US airlines sound bullish on travel demand despite recession risk

US airlines on the back of strong financial results remain upbeat about travel demand, even as economists and analysts say the risk of an economic recession has gone up. United and Delta reported higher-than-expected quarterly earnings on resilient consumer demand, while American Airlines lifted its profit outlook. Carriers are enjoying the strongest travel demand since the start of the COVID-19 pandemic, boosted by reopening of closed borders, a strong U.S. dollar and rising corporate travel. While recession fears have sparked concerns about consumer spending, airline executives say travel demand is not likely to wane any time soon. They also point to staffing and aircraft shortages across the industry, which are expected to persist and limit capacity growth, underpinning pricing power carriers currently enjoy. "The supply-demand dynamics are different than they've ever been in my career," United CE Scott Kirby said on a call to discuss Q4 results released on Tuesday. "I realize there's a lot of investor skepticism on that, but every data point keeps demonstrating it over and over again." United forecast at least a quadrupling in profit for 2023, while Delta expects to nearly double its full-year earnings. Booming demand has helped airlines mitigate higher fuel and labor costs through ticket price increases. Any slowdown in consumer spending would make it harder for carriers to hit their forecast targets.<br/>