Why airlines are so bullish on Europe right now
22.01.2025 - 21:39
/ insider.com
/ Glen Hauenstein
/ London Heathrow
/ Delta Air Lines
/ United Airlines
/ Andrew Nocella
Airlines say Europe remains among the biggest money-makers going into 2025 as people eagerly flock to more international destinations.
United Airlines and Delta Air Lines said in recent earnings calls that they are deploying more seats than ever to Europe to take advantage of the booming travel demand, which has remained strong since the COVID-19 pandemic halted overseas vacations.
In the fourth quarter of 2024, United's passenger revenue to Europe increased 9.5% compared to 2023, with just a 2.3% increase in seat capacity.
Delta saw a 4% increase in transatlantic passenger revenue during the same period, despite a 2% reduction in capacity. (Delta's figures include Europe as well as half a dozen destinations in Africa and the Middle East.)
Both airlines have increased their planned transatlantic presence further into 2025, operating more than 100,000 flights total between the two, well above prior years according to data from Cirium.
Andrew Nocella, United's executive vice president and chief commercial officer, said during Wednesday's earnings call that Europe is becoming a "year-round destination" after being a less valuable revenue stream during off-peak months in previous years, like between January and March.
"Now we're seeing a totally different result, where people are willing to go on a Southern European vacation," he said. "And that really helps de-seasonalize Europe."
Nocella later said United expects quarter one to boast the best transatlantic financial performance in its first-quarter history.
He added that stronger hub connectivity with Star Alliance partner Lufthansa in Germany and money-making business traffic returning to London Heathrow are also helping United across the Atlantic.
Delta expressed a similar sentiment about Europe's desirability as a year-round destination for US travelers, specifically noting the strong dollar's additional buying power and the smaller crowd sizes compared to peak holiday periods.
"You go to a restaurant in New York and then go to a restaurant in Europe, you'll see a vast difference in the bill," Delta president Glen Hauenstein said in the airline's January 10 earnings call. "This is a great time to travel to Europe. People are seeing that."
The Atlanta-based carrier also said it does not believe strong off-peak season demand for transatlantic flights this winter will eat into consumers' appetite for summer travel.
Bernstein analyst David Vernon maintained a buy rating for United following its earnings report, saying international flying and premium services are particularly driving revenue.
CFRA Research analyst Ana Garcia said the firm expects United to see continued profitability. She said earnings are "buoyed by network optimization and operational