United CEO says business travel has ‘plateaued’ but revenue is still rising

Business travel demand has “plateaued” but revenue continues to rise thanks to strong demand and capacity constraints, United Airlines CEO Scott Kirby told CNBC on Tuesday.

Major companies, many in tech, have announced plans to cut back on spending, like business travel, or even lay off workers. San Francisco is one of United’s major hubs, along with Newark, New Jersey, Houston, Washington, D.C., and its home base of Chicago.

“It feels like business travel, and this probably is indicative of pre-recessionary kind of behavior, has plateaued even though our total revenues are still going up,” Kirby said in an interview with CNBC’s “Squawk Box.”

Kirby said the carrier isn’t seeing a recession in its data but forecasts a “mild recession induced by the Fed.”

“If I didn’t watch CNBC in the morning … the word ‘recession’ wouldn’t be in my vocabulary, just looking at our data,” he said.

In October, United forecast another profit for the last three months of the year thanks to strong demand. At the same time a lack of available aircraft and trained pilots have driven up airfare across the industry, helping return airlines to profitability.

United’s Kirby reiterated that hybrid work models are shifting travel patterns to give workers that “have always had plenty of disposable income” the ability to travel since they’re not “tethered to their desks.”

Retailers and travel companies are battling for consumer spending this holiday season, as households face rising costs for everything from housing to groceries. Walmart CEO Doug McMillon on Tuesday said consumers are spending on travel because many were unable to take trips during the pandemic. “They’re spending that money to do that because it’s a priority,” he said on “Squawk Box.”