United Airlines is starting to reap benefits from its efforts to build its corporate share and believes that growth will drive revenue benefits in 2020.
Company chief commercial officer Andrew Nocella recently told analysts and investors that United’s sales team had “been busy signing up new corporate accounts totaling over 500 year-to-date, a record number for United so far”.
Mr Nocella explained the result as a mix of new customers and those that had left United several years ago, “but quite frankly, a lot of these, the disproportion of share are brand new customers”.
He explained that some of those customers were flying on United without a corporate deal, but now they are signed up under a corporate agreement “where we can provide them the appropriate discounting being a bigger share of their spend”.
United remains bullish in the progress it has made in the corporate sales front and believes “that a lot of that activity in terms of the revenue shows up in 2020 and beyond”, Mr Nocella said.
Overall, Mr Nocella explained that corporate volumes were steady, but not growing rapidly. As the airline enters the fourth quarter, he said that leisure yields are pretty strong.
“I would always say that I’ve never seen a bigger disconnect between the global headlines in terms of the economy and its potential impact on travel”. Mr Nocella remarked.
He stated that United’s Latin American markets were remaining strong, and in the fourth quarter Europe is likely to be its weakest performer, “but also still doing well from a P&L perspective”.
United’s passenger unit revenue forecast for the fourth quarter is flat to an increase of 2%. “I couldn’t be more happy about where we stand and the outlook for Q4 I think looks really solid”, Mr Nocella said.
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