United Airlines (UAL)

Mike Leskinen Vice President of Corporate Development and Investor Relations
Oscar Munoz Chief Executive Officer
Scott Kirby President
Greg Hart Executive Vice President and Chief Operations Officer
Andrew Nocella Executive Vice President and Chief Commercial Officer
Gerry Laderman Executive Vice President and Chief Financial Officer
Joe DeNardi Stifel
Jamie Baker JPMorgan
Darryl Genovesi Vertical Research
Hunter Keay Wolfe Research
Daniel McKenzie The Buckingham Research Group
Jose Caiado Credit Suisse
Savanthi Syth Raymond James
Helane Becker Cowen and Company
Mike Linenberg Deutsche Bank
Catherine O'Brien Goldman Sachs
David Vernon Bernstein
David Koenig The Associated Press
Alison Sider The Wall Street Journal
Justin Bachman Bloomberg News
Tracy Rucinski Reuters
Call transcript
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Good morning, and welcome to United Continental Holdings Earnings Conference Call for the First Quarter 2019. My name is Vanessa, and I will be your conference facilitator today.

Following the initial remarks from management, we will open-up the lines for questions. [Operator Instructions] This call is being recorded and is copyrighted. Please note that no portion of the call maybe 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 Development today's and not of you Vice terms, Mike turn host Leskinen, call, agree presentation Investor will If Corporate I with simply President for line. off the Relations. your the

Mike Leskinen

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

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

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

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

And with now, available the turn I'd the members call the In team Oscar. like over Q&A. other assist addition, we to in to to room of have

Oscar Munoz

for Mike joining and you, you all today. of us Thank my thanks to

the out in of unit first a with at trend outstanding effective back margin With the expansion, gate of XXXX quarter pre-tax came strong consecutive adjusted of second we our and to management, quarter right cost an the XXXX revenue continue. an tailwind United expect emerging growth, of

Now running an industry-leading precisely of has turn that make investments are fly. series let's first, what X. efficient increasingly to this quarter airline the United us allowed to is making people slide a choose But airline to

financial is the clearly As results working. strategy quarter this our affirm,

$XXX quarter doubled than an three points million First the had with adjusted more our earnings an and best share than quarter first of pre-tax year-over-year. we've pre-tax quarter earnings were per X.X%, years. We in basis margin adjusted increase first of year-over-year, XXX more

and achieve several cover especially consider of track will goals. exceed meet, the us EPS that easy MAX the well an this will So adjusted to quarter not an confidence operational weather, and gives grounding, us EPS $XX to or later. other From winter on perspective, our adjusted was targets when Greg this puts $XX XXXX our events harsh that we we XXXX

want this heard to to By customer while customers in you've I us mentality experience talk in demonstrating we've much strategically tangible So investments not proof hard our making costs. work able promises for about. once again and employees ways, smart service, combining and our operational the thank elevate so managing our performance their impressive been

few examples months. the Here benefits in are customer unveiled just the a few last of we

resource and making customers. more it United more a app We made debut world personalized we for the of version a the app even in the better. new most airline intuitive our First, downloaded by

on Second, for now every class service United in customer of more free are television every aircraft. live XXX more than than channels of XXX

will Bombardier XX-seat for two-cabin cabin, the later announced we offering Plus changer our fleet, regional year, and game Economy When particular in through customers product more This of amenities will who CRJ-XXX our enjoy it hubs spoke in WiFi our that aircraft. for any cities, consistent can other a this seating, flying travel innovation regional aircraft more be offering XX-seat launched is benefit the internationally. first-class when it on regional today. Third, connecting to aircraft

offering will premium week seats, of more. York and this addition, Fourth, In increase Asia month, significant additional we expansion announced which by capacity Africa to non-stop to United Africa. Airport. service XXX to earlier Town, And first our South to XX% applying returning class to means to announced X,XXX aircraft serve United plan better an a more we to we network and and customers. see premium our our a by business wide Polaris than our service or unveiled daily continue grow adding Cape flights six that United launched ramp-up is Haneda Newark/New Tokyo We our between United last

to our and delivering and airline, invest service is workforce, customers, strategy demonstrates in manage it's costs our customer success inspiring our And effectively our it's investors. winning working. quarter our our Our over grow for our this it's

future Our as bright fully ever. really to momentum starting is build is and our as

bigger to of that impact let over airline any hand but over positive than opportunities will These and most and we'll long-term it have and be on for competitors me the quarter customers. Scott? to make it. have now to discuss our uniquely potential Scott take several So, United of us we're the rolling our his on for the upside a significant our opportunities immediately, and determined

Scott Kirby

United. momentum Thanks, to We here everyone with great today. call Oscar. It's on have the started at XXXX fantastic

this quarter, faced on margin earnings our pre-tax our we the headwinds impact midpoint of above covering the some adjusted minimizing customers, our while operation job exceptional and an achieving still guidance. While team did external

external prices, team able customers headwinds few adjusted to faced take accomplished the raise high EPS were Given Last executing talk of operationally. were guidance And because year, what than to to our every about some other quarter, more fuel the extraordinary the United is efforts quarter. Greg going time this for well. we we to care team we

We deliver We customers to point proof for remained continued just quarter. one exogenous faced believe this the our strong we our a successfully better had as shareholders. number executing we events, of more through managing on even path is an an the of is both And like track even well unusual quarter trying we and on. United

improve or that. It's allows just target in more doing year the to We effectively excuses business have our to is precisely manage per and caring, adversity to cost, striving and four share product exceeding invest our and same we've we expansion. without a the performance and year and the this earnings with did experience. in our higher and dependable the service prices making up we're consistently year-over-year adjusted revenue cost our to and the pleased that in By and still responsibility what on XXXX. customer efficiently, and our to just principle margin first able overcome – us our quarter, plan foundation expect core game In fuel were to run invest customer lead that built. upon efficient. with did airline we're just is in done peers we pre-tax safe, the We're our management, we last Meeting based continuing strategic deliver which

our We've connecting save little testing been United flight need decision great flight. team experience. of Chicago. for each customers expect late, another commitment to sessions based our caring customers. of a ethos for identifies all which the of flight at time XX to when miss a new customers, day a is hundreds the customer events, central in-flight to connecting also downtown fully our illustrates example the our the whether this for are per for be workshops, customers of called customers with crews XX,XXX the customer dynamic this instead arriving time to second promise we're technology frontline in technology them. of A we attendants to events of our In deliver a a where rolled Denver make backstage separate of pioneering our the to who how better. departure informed way the testing it's connecting headquarters There and flight gathering caring leveraging centricity. technology attendants their on culture innovating connecting United new rushing focusing the implementation is make on and about we in we're constantly series to caring on year, where in two-day but about technology are arrive customers, still interactive connecting This our to data to vividly building at near and an employees; door and Dynamic flights they continue how elevate and course real-time We're XXX opportunity That's of up for We closing out. flight, one. will have make departure, hold empowers on over opportunity, wait of service, on feel

Finally, There program, of our us with one many respect growth the of company's that prior one we biggest to our know and my are some proud of and top MileagePlus personal single opportunity, the experience of. therefore, is this from very margin personal of priorities. program, aspects we're

our of peers, component relative widened underperforms remains disparity after the to recent announcements. that it true and program our this However, co-brand only

economics Chase competitive or ahead in for Chase highest negotiating ensure forward of card that gives hubs stakeholders. answer the on and industry a related discussions moving United delivers anywhere Chase opportunity and deal most the we has value any which questions which We negotiations Fortunately, in card our to opportunities cannot We're about with our of for deal partnership, the today. for with cities, the status these to United largest look with our improved the means our income co-brand all to world. privately,

XXXX to adjusted full benefits existing assumptions noting guidance guidance. current a worth it's new not our our the co-brand negotiations XXXX year are only any regarding so However, agreement, upside include that does from and EPS

the momentum the us as Our year that plan. we'll XXXX, second of our continue XXXX the we confidence quarter into into -- success of strategic in second move the first half gives

grounding adjusted EPS the this quarter. team this to did With take EPS to of several – this to the feel it's incredible the duration, our talk to things nice it guidance over United affirm about turn the raise at time. I'll While in we to uncertainty guidance simply our be around XXXX able quarters is Greg best year that, of light full past care adjusted MAX customers to and it

Greg Hart

Thanks Scott.

As number in Oscar we Scott a faced of unexpected the events and already mentioned, quarter.

of these of our challenges extraordinary and through employees through XX,XXX proud who over particularly for care went lengths to are worked dedication We the customers.

In or winter hub-closing the events storm overcame unique in the in quarter. the month like each operational event polar weather Denver, a of to in we Chicago vortex addition

have of closure with to of The continue February, the to in our the X has operating represent decision our First, On find announced Then for Delhi us flights. and the we But to March shutdown. The we to stage were through team to closure airspace. the government to flights crews started order the in Pakistani X.X% XX, flight. our minimize disservice Mumbai ground unfortunately, the customers. to quarter suspend to hard had the required order the solution which Germany off July the MAX impacted capacity in service worked January to refuel India, our a by a in FAA in aircraft.

X.X% harder us to the money for to and Making are short-term, summer San thing Houston right were when impact to those have this which the the Francisco even some solutions but far, or for the aircraft with thus these in busy other modest Maui among grows fleet. higher. This customers about for has thing much costs operational of we Los that customers in We things, longer a XXXs grounding airline But means XX only of Angeles. grounding airline kinds do adjustments adjusted utilization had the the and travel impacted. that We and have over lasts. season, schedules the like to do the the our our gets plans was XXXs and the of our but upgauged clearly caring focused factors long-term. load capacity, aircraft during on been whose routes travel impact right on represents These

their we announced aircraft the MAX complete we two focused will that yesterday, of priorities. So one be through review when early July. on hold Since we'll out of our the MAX, no schedule knows regulators

their our mitigate on take customers care impact First, this to the for extraordinary change to we'll continue of and travel plans. steps

aircraft's fully independent Second, safety. cooperate conduct as their they the own of with the we'll regulators assessment

For a more running United proud We at employees of that United first. our of complete. safety a is customers take we pride be than ran operation. employees XX operation don't -- plane Despite the can the in years, independent our why come all an That's of. at the great on of has that won't we we in customers until and put assessment headwinds and lot all quarter,

with the Denver hub major of a These best competitors to testament success of fact, results we In go the largest are in work and airline's ran nimble is of strong Francisco our the more to Chicago, hub that again hubs our an the Andrew into in environment enabled operators. and changing. The all once will always outstanding adjust employees our revenue to operation be San now the and ability results hard that detail. operation

Andrew Nocella

Thanks helped up growth a with The revenue X.X% and this passenger success X.X%. our teens. the strong we're revenues ancillary this initiatives for business to earlier faced us our up great and we and revenue of quarter our of XX% performance high off uncertainties demand pleased PRASM achieve Greg. or got the given line performance with were passenger commercial The Overall, year. start strong with period revenue very top continued leisure up

for Our entity first quarter best-performing was the the Pacific.

albeit quarter PRASM region represents consecutive strong for quarter was moderate our the as the continued is expect our performance across the we X.X%, fourth with above second more and growth. Latin X.X% our and in in increase well quarter expectations of PRASM strong flights which quarter robust levels. Demand First shown for RASM. early increased America strong was at

also by April. in demand May expect by shift the in in to comps in creating for the inflection weak entirely to we even quarter PRASM of negative. strong quarter, turn quarter is yields quarter to time with the continued since in XXXX, economy Easter both expect main significant of healthy the most to due decreased part but well. the strong, front In positive a quarter PRASM to continues first X.X% across the difficult shift however region, Atlantic. expected for Easter the We We Brazil very cabins. looks pricing. cabin anticipated while do driven the The second second stronger second be a Argentina for due performance a for the April. cabin Europe of challenging first will cabin look

increase the increased in quarter X.X% in PRASM domestic Our X.X% capacity. by on a

will highest quarter first we're quarter pleased the very of growth results. year The be our and capacity the with

we unit be to in revenue quarter, up The expect our second our unit when XXXX Looking year-over-year. adjusted guidance. ahead set with to consolidated year we the is passenger line our X.X% to X.X% EPS full revenue expectations

XX. slide to Turning

network. We continue to focus on commercial initiatives capitalize on all the opportunities of our

to forward. As co-brand available reminded quarter-on-quarter in the continuing Tokyo end, Scott Scott future potential look efficiently strongest our We upside growth. encouraged we by aircraft posted of flight as focused on before, we we outlined, our has just on in April. Plus a recently we're significant long-term already we're quarter will flew of and of mentioned the acquisitions that be double-digit remain Premium United the five first to seen as to our account card early Close have we of past years new agreement. the the But first trend

have above in on XX%. see to revenues load We far more Plus seating times the be our will of The across be are to remain States. for on XXXX up. we been expected have Plus Premium fill to fully filled two gap average impact impact in than thereafter coach paid been yields expect challenged but factors for more we United smaller when a XXXX, is expected long and Premium at communities premium structural has We and negligible optimistic to the as yields continue impactful

XXXX this is continue introduction fall As on sixth XXXX focus be of Washington that join the we CRJ-XXX pace fleet June finished announced and our XXXX installations markets. when to Oscar well. be as seat of we open the lounge Dulles late at Polaris short-haul to planned the scheduled Polaris earlier, in mentioned business between quarter, on to in will and in

quarter, RM sales efforts quarter, our our system In line focus revenues increased above the more closer our possible sell curve. held which growth. in to the to to Yet on later in departure Saving XX% to the the top be force. is again, to much booked billed seats well closer seats departure date of continue We due to corporate revenue using we Gemini. first booking

we'll had the customers. recently accurately best planned this up is we award leading program for significant and has positive winning to And As weighting as given award supply next increase first for We added be by directly The have quarter fees, all the frequent to chart, our we award the mid-continent hub removing the year-over-year Denver optimistic to flyers. flight us booking timings capacity one revenues award changes, re-banked margin to our unit re-bank through same as expansion. re-banks from committed which MileagePlus the have year. with pretty three this flyer more schedule again posted demand consider mid-February. be improve Denver We market together we award this is dynamic in successful redemptions. won We're Denver connections the match FlyerTalk. for absorbed from restructures. and member well well completed as recent with of about hubs the in can announced award so pricing the that outset. We're at all all With been our

the As commitment accounts instantly now member to gate. flight upgrading part of a miles our as soon into continuously our post to as we MileagePlus experience, pull

expand flights continue and through more economy basic more booking We well classes. to as

to from economy. experimenting also when are We increasing amount buy-up standard the Basic

Town, launching of Italy. and Prague, global Africa South just to we're be thrilled service to higher away to Czech week, now, Africa and Republic of introduction on our Naples, We're the addition from even offering. route buy-up announce for continue weeks this Cape costs. announced we now Earlier XXXX rates late buy-up stable, to As of the

the focused United long potential we for mentioned. activity The the years, good to the building like the coming In remain we really international we're mid-continent as strong international track XXXX. for We're the financial about outlined we United While, in the over doing a earnings January our just to network in excited strengthen entire will are term. quarter. domestic expansion to enables it well share we I on With is the targets announced as the feel the margin routes network turn new achieve working our continue Gerry to per on I our to in discuss of XXXX well. the results. Thanks ones about work first pre-tax plan adjusted team we closing, to that,

Gerry Laderman

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

You additional those to refer can detail. documents for

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

are $XXX and share of XXX than more adjusted We report ago. adjusted for margin first the pre-tax XXX% of earnings up adjusted was year million pre-tax versus per points up to basis quarter marking expansion. $X.XX consecutive X.X%, second was margin pre-tax the Adjusted income and pleased a quarter, year-over-year

of quarter cost first unit We are and our for our and XXXX. quarter full Slide the proud the shows results. total year all very these XX forecast second for

great cost better decreased combination to unit by Non-fuel a year-over-year X.X% of This completion of the was timing a on cost in a course continued the quarter XX. and discipline, over result, of year. Turning expenses basis. slide first driven the

to be non-fuel expect up cost we flat to XXXX, quarter second the For X%. unit

face to combined driven is which look of X% the the ahead MAX our suspension caused CASM currently MAX, we more by have headwind by aircraft flights respect quarter of in of to represents As XX reduced temporary the of in the the a about rest grounding -- flying, we Delhi, the delivery with to we of in quarter. for the for and XX five second and we of scheduled aircraft currently capacity. have more delivery our the scheduled fleet, With currently our the third these XX year,

to out also be CASM. been events the our will greater service least to the to of will our Delhi the full that Delhi at the year capacity until suspended While the last July through schedule and year remain current grounding longer modest, these capacity we've CASM-ex X%. we X, our Based reduced changing guidance have and MAX temporary revised early around financial assumption suspension full and on the to flight impact remain July of our flat X% year-over-year. MAX aircraft Due our up the impact guidance to has ASMs on of to

achieve Our suspended if CASM-ex flights impacted will out than year service aircraft ability in year EPS guidance. current our this but remain assumption, better-than-flat our negatively the remain of to remain be confident or MAX Delhi we full to longer

we $XXX million you our per quarter to $XX.XX on common repurchase the XX, see of average can first shares As of share. price an stock spent slide at in

quarter our $X.X to our be of repurchase continue we end the left to and first of the billion share As plan have opportunistic repurchases. approximately authority in with

quarter, we of aircraft. delivery During the new eight took

XX in We drive also mainline billion. purchases, outlook five purchased and with business, conjunction CapEx continued investments regional aircraft of $X.X off-lease. aircraft our These adjusted XXXX aircraft in the

using has projected for XX revenue the summary price slide provided fuel curve. quarter April the adjusted pre-tax second XX%. and current including Lastly, XXXX the costs and implies between range capacity, range a XX% second our margin The guidance, of XX quarter's

expect $XX. full share year between We be $XX to and adjusted earnings to XXXX per continue

XXXX remain continue ability to and our growth results the in quarter our of We plan. first to our pleased confident in are with on execute

to managing Mike on the and With to long-term creating Q&A. our be begin continue that, are now earnings will business focused value for shareholders. We maximize the

Mike Leskinen

Thanks, Gerry.

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


And first [Operator have you. Thank from ahead. go we Joe DeNardi. Stifel, Instructions] Please

Joe DeNardi

Would thought that got Delta's recent you they deficit or be with maybe about Based United's so economics margin deal, point. to your math? XX% may points X.X now. improved XXXX would that economics imply that the like morning. disagree so, you by the seems is point from headwind X yes. closer it mentioned to earnings X call were card on Scott, Yes, margin Good in you on

Scott Kirby

is certainly disagree said, We're going number the a not your what with think opportunity. the we of this but we as affirm to proactively size the we significant on opportunity. the is potential would opportunity, and So analysis

Joe DeNardi

And then, bit little smaller of of Delta kind versus level, and potential earnings United American. the from in just Scott, -- Okay. you terms a now quite passengers at card, is think the a as for bit higher about least,

do we with then, And how that reconcile Is So market Scott, a have you with eventually? Chase that negotiations? you. could Like, card formally airline? Is just, why smaller as get mentioned you card in that your economics what Thank penetration? be negotiations in spend you're in like have now. do your a card now? been little better per guys change rate higher? Or you you're economics you negotiations for a Do while

Scott Kirby

best firstly, lot conversations to with I a essentially is not our number talk the is about have the which of smaller, is describe D.C., tough in that we're going if our United market it of Denver, the in indicative of Look, first, Los fair the about at fact it's Well, We passengers negotiations. Houston, Chicago, San Washington opportunity. revenues, hubs same, and Chase to think And Francisco to is look certainly Angeles. start. while you the York, New

most the markets it we with them. Great the question around working we are for with demand. are of that with potential and we think markets no card realizing spend. premium the -- have I incomes, high that potential. a issue best the think hard is And markets there's The with Chase I they that for have premier set best there's no question cards and is total

ongoing We hard both solution both sides more that are and recent of for win-win actively in United economics discussions work gets but more customers for us. the engaged boost that work little them. from are have competitive that Those a working got hopefully bit and been and with Chase of a on for announcement, more octane and

Joe DeNardi

Thanks, Scott.

Scott Kirby

really -- ask to we're to are on to and the we we way have same in not anything please. add don't really ask card, again so the going try over by And the not over we -- to questions future the

Joe DeNardi

enough. Fair


Thank you. have Baker. Jamie From JPMorgan, we

Jamie Baker

taking Oh, my good thank for and morning, you question.

were MAX Gerry's Greg, the have Following for observations, you walk those is even smaller. below us up on other of fact when I'm mechanics imply for well how over-spared cancellations fleet margins the begin a pushing off by pressures trying adjusting bit? date on the Does accomplished through you been post-July, operators, is actually What potential the your just to to Can that maybe show U.S. do but Was it better nonessential to with? up? it maintenance? understand

Greg Hart

the we is we're Hey, risk to for including, schedule we around the because or flexibility of could of some tough many manage, was some we combination Thanks question. things do can aircraft. aircraft that within as month two, really beyond hangar preclude combination a manage doing little of things. terms utilizing frame. take Jamie, a It there did the the recover in not time we this gets our check as have in that maintenance something we that to to moved Greg. events for deferred of it a able the maintenance plans We was it spares operational But that, XX had. some was But the really our changed well a and With of we maintenance and heavy are schedules plans. on given

Jamie Baker


That Okay. whoever to And helps. follow-up second, it. would for take like MAX-related

slowing you'd that initially the both assume the exclusive. management we conversation and pilot two that As ALPA potential is for down are think with be with this having focus aviators MAX would all phenomena deal, of otherwise But or the I not? for your timing the a mutually about

Scott Kirby

us And the issue. on not. it's I partner No, would MAX say great that been has a ALPA for

here where appreciate comes all at glove not have safety ongoing at it it so agree negotiations, and we we or in don't ALPA to impacting But the we everything. with far. While process in active their that's work is involvement always But hand negotiations. about the one United hindering we

Jamie Baker


thanks Just wanted check. Scott, Greg very and to much.

Scott Kirby

Thanks, Jamie.


And we Research, from Vertical have Darryl Genovesi.

Darryl Genovesi

move you're morning, of With Good facing this flat issues in both any cleared CASM MAX the flat issues is you down we CASM up the and and thinking a shouldn't XXXX? assuming the to had XXX previously time. in that XXXX are why your talked by about for CASMex some Pakistan the about you down year-end Gerry, Thank there and reason XXXX. guide, to year be everyone. exogenous

Gerry Laderman

be would everything's we said Darryl, on do up we if year, there's reason this that So we what next year. cleared focused wouldn't no

Darryl Genovesi

initiatives Okay. still of that guess to over the some that Are periods. CASMex? there you highlight I opportunities is that I get years are big -- to off-peak helping, the levers what you particularly CASM Are capacity for any focus the next year, big realize you there on other the the that pull would growth to any have X.X guide? during being as

Gerry Laderman

the are probably I kicks would than some as this been in more describe same as which would talking year be for one. we've year There instance gauge, the categories next about.

another But be to Continued better of is efficiency the and our the use continue same. It's the execution. just assets will one. generally, categories

Darryl Genovesi

Okay. us trajectory And could of then from a give also sense just you the CapEx here?

Gerry Laderman

highlighted disclosed XX-K. we the what ties schedule investor our in was next new deliveries to So in for which year, our aircraft update,

Next is a peak year deliveries. wide-body year for

a the you about this number. ballpark XX next than But you XX does XX this more CapEx top year. those year. narrow-bodies you're I incremental the cost That's versus early That can on year of -- is peak. of this It's looking billion too tell have We to give year. versus drive only wide-bodies $X precise

decisions focused CapEx. on making at to We're An XXX-XXXERs the year. example taking we deliveries look it, we're that of that. take how smart after this on wide-body expect come down We very

on aircraft those now as We I'd the end have million above we what where at XX aircraft we're us $XXX expect also depreciate. capital. our that's aircraft if that next And a year those you coming savings. focused can only of that's and CapEx used between on And CapEx improves in $XXX that in. We million cost year. actually look mid-teens mitigating aircraft aircraft of highlight saving first ROIC well new versus the of to

-- of sort talked what before, replacement of is that, grow that non-aircraft can beyond where like and which year, I GDP on a an kind a about of there's and we a number So repeat is next that's can as around CapEx we've you CapEx of find basis growth billion a on But little are see next $X normalized this to year spike. bit year like opportunities annually.


you. Thank

Research, Hunter Our next question from Wolfe Keay. is

Hunter Keay

Hey, Good everybody. morning thanks.

from the CapEx relative Just plan anything to CASMex? CASM why you bit save progress but have And initial how you've for that CapEx. don't made, did any I a idea the much to to incremental come the little the up on P&L want CapEx diminish more wide-bodies do Gerry? Thanks. you going on about the is

Gerry Laderman

to It really I'd it's now a allows that next addition a -- these planned, are But us just growth much in year keep benefit in that's had plan growth our those it it in aircraft and happens aircraft, the we up -- to effectively, it say have these years. to the wide-bodies been a some for with most had, has newest us they're nice assets for us. spike more But efficient the us CASM to that that plan aircraft. so what do been are consistent allows of a right wide-bodies. that sets few the investing the also for mind, the in retirement there's the and XX-year going older putting all on nicely route we're right alternate redeploy of

Hunter Keay


system Is travel investments premium then close-in the it strength old in the to to guys Gemini given Scott, strength that all demand you products is now? that the Okay. possible still say are used and you And of underforecasting underforecast the Orion used in making business some demand.

Andrew Nocella

think sorry. Jamie its I -- Andrew, Hunter,

been made the Gemini booking fact we've of careful that lot curve very I and with have demand. reflect our we change think more on close-in to we've a progress

there and there every better we some be go work still from at it. may Gemini. we how rest the year get and obviously learn of we better But with we it upside as day as the we So, of through tweak kind

of that I to QX. So, our the But that's think. did revenue in potential well we and very and to sure conscious more way in start we've to that successfully been curve our to that booking airline QX on doing think we're reflect come we we make the changing


Thank you.

with Our next from question comes Buckingham Research. Dan McKenzie

Daniel McKenzie

Thanks couple of Hey, questions. good morning. A guys.

some guide full I means the of are first, year regarding distribution the going second investors Expedia to spilling ask, how the for what it with yield. of material then first? that's the news Regarding in negotiations And into inventory overall to is United's guess, media course, Expedia,

you to So, how around I'm can numbers help just that. wondering if some about put think

Andrew Nocella

time we change. not suited most evolve to innovate question. we'll to to were to different partners say Expedia our on United we ways. past. failed. moving and on, earlier Maybe Andrew. many frankly that better stop The year need way of we try can and distribution quite this lot. to is changed the simple be a is clear answer this that to the This have tried and I'll perspective Companies us It's complicated from tickets But many, our hear sell in future

We can in particular abilities very fares. our up as have and optimal distribute we invested that's app are. But selling more just the be transparent to to historically has with cost our Expedia our much quite been website we think our we in sell and sales be content. well lowest own to and where lowest fares effective good come in honestly our

So, we direct really look where relationship forward and are having forward that's to with customers our we Expedia. with going a

Scott Kirby

$XX guide from comfortable we've just would end the will still full since September, effective assumed that in with about full and not $XX I our Expedia of you And year asked are the the add guide. be at we to year we

Daniel McKenzie

to average? behind I helpful you the you how hear then core -- it or perspective volume normal elevated So, we But Thank booking commentary call guess you've and guide. some it is on shared And first on the given Andrew that. below you. would appreciate Is the demand. Easter have some perspective volumes? shift, the I booking revenue obviously, Scott characterize underlying

on some on with backdrop. are what's how just yield going So, the consumers digesting perspective kind of existing

Andrew Nocella

really we we're them, Board. with was pockets, that's thought very as few forward are overall little we There levels the as really same QX, Argentina Well, feel across And we a I the weak. Sure. look the for But would strong. big Easter clearly looks is going is QX happy shift, good part the great entity Easter the think be of in Latin of to shift. our about after but the cabins. I to And few both this. next really is that demand talked due that weeks, America into weak of a about say holiday a we that quarter Europe, being and one best-performing

have would we we lot is going the lot underlying see a I of as demand holidays into how -- out particularly But or there's are we that June May good. going on. So, things. moved affects the look say very look at which A and


Thank Joe From have Caiado. you. Credit Suisse, we

Jose Caiado

from the flights much. very morning revenue everyone. the Premium that's guide? revenue QX Thanks Andrew Good contribution embedded to Plus able are in you quantify

Andrew Nocella

or route. we couple at flying insignificant -- of at really month, a this as cabin And than two And versus more tracking this we is things started point. selling said earlier yield what times It's earlier, we're the the of one Tokyo-Newark say started there's will the coach. to looking I was them that's first I coach.

payload excess -- the been in for expectations in first factors payload other is load had of has And weeks excess in The factor the XX%. fact factors we thing two XX%.

of forward. new on really Premium and a we really this financials we've have seen started-off be weeks every last with our Plus So, an more over we've this XXXX day early think way. on the in Ultimately, XXXX what of few is and to a our two we X% our today. there'll given important great weeks got And here aircraft will more. be X% days few with wide-body but really very impact capacity product, will -- this this But going

data two excited particular given how seen So, I are points can't over we've the in say the we last weeks.

Jose Caiado

maybe puts with adding one outlook year? here year color, the small. of change cost unit the outlook parse the Gerry is full for the fairly takes some for the appreciate you. some that. helpful and but to mean pressure, capacity the very respect I lower MAX is That's just unit I obviously Can to growth, cost you

of just what's So, where or through really and maybe your talk shining can those some about outperforming you the expectations? cost controls are offsets

Gerry Laderman

of of fleet. the the as now fact I would have of is indicative it's MAXes that part just relatively small say of number we the

Delhi now of right adjustment result the and expected service is that outlook. the that suspension a this is and pretty solely else as the we capacity So, simply the of the arithmetic tracking MAXes everything of and is changing much to


Raymond we thank Savi have James, And From Syth. you.

Savanthi Syth

expectations will there kind grounding. when this for deliveries Hey, good MAX an impact are morning. be Two quick follow-up on just Could CapEx your on the what resume? year of

Gerry Laderman

this deliver our be Boeing to won't summer, if of wouldn't Obviously, timing beyond the long deliveries expectation lasted impact aircraft. enough, that year. this returned But this if service it to able grounding the

So, year. the take aircraft this scheduled for would expect delivery this we year to

Savanthi Syth

ancillaries pick outside lost but or its when might of front? card Great. Okay. revenue. revenue, then also what of just well, credit the a the other thoughts to the doing revenues really you're And kind new on the other just anything. seeing of of expect Any kind other kind that bit of up non-passenger on deal momentum then cargo and on revenue And you

Greg Hart

Savi, Hey rest question. Scott to of Greg. this over for piece is I'll it take the cargo turn the then and the

be revenues to were by and continue X.X% driving side, across our really team largely with the of -- cargo the the really, roughly, in of our peers, But capacity On performance really relative us our good cargo really, network. down the happy cargo the we industry. driven a product our to performance for

Andrew Nocella

revenue that this didn't the the is And one-time category Chase speaking. reflects think we this the that chunk year Andrew had we of big majority payment from so -- other if I -- Last not that year change. a get


we Cowen have Becker. Thank Company, you. and Helane From

Helane Becker

whole first compensation taking to MAX you has grounded? question. Hi thank Thanks or My all at and offer that -- offered make question any for you my is being you on operator. Boeing team,

Gerry Laderman

Gerry. Hey, Helane, it's

whatever have that on said and with for resolve now ours for like we we Having continue if obviously, right we're in Boeing incurring every as decades. you of been the assisting and is references conversation works of with there a expect years to partner Boeing focused to a and has that, some can we're to on. situation problem always conversation are been do XXX number such expect of we've the focused way a So, that great some we on all Boeing solving that And I and use regulators with ago way us. incur. costs both a historical that's we'll

Helane Becker

completely my question with to then Thanks, has is more Okay. other service. and unrelated really And Gerry. do customer

in is airport has of one, go how on or area impact that under X.X Newark to construction know about; will experience don't certainly going long customer I Can some is your been I where the for…? security talk or for on through and you construction so. now main go undergoing that to not the any better continue seems years A, just whether -- have part think Denver and construction and right you through and

Greg Hart

improve much always Helane the very Greg. our they're airport this possible of talked a work questions. partners We you lot actually that the actually about closely Thanks for mitigate the we experience making impact as finished projects the customers. of for as is customers. time And our in by the materially with all the on will sure

make are to ensure together customers from we as mitigated our our changes get may impact much possible. that the the They and easy. aren't are programs on projects to time-to-time, we we as these with And is what need do to So complex. and reassess where partners

Helane Becker

you. Thank


we Bank, Linenberg. Deutsche have From Mike

Mike Linenberg

America best like the drove March was two hey Latin that And going June some -- morning, Yeah, best what moderation the everyone. quarter, Pacific strength good Thank of on the really quick in ones the here. Is Andrew quarter. to Pacific performer. just was PRASM give what mentioned Hey, that looked just a quarter? March highlights? in you. you there Pacific? Can for be the you us

Andrew Nocella

long the a was a give really see. Yeah. to across in business the the great we so to economy really cabin good class strength try But in good actually but really strength quarter class entire more seen for time. but a Again it March saw across that's you performance, little the Pacific the color. region, quarter with I'll bit great We've happy in

the really nice Latin But the said Pacific. for Easter shift part looks that Atlantic for May and we economy I see bullish And see looks and June the really So on it's is up really big result. as America as rate. a and great June A strength America I'm this QX. a continuing XQ and think I at entire across again very well. had this into that fantastic as for of entity well. catching back Latin quarter point to stellar at cabin incredibly May international is doing And

Mike Linenberg

in the Okay, puzzle is terminal is with is Angeles great. missing And terminal United just piece unveiling nine, my second L.A.? Scott nine projects, the Los and zero question to -- that that for terminal

Scott Kirby

That's probably at an full someday. really we're built today accurate having Los description. We'll look Angeles. nine forward to terminal And

our that's in gates done. will on the in Los get and utilization more gates grow at point forward and incredible have We Angeles to we look some opportunity to future when the


from And Goldman have Sachs, we Catherine O'Brien.

Catherine O’Brien

Good morning, everyone. Thanks for time. the

are two hubs last all margin the about the With maybe driving been Are Is margin you've mid-con the you the expansion, biggest there -- initiatives that? margin last over quarters? really like networks could certain where What's quarters in you've improvement? seen the that seen talk two leader re-banking? the of segmentation the your in improvement progress there seeing

Andrew Nocella

this of all going the it's to I and take we suspects. Plus small. given future for call economy on offer the mean, before I in Plus, different trying has it. to accomplish in key really, reasons of whole Sure. I'll try all Premium to and where our to segmentation as But new. focused on generate -- big and or and Premium we're which that's its we're brand basic mid-con on incremental that lot part the a performance a really connectivity, is individually hubs them each have break we particular to of that for of talked about a big mean, really we've we and the out the usual not In host value the but lot commercial initiatives on. tend those a the

international deliver successfully week's to South Naples we and So, to potential Cape have say the I'm the of really initiatives incredible. the long to Prague ability We're a the company with And excited Africa Town medium and and now I'll a in have starting the commercial last over time XXX. is is few fly about the run. we of thing then they're and broad what going array we believe

the of our schedule we that think liability the the of our offering connectivity of commercial lot we're results see XQ quarter changes and changes, that first long of break saw you in this division. you we when anticipate the these run I what marketplace, potential changes international in year. will making, we for the with all in the the So bring But a product together the have in initiatives

Catherine O’Brien

one color. Understood. And then Thanks so much for maybe that more.

major the about airline So, of scope in spoken to you've compete with your past importance peers. the

that in With discussions you better your mind event get the you top pilots? your don't of of with position Or the the do about competitive feel the is in scope? innovation even an CRJ-XXX, still increased

Scott Kirby

there pilots of for do actually will -- It grow a that So, it's our and scope Airlines. to don't think the is really United that use. important that we shareholders. and all be we'll word employees, our we I you used in able It's of important customers is that way our that good our

remains there, be pilots The really we're going a being going our for to a win to that them growth with premium we're we it where board. solution across getting with aren't can us markets have, in for way on demand confident working so offer compete and are give to opportunities product win-win win in of do and to the we it to our for pilots feel going flying service other it carriers for in important. a us future. competitive a position unique the to find And good none allows large customers a still is competitors And us that is CRJ-XXX is full a that our I'm ability win-win their to about that that enough mainline important. a the but And our great get


Thank we Barclays, Oglenski. you. Brandon have From

Unidentified Analyst

This [ph] morning. Brandon. on good Hi, is actually for Matt

lot would mid-con fair left within hubs? I And -- a is optimize Is to improvements want to come make the all So just it continue back there the see to to we of now say to you on the hubs remains have there. focus opportunity schedules? that mid-cons re-banked, the opportunity really, how to the

Andrew Nocella

speaking. Andrew Sure.

number the reasons of frankly to look competitors we create some connectivity, in we're hubs what have had of at it and do have. sufficient trying As a quite years a for mid-con didn't that United level is connectivity our level for a of of

well as So the short we that of same to And aircraft the well on hubs on RASM but adjusted want strength. number we're that the our structures at build come of of build level have make the and connectivity. to ground in create we're to And still time all the together our to way, we continue we've happen. this of path, of the each down will we that connectivity make

measure we the we cities still we so. similar how that the next connectivity rate others significant see over versus or and years we're a gap So sized in closing

Unidentified Analyst

Okay, cool.

Houston? that I that know could as has that strategy? there a and whether bit limitations, Chicago any quick little something follow-up is or employees Are structural just structure Now that. more. on deploy the anything particularly anything or a or on growth you Denver to airport it's or be that of -- in aware inhibit But growth

Andrew Nocella

the the So into to across going system achieve airport United, at factored designed. or ticket here all number plan of we growth whether the what in of are jetways the issues that be hanging and space, the team all those as different or it a teams where that counter outlined we're need we've we've we baggage

allow has designed to But run can we in all to has we've some infrastructure airport that achieve we've plan the strength. designed, There's around plan about that. that doubt unique Every every So an airport characteristics. no it it the short happen.

time. So at the that us going to out from laid nothing point achieving stop that's there's in this plan we've


Thank you. have From Vernon. Bernstein, we David

David Vernon

XX% guys. to good to -- wanted follow just Premium capacity Thanks. to X% up Andrew, of going on that's X% Hey be morning I the Plus.

with the ramp over the I be? years? to wide-body. see would we think the I but Can what number was for working a think should of kind was of of you kind us XXXX long-term you be volume that I said next be tell want that goal what couple should

Andrew Nocella


aircraft all XXXX of year XXXX. and in so of little think the definitely the XXXX the while shows very at we that's as in on online I then as we right today, actually, then careful because on The here it in is a aircraft So, that we're board. a most want of it and quite it where Premium sell have product gates all stand bit we up right that to next level that it's few is Plus on phases, ensure

we like Premium year to. the it way in actually seats of the can't but So we really we'd onboard, have one monetize Plus,

numbers, X%, our then being So X.X% you should in as between say X%. X% and Plus. see would round wide-body effectively capacity of XXXX, sold XXXX, I we'd In in Premium be


ladies you investor gentlemen. today. our concludes the portion and and thank call And This analyst of

questions Press, media. Instructions) your is David We will the now we have The take line David, (Operator Associated from And open. Instructions) (Operator from Koenig.

David Koenig

groundings? could my things, the Xs to question you quarter, spent in what MAX Baker, gave this super Two fourth your Jamie one then And while complete of deliveries any kind about sorry. response And from you much schedule those exactly we I'm that about in have maintenance answer in how XQ. If to are heard protect your or Greg MAX his extra he are Gerry scheduled to-date mentioned then quick. deferring two grounded?

Gerry Laderman

deliveries, fourth the we no delivery in no on aircraft scheduled the quarter. So, had for

some quarter but previously were scheduled aircraft no those third quarter, expect Although I deliveries. there to end quarter slipping fourth would that the up fourth of

David Koenig

Okay, great.

Greg Hart

MAX simple that maintenance And is be later we've from able work WiFi an a something deferred. then as cover installations as that schedule on -- pay had as aircraft other to that deferred deferred maintenance we've voluntary the to date the voluntary we've as to in perfectly help ranges to work well scheduled

kind runs do the gamut it maintenance on the So voluntary of a world basis. in we what across

Scott Kirby

no it's item. importantly, But safety-related

David Koenig

then much And how you intact more far keep spent less? extra your know. to wanted schedule people what or That's have Exactly. to so

Greg Hart

have I answer material. but it that not don't you, for think, was we

David Koenig

you. Thank Okay. All right.


The Sider. And Street Journal, have Wall Alison from we

Alison Sider

are training something everything with what's Ethiopian report. satisfied on sort Good just the morning, safety preliminary of you confident light you that's incidents hi. the with in Ethiopian? detailed is feeling you're practices? reviewing customers just Or and happened? pilot My How Are are at given flight codeshare that of questions been in sending Airlines and

Scott Kirby

specific for do Ethiopian. the at We training we're are have do but we the don't pilots. on programs. will process partners commentary have go we don't we think programs prepared to I programs United that and through our auditing, go IOSA we in that codeshare all continue that a of to training at confident for what for use, comment and through training their involves Airlines training our on standards We

Alison Sider

when when So a process, mentioned partnership? Ethiopian of that be like is it additional Or that partners an Ethiopian an now? out Or auditing review that they for you initiated undergo going something something is your is generally? strike would or to

Scott Kirby

long all process have through our audit that of for been partners in we done that the as and I've airline We as with at go least industry.


Bloomberg From News, Bachman. have you. we Thank Justin

Justin Bachman

in the you time. of the wondering maintenance buckets thanks of terms you capacity went and that through I Hi, quarter performance for the the into in some deferrals go wanted could to performance on first focus the if that the CASM-ex that did. and growth

of what what's upon on delivery that make delivery of percentages? different Thank what have the of the pre-delivery -- the secondly aircraft to you areas breakdown for And payments when versus sort United CapEx, of what sort scheduled that And by you up cost are pay and you. aircraft? for

Gerry Laderman

delivery respect what With airline I'll having to better that than thing. maintenance question certain would expected pre-delivery events talk more to maintenance be a done, expect really up just not CASMex sort that It's of nothing versus a to and somewhat what something timing, performance breakdown it's our about. to that some engine really instance but better but that answer. were. specifically that did of That end and timing done for year. we we the lot for than deposits be might varies and be question ended that expectations was second airlines take we expectations, pay to original not up It's later our that in at which between quarter So first first Boeing airline strictly

Justin Bachman

the how of was that airline's and have just of function -- the overall some capacity of planned much that was you as active But just the Or growth? -- growth was far Okay. of management? then as mix it that

Gerry Laderman

of into helps plan. growth us built Well clearly the ASMs but that's manage our CASM, the all


Rucinski. you. Tracy Thank From we Reuters, have

Tracy Rucinski

you One good pilot about the question. Hi, training, Talking requiring quick training will on morning. be simulator MAX?

Greg Hart

Hey this is Greg.

runaway If I'd the you the to Ethiopian like and was of preliminary accidents, causes primary your of among Air Lion context Based investigations just mind, don't little results question. to accidents. the provide the of on the a trim

trim of situation. of aircraft our to have United trained For runaway decades, -- all to respond our all pilots here Boeing a at been

situation and our training pilots so around the MAX aircraft. the pilots consistently curriculum reiterated fact, have safely In of our ability are to for required we to why confidence is United central the United operate That's memorize procedure. the that

Now of regulatory changes will training we them. require if course, the our programs, comply authorities any to with

Tracy Rucinski


So no decision yet then on simulator training?

Greg Hart

training obviously as any that authorities if regime. added comply Right request. no But -- the with to now, add will we request training, that regulatory if plans simulator federal we to training have our


now turn back That to you. last was call will I closing question. thank And for remarks. Mike the Leskinen our

Mike Leskinen

questions you if Thanks for joining you any talking to to quarter. and all further Please look to call Media next contact forward we have Relations today. the


concludes thank gentlemen, you today's and ladies conference. We thank And you this participating. for

disconnect. now may You