What happened

United Airlines Holdings (UAL -4.57%) easily beat analyst expectations in the third quarter, and management voiced considerable optimism about not only the current quarter but 2023 as well. Investors took notice, sending shares of United up 32.4% for the month of October, according to data provided by S&P Global Market Intelligence.

So what

Airline investors went into earnings season confident the third quarter was strong, but anxious about what airline executives see up ahead. Historically, periods of rising interest rates and a slowing economy have been tough on airlines. Consumers and businesses looking to cut costs can more easily defer a plane ticket than they can their electric bill.

United not only delivered on third-quarter results but gave the "all clear" about the quarters ahead. The airline reported quarterly earnings of $2.81 per share on revenue of $12.88 billion, beating the consensus estimate of $2.27 per share in earnings on sales of $12.75 billion.

The airline said it expects its pricing power to stay firm through year's end, forecasting a fourth-quarter operating margin higher than the same three months of 2019. And on a post-earnings call with investors, CEO Scott Kirby said that "we're so optimistic about 2023 and the longer term, despite the economic challenges."

United appears to be preparing for growth. The company is rumored to be weighing proposals from Boeing and Airbus for a massive order of more than 100 wide-body aircraft.

Now what

The quarter was solid and certainly justified some sort of a stock gain. But it was likely Kirby's optimism that really fueled the stock's push higher. He said that he believes there has been "a permanent structural change in leisure demand because of the flexibility that hybrid work allows," implying that the airline industry might be breaking free from its historically cyclical nature.

More work flexibility means more opportunities to travel during what have traditionally been off-peak months for the airlines, potentially smoothing out the industry's choppy revenue flows. In 2022, with significant pent-up travel demand following the pandemic, it has meant that even normally quiet months like September have seen mid-summer demand.

Investors should remain at least a bit skeptical anytime a CEO is talking about a permanent change. It's far too soon to know whether the pendulum will eventually swing back on hybrid work, and it's dangerous to say that "this time is different."

But in Kirby's defense, United's results year to date and its guidance for the rest of the year would suggest that, at least right now, this time is indeed different. For airline investors starved for good news due to the pandemic, the comments were viewed as a green light to rush in and buy the shares.