Latest news with #premiumtravel
Skift
3 days ago
- Business
- Skift
Indian Travelers Upgrade to Premium Despite Fewer Trips
Travel disruptions due to unforeseen events may have led to fewer bookings among Indians, but they are making up for it by spending more for the premium experience of travel. The demand for premium travel to and from India is increasing, according to data shared by travel brand Trevolution Group. The company noted that despite lower volumes on outbound booking from India in the first half of 2025, its gross total bookings reached $68.36 million, up 6% from last year. This increase, it said, was driven primarily by higher spending and a greater share of premium-class purchases. 'The demand for business class bookings increased by 27.12%, while economy class demand saw a modest 0.78% rise, reinforcing the trend toward value-added, premium travel options,' the company said in a statement. For outbound travel from India, business class travel surged by 17.6%, 'pointing to a higher concentration of corporate and high-net-worth travelers.' 'We are now seeing more deliberate, higher-value travel to and from India, especially in business class,' said Alex Weinstein, the founder of Dyninno Group of Companies. 'The demand for trip protection and comfort is growing, as well as the demand for secondary hubs. This shows the evolving mindset of the Indian traveler.' The Inbound Travel Story: The overall surge in gross total bookings, however, was driven by inbound travel – which increased from $50.29 million to $56.10 million. According to Trevolution, this showed 'rising consumer spending and sustained interest in long-haul and purpose-driven travel to India.' It's worth noting here that expat Indians visiting friends and relatives form 20% of the numbers for inbound. The group issued over 39,000 airline tickets to India in the first half of 2025. This was a 4.21% increase over th
Japan Times
5 days ago
- Business
- Japan Times
U.S. airlines reap rewards from premium travel strategy amid demand slump
U.S. airlines doubled down on high-end travel after the COVID-19 pandemic to drive up profits and reduce their vulnerability to economic swings. The strategy is paying off as the margins of carriers selling premium seats have held up despite a slump in overall travel demand. Strong demand from affluent travelers is helping airlines offset a pullback in spending by price-sensitive customers. Delta Air Lines last week reported a 5% year-on-year jump in its second-quarter premium ticket revenue, compared to a 5% decline in main cabin revenue. The 10-percentage-point gap was the widest since the pandemic, helping it post a double-digit margin in the April-June quarter. Similarly, premium cabin revenue helped United Airlines mitigate the financial hit from operational constraints at Newark airport near New York City — one of its largest hubs — and increase its earnings in the latest quarter. United's premium revenue rose 5.6% in the June quarter from a year ago. Its overall passenger revenue grew just 1.1%. The industry saw a similar trend in the first quarter when President Donald Trump's sweeping tariffs raised the specter of an economic recession, hammering airline bookings. "Premium capacity remains resilient," said United's Chief Commercial Officer Andrew Nocella. Airline executives have attributed the resilient demand for premium travel to the healthy financial conditions of U.S. households with earnings of $100,000, which account for 75% of air travel spending. While an April selloff in financial markets after Trump announced tariffs raised the risk of undermining that demand, a sharp rebound in U.S. stocks since then has eased those concerns. "Our core consumer is in good shape and continues to prioritize travel," Delta CEO Ed Bastian said last week. Trouble in the main cabin In contrast, lingering uncertainty about the broader economy and rising living costs have taken a toll on demand from less-affluent customers. Bank of America data shows, while spending by middle- and higher-income households held up in June, lower-income household spending turned negative. Low-fare carrier JetBlue Airways last month told staff that it was planning new cost-cutting measures as soft demand made achieving a breakeven operating margin in 2025 "unlikely," according to an internal memo. Summer travel season tends to be the most profitable for carriers. But weak demand for main cabin seats has forced airlines to offer sales to fill planes. Discount carriers such as Frontier and Spirit Airlines are aggressively slashing flights to prevent more discounting pressure. Airline executives say premium cabins have become "the profit differentiator" in the industry. Since premium travelers tend to be less price-sensitive, carriers expect them to be less affected by economic shifts, making their spending more stable and offering a buffer in a downturn. At Delta, premium revenue accounted for 43% of passenger revenue in the June quarter, up from 35% in 2019. It has helped the Atlanta-based carrier become a pre-tax margin leader post-pandemic. The company expects its revenue from premium cabins to surpass that from main cabins in 2027. Diversified revenues, including from premium cabins, have helped shares of Delta and United outperform the broader industry in the past two years. Encouraged by the payoff, carriers are further ramping up investments to make their premium offerings more attractive. United has unveiled new premium suites with privacy doors on its new Boeing 787-9 planes. The suites will have 27-inch screens, luxury skincare amenities, and caviar and wine pairings. Alaska Airlines is on track to increase the share of premium seats on its flights to 29% by next summer from 26% currently. Risk of supply glut Faced with weak margins, budget airlines are now also trying to tap into the high-end market. JetBlue, which has reported a profit in just two of its last nine quarters, is putting first-class seats on domestic flights and opening its first airport lounges in New York and Boston. Frontier is retrofitting the first two rows of its aircraft with first-class seats. Spirit, long known for its no-frills service, is seeking to rebrand itself as a premium airline to turn around its business. The number of premium seats in the U.S. domestic market has increased by 14% since 2019, more than three times the growth in main cabin seats, according to data from Visual Approach Analytics. The rush to add premium seats is hampering aircraft deliveries. It also risks causing a supply glut, hurting pricing power. But Alaska CEO Ben Minicucci downplayed those concerns, saying premium travel is more about an experience than a seat. "We see it as an end-to-end premium experience that people will pay for and people expect," Minicucci said in an interview.
Yahoo
7 days ago
- Business
- Yahoo
United Airlines' Premium Focus And Cost Discipline Set Stage For Q4 Recovery
United Airlines Holdings, Inc. (NASDAQ:UAL) is charting a steady course forward with a sharpened focus on premium travel, operational efficiency, and global expansion. Bank of America Securities analyst Andrew G. Didora reiterated the Buy rating on United Airlines Holdings, raising the price forecast from $90 to $108. On July 16, the airline company reported second-quarter adjusted earnings of $3.87 per share, beating analyst estimates of $3.77 per highlights that United Airlines' focus on premium travel, international routes, and loyalty programs is supporting industry-leading margins. With encouraging signs of domestic demand recovery in early July and improved capacity trends expected in the fall, unit revenue performance is projected to rebound, nearing flat in the fourth quarter of 2025 from a 4% decline in the second quarter. On the cost side, the analyst sees that the trends are improving, prompting a revision of estimates toward the higher end of the firm's guidance for the third quarter and full-year 2025. Per Didora, the second half unit cost growth is expected to remain manageable at around 2.5%, lower than the previously projected 3.5%-4.0% range. This outlook remains positive despite the likelihood of a new flight attendant contract, which could create a 100bps cost headwind on an annualized basis. Didora views this as a solid setup heading into 2026, where unit costs are also expected to grow by about 2.5%. Given the company's historical conservatism and its second-quarter earnings beating guidance despite a $0.50 disruption impact from Newark, Didora has raised expectations. Third quarter 2025 EPS is now projected at $2.70, the higher end of the guided range of $2.25–$2.75. The full-year 2025 EPS estimate is lifted to $10.50 from $10.00, nearing the top end of the $9–$11 outlook, while 2026 EPS is raised to $12.40 from $11.41, implying nearly 20% year-over-year growth. Price Action: UAL shares are trading higher by 0.41% to $91.59 at last check Friday. Read Next:Photo by Miguel Lagoa via Shutterstock Latest Ratings for UAL Date Firm Action From To Jan 2022 Raymond James Maintains Outperform Jan 2022 Barclays Maintains Equal-Weight Sep 2021 Morgan Stanley Maintains Equal-Weight View More Analyst Ratings for UAL View the Latest Analyst Ratings UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? UNITED AIRLINES HOLDINGS (UAL): Free Stock Analysis Report This article United Airlines' Premium Focus And Cost Discipline Set Stage For Q4 Recovery originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fast Company
18-07-2025
- Business
- Fast Company
Delta and United are using this strategy to survive the overall slump in travel demand
U.S. airlines doubled down on high-end travel after the pandemic to drive up profits and reduce their vulnerability to economic swings. The strategy is paying off as the margins of carriers selling premium seats have held up despite a slump in overall travel demand. Strong demand from affluent travelers is helping airlines offset a pullback in spending by price-sensitive customers. Delta Air Lines last week reported a 5% year-on-year jump in its second-quarter premium ticket revenue, compared to a 5% decline in main cabin revenue. The 10-percentage-point gap was the widest since the pandemic, helping it post a double-digit margin in the April-June quarter. Similarly, premium cabin revenue helped United Airlines mitigate the financial hit from operational constraints at Newark airport near New York City — one of its largest hubs — and increase its earnings in the latest quarter. United's premium revenue rose 5.6% in the June quarter from a year ago. Its overall passenger revenue grew just 1.1%. The industry saw a similar trend in the first quarter when President Donald Trump's sweeping tariffs raised the specter of an economic recession, hammering airline bookings. 'Premium capacity remains resilient,' said United's Chief Commercial Officer Andrew Nocella. Airline executives have attributed the resilient demand for premium travel to the healthy financial conditions of U.S. households with earnings of $100,000, which account for 75% of air travel spending. While an April selloff in financial markets after Trump announced tariffs raised the risk of undermining that demand, a sharp rebound in U.S. stocks since then has eased those concerns. 'Our core consumer is in good shape and continues to prioritize travel,' Delta CEO Ed Bastian said last week. TROUBLE IN MAIN CABIN In contrast, lingering uncertainty about the broader economy and rising living costs have taken a toll on demand from less-affluent customers. Bank of America data shows, while spending by middle- and higher-income households held up in June, lower-income household spending turned negative. Low-fare carrier JetBlue Airways last month told staff that it was planning new cost-cutting measures as soft demand made achieving a breakeven operating margin in 2025 'unlikely,' according to an internal memo seen by Reuters. Summer travel season tends to be the most profitable for carriers. But weak demand for main cabin seats has forced airlines to offer sales to fill planes. Discount carriers such as Frontier and Spirit Airlines are aggressively slashing flights to prevent more discounting pressure. Airline executives say premium cabins have become 'the profit differentiator' in the industry. Since premium travelers tend to be less price-sensitive, carriers expect them to be less affected by economic shifts, making their spending more stable and offering a buffer in a downturn. At Delta, premium revenue accounted for 43% of passenger revenue in the June quarter, up from 35% in 2019. It has helped the Atlanta-based carrier become a pre-tax margin leader post-pandemic. The company expects its revenue from premium cabins to surpass that from main cabins in 2027. Diversified revenues, including from premium cabins, have helped shares of Delta and United outperform the broader industry in the past two years. Encouraged by the payoff, carriers are further ramping up investments to make their premium offerings more attractive. United has unveiled new premium suites with privacy doors on its new Boeing 787-9 planes. The suites will have 27-inch screens, luxury skincare amenities, and caviar and wine pairings. Alaska Airlines is on track to increase the share of premium seats on its flights to 29% by next summer from 26% currently. RISK OF SUPPLY GLUT Faced with weak margins, budget airlines are now also trying to tap into the high-end market. JetBlue, which has reported a profit in just two of its last nine quarters, is putting first-class seats on domestic flights and opening its first airport lounges in New York and Boston. Frontier is retrofitting the first two rows of its aircraft with first-class seats. Spirit, long known for its no-frills service, is seeking to rebrand itself as a premium airline to turn around its business. The number of premium seats in the U.S. domestic market has increased by 14% since 2019, more than three times the growth in main cabin seats, according to data from Visual Approach Analytics. The rush to add premium seats is hampering aircraft deliveries. It also risks causing a supply glut, hurting pricing power. But Alaska CEO Ben Minicucci downplayed those concerns, saying premium travel is more about an experience than a seat. 'We see it as an end-to-end premium experience that people will pay for and people expect,' Minicucci said in an interview.
CTV News
18-07-2025
- Business
- CTV News
U.S. airlines reap rewards from premium travel strategy amid demand slump
United Airlines jets are parked on the tarmac at Newark Liberty International Airport, Tuesday, July 22, 2014, in Newark, N.J. (AP / Julio Cortez) CHICAGO — U.S. airlines doubled down on high-end travel after the pandemic to drive up profits and reduce their vulnerability to economic swings. The strategy is paying off as the margins of carriers selling premium seats have held up despite a slump in overall travel demand. Strong demand from affluent travelers is helping airlines offset a pullback in spending by price-sensitive customers. Delta Air Lines last week reported a five per cent year-on-year jump in its second-quarter premium ticket revenue, compared to a five per cent decline in main cabin revenue. The 10-percentage-point gap was the widest since the pandemic, helping it post a double-digit margin in the April-June quarter. Similarly, premium cabin revenue helped United Airlines mitigate the financial hit from operational constraints at Newark airport near New York City - one of its largest hubs - and increase its earnings in the latest quarter. United's premium revenue rose 5.6 per cent in the June quarter from a year ago. Its overall passenger revenue grew just 1.1 per cent. The industry saw a similar trend in the first quarter when President Donald Trump's sweeping tariffs raised the specter of an economic recession, hammering airline bookings. 'Premium capacity remains resilient,' said United's Chief Commercial Officer Andrew Nocella. Airline executives have attributed the resilient demand for premium travel to the healthy financial conditions of U.S. households with earnings of US$100,000, which account for 75 per cent of air travel spending. While an April selloff in financial markets after Trump announced tariffs raised the risk of undermining that demand, a sharp rebound in U.S. stocks since then has eased those concerns. 'Our core consumer is in good shape and continues to prioritize travel,' Delta CEO Ed Bastian said last week. Trouble in main cabin In contrast, lingering uncertainty about the broader economy and rising living costs have taken a toll on demand from less-affluent customers. Bank of America data shows, while spending by middle- and higher-income households held up in June, lower-income household spending turned negative. Low-fare carrier JetBlue Airways last month told staff that it was planning new cost-cutting measures as soft demand made achieving a breakeven operating margin in 2025 'unlikely,' according to an internal memo seen by Reuters. Summer travel season tends to be the most profitable for carriers. But weak demand for main cabin seats has forced airlines to offer sales to fill planes. Discount carriers such as Frontier and Spirit Airlines are aggressively slashing flights to prevent more discounting pressure. Airline executives say premium cabins have become 'the profit differentiator' in the industry. Since premium travelers tend to be less price-sensitive, carriers expect them to be less affected by economic shifts, making their spending more stable and offering a buffer in a downturn. At Delta, premium revenue accounted for 43 per cent of passenger revenue in the June quarter, up from 35 per cent in 2019. It has helped the Atlanta-based carrier become a pre-tax margin leader post-pandemic. The company expects its revenue from premium cabins to surpass that from main cabins in 2027. Diversified revenues, including from premium cabins, have helped shares of Delta and United outperform the broader industry in the past two years. Encouraged by the payoff, carriers are further ramping up investments to make their premium offerings more attractive. United has unveiled new premium suites with privacy doors on its new Boeing 787-9 planes. The suites will have 27-inch screens, luxury skincare amenities, and caviar and wine pairings. Alaska Airlines is on track to increase the share of premium seats on its flights to 29 per cent by next summer from 26 per cent currently. Risk of supply glut Faced with weak margins, budget airlines are now also trying to tap into the high-end market. JetBlue, which has reported a profit in just two of its last nine quarters, is putting first-class seats on domestic flights and opening its first airport lounges in New York and Boston. Frontier is retrofitting the first two rows of its aircraft with first-class seats. Spirit, long known for its no-frills service, is seeking to rebrand itself as a premium airline to turn around its business. The number of premium seats in the U.S. domestic market has increased by 14 per cent since 2019, more than three times the growth in main cabin seats, according to data from Visual Approach Analytics. The rush to add premium seats is hampering aircraft deliveries. It also risks causing a supply glut, hurting pricing power. But Alaska CEO Ben Minicucci downplayed those concerns, saying premium travel is more about an experience than a seat. 'We see it as an end-to-end premium experience that people will pay for and people expect,' Minicucci said in an interview. --- Reporting by Rajesh Kumar Singh; Editing by Rod Nickel
