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United Airlines (UAL)

Participants
Mike Leskinen Vice President, Corporate Development and Investor Relations
Oscar Munoz Chief Executive Officer
Scott Kirby President
Greg Hart Executive Vice President and Chief Operations Officer
Linda Jojo Executive Vice President-Technology and Chief Digital Officer
Andrew Nocella Executive Vice President and Chief Commercial Officer
Gerry Laderman Executive Vice President and Chief Financial Officer
David Vernon Bernstein
Joe Caiado Credit Suisse
Rajeev Lalwani Morgan Stanley
Jamie Baker JPMorgan
Darryl Genovesi Vertical Research Partners
Hunter Keay Wolfe Research
Andrew Didora Bank of America
Michael Linenberg Deutsche Bank
Joe DeNardi Stifel
Catherine O'Brien Goldman Sachs
Alison Sider Wall Street Journal
Justin Bachman Bloomberg
Call transcript
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Operator

Good morning and welcome to United Airlines Holdings Earnings Conference Call for the Third Quarter of 2019. My name is Brandon. And I'll be your conference facilitator today.

Following the initial remarks from management, we will open the lines for questions. [Operator Instructions] I will now turn the presentation over to your host for today's call, Mike Leskinen, Vice President of Corporate Development and Investor Relations. sir. ahead, go Please

Mike Leskinen

Good XXXX and we Earnings and earnings Brandon. Third issued to Quarter release update. investor of Conference separate morning, you, welcome everyone United's our Thank Call. Yesterday,

these presentation morning, this this three on ir.united.com. we website a documents Additionally, to available are issued call. accompany All at our of

beliefs this and investor the contain may forward-looking performance. which represent Information and accompanying and call update, in yesterday's events the conference presentation current concerning expectations or Company's the financial release remarks future made during statements,

All cause by information XX-K Holdings and Company. factors. Form for to forward-looking United Airlines our currently available a A number refer are based of SEC these release statements upon to and from to other of actual materially Please Airlines description earnings the factors United thorough differ reports expectations. could filed current our more the results with

of Also financial non-GAAP during we the several course will discuss measures. our call,

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

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

the to with assist members In addition, available we Q&A. have team in room of the other

the call And over now, to turn I'd like to Oscar.

Oscar Munoz

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

It targets serving want solid passion have. us financial build that of returning every for United our I helped their value record delivering their track determination has we customers. and start, that our we for to each of thank and to as truly dedication one investors Before always the our we colleagues on and our is do, a

quarter strong of another had we results, the results. to So

As earnings of X, with we reported you pretax pretax Slide margin can XX.X%. adjusted billion $X.X adjusted of see on an

earnings third quarter of pretax $X.XX It of per XX% in basis year. Our that higher so points share this was adjusted our far adjusted is of quarter. third best last the and XXX reflects margin year than expansion the

consecutive also margin our reflects $XX.XX to fourth a It of full the strong the gives adjusted to that us $XX.XX. grown EPS on adjusted in raise year the basis. to pre-tax third range an confidence quarter performance has quarter XXXX This our new guidance

of target which of historically now like are course MAX quarterly volatile XXXX we $XX We ahead despite expansion of years the global market the We weather, ago. severe EPS pace pretax set achieving towards nearly aircrafts. streak obstacles $XX to two of the this adjusted our margin grounding of and extended

to on cutting these fact, our we obstacles customers, overcome back by Now value didn't the just in you, we provide the opposite.

We of a continue the and to of elevating United. experience value improvements flying customers variety benefiting United are proposition the invest our to in that

Here's items. a just few

and from XX,XXX about appreciation their time. accruing arrives on year-to-date, over connections Our is you've that's gratitude already which while heard aircraft which customers customer over ConnectionSaver, each time ensuring saved missing

city] We flying customers give and destinations. are on to the also now new international a uniquely which United our CR advantage selling will transform us in JXXX flights [small connect regional as serving they [ph]

seating, plus regional will operating today. other than before, you it aircraft told offer first-class any Wi-Fi amenities and we XX-seat more a As cabin, economy

experience are employees. in our app So continuing customers' absolutely to that our and from so across United we serve makes the complementary an flight But for come refreshed game Backstage award pivotal. expanded It's to deliver attendants ultimately, customers options, who is what our every truly board. our the and proven people those alive are our invest be day why snack event enhancements changing all the winning are of and to experience them for

our how witness Backstage to employees to believe and embody life every caring, since to It's and response how been every systems the that our enthusiastic customers. tangible creative day. ways our have embraced personal coreX in coreX taken our principles is a authentically of they've their employees And efficient. framework really concept reason it's finding the flight, this ways every for customer, that compelling and satisfying it, with I dependable we resonate travel brings of variety inspiring safe, see introduce to of ownership

what in is you In see not when the efforts, like picture promise at of proof looks look of a practice. sum what you closing, all these

a we and have you remains we that we promise confidence, ahead. momentum and our best earned But with use XXXX than So I the less believe quarter strong. word left expect lies I of

look bright what the journalists the confidence is and October United our on Airlines, of XX to here driving showcase opportunity from and I spheres forward It for Media and world first be future will ever the around excellent an new welcoming Chicago in to our Day of XX. United. October

So to over with I'll turn that, Scott. it

Scott Kirby

thank they're margin of also customers and producing our quarter I'd taking Airlines people for results. strong doing we mentality, expansion. delivered another like of team's to adjusted of to excuses the care all United Oscar. no Thanks the Thanks, pretax incredible our job

Gerry top quarter midpoint results Andrew and recent and the streak that eight will bigger to questions of near-term more been have an but in couple mind of the our for a about coming our the address above want picture I of guidance talk of the range. investors. continued This future,

flat years flat CASM-ex but compensation it's rewards. easy, driving United CASM-ex they all we're a be of It to remains come. about of our deserve the increases won't sharing certainly these our After goal to First, getting drive for the our are continue make at and of questions course time, the same lot to continue the will anticipated in to results we people all, Airlines ability that of employees. the in driving

DirecTV, with of being more. and the ConnectionSaver, to also with significant dependable dramatic experience next caring, expect we and free earlier, our positive mentioned see impact year customer framework continue those improvements and investments. efficient. that We've product Oscar to year this We much Wi-Fi coreX making investments much, already safe, been of doing As consistent like investments

The choose in contributing customer Net United Airlines Scores satisfaction material customers Promoter and driving our strong is and which to to increases results. financial

how of CASM-ex? So advantage customer drive we our to plan gauge. flat our can one we to invest people in towards thing, and continue experience take and increasing For

point, across cities We country hubs with we big be that highest this and large aren't. the the have in should at of because we But gauge. airline the

on per domestic departure United eight XX% to approximately seats gauge In to behind seven Delta. years fewer with years large fact, growth compared is our competitors

As earnest of mainline our of we're closing percentage regional next aircraft shifts XXXX. aircraft, of approximately gap in to fleet for higher planning mix X% begin the and seats year, that starting a more end per larger by we gauge departure instead

to We next the of middle expect the continue growth gauge decade. to

addition customer a difficult In and product, also resources efficiency to we've with throughout to the at Company, growth, to drive us people, disciplined, gauge where provides no we which innovative action-oriented, in make investing built experience. here excuses our decisions United, culture continue the

the that the concern to industry more MAX. investors yours. of big we're happen into economy make producing making our is feel with of overcoming going track will revenues our unique to insight better importantly, The return PRASM We without optimistic the good we from opinion second don't excuses. results have what's hearing record than than we're most hurdles and more any But about and about industry that

continue owners. and innings We're of our customers to for world next to line or year. early our uniquely target to and meet in $XX our employees airline is the we will The our beyond. differentiate and adjusted United best us exceed XXXX continue the in have we'll make expect We our for that allow to performance journey $XX to that the opportunities to in EPS our United believe, bottom

the hear moment now little to play I I a so a is and is And Many here talk to my of it don't United. the probably I'd at actually of league, in about of of couple take our Kathleen leagues Commissioner like one you about football. culture way. team and fantasy a lot. wife, the a by bit

successful a like is fantasy a A company team. football lot successful

stand can who than looking count for just performers. individual players you You're on out more are

competing players, their team sport. a a Well in and airline overcome team and team, sport here for is And who running a to good a great highest an and system Football playing has are team who the of win. help And a talented team talented level. now is are at at simple. part a You the also. of obstacles United, obstacles good a looking overcoming is got that track reason record system you've

the Hart, Jojo, Gebo, Human call of on Linda our our introduce will Chief Officer. increasingly these you to hear Resources our more Labor Relations quarter, EVP and both Operating call, joined team. we're and Greg and On today, of our and and Officer; Digital Technology to of Chief from EVP Kate you earning last EVP the talent trying

better, what and United, to new owners. out take customers, team be and care Airlines of every the United we're really team you'll best around new incredible and culture is the talented employees continuing a world that's determined see customers. get a for person day a our in to our Even fly there is and in doing to frontline airline This our build

defined the and we're our confident Right been now, have winning than bumps not speed ever be way. and we them. by along about more will But There we're future. be will

We a proud defined to be them. team by will to I'm of really be it. our proud part overcome this really ability and of

over Greg. And with that, I'll turn my colleague, talented to it

Greg Hart

team. here Thank take to has all you, year some our moment XX,XXX to to I the Scott. opportunity be been our the achievements thank and also appreciate great and I to mention of of I incredible an today want employees. of a want This

Los departures We quarter, are where with achieved competitor. face consistently the place we for in number Chicago, one Denver all Angeles. we In and on-time large hubs, first at

in of competitors in was we've we've outperformed in first two the we three while row Chicago, carrying at did in customers month major main row competitors ever. competitors, a the month In the September LAX, two fact, in XXst our this that hubs. outperformed a XXth in and major a than outperformed our month XXth we And in place our more departures on-time achieving Denver all those row

every range of something best and day their face is to to be true team's effectively to operational quickly the challenges while and very really is of customers. to proud take the doing testament our a ability we respond to of care This

that are facing three teams severe XX% our flight Houston across Tropical weather in system. scheduled and this the track incredible for system-wide flooding September. achieved despite hitting hard over caused the storm Imelda Our of we have days impacted record some fact in

incredible it's aircraft flights are our We in recovering control competitors. X% United at about to of from to compares and Tough gets nothing how delays had This irregular see our also new these better faster impacted to quarter. X% but operations our and by the events. weather team

enable To the and with our care of job manage or incredible this of better solve success, tools each our have done the of have types the in her with problems team customers to right in Linda equipped an employees hands communicate to putting we in the of employees technology all other take situations. to operation moment.

are running great and operation be of we United We proud at couldn't a team. the

when comes industry operations to We by and only from recover to our leader it caused are continue from we'll irregular get weather ability better learn to here. and the

on Linda. to now the call I'll pass

Linda Jojo

and I'm Greg. improvements making out growth and innovations. to people closely frees fast-paced, on some of progress created call today. culture takes the partner on At test our with the hold. be business roll and that Thanks, the quietly quickly share its to been the to plan action-oriented digital It's units our front, new we've a core, great we've operational excited

but examples high time of change where those going us investments. with that app, them channels test our products united.com of a our allows any work, award double few fast highlight trip. to digital winning tickets through Starting customers and we to their we're before at pace channels, seeing our Today, purchase new discard to enable any our mobile both and return and I all ancillary ideas, down Not cuts. and the those quickly don't am of

change of All their that mind, have we if confidence they back. the their

end For up bag at if customer refunded. for ticket bag her example, time purchase is can but bag, automatically of a the if doesn't actually pre-pay checking fee her she

she and the if app, in airport she checks do the only are far she this. at when app. We customer the airline might Or an a too to purchase arrives list, the upgrade upgrade down be sees that the can right

that offers Developments in-app increases We our customer gamification also product build even to personalization of to include millennial which mobile – our continue is drive Play, customers. upon United, our take our like intelligence, app. especially engagements artificial features rates unique Mile with higher, and

year-to-date. but by they to may over seem us about revenues speak work. grow how ancillary want examples XX% briefly have helped we small, These I

sit building Our off some digital far in does not team or city.

embedded in get rolled rather get one years, and or airport it out real-time the than weeks region, often We new are make in it take tools right. one then feedback, and features we changes airline and we until where just at repeat are

As wasn't our revenue management the was modified a implementation our get past, until new and and platform that United but granular more value to you've is heard from predictive markets. and in expanded delivers us Andrew precise all helping started significant it modeling. Bang one Big This Gemini of small more to covered forecasting

swaps. operation, In the approach took of aircraft solving the this we when problem

service. out plane a take to have of We

many evaluate future to our maintenance, aircraft gets down factors while to the then and which – disruption. This routers fly. least the and makes on We our tool a way, aircraft, their layout that scheduled have a downstream amount seat real-time possible several on recommendation of customers other all consider our new creating

on a do. I’ve touched of what today we is small What sample just

hundreds and engagement, improving and by revenues to believe tools, side employees side empower and are streamline for teams and driving cost on benefit of working now created our apps developed and our have that customers We Andrew's we performance savings, customer we're Greg with while projects that financial will drive years come. processes our there

our to Andrew I'll recap commercial that, pass With it performance. over to

Andrew Nocella

slightly midpoint driven network the quarter. close-in our the X.X% a X.X% domestic was in of our PRASM PRASM X.X% being September in Thanks, our by which Linda. capacity up grew the quarter, strongest with guidance, above month third solid the In performance bookings. increase on in was

was performing in mixed best offset headwinds Asia. performance our International in Latin the robust in continued America region third America with was by results international Latin quarter.

increases We X.X% and X.X% increased Brazil including increase Latin on Rico. Puerto Third in a in great of PRASM America, in quarter double-digit parts capacity. results had many Mexico,

the X.X% in weakened X.X% a lesser across weakness in PRASM with negative capacity. and Hong further Pacific and to on Performance extent the Kong Shanghai. a in a Beijing quarter in decrease All the occurred increase

performance Beijing quarter, Kong, and earlier As our about by point. the indicated we X.X reduced in Hong system Shanghai QX

weaker Atlantic in the was demand quarter on demand. point-of-sale PRASM strong a X.X% increase point-of-sale European up X.X% offset capacity, in U.S.

We commercial quarter, of fourth X% travelers up our increasing consolidated leisure Looking stronger of the passenger season. revenue see yields unit and at a be United. for this customer potential ahead We to holiday the during among the expect we focus our to is to here initiatives X%. think indication positive effectiveness

Our issues. capacity PRASM will Buenos ours have global spots increases to there summer, market which a offset Chicago as of to quarter. and adjust as impacted America. Aires with of demonstrated to that be third to parts were announced demand few New other the a York as changing clearly Latin quickly also large And we This always Hong network ability by outlook in suspension the to our Kong is conditions

while moment for stabilized. the Hong weak, has Kong demand,

the Pacific in fourth the third expect versus to PRASM year-over-year improve We quarter quarter. performance

push for We allows yield booking leisure closer-in, into departure stronger continue the which yield date saving a in performance seats early the curve turn higher closer in business booking traveler, curve customers. for to more

this Gemini, that system earlier our strategy. is RM Linda working with well new mentioned

in XXX year-to-date, accounts one Additionally, a we just performance that United signing many to us our new far. our the place for This so is sales drive have up over number been XXXX. busy in help corporate totaling initiatives has team record RASM of

across network is well the in U.S. airline United's the as great leading suited with partners. to globe the here be our as We uniquely business believe for

connectivity, continue small our to hubs. and focused build service on is scheduled dep performing network well community we Our Mid-Continent as

basis. hubs network We're road XX our EPS hard all However, our service adjusted year. gateway targets. make rolling a a suspending as to are on disciplined a running month It's on profitability our like on saw coastal hubs airline a our improved result, many achievement nice over also realignments will of profitable decisions the past that and

Slide XX. to Turning

commercial We initiatives. continue on to focus our

next Our weeks service client in are first of followed class Chicago, by into later New scheduled focus the CRJ-XXXs with set in York. couple of XX dual here

have XX the of XXXX. CRJ-XXXs expect flying We by fall to

program We announced quarter. the into several changes to the third MileagePlus

don't will travelers in less the frequent miles program. anymore, engage expire First, and help members new which

be in certificates our Second, with to will use PlusPoints, we replaced upgrade which easier December and starting understand.

can PlusPoints for our managed first any in be industry-leading app, mobile U.S. a airline.

of we adjust status more their be in total reflective will to forward Third, how members value. are going

award redemption are QX win first for dynamically our investors. and we now for lower our the redemptions also pricing time, in a higher allows, customers reminder, which pricing, a both and As

we continue the have Basic our profitably. consistently of to them Economy allows jets. a low will Plus and globe offer beyond, lot different in across point initiatives perform more out. offered phases on be us XXXX a to accelerate and roll well Segmentation Premium in of price wide-body

Our high flights intercontinental will business increasingly to most our class an York. of Polaris our consistent in passengers New now fleet and operating find experience are configuration XXXX, continues from XXXs and London wide-bodies. seats Installation Chicago of on

offer excellent We New flights. these on XXX-XX departure per more our Boeing driver providing more estimate larger started frequent XXXX plans our service seats now revenue that and flyers mainline for ancillary with York from is XX% to Premium than upgrade seats We California with on serving our competitors, and selling now to than Economy opportunities growth. have selective Plus in continue regularly jets as Plus an recently

team next about ancillary CRJ-XXX yield that incremental third a for drive these we deployed to revenue moving in spoke year, the drivers uniquely quarter. markets United expect look growth Linda forward. the key to initiatives, the we revenue earlier high to United As entire and great Thanks

results. With it discuss to to that, will Gerry over financial turn our I

Gerry Laderman

Good everyone. morning, Andrew. Thanks,

that issued morning. I this investor no XXXX call will possible. be quarter analyst, analyst mention have theatrics start, attempt that this on one update. recommended fourth I In bland want Yesterday to and earnings I release the deference as third prominent to quarter as we our to we afternoon, Before our

You detail. can refer additional documents to those for

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

our We are income year of adjusted share year-over-year pleased to Adjusted marking versus was and up the Slide ability strong consecutive adjusted quarter unit continue XX% margin our year billion $X.X per XXX grow quarter, third report adjusted earnings the the pretax our demonstrate total as XX.X%, shows a our XX points pretax was quarter for and XXXX. ago. basis margin margins. cost across challenges quarter for full expansion. pretax These to and offset $X.XX global to we for results forecast up and fourth network, the third of fourth

expectations. Slide slightly a cost growth original above to basis, on expectations. unit nonfuel at the XX, quarter in quarter our due This Turning slightly our X.X%, year-over-year third original in to capacity coming below was X.X% the for increased our

on to of to we second half we As the call, which some in this year of the the year nonfuel the half second discussed of pressure moved the first costs maintenance events from last of have timing half a the number of the unit on due year.

to India of Kong flight. plan flights grounding, our this of We increase projected expect Chicago, of approximately our up cost CASMex CASMex year temporary around as year-over-year Almost up by suspension of be brings which our year. XXXX fourth last full quarter X.X% compared in unit and be MAX to suspension by or to flat all year-over-year year-over-year better Hong is driven to original X.X% the compared

Looking ahead XXXX. to

provide We our in and January. of we'll guidance budget are in the process middle formal

flat three we will to XXXX target year nonfuel preliminary cost we CASMex year ago the almost slightly based this This compared the years through us numbers, two be established year. expect on from next XXXX. as put maintain period However, flat during to to unit above

over results. in financial We customer those resulted past investments in have making investments the year began and experience improved

enhance expect to make next investments we more We to continue believe will year that margins.

of delivered continue will of cost we growth While and control the we've about X% very represent these proud improvements to are overall, deliver. CASMex

remarkable compound Through use deliver EPS would to X.X% we to cost three and be achievement and our commitment exceed a allow adjusted industry-leading to meet our next unit growth for annual be to year us rate the year, targets. which nonfuel expect or just

see Slide As on you can XX.

During and of used additional the AXXX Embraer quarter, new aircraft aircraft. we nine six EXXX Airbus took delivery

year-to-date quarter also per We our an third brings at repurchases quarter to shares spent the the of million $X.X through $XX.XX average stock in third common to share. $XXX of price billion. repurchase This our

for repurchases raised us at opportunistic quarter, market sheet blended this with billion proof of debt to debt of maintain investment a the views We that and about point share another already that a the as rate grade During credit. strategic investments. lowest we interest WTC the balance record an $X.X X.X%, healthy of be rate us and type allows on

revenue and costs pre-tax XX The for range of Lastly, X% adjusted Slides an between quarter X%. XXXX expected current XX have our margin and summary fourth and a implies guidance. capacity, provided

adjusted of share mentioned business. be to manage earlier, proud $XX.XX. the us, per Oscar full nimbly and earnings behind expect we With As we XXXX are ability now year $XX.XX quarters our three financial to and performance between

Finally, part targets. to and entire our towards management is rigorous to that expansion, achieve offset a pressures and process approach budgeting inflationary our an team we of continued next taking cost is path our our our year financial ensure integral margin

now begin Q&A. With Mike the that will

Mike Leskinen

Gerry. Thanks,

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

Operator

Vernon. you, sir. And Instructions] have [Operator Thank we go David Please from ahead. Bernstein,

David Vernon

the the unit the Thanks or about being wanted taking any or on before, for Have XXXX? tailwind, closer premium going kind able that we to Andrew, guys. out. talked question. revenue economy a be tailwind from of Hey, roll guys is morning, an to give follow-up headwind gotten to I sense for to is issue you us good in what which

Andrew Nocella

number to system. tell to X.X in number point can report you. it QX have was I don't you I XXXX a

So it's pretty substantial.

David Vernon

should that impact? X.X next out So tailwind point bigger roll from smaller be impact economy and year a or the premium

Andrew Nocella

But that we very and I'm that would very, consistent out team is these are is what aircraft not becoming to number quickly. today. say I you rolling Greg's increasingly going give

economy across So its good. pretty we we're really we expect It's think is next – system, by of pretty why year. so the one RASM PRASM summer, next premium next consistent the contribution getting the about reasons year bullish

David Vernon

quick tickets, – then that pricing about the And dynamically the follow-up, utilization can that – award do sense help as you us the yield is just for you us think maybe from benefit Okay. or of of a we think should as kind as about a help give a what impact either give XXXX-XXXX timeframe?

Andrew Nocella

What any out it. we to that, and there on that we our lower-priced have awards of I we're to a not benefit we win give way higher, everybody which details is more more a going price ability but way price more to this to price think would tell to redemption surgical that net you based do in think a around is for allows available able the inventory lower airline, kind will the that but a in move I'm lot us the we on be and be

David Vernon

change you Have you're rates any starting the redemption seen as to so it? enable far in on that

Andrew Nocella

going think the pace. No, we redeem to well. miles, same are I continuing It's at very

David Vernon

thanks very the time, for All guys. right, much

Operator

Suisse, ahead. Credit Joe Please go we have Caiado. From

Joe Caiado

Thanks morning. much. good very Hey,

XXXX high level question capacity First growth really outlook. on

departures you the to guide going Scott, looking to explicit some and year? but see of gauge Now could bit I'm composition given to that start posts how stage we since you a have the talk us, little about overall you've the operation growth we gauge that and we're growth in next about think X% not your was for for guidance, hoping mentioned I X% and next just should year,

Andrew Nocella

next Sure. This still Andrew. is We're the for year. developing plan

will quite increase being we the still the it in driving based the days the quite to said, are more That we gauge bit, there a And in we know of and don't fleet when the than the returns that more MAX half the on So assuming half year frankly. plan have, first airline. in preliminary. is the last fact, of It happens back be. XX

opportunity. factors I'm to the CASMex we there, aircraft later. to will our next looked and sure a Gerry out we about where significant is think be at size this flying load going aircraft help as great we're of as But we the talk have It's

across where ton growth kind there's cities pieces. but flying finalized, currently moving of are But is opportunity anybody. given country, not and smallest we're of believe plan going. at of our The the the there airline, we're that's located is a gauge So a in we still the for as lot hubs gauge largest

Joe Caiado

And got just follow-up it. Okay, another then actually, Andrew. quick for you

your a mentioned XXX said. for year, sense be brand sales give accounts back? you're them accounts left us corporate that now you You winning this roughly breaks new down record ago that United United new customers signed that's how Can several may between team you what a think just I corporate for and years versus

Andrew Nocella

these customers United corporate brand a be To clear, these of definitely frankly flew those, of There's new mix without a quite but a of share are some deal. lot of – the customers. disproportion

very share signed but So discounting bigger that, we a a we can be corporate of up spend. provide about they're want being to the them on where appropriate now their deal clear

it's think a I So big pretty deal.

we're frankly, job there, product every and easier their is that an team doing quite delivering out easier. making day is excellent sales job Our the and

customers we back and also left win gain can can that we many years maybe So ago many, new us customers.

in just been, XXXX that say a of and we So terms can’t bullish it's activity how made creates we've revenue about that of sales the front, in up are shows lot the the beyond. on we progress believe

Joe Caiado

I'll Thanks. I queue. back appreciate the the answers. in jump

Operator

go we Please From Morgan ahead. Lalwani. have Stanley, Rajeev

Rajeev Lalwani

guys. morning good Hi,

contracts? side guess, still does open and for next preliminary Scott, and the for, your CASM all I on First year include thoughts CASM your Gerry one of obvious labor a reset

Gerry Laderman

Gerry Yes, it's .

open that put something for includes any we guidance CASM including our the three-year of out, all numbers So contracts. original labor

Rajeev Lalwani

XXXX well? And does as that apply for

Gerry Laderman

guidance It out, applies CASM pretty we put for much period. any

yes. So,

Scott Kirby

consistent to For anticipated put going in guidance scenarios in is this out, to everything, putting excuses any we're guidance. with it point guidance our put a of we for make not make increases we so practice that and labor the

Rajeev Lalwani

It like And for you so Andrew, to were thank a seemed relatively then, and moving for I wanted just around you. that. quick Understood. things clarify, one

the into and going fourth quarter. then leisure on of domestic a maybe you bit color looking, color and little health how provide about some talked You corporate's versus international? on Can

Andrew Nocella

take we're to volumes leisure rapidly, trying Sure, enter steady, than are we're we quarter yields importantly the even it think I are what piece. growing that, they piece not seeing would more is corporate by pretty seeing are as strong. they being steady, but but

us go gives confidence lot that outlook quarter. of we the about our a as So into

the So premium cabin the across outperforming next for is down that's in probably cabins in But main previous that. across example, Pacific slightly Atlantic the true and quarter the were and quarter. the

pleased that again performance pretty by we're travelers. leisure by travelers so travelers or business more cabin and And than main driven that's

had In international of view the QX in terms period. the tough time comps of world,

into year-over-year As PRASM is to go international I we outperform increases. likely on expect QX, domestic

Pacific to potential As did expect it QX earlier, I QX. the say would better in perspective. the think look the numbers – terms on of I a never and continuing to in three, global and impact still here headlines RASM doing than between United probably I looks interesting, Europe in than very a to It's well do definitely that always builds I I've but across bigger seen the its said the economy the future disconnect travel the very strong, America be Latin I also for see is P&L going at from of yields globe. weakest

stand QX So I couldn't we more think for be solid. overall, I where looks really about outlook happy the and

Operator

go have we Please ahead. Baker. Jamie From JPMorgan,

Jamie Baker

good everybody. Hey, morning,

quickly those the it's think How above creating, long-term its to about the they I for but provides MAX intend reintroduced? you have as the or any is rate differ one-time And specific for exit it's short-term the sticky currently is to Gerry. and CASM next Obviously to guide? costs cost and as how that drag CASM that going year as question costs? whether storage, baked understand reintroduced? First plan take relief, own maintenance do do planes or relief one-offs been the How MAX the do into in in are growth we is aircraft also those also

Gerry Laderman

are be, currently next assuming, similar pressure the to for next usual The tip, for that it's the plan than if, did other that again baked this I as guiding earlier. MAXs further that sort are I of but we create to year, were what than what it it that, mentioned us, there expectation our yes, So, call going could and planning is CASM, issue year. CASM like delays wouldn't CASM year is business we into Jamie, but let's say a this actually year

Greg Hart

And Greg, – this the associated maintenance cost is

Jamie Baker

Hi Greg.

Greg Hart

– aircraft material minimal, back in the not all. service is at

Jamie Baker

own how Okay, with Obviously, your perfect. Andrew, multi-year in so? partners. revision probably structure terms Scott pursuing America your or several in material for the And have there, second or changed of for down realize for I last month strategy alliance forecasts Latin you're question

thinking don't America also adding you're with geography, own a to guide basis? how American Latin revisions made as forecast know your internal you We its have about by I metal. to have you multi-year capacity but any on

Scott Kirby

has think I you our given is will not, think is doing I the I it well. all revision, have We changes that actually recent tell fascinating, better, performance gotten incredibly which with

last quarter and numbers As see put we’ve by you quarter. up can this the

joint region has we fantastic therefore really it's that the it, a and group a by been working way we to happy biggest international in Avianca I going Azul, business with So we're not weeks. in last over enhanced together Copa, just and are we of actually a and great set entity have are think the few hard partners, been be a competitive put and to going pretty our as

where pretty by So positioned and are stand pleased for we're long-term. in the we

Jamie Baker

the Okay, color. gentlemen. for thanks Thanks,

Operator

have Darryl From Genovesi. Vertical Please Research go Partners, ahead. we

Darryl Genovesi

CASMex much the better to don't a morning for about, good – feel time. that But I little customer you're that Linda's the like your investments outlined, you've the made bit to back become as that's you're able performance downplay want relative talking has better if everyone, clearly has all RASM get is experience reliability particular, guess I would clearly a the better, in tie for I the leading. industry? Is expected performance, way team your investments. of do thanks I Hi, to to operational Scott, industry some there to

Andrew Nocella

it's examples. I'll give – Andrew, one you try I'll maybe or two Maybe

about that aircraft New flying CASM So from When did the quite flying we of XX% the I to by out seats across up think a the London or bunch of months High-J XXX six and that Atlantic. the caused to would we York we ago announced, nine aircraft months we go took be that, frankly.

give done significant otherwise, that those not in be CASM, CASM as so higher aircraft, includes And the related to and as we to we have in guidance headwind those the next our RASM reconfigured guidance get we part of we in excess going it. increase a of of to would year, but performance well reconfiguration for our aircraft fact forward look is

higher have to that going But so the a it's as that working CASM you think, of think higher we add you decent to RASM think reasons to well. And the And about that going year. fact one our and for results definitely is it's have on we RASM are next that's result, aircraft. up, I drive when

The we know to all didn't we premium our aircraft flights that could particular before. of to not more now be that up all our that have than relative to is the high we what to but CASM be, that. related is think is CRJ-XXX being dissimilar, going offered have We cabin RASM digits gains that otherwise single

it just So in CASMex, back going really managing to are we're CASMex airline specific total to are the we examples to spot. get our pushing really knowing us very of a two, but costs higher RASM those in knowing of I on number of terms and terms think great

two So those are examples. just

Linda Jojo

make one team tech-ops I really job Yes, in Wi-Fi. incredible onboard the I more an Linda. Greg's improving is this product about just stable. add to can, have done can

is less just more. it maintenance XX% onboard using deferrals, less XX% by our what crew. are customers that translating that's have We recess into in-flight And

in increase increase and our XX% customer XX% consumption in data satisfaction. have You

Darryl Genovesi

you. Great. one, I'll keep to it thank

Oscar Munoz

Hi Darryl.

enough been to hearing EPS. all managed revenue. say and is everybody were Let you're times as long for those is me managed add. are and to see cost times worked this margins where managing There just we we there and have never for I you know what

financial we're So drive making that those those results. are going to investments

Darryl Genovesi

Thanks Perfect. everyone. much very

Operator

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

Hunter Keay

with and partial important that Scott, near-term guys issue. a way Scott, with morning. do big success is good that's that – obviously you is if Hi thinking, agreements for important eventually changes you Hi, the your some next content are your you backdrop, you clearly business the likelihood is pretty what driving so some and involving with transformational there? GDS How and get not how that push in to to you get negotiation that that

Scott Kirby

Look.

that doing I We’ve the we We items, the on big line my about quickly that some calls showing the here I for about some the could literally things you're no is bottom on. and because, proud doing that changes the right one these it's of throughout of Airlines examples transformational picture are quite team culture and airline that are is the talk we're next culture going the we're, of United that of United talked top talked is reason at and that going creating is there people the at on head of the hour on and off in and results. of up our team doing else recently

consume actually as want want in to the our do price our fair who are importantly or they to fair product actually do or We customer. and to to that. display to and the wanted as products deliver of the to a at want long as purchase able anyone kind so are as be OTAs else to be do. depends customers it willing our we can specifics, to price to GDSs We to what customers it As partners way those and can they to able a where products it deliver GDS the our to carry on long

is And so third-party more quarters, that any appropriate. to the be way months, ability push to the to likely with have about we a in their is customers in come providers back service that years we think

Hunter Keay

the Why revenue tracking in $XX And rate expense run XXXX? a up out was didn’t over as for is CASMex XXX% XQ, the guide. good quarter third-party a other And year-on-year we then that on use to All higher? right. million model

Gerry Laderman

Gerry. It's

So is decline which what also gain impact maintenance you happened of a are the with offset other seen seeing cargo, revenue. as in what you third-party there would the what have revenue is, in

Hunter Keay

it should and third party-expense run rate Right. run put Gerry rate you $XX And million XXXX, into we then in – that quarter third-party a if for into the expense. XXXX, take would

Gerry Laderman

to use. Yes, it's a good number

Hunter Keay

you. Thank Gerry. Okay,

Operator

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

Helane Becker

Thanks, this team. Thank operator. for Hi the very morning. time much you

right frame. hire at we question, So X,XXX when XX,XXX sure Scott Greg. Last we even going think look I'm maybe of to said, retiring you or next XX,XXX, whether about I decade, or time not answer the about week, pilots over seems your to but, maybe Oscar see XX,XXX that it's in were this you numbers, which

be year. retirees? to what Right? So say are percent a can works Can like out – to hires you it growth X,XXX a those going so versus of

Scott Kirby

flying a will need right because with difficult wave flights. We XXXX. augmented XXXX where hit that's those pilots, to to got if for lot we're our on hires of Helane, replacing depends a flying us drive question be vast retirements majority. answer, now, majority more The a or crews starting in we're obviously the little bit long-haul which but

the is vast at looking we're of folks list. replacing what currently our on of kind that's So seniority will majority the XX,XXX be

Helane Becker

as you then so gauge. Well, Okay. up

follow-up. Just a as

pilots is moving it pilots with do gauge more the of up or it you plane training costs guess per As is the the around. more, aircraft, you associated I need part other

Gerry Laderman

them. plan to the use not to that's is to to you nothing will number actually back have be that level use a nice try what high pilot Helane, magnitude is. I'd back over it's There pilot number, read caution into the to hire hiring we – We round number, to of our next of what assumption don't order decade. try growth in our into XX-year

Helane Becker

it you. I'll really keep at Thank That's question. one helpful. Okay.

Operator

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

Andrew Didora

everyone. morning, good Hi,

some just expecting question on about be free should maybe help understand Gerry, of cash terms we cash billion originally on, about I year bigger there of of Can we in taxes higher $X in in some XXXX? then you a planned of should still anything contributions, the CapEx thinking particularly components. flow had than So terms be pension buckets us planned and next

Gerry Laderman

start let me So with CapEx.

of aircraft, you other As aircrafts. a a significant MAXs for and deliveries for peak the year number year particularly know, top next on is of XX-or-so aircraft us hopefully wide-body

than assume kind a level non-aircraft billion. to $X and up get that all actually that's of CapEx, adding potentially to $X start you normal closer number of you a when so billion, And

So billion $X.X than about we billion it's $X just more that which is still running than year, be going said. higher the to we think this

to to contribution million otherwise September, we next effectively with, year's With in a would you what over $XXX the year potentially so hit of been assume in year year. the probably unusual prepaid year made we would expect next – zero. first is I we contribution pensions, have little point now quarter substantial some during normally amount of this bit $XXX some pension have right that at respect would to should be year, million. was fees be save total a because But an this slightly of could

Andrew Didora

Got it. cash And – become just curious do a on taxpayer? when you

Gerry Laderman

it's while of hope a for really other not a amount taxes. than I small

we much are now benefits now going XXX% of take, are One on we the expensing next years. for aircraft of aircraft for through year pretty this the up and all able that the have that – few is making the the that is that the new new NOLs delivering on to

Andrew Didora

to keep that's Thank helpful. it you. I'll that. Great,

Operator

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

Michael Linenberg

assume How two likely, I many seem Does excuse many headline plan? less number original back number to me, come guess, first about think your the and does to about India? if MAX ones think that about tied current the points, Hey, in just Is relates to here. schedule, how plan. to and points that a that the MAX how does that but the XXXX XXXX we headline two assuming points? we – points, original which quick in half as capacity January, Andrew, Yes. relative we the two drive it

Andrew Nocella

a and I estimate. is half our points think one

Michael Linenberg

in that does year. reconciliation? – Anything than guiding bumps fourth then were year And the of Is second quarter? the timing? my first to by question, on for three that for What the what's the about it rate year you to thanks. that Gerry, other just Thanks. XXX XX% quarters, for XX% up full bps the just tax Okay, end now that? Is

Gerry Laderman

result. a right little crept that going bit. the slightly but decision result economically, savings, a to some saving the there on we we But to depreciation up effective were choices a actual was to It increases bonus was intuitive, some make it is counter effective how of cash the to that rate tax make, It's had substantial rate. get some cash take as tax

Michael Linenberg

I mean, guide. That's look a end higher at great. of the have the EPS you day

all that's Thank care So you. we about.

Operator

From Stifel, go we have ahead. Joe DeNardi. Please

Joe DeNardi

the good Luc call Bondar Is on Yes, by morning. chance?

Scott Kirby

not. is he No

Joe DeNardi

innovation Okay. he In is opinion doing be, standpoint he should an for probably my of a I that think United program. asset lot an from the is loyalty

So different of maybe it than clearly think Scott the very is or is program Andrew, I within United’s level industry. elsewhere innovation, in the

in along talk I'm wondering to could think improvement when a the what program, in you so how that of if you'll terms to card just get? you be with kind personalization about issuer about And gamification, operations of And relevant that's members? able the your with from the economics then, of the that engagement loyalty meaning is the standpoint

Scott Kirby

how these can new kind together the be the it Linda good we out publications. charge be to and about and will on even use, simple, with and ago with and will set customers really we years look a and our along PlusPoints available is make quite rethink we better for an of that And put app, forward all side, it Value easy things of it frankly. that on as innovation example the will the it Luc like whole amazing the work we program should two what leading digital Well, be

understand I think much forward. customers will for be our easier going to

that. increased versus join charge or of the phenomenal. doing Linda in to that because a hold I'll said often, about see the all propensity more to by happen to Luc this, or And or buy higher previous all to great been digital used a lot customers. the more kind resulted engagement together year and to think off significant I card all amount. the all technology by really can of pass And coming that's fares make it lead in I to the the has just club and our as We fly has are we're excited call is their We're excited idea. really So previous credit to

Linda Jojo

Yes. Andrew. Thanks,

is think it's to about us. I program customers to in it's way the ultimately to think our about them obviously but designed, to the way right fly to want get loyalty the offers giving

them thinking haven't want a leverage things all and a customers that new rewarding a so different then example are to we they that with before And get we and ways Play product is location are our program. currency of to whether go to gamification to where where offers, using is then or Mile targeted that customers on new try very tried our that's create really great

Andrew Nocella

Luke So high to that him. let pretty we’ll know you’re on

Joe DeNardi

with mean, I some there a or ago don't that. Chase two runs appreciate know deals or is I a which through I XXXX, longer Andrew, lot most run. that I headlines, deal was XXXX think than Yes. your Scott month

close earnings deal you. Scott to gap whatever along lines? So Andrew, talk say your the or those a can you between or your about in without ability you'd like to Thank you new and peers

Andrew Nocella

up is, and XX% really would and with up year I Chase last we're say hard to are XX%. working this our be What year going new were acquisitions

say together can it. on creating working lot and are a really teams value, really about the of and I all So that's well

So we're in recent pretty card credit happy acquisitions. the with increase new

Joe DeNardi

Thank you.

Operator

Please From Goldman O'Brien. Sachs, we have go ahead. Catherine

Catherine O'Brien

time. the for thanks everyone; morning, Good

maybe retirement it Just some coming any by you on have would be over you years, have Should new average five to age of bodies? Thank secondary look those currently more thoughts long-range we market? you. the helpful. like So think narrow order. being global than next aircraft six looks the wide-body replaced to the technology there up Would or you aircraft about

Scott Kirby

Maybe the to life. extend and help and reliability an economic I'll for invested We've standpoint their XXXs to company, our XXXs start this. on perform our off continue well a me and are aircrafts from and Gerry incredible machines both can Both standpoint. in

the on just Polaris recently them. put is been new interior So

with and not longer. you're they age. bodies for a these But we're retirement wide for bit what assuming can sure So I'm pretty happy fly

Gerry Laderman

To bodies remaining really flying the of and Yes, we're retire that's wide the that I will next fleet retire. no start Yes, the fleet XXXs next, on out. to would currently five next over not need next the right the any to add. to start coming focus our there years, just now is at retire, be over honest, looking we'll certainly

Catherine O'Brien

you and high quite in more as how discussed see then these the much time. year maybe that Okay, Like, more And for thanks Plus, the that's looking whether of capacity so much to features our being largest Premium should terms how a you of growth what the that's ranking you're that's great, of projects revenue next revenue next the just we see growth? forward projects outside think should drivers And some guys we list of thanks just there next few enhancement for much is about anything have color. that year? on exciting for And CRJ-XXXs. level, so else year, prominently

Scott Kirby

well then and different all with our expanded Well, it's doing of initiatives pretty roll-out of philosophy, they're I large really very the a number company. commercial clear we think have ongoing and are in for stages segmentation

substantial, a So to we're Premium small third globe that in to of already not value just our half which the the going has that projects quarter, pretty each I the line. line us these brings one given that bottom the item, a RASM across provided started. point of a is hint Plus given we

to year, know So next and we're that that lot are going really that's why exciting. our on as we for come yet announce, at we're target. to is EPS which our to coming, outlook have initiatives we we the a we're pretty And bullish there be where there is to that and are look road

Catherine O'Brien

great. That's

hearing in forward more to Looking March. Thanks.

Operator

And of Q&A and concludes the investor today. you. portion analyst this Thank our for

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

Alison Sider

there hearing of if that that about sort the the and consider push signed back you getting might hasn't the it's MAX, if could everyone. you any own thanks and return on? between yet recertification regulatory to disagreements by if happens, I off are FAA on share Hi, was its that process pushing terms anything your something off service have you're what in wondering, you of the sense room back if or, you're whether

Oscar Munoz

Yes.

is chatter different Oscar. lot from between a ongoing many is and this There So of dialog folks. there's

and I ultimate the do obviously qualifications make think facts is and goal the of world regulators aircraft data research its the on the right the and all to around decision.

sure what and what we you So hear as hear, entirely it’s not I'm as far pertinent.

safe on and is. making I is we're all sure that to and return think focused flight aircraft that when

that else extent, much on and so And – subject. is there nothing to say that to

Alison Sider

process, so different I mean, of different kind that create would of any your authorities regulatory alliance regulatory if this was some there view have issues with the planes? like that plans your a staggered partners does affect

Oscar Munoz

I that's world, think roll-up we the to somewhat across towards not think, FAA, bridge – staggered think, one I measured it we'll we I certainly country, to overseen that that are when But time. we'll aspect comes and think a don't I the in hope. and lot the of sort cross driving in be of we're to. necessarily going But across so, by and look

Alison Sider

you. Thank

Operator

And from Bloomberg.

go We ahead. have Justin Bachman. Please

Justin Bachman

in and that revenues few think unit the how employee as next out cost playing My United that do time And see revenue the and of question is grow for the the you do employee to against in the to But today. different share flat. want picture your terms plans hi, obviously of you those balance profits over that? goal longer-term contracts? would has base some about nonfuel of initiatives over that Yes, How the the be years you thanks time. costs and to

Scott Kirby

We absolutely.

into increases my we in that I built deserve results have opening in are those, are think people said that I they delivering As these and compensation get to our that the plan. and comments, our ones will

airplane keep is doing We we're the other lower have flat, by more costs so because doing doing We're we're flying by constantly it it efficient. CASM, growth, it in to ability that larger by putting, gauge getting ways.

administrative process be a We're spending despite row for initiatives growing and the management pay second new go all of employees, airline, total to as in we're we giving keep despite example where there through flat. going the here despite raises and kinds to year budget to the going

people, and time, product this the our growing So team we invest keeping doing the them gauge customer and gives grow and us at cost fixed to experience. airline effective as monies the that same we're a managing in job really by fixed

Justin Bachman

you. thank Great,

Operator

Thank you.

now Mike We it will to closing Leskinen remarks. turn back for

Mike Leskinen

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

Operator

may Thank disconnect. you concludes now and today’s you. Thank joining, for ladies you gentlemen, conference. And this