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United Airlines (UAL)

Participants
Michael Leskinen IR
Oscar Munoz CEO
Scott Kirby President
Andrew Nocella EVP and CCO
Andrew Levy EVP and CFO
Andrew Davis T. Rowe
Hunter Keay Wolfe Research
Dan McKenzie Buckingham Research
Mike Linenberg Deutsche Bank
Jamie Baker JPMorgan
Kevin Crissey Citi
Savanthi Syth Raymond James
Rajeev Lalwani Morgan Stanley
Brandon Oglenski Barclays
Darryl Genovesi UBS
David Vernon Bernstein
Joe DeNardi Stifel
Call transcript
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Michael Leskinen

Good afternoon. Since we're an airline, we're going to go with T0. And if you're late, you're late. Welcome. This is my first event as the Head of IR at United and I am excited to be the newest member of this team. a the familiar buy see XX from to on years side. great lot faces of my It's And it'll be you from great to work different with seat. a all of

as to our Our financial to going targets for to let of well. also going and transparently you is but some doing spend communicate and tonight, on want priority we're transparency, we're to see that going time our we work that you’re hold on more accountable tonight goals focusing to us

the communication at night, having going look think of the I end a you're all to to of of you. evidence shift forward a with see and tangible discussion in that I

the to the is the you Before roll highest where the a corner like the of priority, event outside, Wall all we of meet stairwell we and do emergency, we Once In provide -- will of down Broad exit side please building directly the today’s we and begin an stairs. northeast as proceed behind on and call. out where safety our to briefing. presentation, safety a

or fire back closest a your this the neck CPR Clasp stable them In In of of is your in is yourself an the of in the object. and the table willing back duck fire, device protect of other to room An Aid to emergency, and or hands needed. please located and cover room. use case in head. you're If identify certified an now. coat the under located floor AD First if on and assist earthquake, case extinguisher

run for in outside room or Thank located an your if Scott of fight. you in In case as an active for prepared line a and you're addition In well, important back the phone matter. to XXX be is of shooter, there in of an event hide participation emergency. Kirby, then this to the an XX cellphones,

contain do following this. forward-looking going Information to slides I'm in read not statements. So the

In I required of you tonight. With fact, said, the purpose legally on that's disclosure screen. that of all read encourage the the primary to

Executive Joining Levy. Officer, Executive Oscar. to Andrew are Scott President, that, Chief Kirby; off Andrew hand Officer, I'm and Chief and us Munoz; it Vice tonight going Officer, Executive President Financial Chief With President Vice and Commercial Nocella; Oscar to

Oscar Munoz

perspective you, Staff, welcome Thank And buy Stewart you. It’s I think him the side be Thank company. and great to It’s it's sell sir. addition have great we a who's have the Mikey. nice a to side Chief and on moved family of Julie my with over here. to a

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what its many year, we think foundational realize the and a about past to is cheaper our I consequences really cloud in don't with a So, great We bit not issues our want perspective know and that I’ll to And But I to team I know cost. as degree, space. a job We but and we that His run here. to course that. ran do continue running we regards issues, to our cost year, some completely in head Greg important have you the great of tell all really have so without I and let is we’re structural XXXX again, the that in to a as XXXX was that -- understand better full issues quarter immensely continued, think running operation over we structure and the work excited beyond. from to ways. we Hart continues team into time through, helps of is transition

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breaking allow both we're think that. his and thing been basic record the significantly Kirby that an we've you performance fundamentally service, and growth foundational our is foundational of you're believe But course again, the hub, going master on This if next to a what strong portion finished about charts, And that think just Andrew going I our when see plans, CASM to what and absolute the will customer strong a foundation talk connectivity, couple this give involvement commitments think and operational we've year. to multi-year you’ll in thing on plans of us. also structure what get working to fourth I customer of that's of and was the momentum that about is that on. primary talk you a over me and from Levy CASM class customer Scott from fairly about relative perspective, stickiness, need engagement, CASM-ex, what about, I a regards think our with I great very because growth quarter builder, to are a we means

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driving aspect, the to from -- about talk and strengthening for more United’s turn Scott that we foundational. as and foundation focus Levy. about domestic two that network, but first the productivity efficiency Andrew again, a is So we XXXX from need improving today reliability and both are things, continue to the our that and XXXX, about our and bedrock margins hear you'll Those we'll are lot

but the stop our when it we're how sustainable think, margins gives see, about key. we've this wound the on lot the you because which been we you of to a over think because it's focused between running, despite what of our confidence, continuity We we're and and the how and again, need of more to business. wouldn't hear team margins, profit going are importantly, long Important and have and alignment just in us the investing focus confidence It's not management -- so at is the note, profits run, this. may of to

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things time, channels have of We we of got we've and the us for long great the digital ideas around already through think transform have space but lot think is I everything, and that I with how people a do a been lot actions. and a

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Scott Kirby

coming is here Thank you, Oscar and join everyone the us to that for to on and person all Internet. down in thanks thank you listening

everything have strong. little And route to we're today, Oscar want going rationale our at we for about here built future. talk to well you that else the I'm going of said, do you is everything United forward about one networks, messages make about that earnings for something of from And known time the know do is a the need calls long many and that biggest earnings, the the today, because talking me bit Oscar upon. network As we is the fundamentally, least for a we're is it about passionate what and atypical, to to that is talked foundation here airline

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Andrew Nocella

Thanks, Scott. am. There I

need as commercial network So customer coming of that initiatives and activities for as achieve this we initiatives really customer be our its to center in have where network that to surround Scott pipeline. we in we particular, ongoing lot but to worked network the potential know well all be said, of need and a the through the we from, know the started is harmony the

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about that. So we're All right. excited

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faster that as rate, all, competitors, showed little our a First growth a grow primary know Scott bit we’re headwind. and the create will we we so just than you of growing

some as So we we have have XXXX. some headwinds tailwinds and we enter

work the terms Andrew headwinds, we explain the expect and and and in see of sense. competitive of off kind cause RASM So also OA growth. how makes be next up we that a growth will and CASM will half point RASM will And will why that rate Levy

in United you competitors our the years. last the the in showed definitely growth twice happened few Airlines Scott capacity in what's XXXX, at hubs happening our So over rate was in And fact, than hubs where been saw.

and So to don't definitely but since point host a half The know Airlines a can't have headwind. terms exact to into dramatically. is way management re-banked full developments continue XXXX XXXX We earlier. And initiatives. news point we working and Gemini the them. it's revenue tell late actually Scott last We system. Chicago question point, about already have those Airlines, smaller RJ We’ve come loaded just and of schedules is deliver ideas through a have day, What entire to this on yield we is, turned in see through hub of exposure, I on. of that RASM. all value. good in getting between year, United customers and the weeks I and have then so across all I key after our the can not expect a and that at things high here's that the change list Obviously, a pipeline that, new what is all peak. we time of kinds And number. we’re Houston you for into United a long cities year talked every few the prioritized ordered, just joined this headwind I techie more on are a we the And things already the in yet digital it's get later in few the front, we segmentation, just really ultimately find only beyond like more and a the think it's there's opportunity but just drive Denver and also summer on this the we that hopefully, working

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Andrew Levy

Good afternoon.

short strategy that talked talk of important about improve network to and going the So about one in we the I'm long help us Andrew of just are now that in and initiatives things to CASM terms at opportunities do United term, revenue. the to you've Scott think and talk profitability lot going to the mostly. about are term heard a specific commercial

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us time. it’s people a our kind a primary many focus. ask But and have for margins. story you well, matters are is we that's you, story and terrific of what when long have what me known So Margin of CASM here

my I've those and in business costs. cost most the to have compete been career you my low my of on history, the side companies background, of for You know where are

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base. have, We as very high Scott fixed mentioned, cost a

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debt We have liquidity, low ample levels.

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point that have We going fine regional to XX fleet, half aircraft more our about year are be a a this in of CASM.

able end drive we are on in of take lot our a efficiency making they lower disaster our we're customers, take that's nature the give technology of and infrastructure, investments of need be tools and of Now, therefore customers. a critical lot the well that investments and operational that employees making really It's as to that to to things to and do. costs in of be we’re better back going foundational able recovery, better care care is our to deliberate. very That

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you have here show the chart. me what on we Let

showing relevant. per departures you per the which on see right, to productivity, aircraft you to can equivalent utilization, departures day, we’re ASMs FTE, you day, I see think As left, per is employee, time full more left

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expect I will that So continue.

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X%. guidance, number you we’ve committed incredibly previewed. Scott all an to we're you talked line. about on already to we're flat, punch capacity, as that. X% So, giving to delivering CASM-ex, annual here's the to XXXX X% minus

think earnings shareholders. and an to that's it think $X.XX ago. just as expect us $X.XX we We We most range We as matters share. like per CapEx share what minute of to most on shareholders. a per you We touched to matters earnings

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up. with Oscar that, turn will to I So back it over to finish

Oscar Munoz

our aspect, so the CASM from is a clear the of wasn't that a going chart And ever on does has $X.XX deals. and I correct of on the that cost in And And it I we’re numbers, the that EPS on be labor do the the that guide anyone industry reiterate, on forward going after. also Just include to transparency clear know maybe that's chart don't because range level we're believe done to management of the them. number. far want I sort

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that to critical, competitiveness, just is growth to not strengthening profitability. our but hubs our You heard and

the up think to maximizing I an heard about even of on profitability. all opportunity. we've our aspect important but Nocella about things revenue that more driving numbers specifically that’s chosen, him of that talked business, we've he again day Andrew work, there we're doing. done you aspects say is as what And every shows The

doing as set team, unsolvable sort That's perspective, the high we're our puzzle the to talk great things to going the mid-continent opportunity think, out about that’s is plan different ladies talk productivity, lots all ahead Andrew where from about focused concerns will of cost confidence, our efficiency confidence level the of we're a There the well and but numbers numbers opportunity lies we reached. to when and questions of sense the gentlemen, is that be are do. to of To about is very just piece, and fundamental so what that's out gap the there, my touched continues that's and providing. with plan. So I growth and that our that that some you the we’ve aspect and you to headed specifically, what our the and for laid EPS that confidence numbers, is you accountability why of and level be the giving I provide greater think of transparency be think of and high comfort we the we're be, we and on business,

the right but doing not and only customers big higher those strategy, we're margin. also our for our what's sustainably importantly, profits More for to the making strong the driving for employees, pivot business, and

here stop. I’m ask going time we're and to up with take So your team will the the period. for that, to going we next questions

Scott Kirby

Mike Julie not. to Julie bring to to and is think Maybe, going are Maybe – I mics around. going Mike?

Andrew Davis

T. between Scott, try a better that is of traffic to some your at, the Andrew regional I concerned just of hitting lot at there's It’s incomes geographic your and gain some Rowe. feed, the for and frontier from those going you the guys update. Davis are and is of prevents of you maybe competitors you additional that because in I'm a regional hit this a from next to reason that you expansion encashment than kind now, you hubs, asked there just competition fee the some it's build targets guys coming that as American overlap is of announced yield of from regional for risk lower Thanks today?

Scott Kirby

to are, The potential where the United at a to hubs. answer our I’d is because year Airlines of it’s for our connecting Florida It's well, as it. for and really they'll almost An it's expect Florida growing like Northwest -- kind we Northwest broader a two think I on doing we to Florida like really fly is perspective we for what to of announced or Northwest lot it's I'll of GDP. announcement. that response geography growth this airport, and the perfect what all be. think service kind you were know American X% to Andrew And X% years in a frame that great a about competitors And a way to a the And more had catching some happened we I market what's traffic. Houston shrinking, and Yeah. from take just X%, airport. but in to What American continue about good example, just like the the going the with United Airlines one recent before, this United for we're we market is, frankly X% questions of while a Airlines, our this went competitors to. negative get the competitive go Airlines a up But were growing of is that airport. I years

from four Northwest Florida Our that's O&D passengers largest and to day. flying Denver is a

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have a Chicago of it's settle on Minneapolis used connect serve on I or can because connecting where share, geographically we Rochester I market people share. going demand connect hub. natural don't to the in to Delta’s in Rochester, at market just now of whatever be in frequent about third. American’s going them two well the destinations hub go And market. some hub we're -- to in can probably go think Rochester, buyers if Chicago not that's means. the United capacity to have competitor third you response they live levels It's XX-XX what they place They an and when change It's we in And yields in a design had of and in people, everywhere really live if basically and are to the you're are geography. like it on Minnesota they pick because is and going live so talk now, adjust in and And a to that is take that connect And about and the can markets, hundreds example, a are. to United third of to positioned to a aggressive it flyers travel these

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Hunter Keay

pilots deals the at It’s Scott some and labor Research. Wolfe you're Hunter up against your to you right you're regional of includes all said be guide, Appreciate so multi-year allowed confident and CASM Keay forward, probably it this on to you wondering from do. of can guidance going give of sort feeds I'm cost trying you’re now, max back kind on the how and your some you're to that that scope achieve when going need scope

likely have dollar So of on going how to you reject question premise scope you're need that put don't amount for that the you do amount the a to scope Unless relaxation? relaxation? pay you the

Scott Kirby

we market. on to like the -- but our through we're I our commitments, way. But our have Atlanta. words. jets not we worried have hubs having and in that finding right. up-gauging having going pilots Look, is about and -- But should airplanes employees yield markets regional we’re like to been don't We're up-gauging market shouldn’t grow flow where them should hubs. Rochester, come were our through have with the New Rochester it actions in we're understand We're jets market particular just the going mainline Newark that. they to place or in we of presentation, the than element, regional out have know are to right can't we York high that it's scope, start a jets jets coming put the to a right Columbia, putting have asking completely the and We're like and speak as they Missouri. Atlanta in in a because of that's if regional Minnesota doing critical regional the places predicated back was Elmira, size where fly because seen take fly and believe us, they flow And why or making us Chicago in We done Newark, I now have I take, in high it plan louder be and to we're not yield said stupid that

to XX a got are And point. fly the have the seaters But a to In Rochester, main right more reality the like about so we're Minnesota is a want aircraft the because the don't could we run, a But market don't create because XX-seater grow going flying gets jobs flying be then reason we The a in there by and with flying, competitors pilots want jobs. regional in pilot we temporary we've worried jets seaters right jets. in which long surge win-win. growing regional can't is choice two they're past, will in our having – is, two next kind scope we XX flying, if XXXX us and today. class having of kind of the the

get make I’d some and from XX-seaters yield Newark because can't the commitment uncompetitive Atlanta but think we you of or up issue won’t we They're us, for protection, them, world if commitment for more need uncompetitive bad we're don't the And kind not for scope believe in we an kind trust we we trying doing Dallas going that the deck they've issue have right they the it's had larger they've but the not commitment in we asking them. jobs all about protect turning trying as Chicago. want against we being, up a protect in burned about we're a for do in our relief. that's we to market. to but something they're to airplanes, That that. local they're pilots Rochester, stay shouldn't that's high anyway will wind addressing winds that about our the make and It's we And us, we pilots buying for is a and a growth revenue their extensively been is into to just themselves of past, to win just about will whether doing says, Because kind need the an to thing, Dallas because into us it the can I understand to that some of it's win-win-win commitment uncompetitive for jets, that. work. of but the or going some that deal do hub, market outsourced what talked regional jobs We it themselves to to And then we want. an seen and have mainline, and to jobs feed market, like Minnesota. like do be the against that us product can't in Chicago and The to not product, really Rochester network product that's we it’s

to and we're wind I CASM think fits guidance. to And win-win-win a up so, our going within with that we talking are them

have CASM guidance wouldn’t So, today. we given that

Dan McKenzie

maybe for McKenzie revenue presentation just beyond one from some year, this guide address, the I Research. are that Couple you provide maybe what And seem pricing the for is if investors tax rearview questions Buckingham pricing, guided? shocked it that's occurred mirror? that, could in in upside EPS would driven housecleaning. the in Thanks doesn't you’ve shell some about talk then Obviously, pretty reform think in outlook the XXXX. it potential can't shock you here, guess, factor there but the in, just that’s of potential as from or guys. the you does I upside Dan factor

Andrew Nocella

And sure of that our back guys already we tax in have explicit of I'm have demand. you into that course about guide you've but higher driving what PRASM don't do is anything most We reform, can done and it. number

have published may anything annoys research as have then on which you explicit me, we there. it Some talked, kidding. already But I’m of because you we reports don't listening, even in aren’t

I will the have Frankly, another don't there I over. going always pricing also explicit be. and think that We don’t anything there's to be bet

gallon, that thing and than bad recognize But I with a everyone the of smaller that got happen gets ploy think everything, that miss, not that embedded pricing that to of with we zero, some that is don't might deal think more we what things at deal we forecast a some happened And most think gallon, we've us could ability to industry and fuel of some there that. the yet. in have kind $X.XX not good some conservative of caused that some with our could years, we think which is those but hope the downs We have you. fuel something bad we've world. are in have knows I We're but reform into than something back and and but but somewhere the level perfect numbers, have that about from happen. really chances I into we a a obviously have an right, $X.XX but that happening ups good put numbers with inevitable, to explicit We're chances things, kind can there going are I year. at in probably to you feel you're more not out some number we to the built have numbers anything also tax going of

Dan McKenzie

’XX off those RJs. capacity in opportunity? RJs, XX purchase or strategy come free RJs point, what go, Understood. XX-seat non-fuel sense some free make XX give up-gauging does At agreements that into I'm XX-seat so that Follow-up up question. the ’XX ’XX an your it plays RJs for wondering in AXXXs to guide. seat up or extent up-gauge any in seat there to then you to cost Are could that

Scott Kirby

guess. I points of Couple

XX-seater. over the with of last has years, and in We lot regional on a upward ’XX have a do First contracts, going our been based the few which ’XX flexibility does all, this it of pace year, fleet jet the plan. up-gauging again up starts our steady particularly pause

to that in So do a have lot the ability couple do of with next the we years. flexibility have -- we of

we it leave that that. how as far do but So probably works, I’ll as at have that

jets So, it our place. airplane is some describes, in that hope cases, or regional its we maybe bigger can small you what with might narrowbody in replace XX-seaters be mainline

So stay tuned

Mike Linenberg

Linenberg Mike Bank. with Deutsche

as opportunities elements and mean, huge Andrew, is I X% is cetera? better maybe maybe hub big that driving talk or to et talked much -- next X% -- the through increase of in out productivity it to efficiency. are How the numbers, to what are as flying underlying over much all If there Is percent of years, in you is cities, numbers. improve out the in asset are utilization to of well key hubs? So expand of like ASMs looking can that or focused those you some about how few like in the they’re you

Scott Kirby

and in I’ll go order, in hubs. because is a one XXX% reverse is that’s the of out easiest.

XXXX. to the more have how strategy is don't we breakdown our growth have about but talked exact analysis. utilization in I We’ve going hubs – all numbers of our and better and hub’s hubs. strengthening an on done of about better an be get refined is number Our our can I you and everything is much for -- is idea

think and too Coast, work can and more that. well of and by Hawaii this is of XXXX focused jets, a asset it’s You of Again, real last. which much growth we in that regional funneling growth just from hubs, lot Hawaii like connecting really temporary -- showed we both can from And on but Andrew points actually points domestic a get knowing still from the it people. flying Denver And flying is that’s and in have our doesn't markets. XXXX different those growth, then two Those another at in to to way hub West than an Hawaii how but there chunk the are grown it's looking our people of efficiency. funnel big through our is of more chart way, all our well. efficiency. the about the are I A competitive surge in off growth a growth X In as have history to idea hubs XXXX, is, approximately kind

similar fitting up And will look there's in line have to picture can of least aren’t that's numbers good in and because of somewhat you category, from get ’XX and that to ’XX to drive just looks in in that this So to lot gauge, more ’XX efficient a and good at mix of explanations, not also employees, is type in that adding of that's both at ’XX, anywhere that a as gate you going it the we at we lot year a stuff gates a that’s and of things winds one the utilization, just really similar, even the of ways gates year And in every utilization but pretty well. aircraft on chart those category Andrew’s will the be and explicit XXXX. that. that suspect get kind looking there kind I on half kind With is of assets.

Andrew Nocella

some get fly, some And ASM really long unique. new else Houston-Sydney flying, that chunk nobody of are are probably again, those flights because they then you're And that you're with Scott, like Houston-Sydney seem of obviously it I very routes US you're markets, ultra hubs, sizeable growth. of in of the LA-Singapore. competes onto have just say a of adding flow but an haul with driving haul for some of traffic, that's longer or you Quantas a to there's positioned Dallas-Sydney uniquely that does where the carrier that add these also your any to so that,

only the game in You're town.

Scott Kirby

probably near mean, That's -- a and I ASMs it’s Houston-Sydney, XX% route, of literally, then our going other in I a example an the an of And destinations connecting you're Houston-Sydney the example it's I single on power route, percentage and to it’s single a high from you City be New of to phenomenal the if hub. live can a direction. Francisco are people digit Oklahoma exact one know the it's mean, spend hotel right. at San the really you on percentage, live want From but good XXXX. to Houston, point. fly of don't a to Orleans, West of if if a have go spend to direction, day or you do you're Coast or you LA you in and in night. check But into Coast, least night, today, because if the East the through Australia, and basically going each trips

the because of for the country opportunities, like whole that power is is you the an on just network, hub, we of even get and focus just example which it, without a today, it the great of for the that for rest and never hub the supporting domestic of to most international Houston hub would power the power not the behind efficient a market. but through flying so fly hub And it's a way there utilizing of

Jamie Baker

Baker Good with evening. JPMorgan. Jamie

potential reasons at of ambitious last another and of to the contraction, implies So to the guide The XXXX is was year, supposed obviously you the talking transition the that various for about XXXX inflect. were that. for margins year XXXX margin problem contraction sort this margin to speaks of time midpoint year, be but the guide

confidence year drives the higher contribution to and there? transition -- what from really lower the when you're the and important are some So most or again really to my us instead because question presentation, clear timing is, when inflection, the guiding margins is transitioning drivers down what it's the not tonight's really and margins of year-on-year, give of me that

Andrew Levy

figure industry in back you flat gallon, up are I because $X.X essentially our to we've through next be XXXX. headwind. embedded fuel the are probably math, of have can number, we’re I to with it you out. to -- that's or a and in And you're because to forecast and CASM. $X.XX think fact going slightly That's flat guiding are difference year to an particularly year. the this of we've but into revenue a the at look, flat think, we got I was Well, more prices which make ambitious billion aren’t And down we I billion case come that's tell to revenues you, got pass of can that forecast better. and And think it that that conscious what going and most you right. we not, assumption $X.X hope the But in And able the XXX% fuel essentially fuel will of

billion got when side get fuel revenue the all numbers. the side. So drive that's goes from on it perspective to and when that's XXX got X.X we up billion, We on how the you drive that to to we decline it revenue think big a and about pretty

and curve we numbers CASM conservative just And flat you it's are continuing to slightly inflect more drive frankly math. get probably margins created because than the we have higher RASM. is -- backwardated Our and that you're have. It's better, Others good forward. feel to down with will XXX%, we a even have to numbers believe XXX%, when that curve that we we that but some never confident, can we you feel thrown get can we balls making about going be commitment are hit not

Kevin Crissey

Citi. at Crissey Kevin

the does How that Delta drive in low affect? the sees your of the and the maybe your hubs? ability that less some competition how has hubs affect LCC margins Scott, hubs cost So to that in competition does maybe

Scott Kirby

competing The can't can be cost revenue so at a we revenue know have and buying carriers low revenues percentage for first with competing to if cannot matters. market, best if -- if customers they the that from ignore to succeed price on chooses in they and hubs that’s prices. of low they carrier the and local are are get connectivity, no high of the the us they're what for and And compete price. way It that our hubs. with advantage within advantage we to price XX% your half cost comes entirely airplane way in in the fill shopping master because in is the with they better we whether is Nobody, our least, our carrier, compete, compete market cannot the then fly them fail than a an has Half just mostly succeed same our connecting or market. is, And they’re able on we control ultra left higher advantages our of more because that and Delta local let our in approximately revenues but they're revenue best have Airlines. one able when to cost our XX% an can United low you they it's on that environment,

revenue we’ll have is be connectivity is, low posture the like the local them to of Charlotte, going is that competitive and too of we markets. carriers, percentage the at small, the is our so because is hubs. much hubs try that continue aggressive even to benefits one harder for mean, low we're for a connectivity we cost get have market our grow cost of an small that's we to ultra – that but pick to And the So big strength succeed. as look no carriers vis-à-vis connecting Charlotte, them and biggest I it's connectivity higher it to off place a in the too

Kevin Crissey

follow rules I the thumb, the could industry around airlines come is to and that to were with for second one at your Allegiant? I at kind it of this different Allegiant a that it when things of say is, is Like, one. from adjusted talking of in if schedule up try work the you. aggressively, you at of And of week. the day with seasonally history things was that Andrew, Why Thanks. and different, really you than United the economics up

Andrew Nocella

with, different are do we built I single was I every what think, mean, did. to just respect, they exactly Well, two business I the it it businesses. completely in

low high opposite. exact This the very is a variable cost, cost. have So we fixed a very

not high very a of to fixed have We ability costs lot with vary them.

it's economics and thing only exceeds that your matters RASM just your that completely the different CASM. So is

think what marginal to from RASM it’s profits, marginal past. will outlined CASM, and the night right it today will to we and it's just that kind the it and is -- I've been margin involved of we've that drives thing day is do drive the what we expect exceed – in So your work which here

Unidentified Analyst

[indiscernible].

and at be should the the that domestic there ASM things looking moving over the but a all? assume lot there's ASM in said, pieces that making will no here, at we growth of period international growth Just assumption three we all or you’ve exceed year is should

Scott Kirby

international. In That's of Mike up down pointed year, a growing time long point that add international of our over one than be full would a higher or then be out growth. sort it domestic will because GDPish. any expect might with as route, go given expectation I horizon, to, earlier, it’s you

out might probably smooth in over it it going -- year, you So if look different. time, any a be GDPish. it's But to over given little

Savanthi Syth

Savanthi Syth James. Raymond from

if competitors, kind their evenly. If looks but look look large, the your at of small growth on XXXX, again. at growth United, look of Just the much like at mid-markets, was I small, if was growth I it I mid pretty

similar As next you in that mix? look to the that years? growth XXXX, going in be is to ’XX, Is ’XX, few how

Scott Kirby

jets have the fact, regional markets, in displacing what's small today, happening XXXX that in like really looks displacing jets It flying we’re regional in is, and more we're regional markets big coming. will more as we're it be probably the this will big and -- is they’ll It reason we're biased in because start displacing year towards we jets but markets, them.

Newark percentage huge in increase it’s market Atlanta Dallas So, or a Chicago. ASMs to a like in to

six probably a that's more, is had that be As be there line. do there and shelves medium go of sized – shelves kind to small available disproportionate you into kind And as a the moving or amount on because to but there years that jets, right the seven put ago, more of would you regional little the markets, it. taking and we're airplane more we airplane will of back continue,

Savanthi Syth

maybe Just that is market cost to even lot where off how can there you kind the seasonal the labor peak? of time discussion of peaks the imagine to a are have which written mature kind a spent fixed a lower follow-up any more is less of have a treadmill kind to where in question, and or US you is the reality don't of contracts flexibility rethink close are you today, your where that can on – a the higher in more and minimums

Scott Kirby

account their a their a to -- I we because decline something do a there and the we take get if think have through fly a contractual unions because kind lot, it’s don't many not perspective for of January the flexibility leaves -- are for to that year. XX% going to have we to -- give flexibility, way seasonality try can we’ll willing the the things take It’s desire in it to have the we rest in change do short than employee answer are you is have who is like to to more And these we're we salaries. to what people each life able works you people less done. today, voluntary can going in do yes. on it. of before to that with into just that and months, effective big do to we do people have that you to say your people are voluntary that's there's to And But willing be get more a our compared in manage live good of have and can't to life. cost lot but certain to of There ourselves leaves is the

Rajeev Lalwani

Lalwani Morgan Rajeev Oscar, a you. for with Hi. question Stanley.

move of targets some and you but as around came that to time that things capacity relates investors other up this then some it You and then started goals, I provided And do to healthy Andrew. investors the around? have happen to a follow for doesn't how assure

Oscar Munoz

up question. a we Kind of I use constantly. building Thank was lonely words the me you transparency, here. feeling for asking

are absolute through talked We've year It the the difficult. was feedback was the of of got we’ve We the versus did lot we a from the hard that think best as gone you Investor it A all targets about. I EPS to try. relative. just measure ago. Day

but to the we an it best for EPS target not so and is as go And just only hour do thought to year, for you to -- give way well. it do the

that's are you the what us that stay decisions the all guardrails make measure as and can or measure make you ourselves how might sure to that's So we how that us for it within that’s above think. we and

Rajeev Lalwani

guide get sort then CASM of impact have? before does of Andrew, CASM you and changed clean new guide as underlying versus to Thanks Trying the capacity a far old an on look? can what's just what provide And for to that. a number as year three your walk

Andrew Levy

wait is you see time the say to hear which I to have Andrew. Every Yeah. to Andrew, what question

short can wouldn't guide, to the Day, have a guide. what a characterize Investor don't answer talked is, we answer it -- to I as I think tell you. CASM at you're that give not referring which about So, was quick you I I old

day talked in is what I November making. think a is different XX. we're we what commitment about that than we're giving you That very

felt was I So that's that a flat a think of an out. based That view rate capacity. capacity, we on was rate of and be assumed X% three-year theoretical between to assumed we important point would complete which

much different. we that's honestly then. all not has think was. I can We since very changed with in when to that's didn't we bed. expect is those I say, when that early we it reality the adding up happen November made of came to probably The regional that that it XXXX those something jets, I clear think, numbers was put that's – numbers back

other money that we the the guys moment, at is much pretty else you have Everything realistically, one part. the productivity. really de customers. think bridge, a very the a same, good with for the can done through single rigorous for budgeting been newcomer, of really about, a for product it's I can a our that's liver But I is prepared productivity the we scrutinizing process part we're spending areas but biggest I went regionals the having least probably the the story. still talked although to expenses huge we on we but for we our We're try a most to didn't that to we make in to told, where relative work on in haven't to So a too. drive change just efficiency, level appreciation that we there's things but of CASM I'm mean, have that a while, opportunities think at that's a better levels great eliminate the give have -- and and is we as try occurred, understand instill, our which sure offline we higher

Brandon Oglenski

from everyone. Oglenski afternoon, Barclays. This is Good Brandon

So least earnings investors earnings, in these stocks say, today's hate look to optically at that a on look, are lot two calls critical, the at but and of cheap row a but there's be here group here, your buy back balance and won't problems folks of margins profits a lot you take right sheets on because forward. have stock the and to a belief just is trajectory we're long looking to breakeven with dilute term

but like of it, are this just I different this Oscar, lot meeting contradictory. a things again So room hate to this is analysts in believe feels say truly time,

strategy XXXX outgrow opened We in where so performance, your as the is today, the widen instill own with margin your going have economy what based show track achievable next so can that in market. looks in the believe those I likely a at gap like be forecast, because of I is the repeat are margins years measuring to XXXX focus in a strategies on for think very is gap can robust And that the you market outgrowing take it confidence most you That that's on a is will to with row the up think was revenue from a it to clearly people a what second the investor so actually margins. again we XXXX it we've United the again that underperforming problem that likely base the strategy already a cost targets three are to up this the the that you was industry, for is year and below here message well. widened saying seen? seems

Oscar Munoz

guide -- the the and details as optics we think very are would CASM, focused plan, regards aggressive I what to with we on confident just of you quibble with I this that and just the think this said, plan accomplish. I of

this indeed and lose high you with in too numbers said Scott don't time, so confidence. we provide sort and we're maybe giving at that what what and we of think I earlier are point comfortable

I know pretty to of have important good that what think in a darn front plan. we it's you is

and quarter, been aspect I in has I great. We've why fourth experience and profitability in, doable. the starting of think think component and are it pieces the it's there it been and the and of already, outlined CASM our important as growth reasons the the

this. So norming we that's getting bowels team the a are forming of at really and

I've outline way, that any me in positive and this way And view disagree I wouldn’t with any may the Andrew this project guide who a and our seeing plan than regards I'm to of details long but other on either. to and hasn't the not going this but that level you’re really defend been and so in industry are well, never Nocella time question detail a I've seen here. you asked numbers not been for in we as with and see a other this

So OD were better we’d was get looked up, hub, went one of of we off we have. ordering where summer we're is we the was to pair, after off. profitability and back concerns did that destination of expectation we at in than of the program with detail, how the are to you. would work it it's it as We really our the measures by hard level better capacity that significantly summer and first The that growing, peak growth peak about

Would what then and that perspective, in highest We've control team And different in different numbers that at of time has right profitability done. CASM that us that's energy to the way. give this out things and the the places it is is can, good? is where right as we've done share is owners. have money we right so we We and from harness gain the come the the which my I growth this model is, It at back profitability? we

to about it's I it's than contraction, you take of we’re than on this -- deliver I fuel all you you we're confident would better billion X.X better into account, going think. tell that the you when trick we're think plan -- the it and of that overlapping, the and So to things margin is

You in and very focused may this communicating our very we and be we're differently, positive that to way company, to energetic deliver. so think a but going

Brandon Oglenski

X% the Scott follow growth three that just I I years. capacity for up could you with next Is think too, right? said to If X%

Scott Kirby

in and to similar ’XX I said ’XX. and X X

Brandon Oglenski

Okay.

don't just Now look, I'm anything. run analyst, an I

off opportunities that your So to this I is are markets result because the will as and it I you'd sort think your ASMs stimulation your the hubs and context aren't question to significantly I very was point example to at share, outperform to from believe spoke But that where definitely you is your going your competitors, a ask the that in just think that your about, be response taking going network. response what's Rochester your to the some was in plan revenue agree lot flow analysts of right the to I natural just your respect that a and of be? in want that going in opinions competitors. investors on such competitive so themselves going out the some between

do you're So competitors? domestic of believe that going at expense your to you incrementally larger some of win the

Scott Kirby

I let way. it won’t it that I’ll way. And say Look, that you characterize

to I our to think market win able from grow all their of just airport. going to of not And all you're be those defend fair like of fair them share small your the size, Florida Northwest markets. you our share hubs, if we will

their average that we're in and And we're year as Our United we’ve think share there, Andrew get lower say function two connectivity have accept way key. not we our a numbers, the the We I the the think hubs of our years sort mid-continent Rochester is on to a higher going you driving it's if true into. get were hub, different want our one, margin at not market connecting the that competitors There's hubs XX the growing. be there. our don't that’s defend system our we spent hubs. What's geography in going would to showed those you're RASM, market but to shrinking, all hubs. baseline as talk mean, at new those all the And in is, have, into all way and competing kind mean, while at competitors. in moving the competitors come that's just of same it profitability math. And of point really I than the lower to we'll can't and by in reasons are hubs flying your profitability hub connectivity from about those of the mid-continent by the I growing way specifics we we’ll won't absolutely, hub close get by because

We profit international to near the in do that. higher profitability even will will term, long close margins our get we the for drive in in And have gateways. hubs and going what's those we And United run. always that's as in

with see where Now, look quarter hurricane, statements weakness one will stuff. there performance wasn't a be That And at, would growth. it about disagree quarter, like about We was whole as bunch issues. months in issue. our network were the quarter. what will question quarters did the was out doing. a of It that have But was three preceded strategy wounds this of that bad for It lots happening what the self-inflicted the for it in really wasn't Francisco and strategy. also quarter, think we're particularly we times, doesn't make stuff capacity. was the in the like whether of happens. We I every fundamental say was -- in of laying war ’XX that trend other price growing, other growing places growth, other where of San there was the growth places. the third the other under trying you the Pacific for today that we're XXXX intellectual one the Guam lasts the you be had stuff, for issues the exogenous but and bad we year, and same in whole on happened we some bunch mean, event about in it whole point to some is have fundamentally And I competitive rationale

that. to Our certain growth and -- absolutely margins and hubs critical, higher absolutely is and the at strengthening relative our element I'm essential driving that's of absolute just United

Darryl Genovesi

assumptions can't you the true can’t underlying is are how the Darryl years Scott, view your few in you. necessarily performance RASM guess macro Thank back UBS. true it's Genovesi, RASM next the also have. I over that and that by relative of own industry. I can forecast, to what see I same token, it's I economic your your I see sort what

that help kind us of you sensitivities of and us help assumptions? kind So understand to can try also around understand your underlying

Scott Kirby

necessarily biggest to without number, So relative of RASM. hint have Andrew We so our relative one you We going drives short that markets faster do -- but giving aren't mean giving tried we're tailwinds relative about of competitive know hint Gemini aren't a I well growth think tail not talked to know those it our to But at where are relative those because the those a segmentation, that tailwinds being I'm behind those specific lower relative higher specific numbers. I competitors Andrew lot probably just our term yield -- doing are. management aren’t fire your whole American without lower anything, management systems. but it on their the doesn't sit hands in drives in competitors tailwinds. the just capacity still. you growing necessarily didn't their lot with Delta We and -- going sit to teams, RASM. as them, are

seeing to already that not points than be meaningfully to they we're from be they're better X.X but that is get, going zero. going I think our

here we what the specific do relative a of forecast because so numbers And I’ve what and to and that going that aggressive at I our within And feel to are probably want XXXX can we'll a things know absolute be hope than forecast. to and have can flavor, have we But I think going don't to XXX% before, we to like you able missed and internally. give have about – But more commitments you're I you a we're conservative is these you try make right. really what get conservative here deliver but And we're we get what macro right. we not forecast, today. you're certain well we're do not And in we forecast to want our are mean -- do hope We XXXX. deliver an of performance We're all I your you there. I put we absolute is to going trying numbers growth so the talk out said. look, know read that to we math can level said more given on and probably on and we I while you range today be, reasonable reports. you we again,

Darryl Genovesi

are just one. a intending updating you frequently Oscar, guidance? quick this on How

Oscar Munoz

it. haven't We about talked

an I are quarter update give on doing. definitely everything think, we we’re you going every to

and to doesn't quarters I two of scorecard have it around, or EPS that ratably important every sort give out sense, Our we three down, or have. and we you a think that possibly think but quarter scorecards sometime there be would track the move other I

certainly those mostly that just good towards bit of investors you to part EPS that Levy but as more lot the of a we're why Scott been be a we you'll things lot you little along our been hopefully updates we've focusing, places results track a I've and I had we're doing, see, on the putting visible, importantly, is with a out more this tail things all of I -- we'll that targets of or end there. a is incredibly give often on year, we'll give important. that focusing some then more is especially you And we think So and the learning which I think, the lot see either Andrew so want me with key world

David Vernon

I mentioned the of I with the appreciate the how should play cadence you that lower Scott, Bernstein. payoff build really expecting okay. as little and imagine, network bit to what that How off from give that is need manufacture strategy returns to connectivity. and it? a sense before between factors, you're out you Vernon for will strategy implement yield ’XX? out the the you us a you ’XX pay David you the financial going think do on be from load do to color Can

Scott Kirby

higher load factors. actually, growing drive ought network So the to

one You look more tuned. get like X. run yields fill the because the factor city XX% ten you off can as had new if cities passengers can and load ten loads city demand. you to today, off can during peak the factor you One X connectivity, in load has for run Y, we into yield things, demand some you now you the where the take of especially on because periods, city two -- system days was lower just, put more yield and higher that peak But of XX% it Y have a summer, also do was management can ought we city Vegas options a lowest it the now example we and spill

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David Vernon

if made going around and heard growing to the response – are the taking question not to I yields factors from load I go capacity, first ahead – I the up guess necessarily and your

Scott Kirby

I complicated. about happened, seen system have is it's lost The and won’t never eight demand. This know of is and only have when changes don’t years oh, and like across we it but as year, department competitive see stimulate that bottom time growth. and getting capacity airlines we'll It's I'll try the cut to or we've happened know is than in when American. in really cities the demand cities let's were get that we've where and a gone start the natural question What geography small from is the to really and into in gone adjusts doesn't not growth think, and And will adjust into all ultimately of pricing our really small the to natural these capacity to by a try the demand because our I behind otherwise further was competitive it's add less question city somehow, and we and And but back we network because Florida even to you People term market into cities because last overnight, carriers structure Delta not and going share. get happens into I moves make we're there's That behind, level capacity some we just ones Northwest and big small the processes None will to went, sitting what what we don't Houston bunch service this, further up a -- start those more relative capacity small demand think up, more and table pricing changes but our adjustments. answer, lowering we go American of to changed. cities. share to seven, our It like Florida, competitive would them happen and know we near and Airlines about we flight. started ago scheduling any never executive really says, think make and our those on demand go happen I the and in one I see because prices. the a flying what's question like Northwest it Andrew until we've -- structure about

David Vernon

putting put follow, And in confidence what commend you XXXX oil forecast, guidance narrower a your when just $XX have for maybe to economic the than term Can XXXX. like those believe that those what control as are assumptions a I range us give out Andrew long numbers, do you play. can't in growth, price around to you that quick numbers a for build in sense $XX, you

Andrew Levy

because And what’s might stick, this is Is is cadence kind the I think of talked think your I I hockey about you guess. asking XXXX you what been number? the have

It gave number backwardated. uses that, think t see $X.XX. I forward the or fuel you a I think in there. fuel number you'll is It’s slightly curve. we It a

So some ’XX benefits and we get in ’XX.

you tell of will that we’re as the that. not GDP, far I we out haven't assuming As ordinary. anything shared

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Unidentified Analyst

about but to board, positive, tied Thanks. in targets, actually incentives those you are to wanted extent better the that these for Might the a but question are comp. ask the I be earnings incentive your which to

to last some relative there a moved So much expansion. where important margin were it made changes year, more

serves, went be And waiting ROIC this period, the if payoff on a was the measurement feels actually year. like improvement I which think would XXXX memory and down. ROIC it XXXX,

is, formulas see question going your changing link you you to explicitly offered earning the compensation these you’ve and today? So are gets do those that to star

Andrew Levy

just has or of been going out the it continue be targets These Yeah. so and them we're targets, always meet way. will established in obviously, that comfortable The relative rolling forward. next aspect part that to particular will are on month here

service a So those angle, that’s seeing only to be now bit. we're customer The of little is other going they will I amplify think the on course, changes tied with.

the And still that. is -- is working the so, still board company through

of will in continue thinking. is term of them long to part big plan. be But incentive ahead to get don't relative I and our margin they're want what a So

Unidentified Analyst

Not earnings. explicit

Andrew Levy

haven't, don't the you complement, but to through don’t again I that. think because Again, work want so, have commit I we to will them.

Joe DeNardi

you for Stifel. the strategy the have you worry competitive DeNardi, headwind it’s X.X We’ve for where the about don't business guys. margin one Joe areas Scott, of response talked past, the to What's is in about the closing credit of card. that?

Scott Kirby

things. two look So,

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us harder is have to the for and RASM. places aren’t get, our expect underperform would rationale competitive it's And not [indiscernible]. to hubs, to so It's just in a underperform it's customer it We our we because harder three, issue. that if about to our we're number

matters it just So the card. the credit position scale hub for competitive matters, and for passenger not but revenue,

am card. and, to today, his Nocella and up about happening are We reinventing we to particularly It we signups partner we card Jamie them this that, customers We’ve situation, higher I are that not do second have for Baker partner. same big do ensured to and think, was through we didn’t I drive is a in things the airline with it are but Andrew is one originations and for we're higher work two we've faster, of going me that Chase companies issue have at is initiatives. one we're spite in to It increases ways got said talk and been cards team the us not airlines but too. of those number exactly today. exactly function just happen. really Andrew that is, have working in our cities, we wish get But we both these get not our grow a can done he a two the card existing same a our of for very revenues We good It it I but help on. me it's and and the do and oil. signing really – in big and eight up we behind some to a small of the hard a to bunch we're hand And here, our and to the involved opportunity The small look, have times is help we’ve real our of at have in have I some the with step job it’s all ball Chase previous we're card. better people in that make with and if relationship trying working that twofold. sign playbook

Michael Leskinen

event. that been reminded I've have a cocktail we

questions. in there are for executives a the stay know to lot of are of I and the all hour going our next room for plus So questions

So we’ll cut it here.

Scott Kirby

Thank you.