Airlines point to strong consumer demand in second quarter earnings calls

As Wall Street pushes back its recession calls, airlines are the latest industry to flex a resilient consumer and robust demand.

"The demand environment remains strong," United Airlines chief commercial officer Andrew Nocella said on the company's earnings call Thursday. "September and October look particularly strong relative to both 2019 and July and August."

American Airlines (AAL) reported record second quarter revenue of $14.1 billion on Thursday morning, just about twelve hours after United Airlines (UAL) boasted record earnings per share of $5.03. Last week, Delta Air Lines (DAL) reported record revenue for the second quarter of $14.6 billion.

"What we see in our whole bookings is really more of the same that we've been seeing all year," Delta CEO Ed Bastian told Yahoo Finance. "Our international bookings and demand look really strong, so I think we're looking at a very, very strong Q3, as indicated by our guidance, and I think we'll have a strong Q4 as well."

Bastian continued: "Our consumers have the means. They have the interest, and we're doing the very best job to provide them a reliable service so we can get them to where they need to be."

American Airlines CEO Robert Isom echoed the positive tone on Thursday.

"You'll see that we actually raised the mid-point of our full-year guide by a quarter," Isom told investors during the company's earnings call. "It's indicative of our belief that the economy is strong, demand is strong."

Despite three earnings beats from the major air carriers and increased full-year guidance, American Airlines stock was under pressure on Thursday, tumbling as much as 6%.

"The [third quarter] revenue guide was below our consensus expectations and likely to further fuel investor concerns on the domestic market," Raymond James managing director Savi Syth wrote in a note on Thursday.

Broadly, consumers are still searching for flights more than in 2019 too. Traffic to US airline sites was 33% above 2019 levels during the week of July 7-July 14, per an analysis from Jefferies published Wednesday.

TSA security checkpoints are showing that more people taking to the skies. The number of passengers passing through TSA has teetered near or above 2019 levels throughout the summer.

But airline stocks, which are still well off their pre-pandemic trading levels, haven't fully reflected the optimism.

Notably, airlines are still struggling to return to normal staffing and schedules. The varying staffing levels have hampered the airlines as backlogged schedules have led to flight delays and cancellations.

"We're concerned [about delays] but not as concerned as we would be if the revenue environment was slightly different," TD Cowen senior research analyst Helane Becker told Yahoo Finance Live on July 13.