United Airlines (UAL) 18 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Mike Leskinen	Managing Director, IR
Oscar Munoz	CEO
Scott Kirby	President
Andrew Nocella	EVP and Chief Commercial Officer
Andrew Levy	EVP and CFO
Greg Hart	EVP and COO
Darryl Genovesi	UBS
Helane Becker	Cowen
David Vernon	Sanford Bernstein
Brandon Oglenski	Barclays
Andrew Didora	Bank of America
Savanthi Syth	Raymond James
Jamie Baker	JP Morgan
Duane Pfennigwerth	Evercore ISI
Michael Linenberg	Deutsche Bank
Hunter Keay	Wolfe Research
Rajeev Lalwani	Morgan Stanley
Kevin Crissey	Citi
Joseph DeNardi	Stifel
Alana Wise	Reuters
Edward Russell	Flightglobal
Doug Cameron	Wall Street Journal
Michael Sasso	Bloomberg News

Call transcript

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Operator

Good morning and welcome to United Continental Holdings Earnings Conference Call for the First Quarter 2018. 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 Relations. today’s not of you Managing terms, Mike turn host Leskinen, call, agree presentation will If Investor I with simply Director for line. off the your the

begin, may You sir.

Mike Leskinen

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

this this morning, a issued Additionally, presentation to call. accompany we

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

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

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

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

Oscar Munoz

being you Mike. today. the Thank on and call everybody Good thank morning for you,

I XXXX time. Southwest results, family the take our would difficult just in quarter I the of that thoughts. first stands moment and our our all to on keep to Flight a to in like this colleagues United shoulder Southwest crew go with shoulder I Before entire know us and passengers

four, pretax $XXX As pretax adjusted. markets. reported We to revenue a strong earnings and of we the of due robust our in yesterday of X% trend, adjusted margin million our to slide we achieved with top environment end demand turn particularly guidance as international

our per share quarter was as earnings than results higher XX% Our of adjusted, first last year. $X.XX of

our dedication back-to-back in operational keep to focused airline operational performance. delivering these XX,XXX through storms work continue for not employees weather exceptional in first on winter of safe did our flight, thank a as as I deliver all to Every the they challenges, well and of for time. their experience not face to but customers reflects Our events. quarter power journey. outstanding Northeast, throughout the employees team day, various performance on is our And only their positive want every record-setting running only our other our

customers the with tools they employees our possible and our best We’re modern experience. support to equipping provide with need travel

other such coordinating can family for operations, and help not we you devices who and only our mobile tasks. customers airport are our on. this on of rollout irregular tools quarter, drive gate XX,XXX something support focused the upgrade, As we employees applying These completed slide extremely help the see functions agents rebooking but five, seating efficiency, as many during

is in giving safe, a and And caring is on on only service training our means began caring, this also second that principles change based hierarchical coreX. efficient. decision the safety. dependable alongside we call our framework team quarter, of to the United’s employees, frontline have and developed the the is is XX% our don’t During procedures customer we to the hand. what employees satisfaction It take Biggest that we’re on this of framework fit results the our importantly situation positive year. the end to track evident complete by coreX were and more for in customer employees customers training Early our our flexibility and policies our actions ownership scores when very of

of focus customers as As we deliver execute you on at areas. on know, laid January this the plan slide shown to experience a primary per six. two top of we At improving investor us a service and is and earnings for out event, our United. three-year here about one share XX%, To plan, have priorities CAGR XXrd

network; our commitment domestic through growing efficiency flat is our keep or CASM-ex asset and driving strengthening XXXX. productivity, is which First to and second is by and underpinned better

defined We have unlock what network strength. design on opportunities leverage to aligned our and uniquely and call our have to United we strategy potential the tremendous better

growth We’re very targets financial multiyear long-term out the we January. confident committed in to and our network strategy remain in laid

That year we’ve many combination the of plan quarter today, is that targets. EPS our is the march said, fact, increased and results by our our $X.XX the we early guidance in confidence of range XXXX on the strongest adjusted believe our towards increases remainder routes. based first full fuel, recent tightening our In seen in year. the we’re evidence adjusted of on the our new working EPS successes Despite

$X EPS to $X.XX. new Our now guidance range adjusted is

our trends momentum, We’re entering service. environment with the by operational raise customer on encouraged and and how in quarter continue to revenue bar employees the performance the second the

will I that, to over it with Scott. turn so And

Scott Kirby

the We with tier DX a bags, the DX their for I and thanks of best-ever running and a another operational our operation, seat here team. really month and seventh training necessity flavor being not reason We day why some of coreX a And United you enough. in requirement of to to hear their to to represents the judgment we their hassle. believe plans use amongst first us March airline’s The customers do our an United. have this one of marking customer amount much operating long-term. all That’s customers an of begin, core change is that minimum with a such put through great are today. time thank to primary to first, frontline the everyone at about part critical our us our best I’m really The Thank the just measure customers first. put to clearly be all our centric competitors. real as of proud keys airline. United you, the of Oscar, on performance. quarter a of making airline, of corporate but essential the the to being in delivering great getting our talk more To of on-time is like performance it DNA a coreX destination employees consolidated Empowering for with leading element set at would We the joining row run first quarter isn’t top

and environment. performed us coupled our well X%. start. drove both the X.X% healthy for Nocella business. revenue [Ph] initiatives, On focus to bookings our got business executing X.X% Running XXXX off slide leisure and strategy quarter’s All to regions full-year previous our shortly, on and strengthen revenue expectations domestically network a on have XX, our with hubs. a will to the the tightened great from the operation we guidance front-cabin grow to capacity commercial strong environment A to quarter, Andrew above onto Moving did outperformance in international touch allows

important may misunderstandings is that that scope moment growth take product clear three-year to a scope In I’d to regional addition, long-term believe changing up. to it about try competitive some like is seems future. relative there a our be to giving We plan and United’s

negotiate to actually months it are negotiate takes aircraft then or However, and takes a and start the time takes agreement, time it to before first an aircraft then deal, more flying. new XX built

important at meaningful before enough the time done delivered have United, there position competitive us long in change aircraft it regional to for get XXXX. never really all our run to and a of while So, is to fleet that was

So, our were not targets and to not on are predicated scope. XXXX changes through

based confidence but it EPS fleet great our $XX adjusted existing target have We $XX our on in is to plan.

of how continue to our with pleased and great executing the are to year look forward the a on and will productivity. we focus we year, operation, plans, as increasing We but growth running the began, remainder efficiency the

fundamental quarter our profile. to to can can overall confidence we which right growth far, we represented about performance is have the while came really improving keep the impact are more storms. our that United performance, couple that entire the first going for see is I’d and shaping demand the hard by us so at coreX. middle it’s forward, are early earnings feel we doing And about everything plan. that up guidance we that everything him on. in about that on in We can more here and good drive to we we despite next their the cost to cost experience, and revenue of range feel visibility of like in lever quarters work our revenue base how based of the quarter the will do so, significant environment our the And outlook but doing specifically optimistic the path thank to first about our encouraged how for more on gives know increasing also and team our It’s the We and us opportunities most the customer We are talk with that Levy United. Andrew control. have for we is we

I’d home Before and to it I’ll to Andrews. has Leskinen the baby time. Melissa like to gets Mr. this rush due the in airport we a And over, into after assure tomorrow I sure it with he call his that, turn also make turn will congratulate over who that

Andrew Nocella

Scott. Thanks,

XX. revenue the slide to Turning on environment

year-over-year Our system was X.X% PRASM quarter. first the for higher

close regions in which Easter expectations materialize exceeded As weak. has the initial mentioned, before been Scott holiday, historically week with in all strength

revenue tailwind outpaced led in unit had being improved Domestic revenues foreign a up year-over-year, X%. basis-point throughout X% also the energy quarter our the of This corporate top sector. We sequentially with XX by from quarter. growth exchange line the

XX corporate by competitive As year-over-year position Atlantic each a strong cabin our quarter and now had momentum and After pricing, have an the Pacific, well six followed quarters which the cabins. Central in strength is underperformance have the of of all enterprise performance markets region and and in PRASM anticipated the saw The strongly demand improvement by strongest PRASM revenue beach and PRASM in of month to in performance the the supply. both We of inflected the benefit for year-over-year spectrum. sectors, in entire growth continued driven driven fare positive foreign quarter economy demand had small as looks across improvement sequential strength to in upfront, strong as segment, show seen in the trends of quarter. exchange. bulk geographies sales we consecutive month Latin second improved intensified the medium competitive in from particularly This see we Overall, performance quarters. in positive any region throughout forward-looking initiatives China up America, in X-point that the quarter. promising the of result for with a with March sharpened and digit landscape invested continue both the quarter. our with double catching the PRASM PRASM Caribbean

PRASM QX. been Transpac would our Micronesia, Excluding in positive have

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

this and year. slide revenue initiatives the believe on be our Initial [ph] end expect XX, to medial earlier first is of of update the managed month. an team on place drive of forward. Gemini, results the expect a new encouraging measured show cabins of and opportunity really flights plan all at can this optimal to we event and out we the I’d better Gemini our these management more rolled of in are give outlined our investor running end all system to proud fares. moving by preliminary are Gemini we on to Moving like the quarter, results some I’m and mix we commercial by as At represent

thirds product our continues Our available and evolve non-stop domestic two about purchasing markets. Basic of to for Economy is currently

to up we and is mature buying with from to similar our is hoped products to of XX% Basic standard. as begun customers our XX% competitors, with it’s that large Economy competing contributing Now,

optimizing still saver for tool. optimization, November, offer In further This to we members is United. at XX% the increase there Since Everyday MileagePlus time we effective While to Awards room lower it’s members. been seen making to a began for in offering while this expense an dynamic awards. allows awards our competitive for have price MileagePlus announcement, same pricing award

of opportunity quarter. card card, new largest Card we’ve accounts as a acquisitions On This the in up on further inflection MileagePlus continue significant with spend the number which is growth. view strong performance, X%, in second quarter the to was the fourth reached we since build new acquisitions and of X% in an the increase point quarter XXXX. for quarter the

improve for Chase will to customers. programs grow with the We our make work continue and joint to acquisitions to card it better

Another WiFi. is customer enhancement

generation system connect to Viasat’s corporate, bringing provide to to with reliable email. to applications our and internet XX such in-flight This the be XXX MAX. We’re secure air Boeing as including is business latest connections fast, entertainment designed VPN and customers key connectivity able with and craft, system

Moving on to every to induct XX, with the XXXX. on schedule. end reconfiguration We our track slide XX through remain on days we plan aircraft of a Polaris, Polaris-configured aircraft

employee the in invest We are to very feedback. to soft continue Polaris and improve and excited customer about product and response

just this few this revenue Houston as in have open schedule on of time. in we one lounges we summary, Polaris strong In month year. is month robust to and and and York the opening Los currently and Angeles more the this We’re seen with Francisco at days later feel end year long New in as four environment a San

Our Andrew. commercial with off right that, And direction. taken the initiatives over I’ll it in turn to have

Andrew Levy

a our and I Slide documents will of we for investor those slide second at first adjusted is discuss both our refer earnings high please to afternoon, XX Yesterday Andrew. and and released XXXX our Thanks, XX summary our results financials and detail. additional update. level, a shows our GAAP results. quarter quarter outlook

pre-tax XXXX XX% with the income share, to for second for came and first XX our ASM higher Slide $XXX quarter very of compared and initial was full pleased X%. of was the pleased expectations. pre-tax how Adjusted in of adjusted estimates cost and quarter total first report which earnings margin our quarter to million per are XXXX. shows quarter the $X.XX We year. We were the than adjusted was per

initial first XX, the in quarter slide despite weather on of the non-fuel CASM XX events the of X.X% from impact added quarter. unit ex-headwind over year increased guidance non-fuel above year middle to which Turning our slightly costs basis, in a is cumulatively which range bps the

second to of for costs lower line quarter be The of flat quarter airport capacity were the cost largely But, to ex -- year CASM important offset year of unit of up and other points regional pressure compared expect We to to almost we costs provided XXXX. represents CASM XXXX It’s January. between higher second areas non-fuel combination the X% we expense offset largely when ex be pressure. X these increased in will over these by known second will these items. our quarter note, cost guidance in expect

We to second XX. during which the the ex year into slide a expect on nice in get we of see CASM decline also half

first to half with the these get year. we During ramp so CASM we tailwind to the third back compared half expected XX-seat started quarter up we year, as XXXX, our to ex is flying, into the of of This lap alone start half of point provide of the this a costs.

last increased by quarters Our is of expected with off-peak growth driven during also rate higher of meaningfully the in the much periods. to two rate capacity be growth flying

efficiency the part maintenance of our chain, our improve will supply in include programs which fixed increased our of further discussed improve several of we very as productivity area unit container year maintenance supply projects in initiatives also and effect airframe several optimize increasing our non-fuel a we As progresses. our have excellence will which January, heavy costs and our savings on drive believe to in the chain will projects, These launched aircraft helping We’ve the XXXX. cost positive checks. growth planning costs

in guidance to costs. balance optimizes our to purchasing for reaffirming All sheet in off full confident continuing by aircraft X% unit which very I’m XXXX. down utilize lease, non-fuel year our our of ownership aircraft cost all, we’re Finally, the flat

repurchase leaves of XXth, trading stock XX, December our to to of XXXX. Turning billion total end million Board April which $X liquidity. authority our we plan view purchased opportunistically the $X.X appropriate to slide maintaining intrinsic through it’s of with XXXX. by That us year repurchases value $XXX about through when We the of represents to cash shares, excess shares at of shareholders of in granted have to while return our outstanding our below remaining of continue billion X% date the

CapEx be For to took we XXXX, $X.X $X.X Boeing fleet, XXX-Xs of continue and four On we Boeing billion. expect two to first between adjusted billion the in delivery XXX-XXXERs quarter. and

six continued which us mainline off and regional aircraft We of also lease, and of purchased balance to our our sheet economics flexibility greater and gives advantage for better fleet. XX

plan operating take MAX June. the to are to XXX being scheduled forward X first Looking and aircraft Boeing quarter, aircraft of six delivery in our we second the to

about enhancements We’re customer to this excited aircraft experience the our efficiency improvements very fleet. bring and will

kick to our the tightened adjusted to in that, to to used in us momentum an for as aircraft includes revenue this where also for projected and I’ll using very be With between $X first in price aircraft. XXXX. be Oscar increased guidance imply adjusted We $X.XX earnings over the second the turn cycle. adjusted quarter’s share full-year range scheduled secured continue The our and range a in current of to X% second to Q&A. and the bottom in and quarter pretax opportunity our end $X.XX. widebody ability earlier, and fuel it off The of deliver raising including us the Mike costs deal XX per we new provided Used used we’ve mentioned range. slide our a XX, and economic in enhanced established by market recently in XX capacity, the And maximize aircraft XX%. more Airbus curve. to range for active of we’re AXXX EPS margin returns of provide fuel quarter April narrowbody the aircraft guidance we’re on Slide And are the discussions regardless to XXth summary delivered confidence has XXXX

Mike Leskinen

Andrew. Thank you,

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

Operator

UBS, Darryl [Operator Instructions] Please Genovesi. go ahead. we From have

Darryl Genovesi

availability thanks been constraint Nocella, quarter. the I’ve that guess, or plan get have on time, other and thanks scope on I is growth constraint. Scott to on runway your for the do for the the airport Do and more? to guys, Andrew the gate you or Mid-Continent enough go growth to need about execute your you Hi, asset. spare hub, wondering color at good

Andrew Nocella

For the need. the most airline when at the capacity. day rest rest one the full look banks banks our the operated, or fact of completely is part, we the Really we where what bank have the had structures the schedule, but two of structures, you day of through were the excess

very So, in and hubs our time incremental don’t of the as efficient, cost most we grow in obviously able today, fill we’re we capacity the really there need gates on. other across to

Darryl Genovesi

Okay, of perhaps network Dulles when great. your in a back sense My is room topic. but January. a focus rolled kind out guess have anywhere really on that at grow more else, similar you than some And to you then, I wasn’t that plan

over is local room just I that refocus the because there guess, more I if you’d Dulles specifically, my market. And like to more so, to sense wondering is connections was drive towards

Andrew Nocella

perspective. and day operates It only a hub. today from a per of is those departure So, waves four waves Dulles gate is full departure one great

of in is Dulles. opportunity a So, lot there

about We grow are is do I evaluate how in to that of those and there excited hubs take think hubs, advantage future. and one to opportunity is exactly the Dulles but continue of Dulles of to our all we

Darryl Genovesi

half about of could in the it, XXX on Can big you get year Levy, help like second bucket to Andrew points moving you midpoint. the If to would the year that CASM it quantify then guidance, of pieces need us the looks be some full helpful. basis the deceleration just And you help what are?

Andrew Levy

have X.X are is XX-seater that are to the the alone big the ones improvement to pieces think, second the half on first. XX. in referred I slide point I relative Well, The

the that we the as during more noted, that substantially from marginal the -- our very, are of and low periods growth very can of see We a growing that’s capacity year, half back coming and amount cost. decent in is you off-peak

things cost large far statement a that of mentioned, saving that on I give our see of that’s specifically So income the in want line you I as number of actual will items. what those are. P&L, don’t as the then, And to we numbers some the value

accelerating are as they on. However, the year goes

we next to is ramp a as project the to shifted to excellence us that some excited so end that chain something year. time more have up just supply deliver we the balance on, including we of think of year. goodness going lot in the at last are about, that’s continue instance, rent more is expense to planning And Aircraft sheet. beginning really something goes there we’re more the For benefits time we airplanes see on as spent

will we So, benefits continue there. to see some

others less of are year help year. drive guidance. the meaningfully CASM And reaffirming second are these So, right we that, to the the have items of that’s we half not so full how going our mentioned lower confident much confident you impactful I I’m we more as give combination are well why really want that that ex us beyond now the as several feel in to detail sure that but

Operator

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

Helane Becker

When question been year, say years this. historically have So, actually this I’d first in toughest have your significant. now is you think two a quarter, the profits you in my that’s it’s quarter. And fairly you first about where row

historically United bar, quarter think guess quarter as think new we in we about about the going to more see you has than that going fourth to As going is quarter profit seen? are -- first or forward first I forward, this sequentially

Scott Kirby

saying don’t The be first as weakest fourth good United year. and to -- for in felt always first service We have think will simply is Florida about this you the and quarters the really we how seasonally Caribbean. came thank for that and much fact quarter I that. Helane, this a

to less Northeast winter from and Caribbean United other two the the exit to during as big Florida impactful is airlines. the so, And the

I think all going at kinds to you improvement quarters, seeing in those are that quarter in are the are improvement You going in think continue to see to, will quarter. we happen continue saw the We each but improvement you to quarters. think of I United first across

that it be as subsequent So, and including expect quarter the in the would happening in quarters well, seasonal third to happens first our but we peaks, second quarter.

Helane Becker

Right.

And so to follow-up holidays for than less then in just it have carriers, the sort for or you past our they other be is been that the might impactful years might of accurate?

Scott Kirby

I It similar the a think impactful particularly United smaller level Florida, but certainly domestic the network, impact that the years and magnitude were impact, our harder has comparison but less is than on by an helped to the past -- quarter there carriers. are second it first of Northeast is in is other quarter we be Easter will holiday. has example carrier that much probably than they for service they [ph] for in are for the us with less that they

Helane Becker

the to And understand talking Pacific, for just right, and specifically said about for I quick, second my X% after but the talked X% revenue Nocella, X% think you for then, the because want to you follow-up the X% the were system, you about Pacific unit real not Pacific, to in I Andrew quarter?

Andrew Nocella

was I referring what That’s to.

Helane Becker

the on that you think what will quarter, this Pacific quarter Yes, is than do be you then, basis okay. said? positive And full

Andrew Nocella

I shows think right our it will now. be; outlook that

Operator

Vernon. David go ahead. have we Please Sanford From Bernstein,

David Vernon

of might looking going what resolution kind agreement get for executing of on was kind you that issue issues of future bit when on you getting right to important can’t the to the little if Scott, are color add as a be strategy might is you to now? look I the be able that if the like, negotiated to and growth wondering scope

Scott Kirby

long-term a focused appropriately years or been fleet product taking scope are it’s aircraft world. next I growth markets, we reluctance the the are of places the we talked Laguardia, near to -- it for had our at I The making Newark big of Atlanta is about not mainline that a to on them no is lying that Newark, ticking on to into competitive the that regional Chicago. Atlanta, in ultimately part jets markets we urgent making And clock appropriate United, taking that In by because reasons best anticipated Dallas to airline and them fleet. we and markets. in for regional having competitive is we also like understand in the just have about and to here historically have Chicago And this timing in clients the through the change should never several this the that like timeline. moving markets it or And plan, out funding regional done. our a least important get airline XXXX at get There plan no our world best time done. were term,

that gets believe on issues. it markets no is started get growing are of we right creating what something ticking by will horizon. feed clock be mainline. we sourcing at certainly number yield of helps pretty traffic. but planning the as also time mainline the there us as we have done. jets today, our I growth our one using done, opportunities large more a out much have as This far And It regional that is markets the pilots through are actually to And long and and on early as for should negotiations pilots something getting fortunately kinds high just We with the is our in regional of with in aircraft win-win mainline airline support the is and

beyond So, if it’s this really opportunity occurs.

David Vernon

the the whether help is All on Andrew, could us the pike right, understand I PRASM headwind major non-peak hours? appreciate by of about and this of from is the headwind there some that. already year something or adding are shouldn’t color kind And down the the during in see you guys growth back coming that a maybe flying flights you additional non-peak is side on half anticipating if

Andrew Nocella

we carefully. look at something It’s

And that airline I the fly be passengers profile we’ve than we’ve the in though, quarters the connectivity think, changed the changed connectivity. being profile the peak needs through and how off-peak most on hands flow our that system. the helped us of in foundation the quarters the really of for the way we to of because

have seats. We more

off-peak expectations, lot situation. the in look off-peak really the time what than came we to as build will flying similar in fourth So, quarter better we period, us of good views and given a the as a good. this QX off-peak in connectivity, like our that’s feel

it. So off-peak again, airline absorb connectivity in to new change periods the the us allowing fundamental to capacity the this well and very with is is do

David Vernon

on big So, the the departures? difference you’re earlier fares or for seeing later not the

Andrew Nocella

there is RASMs it’s we the fares margin. we’re in, and are it Well, well. difference working a CASM marginal managing then And is the the out we but in accretive, think think margin bringing the

Operator

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

Brandon Oglenski

morning, up. I my good question. David’s to lots Thanks off right and in the systems But now for the in the side, question like want in I management there. expansion of rebank moving I have Hey, pieces have then, of your you connectivity flowing Hawaiian guys adding mean, Gemini positive piggyback guess, revenue and everyone. taking network Chicago you as do the well. on

we more like to as projects margin expansion driving ask, time investors quarters I should these a slowing few to out this a up should revenue want progresses? we guess is with So, that the incremental management see accrue think just of to story? or initiative And expect about over revenue revenues time, I these unit start

Andrew Nocella

move the forward, their definitely than margin, lower their new routes RASM first managing year as but we year. second have Definitely in the

does two how Gemini, we think recently We hopeful lot Gemini in think better look each of this do one. in initiatives, different route year in making I at we further a the to we and a of a that turned two, it’ll other. But, it a way are year some enhancements on. will lot moving there’s overlap than system Also we’re year coming. of So, which there be with capacity and really how go have and long terms of with better when pieces with

long run. pretty and the or with pipeline, that initiatives in RASM many in So, have whether to drive that margin it’s are pipeline’s think we the the the drive other of going full we ideas

Brandon Oglenski

and that. you Polaris frequency appreciate on so product market. And some hitting you’re launched international think as And actually Can aircraft is you now, also equipped could I the some speak you longer product a initiatives what the comment actually out economy term? I I or did those of of that that economy Okay. new rolling think premium add at well. side, that think, you of

Andrew Nocella

Sure.

days. As I XX out Polaris every said, we’re plane a rolling

to done We going economy the Polaris done our with is that. by happy of product is aircraft. going tier schedule the that between really mid we’re be Premium Plus also Polaris on and be XXXX, and same as the end to in new are

less than the to we a we years aircraft three given have So, that’s most sense. bit modifications, what made little go, just how do

available upgrade. to approximately with late three for the sometime later or year during showing have in we years year Premium this We seat first on purchase this products. start system go both early an Plus quarter, but next aircraft sell have we with into summer our So, flight should the to will the for up first

particularly very these These down to in we’re we’re airlines. pushes mid value deliver want I excited segmentation, us the it’s the for really we go. initiatives. ability tier So, all confident important; to really with think its are And road cabin, as the exactly further where it about

on the putting the a there product that more really So, we’re be and to over coming going but a we’re that and lot months front proud we’re years. some on way of

Operator

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

Andrew Didora

from regional different. this the of I schedules, new positive or on a this drastically versus this accretion I garnering everyone. guess, guess, XX% this shouldn’t about Andrew, your flying. on be? at what flying tailwind around when staying mainline, from margin of this your thinking year of any morning, year, line mainline could effect potential RASM? I’m the double nearly so, have regional up And do Good this provide a mix not can last PRASM think down you ASM’s color Hi. way? you hub-spoke theme With right obviously are look I domestic on Scott RASM, more if

Andrew Nocella

the expected. system, across flying domestically and aircraft RASM, and We flying number to at as would and yield max come entire higher higher have introduced in like number that our are higher a United. seaters doing of of of think for It is lot push RASMs And the XX seaters is in with new. do XX both they internationally, brand the traffic I United we’re those

it. happy with We’re

this we’re they tweaks make and will by RASM pleased what but be it. as to a as to pretty We else forward that. going needed is tailwind sure go not I’m add to to

Andrew Didora

us And know, we’ve seeing I is the corporate travel commentary some out of positive the maybe peers X% for during digging rate that on of you’re hotel in side. revenues by cycle, in Okay, give in and change that. this a but I where pricing is hearing had? thank recent does quarter corporate led the stand think a as sense corporate well. any maybe behavior what second guys But, are your more were theme up XXXX, energy. versus it have been you not you a my then, corporate on and of bit you’ve you companies in seen today where Can contract from you negotiation you your any

Scott Kirby

I any very wouldn’t say a premium environment. our strong most changes. seen is entities. international when demand And divisions, of across look at way the we’ve we see the leading cabin you the recent Overall,

pleased So, that. pretty we’re by

to and over just to product a the we’ve of happy make out Our competitive. last adjusted there. have as force our we’re how we’re all few with is to share out really happy has programs sure hit And made park we’re really really competitive sales changes changing and quarters

to exactly another all. is X%, trends regards at see. any line Top for be should is in corporate this well. is and at so see negative QX bigger going business. corporate this of what So, we And growth of X%, to of And we don’t this really this point a great aircraft that’s quarter our sale portion

Operator

Please From ahead. go we have Savanthi Raymond Syth. James,

Savanthi Syth

If I kind maybe talk second the other anticipating in of -- there? and sequentially about go could Pacific third we entities March just you more Could know here broadly as inflected on should and in positive be be quarter. mentioned into the you perspective, the regional obviously I what you might

Andrew Nocella

I is Atlantic demand both the way. seen cabins. good Atlantic in has going Well, lead think to really

we’re pleased by So, really that.

made be Guam. we’ve the in by strongest appropriate Atlantic entity, Pacific. quarter, should changes international In the So, followed our

but positive quarters. fine, Easter no a holiday And China impact we good it’s Prior looks So fact, looks I RASM negative the it’s in had Latin been on Pacific Latin a is work bigger China of think international example. division for of a going The longer and the forward. United the that really is has the us; number very the holiday to in good. RASM I two the that’s weakest negative shift China America last about quarters for think that, part forward. good for has entities. for big shift. American the than three division, going

while Latin by QX sequentially, have of had QX be a driven shift I’d will be holiday that. as lower expect the because So, in it we expected great to

Atlantic first; second; third. overall, So Pacific Latin

Savanthi Syth

And how within does fall domestic that?

Andrew Nocella

I go we all we our fine. just the with falls to numbers going where strength it’s the forward are and Domestic the out -- entities and are we of we we are corporate I’m as QX. but not see, break mean, happy given what in really doing

Savanthi Syth

is takes? you the build-up that of I of in as cost that follow-up timing things long execute and of strategy, traffic? airport your the may follow-up question. And a on moving maybe that, around, connecting is connecting the Chicago if on Moody’s on cost standpoint. the little you was Could calculus questioning And remind a me again, also, from competitiveness like and know I airport to what traffic How just important bit

Andrew Nocella

Yes.

hub when restructures, hurricane did a it through late the region. time last of On exactly this and we spent came that did Houston on year. the a we Unfortunately, was lot there we

hoping so is yielding the flight monitor see tweaks to we what schedule continue we of in But, mix increase are our really So, we lot. Chicago, and the implemented we schedule it we higher business, numbers as continue But, just hub with is which to far we February. and manipulated normally an a which structure are would, for. what the appropriate. we happy to as in in Huston,

planned and this either it we measure how on don’t next to for So, to that But on next this what positive but make given doing is quarter, we that overall, And late good, as as will any a coming our that one, think so it how that needs works circumstances be you number the not better. we something out for in better. optimize are to what over mean depending evolves to day figure to Denver better. make outlook at we months year it’s thoroughly we results far I make learn year time are we even there. something even the structure things point changed tweaks so and early have it really have and

measure So, as far, great make but still good we far, so need this so a tweaks lot and to appropriate. more

Savanthi Syth

the the connecting I’m are traffic? as not costs guessing And about when a airport think the big you driver profitability

Andrew Nocella

Well, headwind. I closely mean, monitor been a and airport costs recent we it are something has

able all we network a in from we forward. we that that negotiate moving it all what And our to know need we baked want to the make do plan. perspective. costs sure our So, isn’t what hubs features, We is, we so have with and it’s we to are something have are of it and and competitive do airports what we know

Operator

ahead. Morgan Baker. go we JP Please From Jamie have

Jamie Baker

four got have I questions five follow-ups. with

Nocella. to the market of your for one cost as positioning over Scott corporate or sort you in decrease better is is First Economy led Basic that to allocated usual, or competitive any the domestically there? carrier environment changes Has business Andrew inventory ultra-low

Andrew Nocella

the how really -- to driven we’re is back system I going and think out. Basic take made not no each seat. There for the inventory the management of yield put value I’ll Economy management here is is decision, is it’s It maximize step and much system to well, by strategic yield is -- our one say, trying expected a

available yield are fares demand extent management fares. weaker, the demand they Basic system And lowest will have make it your Economy the to because stronger, more. is is so, And will when

environment. So, a demand yes, strong it’s

there that fewer means available strategic is but much So, very it it’s Economy at really probably Basic -- seats it or -- nothing are is the and margins. there about

Jamie Baker

widespread think that or to does right it Greg in inspection and final simple in be innings FAA exercise CFMXX-XBs, does for but Hart, for and expense aircraft United? fairly we time order a now about in Is how if question the from should that the second And of service? require early pulled obviously terms actually

Greg Hart

question. or different complete have started everything event as that to don’t which on the of is that Obviously, airlines an bulletin But, there want issued event XXXX, time service another we was we that work well And safety bulletin to issue of actually sure complete focused making as get and on with for and Thanks this quickly as last back is was this ahead expect we process in on Jamie. their August quickly we and here investigation. as week. do a airline in on drove not are service we Hey, and at Obviously it that fully we’re this paramount underway possible. and can. NTSB

Oscar Munoz

think service I was question, this cost the board. On on bulletin

safety are future, and paramount it going so, to our forecast for We again, the is that’s incremental do important. embedded in cost. But cost no

Operator

go Please From Evercore ahead. have ISI, Pfennigwerth. we Duane

Duane Pfennigwerth

enter recovery advance of of April, measure book domestic but kind it time Just as close make you month just Can yields we’d yields following up up we May, moves behind talk book and on domestic to and PRASM, in. now advance when on month-to-month, from a kind sort in for June? a seasonal there was the appreciate of

Scott Kirby

advance is strong short book yields environment. good. the yield, a answer demand are It’s book Advance

means, same close-in further close-in be more -- -- be demand, as good are there that when to happens you aggressive demand seats can opportunities for out, not reserved the can have you you So, have only and well. you

good the environment demand So, across good, we all feel really about entities.

feel contain our that to really trying we environment. but about enthusiasm, demand good We’re

Duane Pfennigwerth

of actually implementation Okay. fare if the in serves, some it And and early lost the fairly aggressively launched that across you And just you because innings. share memory Basic Economy ladder. the year, on then, last

maybe worth? a a point and was about remind in comp, that the you in think we worth that can XQ just much us Is As comp? how the

Scott Kirby

year comps issue. our quarter. more third had a of than Guam not number. quarter really happening, last I’m kind Obviously perfect never what It’s storm get second a -- of was, quarter a third quarter said the we the storms, of number third stuff And the we sure in

was of not impact easier So, May. don’t our in second into particular. I the hopefully think -- should the third much quarter, be comps an There in quarter in really

Operator

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

Michael Linenberg

Scott. the you lot in in just quick guys probably what increased ones about is that Fran, marketplace? big you or guys LA, heard a on are two West Hey, guys big in seeing We’ve you competition here. Andrew Coast. are are This San

Andrew Nocella

Sure, it’s San are Andrew. looking good. Overall, I think particularly of from things a point view, centric Francisco

environment. our a San Francisco In PRASM really we’re doing Francisco. hub fact, that pleased we to in the pretty given But, it’s had really San confident competitive positive we’re in in and see quarter, we’re what

great to open great new product, and above all We have a the few lounge in and schedule about the as Polaris a weeks well.

So, this what’s in Coast we West on point. Francisco the about San at good going feel and really

Michael Linenberg

passengers is at what Andrew flying involves where percentage domestic amount O&D as probably factor you be well. Okay. can points, segments or or Nocella we who Then, what in of load express international, on however the that that, you look domestic connecting When to origination? what this leg, second destination question, international just would are for

Andrew Nocella

But to don’t going think the across Airlines, is significant for it you. exact we a number get it number. whole United have We’ll the pretty I system.

Mike after and our it I’ll So, does it number results. call international it get DPIJ, get international the the factor is also domestic call. better, you When load domestic, our -- we impact journey better, gets results exact the of portion have

Operator

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

Hunter Keay

something morning. around to a Scott, Hey, you know that travelers where do what target have you do good percentage Is you never track and be? you want internationally? fly of that business Hey, your

Scott Kirby

which means have don’t we I a know don’t also target.

Hunter Keay

in understanding contract, of that an consider Okay. X.XX question? CBA or even quick. you doesn’t change comfortable Are the of item the to amended you’re if without And take gating CBA a then, that event CBA clause in of real taking you new the that ratio existing advantage a scope the as to advantage clause language sort ratio in new X back to the would

Scott Kirby

that’s to the to to board at with, on the everyone like well. them pilots manufacturers I’m we and agrees and have road it’s we’re is talking Look, with for time. but ahead would where entire not and aircraft discussions a a even Yes. to the get good agrees that stakeholders, and get of we’re that Obviously as our workforce something going same having Airlines all with backstop United

Operator

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

Rajeev Lalwani

for Scott, Good Hi. morning. time. Thanks a for the you. question

are could are spot? referring far up you And going. color As of the specifically have out than some a come planes keep you’re getting how not filling you are Just quicker rolling things competitor so we what to expecting, track far? as so strategy, surprises across I’m retail

Scott Kirby

that performing really have. as is bumps time largely actually going think, as we think, managing one there’d mean that, team the of but -- for for are I to change results, a DX but seven is I months growth leadership never been produce largely you in to be team we that had the most done There expected. all do those, at to anticipated lot a enough we Hart But, it changes to a entire hard to operational ones and great when implement remarkable geographies, the anticipated job have they some it’s but we’re Greg to testaments But, his that as in particularly in operational same we as the and change challenged the a know the do regional issues. United all it row Look, some exactly amount anticipated. has are because of I got change road, along incredible. it’s is has number with that and which all occur the we we well going the fact

Rajeev Lalwani

a then, Andrew for And Nocella. quick question

side, you some is else? threw about that, giving United, that’s making traction what you at come are out like the numbers. price, about proposition Can it is it the corporate something that what’s corporate driving you more is talked to on just talk You them impressive

Andrew Nocella

they some sales I the what the has to need be about really gotten doing. United has Sure. think they we excited just all out are that and and way a has force really it is a us. us United and the demand And I in so promoting competitive that helped we’ve talked about shifted marketplace, them, and tools armed there in that we’re think the to

underlying have still there Although as premium well. out we demand marketplace strong a for

I But, more difference we’re really QX to for in force And give that. So, to quarter will of together. the a it’s sales working think kind see all huge credit really and of them. we of our making even proud

Operator

go From Kevin Please Citi, we Crissey. ahead.

Kevin Crissey

Thanks for the time.

alluded and RASM would that So, RASM you call, given of think looking strength origin domestic I have a the international to it, others X.X% pure at lower the -- posted. be that domestic pure the than the I what destination, domestic to

think future beyond I for going think and So, designed international how of your scheduled, growth, primarily about domestic for origins be versus growth and about are I what itineraries those connecting XXXX destinations. is domestic to and much XXXX when when flights

focused So, the small to some to about being flights connections. I opposed think of Orlando as domestic maybe primarily as

Andrew Nocella

I’m not I that think way. sure of it

together. works all network Our

Denver getaways growing significant international are hubs presence. a even We and international to started our All Denver of London has just Heathrow.

we’re n together, cities think connectivity the separate small really as we So, way. different connectivity we bullish generating, segments yield ice medium all said that I new creating don’t think of across in that have small I we’re the to would type it works in the that And small as environment. January, the particularly we’re I to have and or all

about overall, we have really distinction. feel it don’t good the and So we

Operator

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

Joseph DeNardi

your next to regional years the the strategy regional to need growth importance have about way changed think the sub? of feed does the over few you wholly-owned Scott, a

Scott Kirby

so. think don’t I

time whatever is is diagnostic calls, about you also best lot is regional talking you a to third-party, use. airline. And is the do We’re sort the up-gauging lot the owned to of not will mainline. It’s through of efficient, a want of mainline. that higher time you or wholly feed just lot we see the cost a as to are a these grow at whether who regional regional operator yield wind most we how on feed, or But, And understand we about regional through spent that not is just a best of as spent feed. we’ve also regional we’ve agnostic to feed way but markets

Joseph DeNardi

And you both then, demand. guys maybe Andrew, pretty are on Scott bullish or

can like your PRASM reconcile, with But, guide. us demand growth. the second to with guess quarter unit way maybe with your you to reconcile help revenue. I any of is trying there exuberance store number, the I same around a Just the lot know, just capacity bullishness

Andrew Nocella

we shift think there holiday. I the is Well, have a said, in always

strong and that in So, we that has sequentially and would would be knew March happened. more be fact April difficult,

of doesn’t analysis But for So decline type it’s even think the that. I causing is Latin great say Atlantic, have if don’t example unexpected. of America shift Atlantic a with show But outlook across in that. sequential the I’ll a is same I the you. decline, not that we holiday across store that look our particularly a

obviously good that. last Easter really are the in because business are cabin. XX are as now, said of or So we Right XX class next the do the are and days, we the think seeing we’ve lapping seeing results right bullish now, we year across Atlantic Atlantic particularly are numbers across we we and I over we the we’re --

Operator

today. concludes this and investor the gentlemen, analyst and our portion of call Ladies you. Thank

Wise. will media. Instructions] the [Operator have We From now Reuters, Alana Please take ahead. go questions we from

Alana Wise

inspections given engines in others and its wondering planning XXX So, to speed Southwest yesterday happened with model into I’m up jets look if any that any the engines. is or the of on the CFM United flight, tragedy

Oscar Munoz

is This Alana, hi. Oscar.

bulletin Greg an service that a happened regarding previously just As week on issued last another earlier, was mentioned event airline. had

and kick a started address we we’ll that result, as recently. so, compliant. program just to off bulletin the the be fully again, did And And

follow will we same yes, program. So, the

Alana Wise

fleet? idea of you the time how of do many table actually And or engines in these how are completion and have any United of engines many

Oscar Munoz

ongoing will the be of year. the This really. course through Not

Greg Hart

This is Greg Hart.

about engines have fleet. in these We of our XXX

Operator

Russell. have go from Please we And Flightglobal, ahead. Edward

Edward Russell

them to -- the period on look little extend over off -- period? fleet give through to how like that out mainline plan you plan XXXX? lease buy a coming mean or do and the fleet what you have mainline comment idea on this I you any many in going leases you going is Could off the aircraft do can

Andrew Nocella

purchase than them. But -- aircraft to we This numbers more shrink times that is the agnostic operating to we airplanes aircraft continues reason the fingertips the don’t lease do cash on we operating aircraft many how I better those is financing in lease out to Andrew. of coming have economics continue my few bring of years. the at off The as lease next as number have rather are balance just but simply sheet. to about is it often to

so a And that’s are we lot that. of doing

on will a simply basis, acquire a are will there as far that look give And or less. on individual back at to go case-by-case each to we I we As look the that there suspect forward many are we deal extend. others And basis. that

callouts including we used and expect plan fleet the to specific the we’ve whole that So, And see investor discussed update. really into more not than on deliveries transaction provided AXXX some expected information have earlier. a in the lot we’re we airbus today go a few compared to XXXX on detail the other we

Edward Russell

will it the Okay. to likely in that without -- to fleet right going Is generally XXXX, specifics? grow assume mainline XXXX grow and

Andrew Nocella

Yes.

we yes, that is that clearly, long-term we see on XXXX. definitely additional on the think growth order provided through to in have expectation into that dependent on that execute Certainly will mainline. the I part plan we’ve of information growth adding aircraft

be absolutely mainline. will we So, growing

Operator

Dough Street Please Cameron. Journal Wall ahead. go we From have

Doug Cameron

more and what a I made And about your talked of deepen of bit a cart done. its of a gap perhaps of that just have the actually That’s before maybe a there alliances do you the bit was line, kind comment rivals place entails. could have Scott credibility longer practically be horse little on useful. I alliance side if which had a with putting deepening kind yourself wonder, as and problems putting in operational who to bit would any the you the Oscar this just what just guess, before, front but some practically because some of alliances problematic? deeper can comments a on alliances

Scott Kirby

as oldest alliances. That’s the a… actually of is Star United member first So, Alliance the and founding

Doug Cameron

then. You shouldn’t be behind

Scott Kirby

having personally together we alliance of with more closely spent Nocella meet We to with lot nominal and we had Andrew opportunities partners. to myself That said, than big bang better. the And and some They some work we that had kind historically. led them working them. release a are got press of frequently. high be talking going level engagement has of not changes. get but about, already everyday We’ve time

we look that are and opportunities Canada that team. going impressive our very you partially we with more results improve a Lufthansa, together forward. working are to And partners closely the If across and Air But, our Atlantic, partnerships with as are our think there how… pleased we is continuing because how and

Doug Cameron

honest, vague. to because all But American will alliances you that’s this [Indiscernible] need they obviously sorry are have money the from the to brought be and up I’d very the from partnership. just and show Delta rooftops it deepen before, a making about I’m their

have So, bit that partners. really a better digging great than little you interested in

Scott Kirby

that’s Unfortunately, the behind partners. our curtains exactly we stuff tactically that on confidential we’re all with doing and what keep it’s Yes.

Operator

From go please Sasso, Bloomberg we have Michael ahead. News,

Michael Sasso

you these more from give used coming information that Yes. those. maybe in may about talk from AXXXs? are We’ve be Can Can easyJet? coming little fact easyJet been source they and are XX of the a these on where hearing you

Scott Kirby

Hey, Mike.

that acquiring. aircraft we’re midlife they’re So,

where information purchase able As agreement. the to that provisions they’re disclose in from, as due far not to coming we’re

I’m I’d do that so. tell So, love as much to unable just as to you

Andrew Levy

asked seller us yet. the disclose Mike, not to

Operator

you. Thank

it turn our back for now to speakers closing remarks. will We

Mike Leskinen

Thanks call to for further Please relations, questions. quarter. Thanks. to if all any the forward to today. look joining we contact next you talking you have media And

Operator

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

You may disconnect. now

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