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United Airlines (UAL)

Participants
Kristina Munoz Director of Investor Relations
Scott Kirby Chief Executive Officer
Brett Hart President
Andrew Nocella Executive Vice President & Chief Commercial Officer
Gerry Laderman Executive Vice President & Chief Financial Officer
David Vernon Bernstein
Duane Pfennigwerth Evercore
Hunter Keay Wolfe Research
Darryl Genovesi Vertical Research Partners
Jamie Baker JPMorgan
Helane Becker Cowen and Company
Joseph DeNardi Stifel
Savi Syth Raymond James
Joe Caiado Credit Suisse
Catherine O'Brien Goldman Sachs
Michael Linenberg Deutsche Bank
Matthew Wisniewski Barclays
Justin Bachman Bloomberg
Tracy Rucinski Reuters
David Koenig The Associated Press
Niraj Chokshi New York Times
Call transcript
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Operator

Good morning, and welcome to United Airlines Holdings Earnings Conference Call for the Second Quarter 2020. 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] This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed or rebroadcast without the company’s permission.

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

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

Kristina Munoz

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

measures most at comparable directly non-GAAP the GAAP refer to these of end the tables of our to please reconciliation the a earnings For measures, release.

Financial Nocella; Chief Gerry today Brett Andrew and Executive Chief Officer, President, Executive us Officer, to Hart; and Vice our President Laderman. are: outlook and President Scott on discuss Chief Executive Joining the results Officer, call and Vice Kirby; Commercial

call on available of to Q&A. addition, over the assist members the Scott like I’d executive other with In to the turn have line team And now, to we

Scott Kirby

say for the that But was my Thanks, joining to thank call more a families. team we been support proud at the our I as United, first dedication and I've am and both all everyone and call CEO. the Kristina, us most I as that not what difficult of today. This, all I to to airline our for during you for that have is than environment love their leadership, I thank our and obviously, time for never any experienced, expected want company

reduction or and Our to customers new furloughs allowed interfere frontline taking headlines their to hasn't potential dramatic commitment schedules our other. mass in requirements about of with care or our each

to about And evidence satisfaction values our United commitment to the XX our talk our and some have determined together employees. safety all customers four improved scores commitment our In is more what customers in and them year-over-year. informed keep detail our how will of June our about. industry-leading Brett fact, care of nearly no core points just in It's for better customer There's safe.

it confident optimism in spiked quarter, through through as again will crisis. scenario that make The second in the the once Sunbelt. more we was than near we reasons. about XXXX wrong we crisis. historic stress At we of the it beginning I've that anyone drop the in demand fade worse of deepest will build, April, any for just this the And as Great the for test the of to modeled. other X/XX or COVID-XX been the end quarter sharpest, was never our all But far saw watched Recession or airline beginning And history, recovery had this demand industry make

an doing safety. April. least were control bad though the started with the doing XXXX leading has case, any – best, second quarter generating We on been controlling extraordinary are what pandemic, this back of we job possible weren't competitors. what the period in exceptional with we can't our I of financial look our as part think filled in by an that three-month wasn't achievement of the sure we that back will can help we'll or, expect to I even course when the be of results And and we team of United network

the program; Some financing of the customers most the from industry-leading of and designed the fastest, the cost the a to variety completing and coronavirus. demand of of our protect and backed our history of employees achievements by reducing spread business, the realistic assessment largest this our quarter included environment, the debt implementing structure; accurate in airline measures loyalty dramatically

create of and excuses have of just – international suspended headwinds be previous who've you some will that tough. those demand, before for philosophy is these are high will larger United, hear because no times to will not joined exposure surprised business you While noted our not that our to strength, including calls

In expect pulled we ever fact, them, together of in the overcome because best network spite philosophy served to team the more financial that the important have times it and in adversity, easily to been and results is excuses, explainable to than well us United of has deliver could carrier. what

competitors strategic hole and we've critical the other to the as forward minimizing depth and about the I these burn. unique remain where that discussed advantage As lower I cargo and side. if and to once we either dig daily more that and aviation the of And business second when very can current because confident we headwind And I didn't future United results, in our a world pandemic important, we losses United mention larger can reverberated stop we're in cash imagine I combined with But not will what thrive of and here produce crisis business, Andrew about our leading other now, virus cash preparing than if expect is, the complete, the right Gerry opportunistic the a because will just to and would for commercial do thriving country, racism we'll again the like burn our smart related being now. quarter on and the in never operating our dynamic day strategy flow where society, depleted. about of in that's are right and bullish look how are realistic, detail, be travel resulted with the headwinds through dramatic to international I'm conversations second this network discuss company, Airlines. the be And United it being confronting before. believe cost-cutting talking United, healthier systemic at returning including backed we by in recap past My to quarter. environment. important financial is will even cash before,

importantly, But United for now, more topic me in visibility commitment future. have we'll committed company, and my do reiterate especially a our the this As the much to on put I'm values, to new using personally at and to action. let our and that equity inclusion, of role influence more say into to

first ago. as our He's call to role United at his busy let valued introduce we you've me that United remind earnings QX been four Hart, doubted named that. my for a widely as partner how than respected him I since longer adviser in almost new over Brett's you. on the good was you if an time friend It's and for President. years President. Brett, just for as Brett trusted to my also new a a leader honor colleague, much joined our United, Now been

Brett Hart

to I'm that Thanks, introduction. and your long-term I United about And equity about we bring diversity, inclusion. action can lasting how commitment also appreciate excited in the our meaningful change on kind communities Scott, and at for partnership and serve.

travel over has begin I of of accomplished saying the last in team back what our am how for Let in air the face demand April. proud by few months me near-zero

team long Clorox a to and in the wear efforts option the in very is jobs unpaid of we during four $XX.X check-in, to and to burn be voluntary While our the any Throughout one spend. clear safety, raised To or dramatic never of for reduction position the of this to at road CEO believe have Munoz, industry-leading during protect cash preserve United that thank leave our have emerge work part only have the I and a commitment we programs with spread liquidity and that over health flights this introduced all many Clinic, of their we first the complete former want current set to Oscar just Cleveland do to to crisis expected program, and who number our discretionary few. ahead unwavering and have expenses all and to but through will to long us, flight reduce crisis the not contributed our term. eliminate non-labor attendants separation we at coronavirus to sight With and up expenses billion the the including change start fact asking the guiding passengers since have passengers in XX% safety. Along was the members early the for pandemic, our in to priority the this us outset this to very employees Scott of recovery. crisis, customers strength measures the as lost to as reducing project survive number offering to a a assessment end, made it least with name Chairman, our masks, always we is customers, be our requiring reduced our or to our flight crisis, very partnering non-essential our free, all core pillar full safety XX,XXX if prevent of schedule. principle, and began possible have a we of early of

are almost Our voluntary closed. programs separation retirement and

this be employees At lasted that employees over of than our these unprecedented participate. become by X,XXX opted And experts Unfortunately, could time most anticipated. far, worse uncertainty, and has actions most one taken. the meaningful so contributions of have longer to were crisis a

get so are only appreciated, a and there. meaningful And small efforts, of while way not us the these and enough simply step

situation we specifically the left the to make one team the are candor demand workforce. United difficult do to where coreX a most be in of of some Airlines, smaller the planning our thing history for in on fault, X, On decisions no airline, response like most size to and we the team. at depressed October of our in is are is Transparency this, can environment. and We a

our we United many to avoid active be involuntary so go in the labor furloughs reduce an can and flexibility is furlough. return, programs people providing important identify our team offers, costs United, uncertain been voluntary of voluntary team to choice members which demand as will will programs returns and world, to jobs have as ready as strategy. this unions giving possible. have balanced We can when could we our while it that mitigate a element with and our These the as and much In to communication that

operate, we great way haven't the changed changed airline. has commitment crisis that health unprecedented to have employees a the run this While our

part we Andrew? team, many As revenue the United. preserve continue do will Andrew With everything jobs people power of discuss to environment. to leadership for can I'll we as it as that, turn promise of in our over the to the to our

Andrew Nocella

Brett. Thanks,

The United's in acted confront was the history. demand quarter decisively second and difficult to most We changes. quarter clearly quickly

in XX%. being down being fact, XX% revenue quarter up in down our change consistent In our total capacity wind with the of total

coastal cash of Our quarter United, we network we as limited we flew clearly navigate long many traffic, burn way during COVID-XX, a capacity, about results. We function not burn. world to decisions is offer. the down is and a industry of this the the than good a as the worst we on and good our to results off on We'll cargo the is the capacity and share been We capacity. amount during burn as the absolutely smart performance but of the we peers traffic as feared relative we feel our financial cash capacity hubs Instead, ever our good to relative losses these our and have exposure can absolute demand, but got other a drag have crisis network of go international driving to on relative of a driver primary focusing returning to In focus network faced. about management pricing and of cash believe our terms carriers, careful peers our profitability. more in United start. would case of pandemic, market At outsized relatively was made to start our has be ending not business

the revenue domestic. with. world than U.S. We at look does an now start demand open worst which felt benefit others, around the do. towards the but up we eventual will. decline When someday recover gateway is to be when United's international have best international growth we believe impact. international United leisure, slower recovery, to United hub recover revenue Orders believe are Corporate will As will coastal fastest will also to passenger well that quicker be in they recover, low. demand and international will down than of positioned than experience and we gateways is of Borders already revenue slower we XX% to believe come having a the June, international we traffic, it was back believe the

is social are We temporary proved in not term. we expect measure, Video creatures. to long person replace a do technology as it but reasonable over the meeting

we people less their more increased work-from-home employees computing term as airplane the that by location. medium business for frequent travel fact, have a cars some a drive In hypothesis by over remote may from trade commutes

traffic to of a network into and leisure appropriate business make will by market. we capacity reflect to and our term, putting relative short the in visiting proportion less adjustments higher So our family

of the view but We see not to be to a again are will recovery new when reopened. able the path what in quarantines cases expect demand fall, start recovery, recent stalled has in be predict pretend jagged. are which recovery the do and demand virus. to we'll look lifted weeks, the we’ll begin that Everyone borders will expect recover like, to to We

vaccine. recovery and to continue contingent effective a we a is therapeutics However, full believe upon

demand Our how on could guess plateau to approximately decisions. used very shape will as revenue overtime best at XX% the our virus and be learnings demand, widely We measured distributed. early a that until discovered is to we pandemic by the to level capacity and near-term in recover down vaccine disruptive those be is then

May, approximately and April For XX%. we reduced capacity

progress per Payroll by the schedule, entirely supported XX%, average of trip comprehensive salaries us costs, we We in also our was United June new Program did team. QX but temporarily rebound. changes outlook XX%, a slow, May to lowered Act only which demand Support be and In helping an throughout June Domestic PRASM schedule performance demand improved the as quarter our even steady implemented in hubs, by up were down sufficient CARES of mid-Continent began as reflecting we restricted update from maintaining sale. while above are an to in reduced came certain deploying and inventory in multiple down We our operating flights our booked seats cash flights departure while each PRASM We flights in above XX% the and load day XX% conserve actions and June, the XX see steady Domestic minimize seats network with blocked factors. per improved the connectivity. XX%.

confidence we actions in increase have factor load to flights high we to confidence. multiple aircraft, While the safety deploy high continue customer manage very onboard to

cargo passenger international in Our revenues. wide-body to to leverage partially capabilities has approach line our been offset declines long-haul for

policies. the to service Europe, Brazil For XX%, international restricted but ASMs passenger and points quarter, we crisis in with border were increasingly maintained multiple the Australia, throughout down Japan, even

in the decline. quarter, cargo to while team our cargo June XX% demand in to quarter, We also saw X,XXX early uptick revenue on quarter, operated have improvements and in in great charted The homerun in over hit revenue quarter. clearly in cargo recent in is United COVID contributed improvement competitors were The cargo have over track July a June. seeing which the another old our late flight and stalled temporarily cases we cargo the

they'd are make we half the fee a the on average booked alternative the in offer schedule recent customers additional our RASM Domestic in as weeks results still industry no advance and be August adjusted given in demand, full, coming week, XX%, in expected least and expected late from increases. if let other change. September own Third know continue is will we as downwards below reduction to in to to flights demand schedule July the are just that not already finalized. Domestic and XX% clearly June. not August load dynamics, capacity for an changes And to saw and at quarter factors down event will is XX%. them flight stalled given our and is are capacity a June, be domestic like United United's good above

revenue XX.X%, to QX We in capacity that third XX% consolidated be with approximately expect passenger XX%. expected quarter fall versus down of will approximately down the

ago, Just less revenues case in quarter prior to the weeks than we be expected to a few spike, had the XX%. down

marginal Payroll any. will the Program, With Support most end increase can our of if that costs the much this year, summer, incremental and -- later capacity impact post in how we will add

most sure of earning expect have on look be to commercial ready be United's world. update on deployment we past a can't relevant in our team our But and dynamics, the an commercial of of and to we're given every quarter We on array However, third and will initiatives. the to ever-changing that reported past plans agile, future. at capacity industry anyone. customer our calls aspect progress of conservative My commercial respond is

past We the prove have years, the few. United Thanks over few again over team. and the proven that we'll to next entire it

out allow in to with I to these over Thanks. of period this Gerry. difficult it strong. that, dedication times will turn come Your us And will

Gerry Laderman

Andrew. Thanks,

of loan. to raising March, the reported to Included quarter therefore, aggressive ways liquidity, total and have largely billion. CARES additional was the daily to For Payroll grant bolster and to unprecedented requires the billion Since and pre-tax our key capital at business first model debt rates global comments Act, of were an We in structure some pre-tax one to second forward. able $X.X and its to objective the on program, we crisis and, of Program kind doesn't which a focused of future. certainly debt burn substantial innovative Sachs, cash materially that who come a our as in in our liquidity of underwriter, recently, through peers opportunities brought actions issuances attractive the this of value were adjusted pursued a we the minimize of we to unprecedented liquidity by able our in financing crisis, the continues with billion These raised support Support program. to programs Working the industry stock position. of represent our manner, cost-cutting offerings, raise $X.X my the use aggressively our achieve a Goldman $XX.X of formulate truly ensure as serve MileagePlus business loss we unlock loyalty us this responses use liquidity. pandemic start in loss as we $X of using disrupt the lead possible. inherent raising amount our how will strong our to XXXX, in results a our an to of Since impair I the appreciate of out billion by in liquidity made MileagePlus going structure for which interest that recognize flexibility of allowed

end target believe the We even $XX well, the continue liquidity of this pace in demand depress of manage the quarter. over to depending liquidity to into beyond, level the by will far position XXXX us if continues third recovery. available of on billion to airline and We crisis the

as market low to to our cash quarter expenses, out million a this until both conditions. raise available second payments liquidity, billion will at average continue our cushion, expect excluding of the our enough cash built second collateral this liquidity, severance of up the the borrow up of Through the across and course, $XX view hold should approximately $X of collateral quarter loan available at we we Act Having million, we are crisis. can business, guidance work for we we While additional we range. to MileagePlus daily we ending collateral, subject, of to we effort and $X least have CARES again, substantial desire our to additional our end of hard liquidity including to reduced burn original and preserve employees the principal make every value,

eliminated we to needed is spend. sources expenses, and left XX% have Over nothing What what total of discretionary more. all operating special by three absolutely charges, is airline the months, is last operate excluding simply and our the reduced

have crisis began an capital significantly We paused investments since return. adjusted and also all expenditures our the have that immediate reduced didn't

expect down forecasted $X.X from course, capital guidance In XXXX adjusted fact, down the our to approximately billion previous $X be we we billion, $X.X now before and originally expenditures from of the our than of crisis. billion, less

agreement taking take to delivery we've of aircraft We in of is XXXX. not that to available, continue any be Boeing we with new when financing new only will come delivery aircraft an and

that is our team how have is tirelessly pandemic overall a Our cost we working ensure fleet. look we once close continue the player, ends. we currently can grounded. variabilize as aircraft further area to out our We One stronger do industry at to examine structure come temporarily XXX to to

our announce not do to to have remain this time, at we anything on aircraft While retirements specific is priority agile.

the daily This burn expect burn to cash payments debt down $XX to with million quarter. estimate XX% be representing $X around severance third million, third the cash is for ahead the in average Looking quarter principal expenses. quarter, and approximately we revenue our passenger assumes

demand to on As nobody next pace the the improvement. good quarter we had of look fourth and year, visibility

necessary that a the quarter. entire to cash respond to burn environment focus believe our cash has work the but future. we our costs difficult size be and in decision led And will be position in reach bring that our on costs. means where will to line revenue, As team in in United to will which the in We costs with workforce this will around demand to the demand the based the down XX%. when best we the the burn be Unfortunately, has reduce result, to accomplished capacity breakeven, foreseeable cutting labor fourth of returns, we to expect are crisis, need including an of minimizing continue reduced all this for primary our

that, the expect to we that it recovery. I through your believe a I that start ahead. will United Christina let is closing, there in forecast will we tremendous to manage Q&A. happen. a when over as position make a of will to jagged all to what will amount still you is with reiterate turn that be And But own We In to of uncertainty strength

Kristina Munoz

you, Thank Jerry.

one now procedure limit one if We will needed, analyst please the follow-up ask and the Brandon, a to questions community. take from yourself to describe Please question question. question.

Operator

you. Thank Please, And David Vernon. have ahead. will conducted question-and-answer Bernstein, [Operator the from go be electronically. And session Instructions] we

David Vernon

Hey, good morning.

to that to you signed play So, required out ask voluntary we headcount over the scope the Obviously, terms course timing of off sort on numbers provisions well be the I next on closes up been CARES about couple have should employees you is loan below out plans. X,XXX us of reductions for this anyway. in the wanted the What right-size be be months? the I that of the announcements in that expecting expected can the mean, to might of obviously, these before tell when How the network. CARES have and the the commented might or actions about of made? here September,

Scott Kirby

there's United Hey, all who've to people, What And everyone say approximately thank is to first, another at I'd David, good X,XXX. taken at talk the XX,XXX you. programs United, so temporary voluntary, like the to far. X,XXX voluntary I'd

their thank of so get doing this. and and a is, But who've how think all help thing. program. about much and XX,XXX taken raised the can selfless voluntary people to coworkers fellow it action of care doing through I It's this So company their far right what United look, a people they and testament them hands to there's for their

working We some still well. other are unions with our of as

at relevant maybe to bounce we we it certified, keep those number connected temporarily, us. I deals have ready really XX,XXX is the are because some of the of have -- to we important be those get company, back, know temporary. look, will because engaged, to to metric, But full-time, payroll on to be that recovery as but and that can done, if people think expect, that's more. is opportunity a going if probably recovery. the And I least there's bounce And we not quick, the trained any the more going So to

so voluntary are So we in feel good program – we where feel actually good the we far. about really pretty

David Vernon

And for can tone and difficult on with these there? it to in the Is you furlough of relationship the tenor -- some is of kind additional status relationship some far I labor, terms far this – get from the are labor and so of as collaborative? you feel mitigating how discussions. help comment through know the negotiations can us But Like, Is tone of as and give that? side the actions maybe competitive? getting is the it

Scott Kirby

there and this going our on I'm specifics And where interests no and be now pandemic that, labor we And and this discussions. would all share of been aligned. the we get other side. the beginning, what the be is negotiations. to everyone goal comparing. pain foundation. We but and honest through kind is comment that last and situation set And it's getting crisis you. adversarial of that our union it, to there going longer because that temporary including helps types wish getting not of was of Look, all the is say, would through the the we is to But with a all all of have a our transparent than is employees I to we've of deeper, are know traditional recognize a to This hoped. to going not We going from

so do about most -- good jointly the the are. with I really humane feel I are minimize that feel people and And in we we our discussions where about way how good

Operator

And from we go Duane Please Pfennigwerth. Evercore ISI, ahead. have

Duane Pfennigwerth

thanks. Hey

provide some the Just there. could improvement you burn of in terms sequentially, detail maybe cash

of higher capacity appreciate a taken higher and and will a up is changes So, bit But in plans which demand. XXX%, it's costs, given yet variable bias, downward your demand capacity meaningfully a have feels capacity it, those drive up, step like backward. call

function a working this all Is the you or of is is working driven? in quarter? capital this capital this cost So, driven this expect later all recovery

Gerry Laderman

Hey, Gerry. it's

what referring a combination our we everything. would versus to little you're guidance, prior when we than -- turn, cash expecting. cash third And also quarter guidance, saving. assumed think in that is established including it's CapEx And doing a on nice what little a so I So, costs, job taken higher of has it's some continuing be including well, savings we're on the answer costs, that say, back demand would short then. a had which while We're than still I on that currently burn we're higher a

that combination refine lower be of estimate few our sort than able to the ago and a it's a burn cash everything driven we for So, a to months has us forecast quarter. assumed of

Duane Pfennigwerth

it Gerry. the we commentary follow-up. it XX? XX expect Appreciate for from maybe perk until plateauing do to then down How XX to is long-term path get taking we summer XX path the up the down a there? as -- of And sort get How from there? Thanks XX Okay. that get just we little for down we bit get a what questions. beyond down or Is do what is like? look But leisure a about corporate down Thanks you vaccine. to

Scott Kirby

path be. Yes. I'll be would it course of to far demand that. try be we path that will I very accurate, expect don't the reasonably of Hey center this. and the forecasting I much fairway what and of Duane, what the so exact pandemic know and say the think been we've exact like the is what don't both and know will impact acknowledge But jagged we'll we the we

have actually a the to also to floor think ceiling and air that outside. and aircraft more I I filter, hear that's And hear a from makes cabin confusing particularly said also, transmission from uniquely that into as is uniquely a masks. should to The airflow -- is about back an the Andrew that it's XX% going down an TV kind is I we that, of while been that this wearing -- be people back air took some mask have that environment. And policies as I because on you think understand, a that I the out. and with here. society, aircraft to today that what country virus. a has cleaning do, indoor weeks, of from And of but we'll learned HEPA-grade a the worth, combined in come it's For policies, we is the what that step back, safe taken we, an few lessons XX% the think are our is re-filtered is and coming think spaces and last has all about designed said, environment. important plateaued, safe that earlier through being up one, and our coming a goes aircraft either the you And But to demand

their XX% journey to vacation or going And on be that an one for people trip airplane, to wanting us business at back to on to on important level. visit safest so relatives, parts a that really that's industry, and is for get and family the to of for a of or go are the United

safe, is I get travel whole And XX driving make you're start safer the very engine that airports think for or And have additional steps process sure car to airplane. believe before taking much to this flying on hours, of the to going an actually case. week in and flying. the we're that we're understanding including to instead the very, announced be I

until family Disney they're business like relatives. people to will recovery like XXX,XXX will going that, My Vegas just last of at back end World a Las did to meetings January. going salespeople and visiting the a kind I party come and capacity. we're of I and Electronics it's is, of think every are the to not sounds small going is travel job, The come lot I stuff get of back. not year But but they a big this past widely A you aren't up a will a in at leisure guess kind All top other start XXX%. come Consumer have back, allow XXX pandemic show January, their of going to for to year, to Companies be not doing XXX% happen. in Those demand, but celebration going not in group great start know at have we're think vaccine. to to available reasonable there's think, the

to get expansive trajectory rapid of we up today's XX%, be you to from there'll And recovery be sure I what's we'll it once I think XX a to I'm we're a think that it level takes kind So how get add of vaccine. and a to how all plateau. going up, XX, then demand widespread where gradual to answer long there. but get will that's we important to very be to think why a of we get not XX,

Operator

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

Hunter Keay

everybody. morning, you. thank Hi, Good

at or you the isn't had than you So know now, XXX think end of fleet less which you wide-bodies XXXX? much, the 'XX. at have do we in XXX year-end what more admittedly Knowing

Scott Kirby

Andrew?

Andrew Nocella

by other take guess have, our this international back. going come see a that I are to you described how going gateways that. place gateways is which quicker. international And in think numbers, naturally don't think gateways I I'll is lot the so the comeback answer more. our way, And our to I have of Scott

Hunter Keay

More than XXX.

it. And Got you. Okay. thank then,

fly you the as about you corporate the stuff? in and amount mix quarter know If same the that in revenue quarter, do like third quarter in can do more now and fourth you what in third the of knowing capacity than you all the generate you quarter, VFR fourth

Andrew Nocella

also What because changed we But say, good in that's ahead tilting based forecasting we're some QX. is on ourselves it we'd results both is, the less about we're and looking Hunter -- we're out your the help. job got forecast. And our pretty this. and everyday And pricing we're answer what And we're leisure to get which market, say I and making bit think we – I getting of towards did how more capacity a at question better little we're going is that environment think and money, refining in but in see where more better July, We've going there. VFR and we're the really to that to markets demand at yes would a of now domestically overseas. the

as in direction. refine right think we to schedule, push and the continue the I numbers the we So can optimize

Scott Kirby

And direct recognizing of has where have as for think, they meant not team. present whole been to commercial Andrew may brag Hunter, commercial company, a the better team – our and by led but I a job, on our done than to the take I minute want of about the it. Airlines be pandemic that any airline advantage opportunities entire has taking themselves, demand. flying. we're for the and demand -- what the in airline places passenger only whether that world the Andrew some was mentioned internationally and United

finding have of who Our able I uniquely the creative. opportunities XX% the know by is something mean, be stuff find by cargo there like demand, where Jan capacity some real is Krems, opportunity. thought to United demand that match working that increase that. on confidence team that cargo. uniquely we of but to to they're I led in could is do outperform ever going to pockets the to And appropriately would more have And team, I also

Operator

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

Darryl Genovesi

QX better cash with the the your you time Hi. in Can you're sense that of gave the Can scenario about framework just Thanks give your end, XX% intra scenario, results? the to give -- or you how everybody. was you in thinking give in OpEx us down nothing that then either of a QX gets quarter? just phased for number that like burn, XX% how a guys And second where quarter. sense sense us us a revenue

Scott Kirby

Gerry?

Gerry Laderman

Yeah.

going third quarter, beyond XX% of we until quarter, would where a but where are. third capacity. set just that I with say we is gives the we be Too sense early around capacity down For it are given the you to going forward number to tell

Darryl Genovesi

does guess, nature Thank XXXX? you're in I up driven slippage out by Gerry, MAX United, or million this is this taking the and XXXX CapEx is then, it on the $XXX of change, on certification now And more related that of the just Okay. to show you.

Gerry Laderman

does to out impact up things. really million of in The move the show It's answer three our agreement of XXXX. aircraft not is It's XXXX. no. The $XXX

instead in were that forecast work of on then taking to committed XXXX, of So that's fair number the year aircraft aircraft were are an -- impact That a partner, will couple now other take a also number little later be expenditure we There Embraer there a has CapEx. that zero. capital of taken bit deposits. we're MAX some is of of out that of pre-delivery now done. this also just a so our And by expect XXX regional in

in what aircraft leases I the brought fair out we're that's expense. now billion the actually leases. so our that of for about of year, operating present that that present the CapEx the CapEx that of is of remember the spent lease it. those are to of last aircraft under leases, and That's if point forecasting $X So We're taking value accounting But months nine excluding quarter, billion of that you out, about number $X.X $XXX of CapEx, that back was new the you billion the would for year $X down first number about a these we down. million. as is the value

Operator

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

Jamie Baker

increase in quarantine some traffic terms you state? any right refund its in been there's of the appreciable give whether here now good everybody. and the clarity demand my morning on air requests Gerry, liability us in home the composition, can in more flattening Hey, following

Andrew Nocella

redemption less just $X that. like previous stats instruments it's But It's revenue get and less some EPCs about other the and the pandemic, Refunds, shy curve coming of there and booking what's there, in one-third as into redemption two-thirds what's Andrew. coming of obviously, our tickets. effectiveness it's billion. the Jamie, of Hi, in are is and past, we and revenue booked, And as of was the are new best further in further the now. – new

now but of a billion two-third, kind And refund moving So shy coming numbers, think, the for ATL. are in right direction, $X all the those roughly of and are right one-third split rates down. I just

Jamie Bake

Okay. Perfect.

probably and for Second Gerry. question,

remaining can loan? look draw And treasury should collateral that has unencumbered loan? event pledged will you've asset successfully that the that pledge you Now you share or a loyalty the draw you what been believe monetized, that in the like also will we

Gerry Laderman

down Act use it we CARES we collateral route the expect and take would to the that I for Sure. loan, choose available as gates. draw slots and if

of that's And so billion. routes, actually used as lien. to that not mentioned as out, combination that is treasury going like the or that collateral a of counting second in And U.S. where the hard we're are of assets, $X successfully at I encumbered least that assets the equity airlines MileagePlus I assets should but point does hold some equipment routes and collateral. other for well that other availability have include available remaining as not there's remaining pool

the brand real have United does the value example, hub include For include not value. things has that brand. network. domestic It not of are the value. itself It Those does

used those $X have We airlines I do know would just yet, billion that since assets, other that but the included have top those not described. on we available of be

Operator

go Cowen, from And ahead. have Becker. Please Helane we

Helane Becker

very everybody. very operator. for you time. Hi, And thank the Thanks much much

MileagePlus? have travel. But I it or lot that they're know, be who looking question when are not seeing My and first you're one-off are flying, is are to loyalty you not who I at that your because two customers as just Scott, actually customers of airline high-value loyal corporate of bookings may members the your wasn't there more tied a people you is, questions. think So I flying, said

Andrew Nocella

flying in business Helane, for for members reasons. but we maybe Andrew. the on not our frequent Hi, rate an flier are seeing Actually, again, of it's personal ever-increasing premier good program the front news is that

getting go nice number way back to Obviously, front. an incredibly back that you seeing airplane. on that was if they're progress low. But April, we're So really in

in airplanes. than of right to have recovering where terms of to before flying higher nonmembers board But a like in nicely percentage we back that was me, percentages? do crisis people moving on get the all on to. So Is we number, as comfortable looks the it's No, more it direction. it's it used very

Helane Becker

And I'm members? to of wondering, nonmembers some able you're if those convert to

Andrew Nocella

card, that as which at well and crisis done during them the work get always to obviously, extraordinarily our credit hold well. has to We also

point Our from this credit diverse completely at our revenue passenger card situation is situation.

we until I of back again, we it in continue makeup we to towards won't well. there's it forward But to as to back But time. think them, that's convert be look vaccine. normal. time, different So seems normal will moving look definitely a a in but But achieved passengers, going as be is work

Operator

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

Joseph DeNardi

level talent and consistent Thanks. Good being compensation, for with a the morning. his Scott, the budget it MileagePlus billion is of $XX asset? Luc's investment in

Scott Kirby

that's said, our really asset team timing his and Andrew great a with on a is Chase. renewed been deal And Luc public compensation team But Luc's so his Luc on what well. have phenomenal news, the they done good whole with and partnership for the And they've finance working deal MileagePlus as that's which really getting Italy truly Luc just going we lot United. in legal through negotiation, whole But sure two literally We a And not this to done business. Chase, to make teams we Mike Holdings Leskinen this negotiation growing keep also on before what like who Chase, also get not a they I'm announced great done. JPMorgan talk the went collaborative need invest about the a call. with the and appreciate job, a resources and partnership and days they partnership. growing

Joseph DeNardi

capital airline do on COVID? of organizational a and the How it you've and importantly, profitability return improve appropriately the your advantage the then airlines, build the an to maybe agreement use competitive program allocate structure earns established capital, most to post you the loyalty so adequate relative between core peers, the and more commercial

Scott Kirby

will Luc, create other they I help support the will which I But kind really we to down already Andrew and don't could more the Andrew not even of obviously, accelerated good would They the each effort, I'll the not through core the But to positive teams the Well, that this, understand that were and clearer They're the sense in you answers non-airline want. internally, the also that know what going way. on for think a side. separable least They go you delineation I'm airline. card, add what to But other. push the at. a and let one at mutually pandemic. what yet. financials separation we of appropriately, I have that split all are working airline new without out real road are their opportunities be sure if and say getting to And XXX% is, you're – side, a in together. do economics

a you to anything symbiotic it's do add? have So relationship. Andrew,

Andrew Nocella

creative has after forward. a see would value I be others We've right that compensation this it. and lot about that and we to the the right the that, we'll we now me The the for is of And there, he'll I'm year, his internally. over and always job thing last And is recognize even with call. Luc only always going ideas. more push sure the of seen saw And enormous guy transparency continue it add see, talking we'll

lot. a thanks So

Scott Kirby

He's we speak, as by texting the way. me

Operator

Savi have And ahead. from Raymond Syth. James, Please go we

Savi Syth

Hey, good morning.

average key is of as XQ, me to burn, if Just do? some a walk tied help components to you daily from that I through on of wonder what cash the you kind the could variable. portion of get understand I XQ

how you saw coming that what that could away was $XX wondering I if take component, back think of you does? there that out. the discussion maybe the If So, progresses. call, was down I then kind last that in kind revenue the about help of of just on some understand a on costs million just from level we me coming

Scott Kirby

continue effect which don't can cost. be we'll costs, But demand if million that. the amount an I I -- cost had going capacity to be forecast, is ability have on little is burn bit -- going capacity give to better. too try million or efficiency accurate you what range. a stronger, and $XX they're think answer and relative of quarter, maybe environment we'll continue net but but I'll actually $XX guess capacity quarter confidence improving to If do in moving of have Savi, fourth there'll we tailwind. a capacity the of the demand And less -- you flexible. to demand effect disaggregate correct an quarter. a to and capacity Nobody But the variable. fourth and expectation is therefore, of weaker, average demand. an bet $XX demand our improving I about A for for to think to to deploy it's is it's environment strong less is other bit progress by I not try, range that I'll word, the in guess to to at not quarter third in cash make as won't happen I which demand cost, even will from generate you you saying, if degree they're combined. various more it's start least the capacity, the the fourth and if of We there'll cost. but just an we give more we of of And know $XX I higher variables, will million the the forecast demand be probably the separate components, cost, a cash at independent be would into had because to if had is on be want, mostly to variables have And a little what the get to I than whether and bet going really think to to million on So, burn, make I'd guess today, to somewhere the But net

Savi Syth

sense and super-helpful. makes That

the on maybe side, Just Gerry. CapEx for and

And look today, gross from very cash on like that based you're small what of Just XXXX, does XXXX, kind from CapEx, thinking it's how guessing then. kind a level standpoint? of a I'm

Gerry Laderman

Yes.

you, aircraft XXXX take too been has for historically financing be are total always CapEx relative in year, account you any given of those So, since is aircraft, going always to new small just is number CapEx, pretty cash to and most the our financed. into when other far going out of the significant we balance been be come we tell lower next this I sheet that for out we has now. restoring historically what to our have CapEx before investments. right years, speculate because principally is can make crisis, than to priorities though, as few

more crisis aircraft year, our next months. this over delivery billion was dollars. that the now. we still will a It's is right going clarity have take when And billion-ish because still the started, $X being on where to effectively target next couple of. For few we'll have of has be we metal cut

Operator

Suisse, we Caiado. have Credit Joe From

Joe Caiado

much. very thanks Good morning. Hey

a still has attractiveness clarification, question quick you're more approved? the more against or talk the the Gerry, Do of borrow versus MileagePlus, can a have First, about of you federal loan relative that of collateral? the you ability to that And just source doing for taking actually. exhausted that

Gerry Laderman

Yes.

it to to, what of able were with, the against collateral. though, transaction year remember, transaction, from as way that is amortizes, able availability X, originally it basically that we're re-borrow market amortizing upsize up deal capacity. So, in the went structured we the first-lien in which starting we you is that because may as the to used The

So want we if the it we in to becomes that against can a facility future. continue borrow

Joe Caiado

Got it.

Okay, thanks for that color.

service, of of away a your more third run to from passenger as add question the revenue and in sustainable Cargo is for talk quick sort rate? second clearly to in quarter job go good capture you Thank one for what's just a the bright thoughts you. that you cargo pivot sort have the just quarter, back that Second Andrew. a you just about spot, back can Do pivoting outlook there?

Andrew Nocella

and advantage our is say an to did Well, in hubs. that, I first, to have what we cargo would tends from that, go

that and point just I'll flattish. our have and thing actually that, and humming. a is So would second say well-established with was quarter the first was month really people we I of the revenue – network other distributors and our cargo our out kind in the

to were June revenue what They off May you imagine Cargo charts. close really the like. rather looked come does and time. So can departure just just in

our yield not think difficult as system the little to And of hub in the and charters. of is again, of strong long this expect to around industry-wide, flying again, ability to predict, production pretty our our a to we we it quarter. cargo So cargo is thanks do it go global of world. the cargo because have team. our wants bit fleet but the only another is to great like advantages which wide-bodies big really, is gateways But from a more is one it And it's as be to terms going normally really,

July at take it's already. easily bit expect in early I of year-over-year it. seeing quarter. a XQ, And can the in but definitely think so that of we to we're so tell, third it on what And little based will the levels more advantage here outperform we of it's Whether did

Operator

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

Catherine O'Brien

your recent cost, the clarification all everyone. is morning good One for adjusted down or Gerry time. Thanks Hey on that in again something first, XX% for operating quick costs else?

Gerry Laderman

That's in Yes. ex-specials. Yes. all

Catherine O'Brien

Okay. Great.

given it stays capacity as maybe around But uncertainty think sequentially with we just to XQ capacity costs, the about like expecting assume demand outlook. costs level August too nail forced changes currently you that down XQ make potentially labor that cut spending that versus you're those maybe impact? your lower how should in it's to to are costs XX% level will If expecting, offset cost be, assuming early buckets from there I'm sounds force that we you're XQ, you other the temporarily in And come labor or so down be to back drive XQ? and

Gerry Laderman

on so burn. I focused I'm am actually, those cash numbers on not Cathy much cost as

would that, answer cash your now. to as terms we're say I try in about to your I be else. But to are more what than would anything assumptions So burn, seeing question of with I think the say going same costs that,

that mention, would about I in decline flat the is maturity normal do quarter quarter. debt cash to Two by to basically, the the amortization, going $XXX the our quarter. We fourth way So have things fourth on million burn. in addition

third quarter And, fourth course, have quarter. rightsize some we'll So instance, costs be the the also in we labor principal higher in that force fourth there would the quarter. be as payments one-time will for than, in the of

Operator

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

Michael Linenberg

Hey, good morning, everyone.

million that's Just or the XXth, I Is that last include July Gerry, $XXX of installment? in the two $XX.X ones number? PSP as here. that like liquidity that billion so. does think quick

Gerry Laderman

end come would typically That at No. the month. of No. the

Michael Linenberg

And ability XX% at was just are to my May to just was on normalize, you probably having in numbers year And on and IATA -- XX% high sure they seeing starting to talked and you or Andrew. or over question this closer your ago. great. within probably very similar, least tickets to Thank then second to days, about a look month are like then XX%. And that? purchased the those guys some three I the it May, It is for Okay, data, they When of think the at plan. great. I'm of color Are close you. can June? some Maybe numbers maybe obviously impact that you are still in, that's provide just some

Andrew Nocella

quarantine and then factors revenue in got I right and quite more hit that to and high in Mike, as York elsewhere challenging than nice forecasting say Yeah, I more in got tapered City which close-in a is demand in bit normal. definitely would in bit the the May, even borders will a early load moving it restricted. was off June, very direction. these saw frankly, New the see, say little We and days particular, Chicago

we'd I to it that's difficult we're is this once in. So where know optimized And get go and to. that like high and to the I going road have to early And and start the predict but curve on get say, things like on back very to we May have it as forward, at really events It's where we better these normalcy, will is it point revenue capacity better to I do think the expect that closer equation realm don't of recovery, in booking are. the happened. all June. it's get moved But but at was of that's now lower

what we're what told consistent, -- and seeing in is that's I think IATA that weeks, changed. So you, although that's recent

Operator

Matthew From Wisniewski. Barclays, have go Please we ahead.

Matthew Wisniewski

Hi. my Thanks question. for taking

making you wanted deferring, to type? there push decision, to aircraft off of, come would quickly. on you can the or long fleet to point decision, flexibility real how appreciate the delaying Just need kind an decision make a I is a but time a or a in essentially, back making on retiring

Scott Kirby

and are a and to aircraft on on. kinds long-term of can or the engine whether storage of I'll temporary Maybe things. put be cycles add lot start, moving storage type storage, of Gerry and path. out But it all it's storage. of short-term And difficult we based time, in aircraft We've some virus maintenance predict and into

went and to retire the fleet and until be of hesitate we length we into the that make type, necessarily to final honest. we're decisions any when a going have situation, plan better didn't understand on this, So to duration to we

going part XXXs very, definitely are there were definitely have are plan. cash for until to aircraft So we that and what's right keep green that dry requirements on we do of long-term of on. But make our of engines airframe been both retired the importantly, token our trying have effectively that they permanently them. on fleet engine what's had of fleet because the using for better and powder rest visibility Those very we're sure with the But burn time of to really we more old the practically retirement number fleet.

to fleet So decision a I hesitate don't need just when we to. to a today make retire

So Gerry, do are And that's today. to to my you we on where perspective add anything that? want

Gerry Laderman

Yes.

retirement, you One, not if Let what recovery. was me the even which it original a was be that is things. would come they're at rapid our couple those just back. add aircraft But going of look even to their likely expectation there on XXXs, if a Pratt-powered probably available

Just time, And stored are need the for amount terms years. of time, we and just aircraft and in measured for the the have we go. of The be can our desert out pulled those them. first plenty cared being if are properly of when in to expectations are

Matthew Wisniewski

helpful. That's Thanks. Great. Okay.

be about could look that your be on Well, of return? having eventually, of Just could little other demand early what touch international when much, to like disciplined on quick questions. or capacity concerted talking a it's some if with kind the but there's too you're you a international does effort to traffic conversations probably maybe peers, quickly

Scott Kirby

American people COVID we letter reengaging safely of talking travel. Lufthansa, Airlines, not to that IAG what illegal. asking to back forth be have way allowing was particular the that and and proud Well, went And in they United test along Airlines in to increase is a borders sides governments because get and begin again start that to between But been we're flying U.S., and traveling on as to consider it sign yesterday, fact, with conversation Atlantic, the having a and Europe negative to definitely to reopening people demand. they a would both people get start way about to if ways

to talked internationally, how as focus, our we've So about has been again. get consumers flying

Operator

Instructions] And have ahead. now media. Please from we go the you. questions And Justin Bloomberg, from Bachman. Thank will we [Operator take

Justin Bachman

Hi. the time Thanks for today.

is Scott, that ahead for a plateau of recovery time virus of comments follow-up does be, revenue to level? next late XX% do wanted Scott. or middle then and year going frame previous think sort question vaccine. about this of any on What about for that I you into anticipate So your that the would

Scott Kirby

when multiple a the be it effective, vaccines. an to when a it. also vaccine a been to But given be distributed. And and seems vaccine Look, is needs percentage widely to I've about be that's on we It expert going it's vaccine, to a about manufactured, a require distributed I'm population. clear, talk found tested, wide available to not pretty been of lot reading going and

what longer late before probably least a really United planning that's than scenario you it's and think to hope but media. of some we'll we're to next at year certainly than is it better I as I it experts takes hope happens, that that. what At is. though, So sooner, go until we that find other its in the let

Justin Bachman

you. Thank right. All

Operator

have Tracy we ahead. Reuters, From Rucinski. Please go

Tracy Rucinski

referenced COVID. program the I that letter in coming test Have restrictions passengers that how And from you airlines respective sent any you that? to House morning. you wanted and the EU Good and evolving on feedback for Hi. yesterday ask to received international see White a the other the to about months? travel that you do on governments

Scott Kirby

do have? heard, say on we anything far, Brett, we so or we've want to that anything know what about you seen if

Brett Hart

able formal it's to Yes. we don't but this on Yes. To This to best we Brett in any hoping the is interest, States. various we're countries, responses, move productive have expect to United including think Hart. and We obviously, to, do have everyone's forward in date, policy. discussions, be fact,

we're So hopeful.

that at of We countries we have and will benefit both our U.S. the of of industry, think, the strong outside something collective our the day, industry. the end U.S. And this our and support is all in across

hopeful. we're So

Operator

David Please And ahead. go Koenig. have from Press, The Associated we

David Koenig

and Scott Hi, Yes. company.

on at upgauging your out to number policy some Your today competitors, not the like Any the release flight. blocking like expanded to reduce on of it seats the to easier because seems regrets having passengers wondered I done just that? be press customers. you've you're face if policy And highlights regretting explain some started of would their per mask

Scott Kirby

we And we, to consumer confidence. have think, that's XX% importantly We're look, but quarter. been in -- So, we And confidence. about July. ran, in as I factor load said, factor second increase XX% taking a significant a projecting load actions the

about confidence. confidence We airplane, the have in incredible that’s of the consumer but safety

it's at end. Importantly,

-- the a being It be not the or space. same in another being indoor is as in in even in one confidence restaurant. really from going confident. steps from confidence your And is HEPA-grade be the safety in giving you the taking same the It's not switch that into And taking of our are the aircraft. the if I it because they them the can of or us and comfortable. not consumers also load if high safe it places building, It's an safe, that and same safest uniquely a is cabin the why policies about the airplane floorboard, that an have to air in to cleaning outside. either safety, on and fewer other other air then is that call, the have the factor we high than And XX% or up than exists XX% getting ventilation you're steps our environment comes because and we confidence customer past when high a to mask And, we the X% protocols consumers that other we the of option in to to system a feel and in as notifying as are don't talked customers air an We back office down the flight, about another are an into we and is date, house goes we're through filtered high, hospital, nowhere -- you customers of have take have filters on re-circulated ceiling, higher that. is leave Earlier the our with aircraft. the combine that.

low with our -- intentionally aircrafts confidence, explain help are to been And build load to it We been. why has story that has policy safe. so factors help kept the what that's

Operator

And from ahead. your is Chokshi. go Please New open. York have Times, Niraj, we line Niraj

Niraj Chokshi

uptake been has guys ask Thanks this. been. that. I barred going? just about how policy. I flights, to many the I mask that's to about hear how have curious -- guess you Sorry say on future for taking that wanted what was from how people Can

Scott Kirby

mask for So policy the to because the vast our majority of follow customers employees recognize and everyone. the of already do safety the it's right they thing

policy we take And than had millions to against. so and very of the the carried that in we've XX we been place, have Since high mask customers, compliance. had action fewer has have in actually we've

of not United majority to them the all to welcome not over that -- It we'll they're during don't flying are if vast compliant, going wear is required, pandemic look, And won't small a is minority masks agree, few mask. appreciate. when a and but the want people they So, that wear distinctly back mask. this be a are on

Operator

we'll closing to Kristina now for it turn And you. now turn back Thank Munoz we'll remarks.

Kristina Munoz

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

Operator

joining. Thank you. for this gentlemen, you And ladies concludes Thank today's and conference.

disconnect. now may You