UAL Filing Notes Lower Q3 Business Demand

"We're not currently seeing a reduction in business demand," United Continental Holdings CEO Jeff Smisek last Thursday declared during an earnings call. The operative word is currently, since a United filing with the Securities and Exchange Commission that same day referred to "reduced demand from business travelers in the third quarter of 2011."
A spokesman confirmed the carrier did see a reduction in business traffic during the third quarter, but apparently that has not steepened since Sept. 30. United would not specify the magnitude of the reduction, nor would it elaborate on why it declined.
One possible scenario is that the carrier was harder hit than competitors by the fall in demand from the banking sector, a trend confirmed during quarterly earnings calls by Delta Air Lines and US Airways.
Claiming United's "network tends to occupy Wall Street, for lack of a better term, more than most of [its] competitors," JP Morgan analyst Jamie Baker inquired as to the impact on the carrier of the sector's slowing demand. United executive vice president and chief revenue officer Jim Compton acknowledged "softness" in financial services, but did not elaborate. Meanwhile, Compton did not see a slowdown in the pharmaceutical or energy segment demand.
Furthermore, United claims it isn't seeing ongoing reductions, and expects a "stable environment" for corporate client demand in 2012, as most corporations surveyed by the carrier are "planning on being relatively like 2011 to up slightly," according to Compton.
While corporate demand fell in the third quarter, corporate yield, a representation of average fare, was up 13 percent year over year. Corporate revenue grew too, the carrier reported.
Back to Smisek's comments, the spokesman elaborated, "He was really intending to convey what the future outlook is, and we're not seeing any decline in any sort of material way. The context was also, we're reading about concerns about a recession and concerns for demand reduction, but we're just not seeing that."