand, sending its shares higher. The Chicago-based carrier sees an adjusted profit of $10 to $12 per share for 2023, up from $2.52 per share last year. That is well above analysts' estimates of $6.54 a share, according to a Refinitiv survey. US carriers are enjoying the strongest travel demand since the start of the COVID pandemic, boosted by reopening of closed borders, a strong US dollar and rising corporate travel. While recession fears have sparked concerns about consumer spending, airlines say travel demand remains strong and exceeds the pace of flight capacity growth, keeping ticket prices high. It posted a fourth-quarter profit of $2.46 per share exceeded analysts' expectations for $2.10, according to Refinitiv data. Delta Air Lines last week said the industry is expected to see tens of billions of dollars of incremental demand in the next few years as the relationship between passenger revenue and global gross domestic product returns to pre-pandemic trend. Before the pandemic, passenger revenue accounted for 1% of the global GDP.<br/>

Japan’s ANA Group is set to restore much of its international network in the coming months on the back of increasing travel demand, but has held back any firm plans to expand its operations to Mainland China. In a network update issued 17 January, ANA says it is “pursuing transformative measures” in the 2023 fiscal year, in response to “new trends” in travel recovery. The new fiscal year starts 1 April. The airline, which has benefited from strong demand since Japan eased its border restrictions in late 2022, states: “For international routes, the ANA Group will proactively build its network to meet the demand for travel to and from Japan, which is expected to continue to increase from 2022, with the relaxation of Japan’s travel restrictions.” In particular, mainline carrier ANA will resume flights on several routes to Europe, such as Tokyo Haneda-Munich at thrice a week, Tokyo Narita-Brussels at two flights a week. ANA is also planning to resume flying to Perth, while doubling its frequencies to Sydney to twice daily. However, the airline has yet to commit to a ramp-up of Mainland China flights. In a flight plan for the new fiscal year, the airline lists its new plan for Chinese flights as “pending”, noting that “an announcement will be made as soon as it is decided”. ANA currently has flights to seven cities on Mainland China, including to Guangzhou, Shanghai Pudong and Dalian. It has had to cut flights to Hong Kong following the Japanese government’s decision to impose testing requirements on all Chinese arrivals, including from Hong Kong. On the domestic network, ANA and its low-cost unit Peach will increase capacity, with overall domestic ASKs higher than the 2022 fiscal year, which will end on 31 March. <br/>

Air India will add another UK destination to its network ahead of the 2023 Northern Hemisphere winter, announcing the start of flights between London Gatwick and Amritsar, Ahmedabad, Goa Dabolim, and Kochi Int'l from March 26, 2023. According to an Air India statement, B787-8 aircraft will operate thrice weekly roundtrip frequencies across all four routes where the airline will enjoy sole operator status. "This is part of the airline’s ongoing endeavour to spread its wings on the international aviation map, hence, increasing its market share on international routes," reads the statement. "The robust enhancement of operations is one of the major pillars of Air India’s transformational roadmap." Air India presently flies to Birmingham Int'l from Amritsar and Delhi and London Heathrow from Amritsar, Delhi Int'l, Ahmedabad, Mumbai, Hyderabad Int'l, Goa, and Kochi. Four other airlines - British Airways, Air Canada, Vistara, and Virgin Atlantic, also offer scheduled passenger flights between the two countries. According to ch-aviation capacities data, British Airways now offers 38.12% of the weekly available seats, followed by Air India at 33.58%, Virgin Atlantic at 17.11%, Vistara at 5.6% and Air Canada at 5.58%. Notably, Tata Sons owned Air India and Vistara are expected to merge within 12 months.<br/>

Air New Zealand had the nonstop market between Auckland and New York all to itself for all of five months last year. Then, as a precursor to its own nonstop flights from Sydney, Qantas Airways announced plans to join it on the route amid a surge in longhaul travel demand in both Australia and New Zealand. The competition, however, does not appear to concern Air New Zealand CEO Greg Foran. When asked in an interview earlier in January if the new Qantas route worried him, his response was: “Not particularly.” The same applied to Qantas partner American Airlines’ new nonstop to Auckland from Dallas-Fort Worth that began in October. “We’re expecting that,” Foran said. “We’re used to competition. It’s our home base. We’ll protect that and do what we need to, but I think it’s fair to say that we will see some new entrants come in.” It’s good that Air New Zealand is unconcerned and prepared for new competition, particularly from North America. Delta Air Lines President Glen Hauenstein told staff last week that the carrier will launch a new Auckland nonstop from Los Angeles later this year as part of the recovery of its Asia-Pacific business; the route would mark the first time in the Atlanta-based carrier’s history that it has served New Zealand. The competitive changes are standard for the airline industry. Auckland Airport CEO Patrick Strange noted in October that there is “a lot more passenger demand than there [are] operating aircraft to fly them.” And, when demand outstrips capacity in an industry that abhors such an imbalance, airlines will add flights. That is, airlines that have both the aircraft and staff, which are no small orders in this resource-strained recovery. New Zealand is in the midst of a strong international travel rebound. The country only fully reopened its borders in August after more than two years of pandemic-related closures and restrictions. The response has been robust pent-up travel demand. That prompted Air New Zealand late last year to raise its profit outlook for the six months ending in December by as much as NZ$95m ($61m) to NZ$295-325m. “We’ve rebounded strongly,” Foran said, adding that this is true across its geographic segments, from domestic New Zealand to Australia and longhaul. “Customers are out in numbers, and they’re very keen to travel.”<br/>