United Airlines (UAL)

Michael Leskinen Head-Investor Relations
Oscar Munoz Chief Executive Officer
Scott Kirby President
Andrew Nocella Executive Vice President and Chief Commercial Officer
Gerry Laderman Executive Vice President and Chief Financial Officer
Greg Hart Executive Vice President and Chief Operations Officer
Jamie Baker JPMorgan
Hunter Keay Wolfe Research
Kevin Crissey Citigroup
Helane Becker Cowen
Michael Linenberg Deutsche Bank
Brandon Oglenski Barclays
Rajeev Lalwani Morgan Stanley
Andrew Didora Bank of America
Dan McKenzie Buckingham Research
Alison Sider Wall Street Journal
Justin Bachman Bloomberg News
Dawn Gilbertson USA Today
Leslie Josephs Leslie Josephs
Call transcript
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Good morning, and welcome to the United Continental Holdings Earnings Conference Call for the Third Quarter 2018. My name is Brandon, and I will be your operator – conference facilitator today.

Following the initial remarks from management, we will open the lines for questions. [Operator Instructions] This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed or rebroadcast without the company’s permission.

consent recording your this implies participation to of our call. Your

to these do now drop over Relations. today’s Please not of you sir. Managing terms, Mike turn host Leskinen, call, agree presentation go will If Investor I with simply Director for line. off the ahead, your the

Michael Leskinen

call. everyone, investor our issued earnings and separate Thank morning, to third we and you, Brandon. quarter Yesterday, United’s update. welcome Good XXXX earnings conference release

forward-looking and of investor which three documents are information during refer SEC represent Additionally, differ this Information Form beliefs with accompany based results currently our accompanying United made a of the current we this on current this website are company’s call All presentation issued expectations to or our All remarks morning, available available non-GAAP and and presentation may cause statements could in a to call. description measures. several thorough statements, during actual will Please our the factors the Airlines factors. we company. events United by concerning materially Also, yesterday’s call, more upon reports contain forward-looking update, future these at filed ir.united.com. course these conference performance. financial release Continental and from of and other number to the financial for earnings discuss to of A the our expectations. Holdings XX-K release, the

available earnings directly investor on to are most the measures these comparable measures, copies our reconciliation For tables non-GAAP presentation, website. of update to release, the at please GAAP of end our of and which refer the

Gerry outlook President Executive Oscar President, in Commercial Andrew and Chicago Scott and Officer, to Kirby; Laderman. and and are Executive Chief Officer, Vice here Munoz; President Financial Nocella; Joining Chief Officer, Chief Executive Vice discuss our us results

to the in like room have Q&A. turn we over now President Hart, to I’d And Vice Greg to the assist Oscar. available addition, and Officer, call Chief Executive and Operations others with In

Oscar Munoz

you, everyone. Thanks for Thank us. morning, Mike, joining good and

to last the CFO found have by him we financial part sometime mentioned has best balance – not fill our expected and the strike on all who’s who leadership of along, We team right and Gerry Laderman, have only I to in experience, seat of would today. As acumen, we’re quarter, the seat. been someone obviously excited our so decision by to

momentum. about quarter, once again quarter, the As I say marked and executed the results and to per not just like quarter. is think of outstanding and proof, before, financial financial said adjusted I we of delivered end results by share about another Like we I this promise, think earnings at guidance strong I lots it our in high

and Now and ways absolutely work only quick the from this meet because our not to our A of expectations recap is to hard financials. dedication customers. continue the new but of find our they you, shareholders, of and employees, course, the exceed of

Turning pretax X. to billion adjusted earnings Yesterday, adjusted $X.X we X.X%. with an pretax third quarter margin reported of of Slide

initiatives about recapture XX% per $X.XX of in established revenue, for of of we’ve are expectations our to all we’ve on strides the initiatives, which of are customer operational tremendous growth ahead service, the and made run the ourselves. indicative continue year. balance through did fuel year-over-year than cost a share Our and adjusted was These of XXX% last earnings We of control. the results higher increase revenue

the we quarter, out Scott growth in our fact, as that in third strongest growth the you in in of highest the quarter also hubs, which we’ve PRASM January. realized laid levels capacity highlight the In to will mid-continent has

the are like examples to beginning quarter this few just United. give I from the Looking our only that in – uniquely competition. our into part last the us on continuing four a maybe of took us what actions future, makes They’re we’re focus sharpening of think I’d here and we to you separate customers.

room kind in from brand, customers our has been rolled less long know means the satisfaction. we communications with employees important out Better a across employees. boarding, an stressful system. for area less of line, on boarding that’s After importantly, and process these customer globe, around first, waiting process have customers our a collecting and boarding an improvement. process and impact better significant for we customers time our overall and like customer improved with So the Innovations feedback feedback from

international Secondly, comprehensive the nonstop in world, to to most Aviv. the from this new summer, we including routes Tel announced route service several network D.C.

nonstop between They great airline tech to have only the world service We’re capitals. fast-growing these both two in offer the sectors.

greatly Third, a to real-time innovative feedback Flight are updates this flights has it by longest and this commitment the made with we customers they their finally, Francisco celebrated no messages. a when plain XXXX. other emissions history has program, And our expanded offers carbon commitment English our that reduce made trans-Atlantic greatly Zurich. Customer flight month, ‘Every clear in Story’ between has we XX% this value delayed. quarter, which these San that last made and airline We by on to biofuel U.S.

good asset makes like possible. also agreement, to A of always the October the We people, Xst to future our to two we us our flight But smoothly. Our it plan flight of But continue component After to our airline. for it and especially collective when full is our our this day kind operation. the is attendant obvious lead long-term business, planet. implementation reliable of scheduling efficient customers, when strategies unique and years investment goes but an not running bargaining most are merge of extraordinarily this to was our a isn’t two for complicated essential systems comes joint an that planning, completed commitment implementing airline’s to in which for historic way for only attendants. required change the nearly this biofuels our

us deliver to and our United leading want continue So XX,XXX flight customers future. I to for who are the over bright United’s congratulate at attendants into

back us those look XXXX targets, we as of. our months that targets since X, much the achieve nine help and plan unveiled past proud XXXX growth we we Slide over have the will and to be per share earnings to Turning

firmly We XXXX will raised estimate have fuel still our created headwinds times EPS year. adjusted year-over-year recapture targets today We to I EPS XXXX in until we raising on increase multiple We EPS adjusted preliminary getting adjusted provide quarter January, in January our to the guidance significant fuel results on both say by set path EPS on that a of delivering cost we’re I the to to and about XX% review the the adjusted deliver XXXX targeted absolute XXXX of EPS basis, to high we by feel rising $XX encouraged of again largely target in fourth are XXXX. $XX the prices and overcome $X.XX. full-year and also throughout while year places that XXXX range and us adjusted expectations this we our near adjusted end outlook our our closer of and XXXX. our in of will EPS for initial won’t $X

So with that, here’s Scott.

Scott Kirby

that, but line. operations service operation thanking to a internal improving I United customer United, thanks service model to the reliability stakes one in and like customer continue and for call we're takes at everyone on table are is today. would Oscar, it’s tough on I you, Running metrics. joining people the the us time customer revenue, Airlines great and service, employees we’re know run operational and in loyalty, our who seeing of winning best and to by of for and higher top our show start top on world. for those up choice of customer the into our that seeing customer that improvements to it in already focused translate Thank

times, great are customer running success. our without can't and operation a be many simply reliable service our fundamental it, successful. said we've to growth strategy And As

flight this attendant all the to common on We're attendants took mettle our mentioned, integration thrilled of of Oscar have Xst on place. As flying our flight [ph]. month,

energizing we better. make the talk do the even our our of with their customer attendants to product service. the around privilege who integration, hear bases their visiting future to the and crew flight and to get attendants are can the During enthusiasm the team for of week customer had our entire experience ideas of to to more what world It's to key leadership hundreds flight our and meet on the

Moving on to the revenue environment.

had customer United. operational, the and coupled service we as initiatives felt place, very With but moment, best the to demand exception across will of and growth see optimistic as regions some one And now strong I a about excited all with provide do and I've of environments continue revenue term cabins. in Andrew the right long countries and near in we've America, Latin in we details this never the additional term seen. at ever the is commercial,

the little Andrew about thunder with revenue help of steal growth has the While January, but accomplished bit support will his the combined team rest more I leadership, the expectations. to our a to quarter the increase in an and X.X% hubs We in mid-continent with markets. strong of in our almost PRASM. grew grow line in even with time, exceeded XX% continue profitability strategy, and on talk the our what same this balance In At we unveiled company, network we third in increase delivered brag environment, of summer from those nearly under growth PRASM the plan. X% the with can't the his GDP a

quarter able to we raise to XXXX encouraged through as in EPS of the obviously we're each went spite from ahead, the been our Looking year guidance have fuel. higher headwind adjusted

so focused our in is to $XX quickly. the has ahead commitments it growth on working continue and the so in of The started and delivering XXXX for our well we off means $XX exceeding plan, to to pleased three-year our in While beyond, or on end plan delivering we're adjusted XXXX. see EPS target XXXX to be

quarter We're third to to XX% our the For estimate pass run-up modestly from up third was to It encouraging EPS adjusted guidance us also time. for in that be to looking however. XXXX margin to about see returning through the able now from pretax XX% the of allowing we'll last also full-year quarter. forward XXXX, fuel, grow growth, we earnings raise

we third recent the fourth quarter, fuel fourth quarter that was turned run-up quarter quarter we rapid As corner ended difficult the returned we now fourth in to margin that Unfortunately, the optimistic the going entered the expansion. more the cautiously makes the for to were quarter. be and and

job do large good prices, in adjusted year, fuel throughout forward of a it a lag, we to deliver done within We're recovering we hard to As growth, EPS the in that to but with makes only looking it but demonstrated XXXX fuel increase does margin which return pretax the moves intra-quarter come we've recover expansion. when expect to also not quarter. adjusted on

our for team year smooth of are the in about The experience XXXX operation initiatives growth to far, many innings customers. execute is running airline working the providing the proving still while for So and that every that on be We're to a to continues has on and early a best airline the customers, customers on United. be to investors. United a fly. want our and the been great plan our day path We're right employees for better

in the realizing Our to I'll towards success And is with another potential. Andrew. United's full it over third that, quarter turn step

Andrew Nocella

Taking a drive a system big reported we the I'd revenue team at had initiatives, of the to our third hundreds high the Scott. on the and look worked Thanks, the result. environment for quarter. to in X.X% X% collaboratively small, to specifically XX, performance Slide X% like in PRASM recognize different expectations. quarter, who the Congratulations commercial United beating of team to year-over-year increase end top-tier on commercial entire PRASM this for also

up our on to us experience really matter. and fly and of customers our demand line Improving the move that you PRASM the Reliability to capacity year-over-year the ahead thank team to All like to however, customer top choose a strength initiatives and expectations. half. with of well ahead our United, digits first first as easier double quarter, our it in in improved give increased succeed. growth. Corporate for far yields revenues reliability would and to customer operations our overall quarter, again X.X% Domestic through X.X% outpacing commercial once year-over-year, and Domestic we the service team, were makes frontline of X.X%. performance well saw employees. big drives We commercial

denied run our new management the much Gemini, system, factors increasing to revenue without accuracy, for involuntary load which our of us Our improved allowed rate. quarter record boarding forecast

XXXX around mainline and our fact, XX% an the and for hovered boarding XXXX. involuntary denied XX% Mainline load of domestic the XX.X%. were month down rates versus entire for versus of In quarter July third at internal factors XX% record set

a was region out further greater booking business year-over-year change traffic in. had departure Atlantic This share accuracy. from and by The our any lower-yielding of Gemini's This quarter, of points on tickets shifted forecast the positive strength dependence five to cabins, one booked each load year-over-year. from successfully in saw also mix We initiated reduced driven the nearly XX%. new profile region with in while tickets quarter, We generally momentum almost Zurich. strong month enabled foreign strongest and increasing including X.X%, higher-yielding service PRASM factor was closer successfully increasing performance exchange. in up our our by up Porto, benefit August year-over-year We point revenue Reykjavik both PRASM PRASM

we've Naples, Amsterdam. Prague, Tel to XXXX, announced new and For service Aviv

we as continue expect for We to can Atlantic far the as see. across strong results

performance nicely, the basis. us foreign however, X.X% from Pacific year to year-over-year, was again exchange. in the a remains This month made Kong year-over-year. a Atlantic, material Yuan Pacific. leaves we Unlike strong. increasing Hong performance, in RASM was Pacific progress that point quarter solid China up the Each down one PRASM While strength Atlantic has on PRASM. PRASM over benefit improving a including rebounded have PRASM saw excluding further our the go on optimism had and we two-year strongest

demand We future see in class for from continue levels business flights reduction demand to and in resulting yet disruptions. for trade China watch to periods have any

Pacific trails quarter, Our revenue with Atlantic the year-over-year. down and and only being X.X% performance in once again entity the negative Latin unit year-over-year was region the

Argentina is region Cancun, challenged and weakness. the demand than to significant While others, more flights Brazil experienced

business we once disappointing, was the parts see looking Mexico and hold of performance mild a taking recovery forward, again specifically certain Latin the in markets QX Caribbean. region, While

RASM America. optimistic quarter are about in fourth improved We results the in Latin

X% X% we Looking ahead, up to be PRASM anticipate fourth quarter to year-over-year.

Slide seat target. aisle to on Polaris give I’d all our be equipped initiatives. continue an flatbed to widebody of jets on Induction XX, commercial Moving on update of like some with access to our

Washington on open Polaris Los track lounge XXXX. Dulles Angeles expected Our Lounge the open is this later to to late remains year and by

Our Business Airline Chicago awarded Best Class World Awards Lounge Lounge the Polaris was XXXX Skytrax. by from

on XX one to month. aircraft days continue average retrofit each We every passing with

more As grew quarter, rolled our are premium out. customers. noticed our third than perform our products, hard to fleet in is wait faster equipped aircraft with we International and see being X.Xx by of RASMs fully transformation once coach how the we’ll can’t seats the Polaris

monitor track on Economy. Economy Basic passenger the Basic continue performance We segmentation it’s Our our related we Basic of share differentiate relative to important remain feel sales. to grow strategies as footprint the We closely to product. Economy

pleased be policies. operational our the to continue with We benefits of bag

our our short to a component strategy segmentation The Premium on Plus. key premium jets of is Another as and small in number is term XXX product Economy now intercontinental passenger the sold new Plus, seat. economy

details we most rolled passengers. schedule first our week, passengers. Premium year of for be Newark for and while optimizing for phase next scope connecting Earlier on and released to reach this official across expect passengers year. change is allows equipped to focus the to More later local continue XXXX for schedules widebody announced launch. This of Premium the an sales departures us intercontinental passengers Dulles we connecting as and Dulles local product will Polaris. early a a capacity mass next domestic our prepare to to Newark critical Plus scheduled from be on and second We similar of our adding to to week on connecting this by aircraft fleet late out Plus

is really The first with early pleased phase flying, and to changes now the results. we’re

recently quarter, performed Denver well. and loaded over hub. our XXXX. Chicago efforts focused the on, rebanked in markets, of RASM February we for the grew the rebanking hub catchment third hubs’ something We remainder for both Houston Xx sale in In Our have

it customers to premium per for the review I’m up passenger the into customers implemented We functionality summary, which ancillary well revenue check-in a XX% flight is by Our Plus. to to and led that strong we quarter. to set demand up revenue this is to window allows fourth Gerry that, the upgrade of buy for more opportunities And turn new financial outside many quarter, increased really results. booking we’re window, their over our robust recently Economy and going cabin. provides environment with for feel that In

Gerry Laderman

Thanks, earnings quarter Good quarter third Andrew. everyone. our our we released investor XXXX afternoon, fourth Yesterday morning, and update.

additional refer to for You those documents detail. can

highlights, the financials XX Slide our For summary adjusted is GAAP our shows a results. XX of and Slide

XXXX income the XX For the $X.X estimates and quarter share higher of XX% our the quarter, than pretax per full $X.XX XXXX. margin fourth the third year. that’s total for third was Adjusted X.X%. we third Slide reported unit of quarter adjusted and earnings billion adjusted shows and cost pretax of for was our quarter

Slide quarter going decreased into X.X% the unit year-over-year cost XX. midpoint near expectations on to for quarter. Nonfuel Turning the our of a the basis, third

month our performance cost we in quarter, assets especially As better utilize shorter unit of the our in benefited the greatly. September,

be unit to down our previous implied and both guidance down quarter than unit costs. to driven We fourth to is The two primary define is expected expect as midpoint XXXX. to cost nonfuel and nonfuel be of good X% I which that compared would fourth by XXXX the of our quarter implies This between higher X.X% X.X%. costs guidance drivers, are flat cost

of GDS This performance we issued the distribution First, than quarter, own revenue expense in higher card third and fees even higher our optimistic expense. passenger the mostly credit estimated our our incremental at million approximately in drove than distribution expense cost, expectation, stronger we higher got guidance. time $XX

year. the In cargo year cargo led by expectations throughout our compared addition, in incremental the has to team million $XXX revenue approximately for the done work our original great to

carry it with additional led million these of tied $XX two unanticipated and been translating of costs to handling to combination million our great costs has additional come freight. to approximately good does approximately earnings, $XX trucking tailwind The to points needed better incremental headwinds, our into in the does nonfuel this a this While we our move targeting not CASM view unit alter for are or of still we strategy, XX additional going very basis the into year. But of flat second clear, And year XXXX. growth as the for be forward. cost to

will call midst speak, share and process, our XXXX in our have budgeting we the on to are earnings we more with we in January. you As of

in to CASM-ex all However, XXXX. upon deliver on confident date, we work the done target I based will am our

purchased quarter purchased XX, As you billion quarters the over our have first in on price common average and we three the through just of $X of see of stock $XX.XX. Slide our shares million $XX of an in year shares at the

repurchase Our last use strategy XXbX-X over grid-based quarters the has a few to program. trading been

the be for quarter before generally the the stock opportunistic, declined, if July. buying to earnings less grid increased. quarter means grid second was but buying allows trading Our our more us back in established call The stock which if

to outlook power. will point one though of chances since of Given over the decline us outperformance also purchaser, our repurchase XX%, the the patient. Fluctuations earnings at a our free the the exceeded. at weeks last market But was have be that the the grid on points and the in where deploy stock long-term about changed stock give maximum view even up to about the we’re stock nothing our demonstrate as several repurchases may price future cash call share time opportunistic market in in going long-term flow significantly

remain grow quarterly in EPS we and variations But that result long-term will we program. a confident our compelling believe in be stock represents investment. able absolutely will approach our to Our

in We quarter. XXX-XXXER two Turning the one MAX X took XXX of fleet. to Boeing used aircraft and Boeing our delivery

just XXX-XXXER We of week. used a also third Boeing took delivery aircraft last

last fleet month flying deliveries aircraft announced three to additional aircraft expect those take These Boeing ER We today. three XXX-XX our the aircraft. For MAX aircraft Boeing XXX-XXX of XXXX. XXXX, international to in this replace with delivery expected Boeing Boeing we starting our XXX-X nine remainder earlier widebody that of and aircraft we ordered XXX X aircraft, of are aircraft in

Slide we fuel a potentially we aircraft XX The to price actively At guidance, flexible October current that a attractive summary also ranges looking XX as do book. implies pretax efficient revenue range a order additional we on are the and of new margin includes grow, moment, fourth quarter our are We curve. opportunities and a capital used focusing using in cost used projected X%. capacity, between the fourth to aircraft fuel adjusted supplement way. for provided so aircraft of number ensure including our for X% quarter’s and

rolling of our Slide XX full quarters summary into year fourth presents when Finally, quarter expectations results. of our a XXXX actual three guidance

As EPS seat. Scott we’ve guidance. both adjusted I the This our for year, mentioned, of this Oscar CFO midpoint in the time thrilled raised is am why third be to the and

my and and fully now the full that, I our unlock are to will back on working closely it colleagues Mike United’s with forward look promises, to executive turn We begin to I delivering our on to the potential. strategy With team Q&A. implement

Michael Leskinen

Thanks, Gerry.

the from we then and question question. questions a if take analyst will we’ll procedure media. question. needed Please community, ask the please to First, take one to the describe yourself Brandon, limit from one questions follow-up


Thank [Operator And Jamie go have Baker. you from Instructions] Please ahead. we JPMorgan, sir.

Jamie Baker

morning good everybody. Hey,

question a if a not what margin it more France-KLM? JV to with having move pooling on First profit you’re has Just table say, some take Air structure like, Scott. by with your the What for leaving would Delta structure curious immunized partners? to

Scott Kirby

interests Atlantic with and job particularly closely So in We’ve Air you Canada much the aligned, results. we’ve years together. and that with work of made could more incredible of our couple the getting We progress last a our over see JVs, Lufthansa. good JV our done

improvement Some and of is better cooperation Atlantic two partnership the airlines. those of with across our because

complicated more exactly do end is day based sharing of sharing, And of profit instead same. a at revenue the those the think sharing answer sharing. exactly to the is mathematically, I and to instead it’s come a of answer, Ours essentially same essentially so the profit revenue lot the

to see it unlikely philosophically not that. we’re don’t so, it, would to brand really damage take, And upside all and but go the we’d opposed much more given

Jamie Baker

three for that Scott, I’m premium about corporate with it would operational more What’s be. having generating loaded? fairly Delta renegotiating Is proposition when consistent? United can you negotiating Greg, I might obviously, does, of two years? for Got how or maybe value contract than improved, to that contracts like and the higher corporate expirations it. look it think offer cadence the what over next is Understood. also used And metrics the Any catalyst the that just of the to corporate Is back-end yield to industry the would it start domestic long way it thinking be take share front-or winning to that thoughts? a there. and

Andrew Nocella

Jamie, are an on right The have interesting it’s up, big and of That’s we’re Andrew. that question. bunch contracts a now. always we actually coming ones working

great So to I’ll we that Maybe to our that that. think there’s let Greg of the whole and Greg, term on plenty sure customers clients the in running. of by United led short team, the and is kind opportunity corporate see medium make add operation

Greg Hart

Thanks, Sure. Andrew.

greatest we As the – were performance operations running have us return improved customers our not when reliability to operational several on capacity, that to And customer but the the we’ve that in return years our do those with United and service, seen focused customers some nothing left more reliability. ago. our of we’ve operational of

United performance the where team operate operating environments really day the in XX most better time, out they completion anyone. industry XX,XXX DX world. to one customer Our to got row. flight And our pay reliability fly since be make had have result customers improving the We’ve Chicago, or months seen doing also metrics, happen – for choose I we’ve of world-class where done there team dividends, difficult a need one we obviously, our of the at growth the the better think, we’ve day in running more we to at market the And in and direct while seen we’re DX and a here airlines of that in they our structures to recovery the XXXX, performance what competitor, previously customers And we’ve share United is hard beginning we sure overnight. a improving we’ve to that led employees back I flight our with operation, into not. a customer And translates to than we We’ve best in customer the difficult service of choosing drives it often this most the choice. in got choice one – together from as and didn’t that of come get lost. everything in, service performance proactively to United and to we’re to product customers have out. is internal of most, on the credit when every given working hub see when the ties a think

Jamie Baker

Got it. everybody. It’s it. very helpful. Definitely appreciate Thank you


From Please we go have Wolfe ahead. Hunter Research, Keay.

Hunter Keay

spending Jamie, away on morning. Hey, part Good exchange Yes. with travel had because but agency previous anything reason getting thanks. much of Not to you’re that take so commissions. from you the why you’re corporate is travel

for tracking It’s these expense a $XXX million to agency year-on-year. XX% United, travel up like commissions. You’re

you’re curious ramping up way. by dollars. much fees talk is hundreds And you are how of kind corporate agency not I’m these you So about incentive millions want to know to bigger it it, one Everybody because picture, fees. only share doing of to the the if of with these buying –

of So this? have sort things how do sure control spiral we race the arms out we some XXs in and make don’t of had we like sort cost these of on

Scott Kirby

payments. payments we have increased corporate agency travel and So, our

philosophy, went that. see over to our not you something measure, and the a that like and responsive if a share we’re really lose that, was think basically, going at looked I back opposed measure leading as to history, you’d

Our to when share but are fly, our to we that share lose customers goal is win to airline it. competitors but can’t not choose buy the to allow that, through ourselves also win being share through out to trying

Hunter Keay


in year? Thanks CapEx, next is fleet CapEx in a you given also pension about for you the parts that talk a front? growth lot. And And couple point about think Can to XXXX. that’s Thanks for get of on want all questions me cash that, then Okay, usages $X on I moving it. a – contributions starting billion the good there. think XXXX Scott. probably help about to

Gerry Laderman

to well Hey. a having too million $XXX of been tell. moving about well-funded to a pension are early year pension, direction and contributing We’ve a On our the plan. we little into

little a tell. bit early too So, to

know historically. this expected been we a our more $X.X don’t last billion we’ve we than versus in contributions $X.X that than year, year year year This January year, it this in about year. next All did year. what We Last it will year, won’t certainly year, CapEx is year to was a With more to what down deliveries expect generally, be exceed can is, I billion for doing the CapEx. range. had we’re what billion, respect I which about say last of down, $X.X but of aircraft

So, think it there. be would number out well you the I threw below

Hunter Keay

Appreciate Gerry. Thanks, Okay. it.


have Kevin Please Crissey. we ahead. go Citigroup, From

Kevin Crissey

All must aspects time. growth right. particularly, your I talk in hubs about highlighted probably those like in the opportunities, prior what assume because have Thanks outperformance? Can you and the are mid-continent you for underperforming year. the they hubs as creating RASM the been

the you. which much could put it’s could overall it in in much volume such So how it maybe, restructuring it the why of great. context just you of of good is comp, Thank needed RASM, be talk how is will terms the way of how you growth? Any you’re that getting you about of much hub,

Andrew Nocella

hubs, company. how three having the will the margins we Kevin, it’s through what far those performance Andrew. think don’t produce Really particular, and nuts schedule. of in the higher all Chicago. Houston in we’ve details of Denver, it’s hubs And we went think every easy comps. of by including the say at so for pleased We can But looked our together put bolts accomplished I I and

offered levels schedules did level right quickly we frequency not I our the conclusion patterns, created high-yield the of And to than think previously right to those provide and customers, right connectivity. the the came low-yield patterns in that connectivity. the fact, connectivity we more

yields way so a this Chicago it process aircraft, year year, And went or where year, and traffic then these this onboard worked favored in and more we well. changing we dot that connectivity, through every early reconnected better late incredibly and a last Houston

there faster the expectations. in In the slower exceeded RASM, the fastest-growing fact, airline the parts than other and of it’s of were our grew airline. They fact, part

ready that is So we now working. We philosophy journey on same this is this that Denver. embark sign think in to were a

the a in for to be less new departures, of sale. remaining improved and all late which expect good again, February. to one starting of which drive year-over-year different is includes loaded schedule fact, connectivity, level new bigger the Denver That in In in we bank have results Denver banks schedule really allow

way So we how company. for jigsaw matter. puzzle puzzle gigantic customers, the schedules a were our for really these revenue a able that build much It and and is put more pleased to in together we the generating better by just that is performance,

Kevin Crissey

Thank up. you. if maybe, And I could follow

going Some cetera. higher-yielding of you et it what talk maybe connectivity, has lounges, some procyclicality, like elements connections sounds meaning for in more of about investments the

demand the you’re certainly about than concerns and about market in there’s we maybe be how you Should cycle in are suggests? in some Can where So the we the generally talk positioned? where is current cycle. later United

Andrew Nocella

we’re add targets, well and we’re to be and to going nimble EPS I sure want do we’re think on Gerry, making in direction. we’re that our our to that? But way you Well, towards

Gerry Laderman


the things our one fleet. to maintained remember I we’ve of is flexibility think important the in

We’re return expense we’ve aircraft, capacity is maintenance reduce recently. off-lease, from we always aircraft reflect looking to older aircraft what we have which manage see our we of and can costs what to been need of can we and do if have as to plenty And that leased retirements we we manage avoid need well. both the we also instead which forward schedule, flying those for to buying and doing can what

flexibility able to the think whatever I cycle brings. for critical the is being adjust to So, fleet

Kevin Crissey

time. much you your so for Thank


Please have we ahead. Cowen, Helane Becker. go From

Helane Becker

Thank Hi for much the time. so you everybody. operator. Thanks,

will were question And you this easy true continue during premium because of much guess, you say beyond? the comps is said you yields saying quarter, here, last the improved you through just it so And and revenue quarter is fourth – can premium, year? and that of on. with how performance that How so storms had I numbers, how much

Andrew Nocella

It’s Andrew.

not I that guidance would just the easy you comps. our for fourth think it’s tell quarter

more I laid few ago. it putting and minutes United, that a as and products few just having incredibly we out schedule together a are a it’s of Greg customers think reliably choose services delivering

fourth quarter, the pleased. the about really So we what look we’re the going future when in the excited like holds. look premium what at where And quarter, fourth we’re we’re in far cabins so

Helane Becker


it products So, premium much products? maybe, differently, how can I economy can ask say the you outperformed

Andrew Nocella

I Latin my cabins and overall premium board the given did was script. the think premium the It fairly cabins I America even did in I environment. well mean X.X points better. to really across did the well

Helane Becker

accommodate who don’t people sell you’re in cabin? be finding and products opportunity turning are you are from to you that to you Okay. And have to enough able everybody those wants that or that, away that

Andrew Nocella

are It business seats from should And our hubs That’s premium is unique represent best each very we United traffic on lot how many aircraft good be many I question. should the think, the be and to figure They globe. seats to and time majority something, located a in cabin. a to in every of on us. United’s spent the out States. how trying markets and the of

we think to our class needs we business globe. premium appropriately the needs so And sized the or have cabins the across accommodate

that. we're think you're China we that, make Heathrow, whether we can I sure offer, do pretty think, and pretty or cabins large-sized So London to pleased to I going with

have. the sure to look as make hubs continue our I class we we on right given say onboard located. seats are every number future the aircraft think, onboard we all we in more We aircraft have premium single the our have to of at have And on we'll where number that this actually,

Helane Becker

it. Thanks that I this appreciate very job And was nice much. on Oscar CNBC morning. a

Oscar Munoz

Helane. Thank you,


go Please we Bank, have Michael ahead. Deutsche From Linenberg.

Michael Linenberg

that it's as to Newark, what of industry, room you go build And through at going you I real I'm that asking in to further? just just relative it terminal position new becoming footprint have out estate I'm much And Or have you your is size? into you this pull most similar loss have Andrew, there's from of today, you some your a these because move it's do a phases, where makes as there look new Two maybe one these when air But is here. the up. of curious, very markets the at new terminal leading opportunities from maybe the them with And another. out Dulles, airport of airplanes maybe probably the loss connections, impact you routes just I'm changes Newark sense. flights airport space and and one to and on there, P&L curious are these – obviously, it put game.

Andrew Nocella

to Newark that no markets All of we have to Newark. those are are really to local while markets material from certain out tend traffic into right. and moving Mike, be Dulles, clear,

We airport. are not the reducing our footprint at

to or larger So it incremental bigger that to we have we've have whether York, a base frequencies much it. replaced Tennessee more flights the the name Memphis from fly new be removed to and Nashville, population New or with destinations you that

our at the airport all. around, moving connectivity in flights. declining by customers these our and more we're at flights not offering flights, we're So for footprint's global for offering better choices local And fact, better intercontinental

connecting doing New that flows. So Newark, traffic Dulles that for suited better is is what is these we're in and and better for suited York

larger in as use offering no fact, reduction on larger the is Newark growing to we destinations. And is in these aircraft Newark. of absolutely seats we're there So number a

pleased really we're by that. So

and that X we're earlier going. terminal how again, York about footprint United's doing we changes will And doing And implemented, is of really work well really continue of in Phase the we what our terms month, we're already. particular. say New in expectations the of in Newark, redeveloping said happened we're think script, in don't as beyond is have the the we with my new all it's in the already developments we've really we which terms by Newark facility. Port I the given success announced excited this I future. of them. excited to just today exact Newark, about in facilities, And the to In hopefully, that and But in in anything

Michael Linenberg

great. Okay,

Just split just would balance floating between fixed a on for quick you and sheet? one Gerry, rate know Gerry. roughly your debt

Gerry Laderman

Roughly about speaking, XX-XX. call it let's

Michael Linenberg

Okay. XX, fixed.

Gerry Laderman

the aircraft the Obviously, yes. bulk all fixed. Fixed, of is financing

vast little is floating. a but have loan bit is fixed. We then aircraft the And our of big other term majority financing the piece,

Michael Linenberg

Thanks, Gerry. Thanks, thanks Andrew.


have we Oglenski. Barclays, go Brandon ahead. From Please

Brandon Oglenski

good Hey, question. and for taking my morning everyone thanks

either well And this I side prepared your to loaded or you points more back-end you upfront EPS the loaded? Gerry, in is commented hit know What to now. or or fuel cost Oscar looking remarks range thinking And progression? on want that right be forward? you're revenue you But would you assuming are in a make are XXXX can track EPS here? about this XXXX us then linear that give we secondly, don't So two in Or costs that targets. front-end should talk there development your

Gerry Laderman

fuel, our purposes. that curve our for on to assume modeling always So forward We it's pretty forecast use simple. and

Scott Kirby

hit to next changes increase able not hitting lag. a those gives at target It and XXXX In at of there we terms fuel link the started confidence margin And the is that regardless and to on gave up and to expansion price, fuel. target, pretty lag. fuel XXXX, as predicated however, in us kicked recover curve, between out short look year predicated this a been at year our revenue the initiatives this fuel can that a believe what revenues that other we'll recover confidence of gives put that today as XXXX the we we It does, those short revenue. to fuel this what of like $XX our what it in $XX just forward year us and be XXXX or is we earnings with because just with between significantly. we we really went year prices fuel it confidence say of has have target. earlier is us and and increases year, can the much if does look price. And to on demonstrated a price relationship come and believe It's that's But

Brandon Oglenski

Or appreciate future? revenue on should we that X% right be that. thinking that place and the United then off Gerry, phase the here it more in we the in look I as to out XX% expansionary be Okay. looking should in taper is is And of the to earlier, forward? question CapEx

Gerry Laderman

XXXX solid. to is XXXX The is visibility for pretty too beyond have and depends. tell. we early It

give me couple a data points, of you Let though.

of runs past to That's an billion. just where roughly adjust $X.X can XX-year We aircraft maintenance you the on as combination of But So only XX-year, $X plus a dealing you just growth natural want $X.X we with grow, and maintenance CapEx in $X little that when let's was on world a that's aircraft with that CapEx kind to to would of aircraft, of sort and for reasons would we assuming run we CapEx. a nonaircraft or this circumstances. CapEx, – size have aircraft, I weren't billion our what probably why billion our to billion to going describe will require and which replacement then one depending $X.X where, of a billion additional growing, us bit. of cycle, mix say, That's as aircraft we some year, obviously get forward. life new the just the you're really the of manage fleet in kind minus the what used

Brandon Oglenski

Thank you.


Stanley, Rajeev Morgan from we And have go Please Lalwani. ahead.

Rajeev Lalwani

just break morning how guide. your the PRASM on any reversal Good you question Scott, time. Gemini, maybe thanks that capacity? the XXXX you then or approach of and is attributable X% out also, Andrew, of with Basic much on? and Can on Economy the for just the XQ initial so so a thoughts for there and And

Scott Kirby

way a York, when Gemini to X.X. Gemini in We've think if that we and in said bit range. doing, back think we I were is January last the how it's not in year was fact, February New roughly backwards, going think range, above do we Looking that analyzed all little or we worth

the by and make pretty are So that, pleased improvements system. we're to more to continuing we

number made significant this tweaks we fact, of summer. In a

going the all out upside into into the those up XXXX. some other breaking not fully has it as we system, ramp initiatives. We're So think

different we're As call, literally things on. when I I the working said hundreds started of have we

as go Polaris margin, one making like our But can and incremental we big RASM would small anybody's we're redevelopment, strong of to more have Premium aircraft, items attention. really drive some our as working the are on and are pipeline get putting a of Gemini, really them network of lounge Some for team continue incremental forward never point. that Plus or all them we together to that sure or –

can eye commercial And innovations we so set changes that to that to so group It and really pleased constant as the And of deliver far can as results a see. feel and the we're with sure on is and do make target building really continue that to the pipeline requires whole pleased comfortable really to that, I continue by far. we're that. that

Rajeev Lalwani

XXXX capacity? And

Scott Kirby

the So team we'll give formal XXXX capacity We're process plan, of budget. is And build, bottoms-up not our the build in doing capacity the which top-down. January. the in is building how we

is to that the it the the what to going that, be $XX of growth of per achieve exceeding to But All meeting by to on earnings best as focused happened extent the capacity. at or earnings. plan $XX so successful about target commitment in for the look per our to XXXX, far. clearly, been way star driven dogmatic our has North XXXX is achieving And not And $XX share. has you we're share $XX in then we're

than otherwise been, have than better our better earnings, is is it would have they would than would it our our otherwise CASM margins RASM Our better been, otherwise have been.

our formal to plan the we'll working and least so we continuing here is hard in And capacity well, feels it as work it's as abandon so guidance give well. January. growth plans today, as growth But and at plan sit to like the certainly long be would it change

Rajeev Lalwani

included If for in $XX buybacks? for Okay. in Gerry. number sneak to anything Gerry, quick there just is could the $XX I one one

Gerry Laderman

very No, little. just


have Didora. ahead. From you. Please Bank Thank we go America, of Andrew

Andrew Didora

everyone. little good fares what more now. just a kind finding concerned Hi, footing is about of you would do Andrew, growth really or maybe its or Scott of at the right demand volumes? you think But maybe about domestic morning be bit of pricing and elasticity fare how level become

Scott Kirby

leisure X.X. minus way travelers elasticity So the it's business minus for Almost about you demand at and I price is about it, for think demand, any been X.X; demand has of inelastic. look

consumers. people Another the for go XX% good long have to need in being years. very demand. before for down price we It's way way out It's we of travel. getting I get about point for and great we thinking about to this fares in elasticity XX been a the about great last worry It's real to been terms but overall are to a would economy, impacting where think been

Andrew Didora

once rebanking Interesting, guess, around you And we've where inning buildup right status us the thank the network you. from the asked mid-continent East Thanks. has past then are left what in the of in seems of centered there? towards update because gone terms back maybe Denver, give in buildup a a to Can your What you maybe seen, get least plan? of there late, more mid-continent? relative hubs. the I on of And going the you in some is in, bit the I focus releases kind Coast And hubs lot a now. of be to focus at

Andrew Nocella

I Yes. hub would in this related say, the restructures. game we're still early particular to

Sometimes, it. Houston put of you in based and and tweaks ahead required online. you we're performance, coming learn. on I Chicago, think, just be would Denver's say, And shows their together I well and their these where now, we'd thought what Right we

tweak. Denver potentially there's So the going what over think months about next in six learn lot right to a got I we'll We're more what we've to come. and

that that. we've it the just to put loves time a after together really group But game in the Chicago schedule I changes time do so are schedule, about least they or well, any because now. what made haven't will end really We significant yet may Houston create jigsaw just the we general and at is as to be that is puzzle for performing say

early to more will so about what it, and adjust. make what is a change that better we're we'll answer so nimble, us And be seen game. continue competition into few But the relatively tweaks to and forward. the factors economy does based the macro it about be is in Denver even we're far. in it we're we've to go think months, And and all likely make doing. still going we the on come going excited we upon And whether to

Andrew Didora

everyone. you Thank Understood.


have ahead we go Please Research, Buckingham McKenzie. From Dan

Dan McKenzie

are thanks ahead coming side. it in driven? understand if of improvement XXXX, the With revenue is pinpoint part already? us because network conversations Is I'm wondering commentary million I'm were just a where And you're Is from example, morning guys. that with just not more million you margin from the in that's net respect initiatives today good help you from. getting of is for $XXX that Hey, wondering if to the the having. it confidence expansion I'm just commercial can us that or about initiatives, you schedule? just it revenue the $XXX specificity investor the is just on confidence pinpoint macro that coming for could looking where help if

Scott Kirby

that Well, service. everything. operation. talked good high initiatives cost great It's it's all on commercial level, is discipline. It's the It's a customer running It a you about.

have ago, weeks look, So But if three not got at we XXX% third it's expansion. earnings have in quarter. element. had we've margin call would that the one we shot not margin good fourth single the expansion this And quarter, recovery of the had expected in we a

flat said, fuel the those couple dollars But or that's almost for we're we million now. we're there of Now all initiatives short prepared said last next remarks, his year. we're hundred going in confident to have hard term. right recover as the a to think Gerry better ran that in And in of or the so CASM couple going we increase weeks. to we're And – quarter fourth

for us. going that have we So

world and be on commercial that will service hit cylinders. confident operational And to customer are performance to the almost all continue We leading. continue – the leading initiatives just

EPS, we to just And do so you the it also like now. together, we're feel on not year to on earnings put next really we're because all right to expand margins and grow that track trajectory but

Dan McKenzie

thanks, Perfect. guys.


analyst you. Thank portion and concludes investor the This today. of call our

Alison media. now have from go from ahead. we take Instructions] Please Street [Operator Wall will We the Sider. questions And Journal,

Alison Sider

so thank you much. Hi,

than You whether could talked in us main for you was you rising fares the premium economy cabin. about strength premium. could about for in wondering tell if I the faster products if are anything a lot

Andrew Nocella

over did factors more and the Andrew. In we yield back months, last cabin did otherwise in premium is few load This or fares. looking than we growth

across to fares really on up, they to the PRASM say, paid business change would the pleased our Atlantic, had – class do premium were we're particularly the I but with So load factors, in cabins, see. were higher our more which

think So more than see I load little I strength a yield forward, going bit factor.

going see to the into have as we're I business. think in the both forward going more quarter we that premium now I yield head fourth for kicking

Alison Sider

ask one And if more. could just Thanks. I

little I for more up mentioned You Plus if tell – you sort buying wondering revenue. driving a what was discussed to of Economy that people seats to demand Plus Economy what rate economy ancillary at are kind and all to charge the could about also includes that of still that for of front. sort closer but within plans extra preferred you the be are may us whether

Andrew Nocella

about officially Plus – does yet. That Economy the just in launched of a I preferred seats. haven't we it, We've been has that latter, terms great think hit. talked

that passengers making I airplane. provides more front and are onboard large have make secret realize ways and legroom the the on seen really day a little it have more bit of the aircraft, And here more particular closer think available, we making we to Plus by which every year-over-year. a product and is working and more more seat our cabin people recipe outlets Economy We distribution the to and that it available

at I on is is talk hard team digital the and driving working our call. that about so the that And think result that, we

have section sure that drive continue see And do to alone that on available, in in more make excited so that product load And will the as can the of we dispersed to growth. that as widely deliver possible. XXXX. paid we we make room I line So will we're we what aircraft, factor item think

Alison Sider



Justin have go Bachman. ahead. Please from And News, we Bloomberg

Justin Bachman

other of Yes corporate it's the contracts the on the from a or volumes some yields and are what and greater hi whether driving wanted color traveler? what's seeing in to little close-in time. thanks if driving it's Or about business what's ask traffic you for there your behind bit business guys I bookings. terms what's

Andrew Nocella

even globally, It the I by a America, – it's It's it's board, in think, not honestly. differ little even, may quite But across coming Latin overall, though. decent bit strong. region. It's

the product is Our fantastic business And and running in past sales we're rolling calls, as about tree, is people class helping pounding force out choose about great importantly, we than has as doing that job. they've great a been But talked a operation, more done the before. what out on and there a we've talk we're Polaris. United greater ever that ways

aircraft have every those seats, We Polaris entering can't have runway seats we come of are XX I enough. of And think I the one class Polaris one every lot to our soon have fleet business single until It jets. widebody with wait a we seats days really and just on can't best-in-class. go.

Justin Bachman

you. thank Great,


we USA Dawn ahead. Today, Please Gilbertson. go From have

Dawn Gilbertson

did plans may Hi answered good change bag Andrew, and have American not, carry-on why to Economy, – a any restriction morning opening you in roundabout your September; it on this question comments. is way not? guys in like and if Basic But in do you your have

Andrew Nocella

you? are how Dawn. Hi,

Dawn Gilbertson


Andrew Nocella

ultralow-cost allow and designed, to our to at. on-time the us speed Basic, And designed to where are and at. win of competitors The yet. I working we compete year to results deliver everybody with so constructed where to we're way a carefully be, been allowing has departures. against segment On operation we're we're our think, effectively allow products, It from better terms for as for was in we us with it's Basic full ahead a happy

Dawn Gilbertson

change policy no the that So on bag? plan carry-on to

Andrew Nocella

are policies. to no plans There change any


Please CNBC, go have we Leslie from And ahead. Josephs.

Leslie Josephs

are a agreement, question stay on of also possible Could pilots? your release with there on have with in morning. was good right? It you XXXX? regional. a just Hi growth Oscar. with a to me a where guys turnaround. I you past lot is X-year scope update want And Do you for You negotiations saw

Scott Kirby

So I'll start in it with Oscar. scope. I'll give second a forward to

the side's in to cooperative our there's understand the perspective. some we us and together Those I are are scope, First, regard and are cordial progressing, all United things tone. negotiations the table, to had where pilots. and have world to they with With today. tone each We are scope. I and working disagree at on at our they seen have perspective regionals, jobs but of history certainly, outsourced with. sensitive that on because is pilots their would different their understand But And fully perspective, their that, of agree

that mainline, have to what and matters and United a use well, that. can growing and need way where it's – American we to scope pilots. growth to we competitive will Delta. ultimately helps them good they place well. will pilots, scope. I a be that And are our for competitive regionals as intend for competitive and working confident that's find for We And company find get continue the is to The our for that's the everyone. And for it's to scope that good way good going have that a mainline, a with fuel think can if we am to we we that We is win-win


today's Ladies for you you. call. this concludes and Thank joining. gentlemen, Thank

disconnect. may You