United Airlines (UAL) 17 Jul 192019 Q2 Earnings call transcript

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

Following the initial remarks from management, we will open-up the lines for questions. [Operator Instructions]

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off If terms, agree not the drop you line. with do simply these

the presentation Leskinen, Please Mike of go I will sir. President now over your today's Vice Investor host and Development to Corporate ahead call for Relations. turn

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

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

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

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

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

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

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

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

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

couple Airlines joining let We're a quarter me start United us Thank all with you, excited you yet highlight successful and to very for of if today. another I and to my for of headlines. thanks Mike could,

this United's team our consecutive towards we adjusted us growth of of strong hard margin the to and growth. pretax meeting quarter adjusted points third on delivered work EPS Thanks quarter a accelerating basis XXXX XXX our trajectory improving

front, is knock at know but with Pakistani although game. new, sport us we weather our obviously weather hubs MAX issues as didn't our and XXX outdoor as and operational the off hub nothing related well On combined and aerospace are grounding Iranian as the you still to an

and our in We continued top-tier to performance Denver, we the those result competitors with deliver performer Chicago, Los top large strong system hub across markets. versus a Francisco San operational DX O'Hare, at the were Angeles,

to most for and number grounding the efficient the Moving our customers for that question taken to by up commend who to on and another comes and in will both And be are way make care continues impacted our priority employees. customers our work safety I the in want and to possible. their MAX our timely that team we customers respect are our of. to caring one continue rebooking sure aircraft

time improvements the they United Finally, United and them to our choose every travel with serve us to allowing we in the better continue making customers great to want experience introduce future.

deliver to our face If increased can confidence results further that turn quarter second we we have through work X, speed bumps. and in multiple our performance the Slide and we even financial results as

of the margin expansion raising are $X.X And today, point XXX were our This $XX.XX at proof-not-promises earnings with pretax raises to full year-over-year. commitments. consistently adjusted billion a new mentality demonstration that our $XX. expect of an our year basis XX.X%, of work, adjusted to of powerful another XXXX quarter margin on range quarter with Second adjusted pretax a EPS midpoint we guidance deliver we

our to would we customers when where strategy network and our multiyear continue flying travel. on execute said want We to

new domestic Denver including both that XX launched Dulles Frankfurt, and headline-catching to other international Haneda. Aviv, Prague Washington carriers Newark quarter and we to routes Tokyo, four and to no offer Naples, Tel This destinations international like adding we'll be additional to U.S. routes alone soon

We and than not beyond we to in And be improvements look will industry the the the most Kate, love to toward choose in the believe but matter fly. the challenges ways airline to said we put touch provide we itself and arise, go what customer-caring best as to United moment on succeed. Andrew experience. airline in more only the flying that exciting ever customers no series in most deliver will and become we future of has fly, and Scott, of a that examples above position

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

We Thank everyone at today. had have here another on you, United. to Oscar. strong quarter It's call the great

We XX% build a of excuses. our India, on record in to weather-related And air pretax of for suspension flights seventh MAX control guidance we traffic quarter our the our and a continue to no increase in of midpoint adjusted the and delays that's above track despite issues, came in year-over-year. the row, margin

such service headwinds. simply navigating to exceeding headwinds still commend meeting like tough and down exogenous they and exceptional the with overcoming I'd and managing and our making not excuses for our commitments United financial to is you. while those through all circumstances provide we're job of team to buckling employees did The exceptional customer

a customers. strong Operationally, our of of run to taking operation continuing care and proud team I'm the for

As all competitors were And hubs. Los number Denver. we three number Chicago, mentioned, have where and Francisco, in scale; Oscar four San one hubs of those in completion in we similar we four Angeles, one of were in factor our of DX

inevitable last domestic at outlined continues best strength and into being the bolstered United year global growth well with that resulting our United our in now growing we flow the We're second our with on weather of capitalize and has strategy plan hubs year improved hitting really the airline. a network The uniquely connecting our is stride. our to profitability. further headwinds and revenue come dealing like

to so that or commercial growth to fly our product choose our on United. initiatives. build We're relying and loyalty in heavily just aren't we customer investing customers But operations people

and making I'll will Kate Board just highlight across about We're even we're later investments more are for then talk couple customers. the that doing Andrew significant and our a what and

we new is does you call which in for what One we the important It two ConnectionSaver. tool previewed past things.

to customer’s it gate. First, detailed connecting messages their directions

deploy equips do to new on Second, them technology employees powerful extra allowing its identify it they time. still minutes And connecting can tight it held get to few with a attempting connection. be destination situations can for where customers and to into flight make

build thousands customers. We loyalty help customer believe customers Tens loyal making without tight United delay. their already generated long-term benefited destination United of and that ConnectionSaver will of to to have getting connections by

the our product customers. rolled this making as while software incredibly out improvement staffs around XX% are are compensation in our to more our the and that's on because another other seen telling we're two-thirds is down important overhauls just a new satisfaction a to for WiFi reliable. addition still story improvements refund And is two of significant And the WiFi hardware of improving year. improvements, product. platforms customer vastly We've and we've rates system

year We're towards make towards high to making past we're or a we've system WiFi bandwidth of goal excited we get and goal. level that to our free the can a the For customers. enough for been the that reliability at working progress so,

at Our better job make United. is an doing incredible technology helping to us the team here customer experience

to to a While future. of Chief quarter we items have some Officer our you happening on Jojo, Digital have detail exciting a plan the today, next give and will little of innovations Linda couple be I the that highlighted more been in

Human strategy, of is some the our to customer an because customer service reasons experience a amazing our to and help to pillar so Resources on Because such today President Relations doing to to United. improving important invite of things discuss the is Gebo, of team Kate Vice Labor improving customers the wanted will the to the key we choose call Executive fly change culture that's United have

headwinds, mentioned results year Oscar give us by midpoint $X.XX. the to Finally, confidence as raise of full XXXX our the target EPS our adjusted despite

as or XXXX. EPS our enter have the We XXXX in back beating confidence increased meeting of adjusted also half target we

over it to Kate. And I'll with that turn

call support being with people Resources set Labor opportunity them lead It's customers. the our on success our for I up Scott. great team Relations today. our energized Thanks by and that to the have and I'm and Human we

we aspire to we From people to those are here, our develop already what internal who to continuing an building service to hiring are to the deliver right it match customers. and culture

our about It's members know on of the our We growing network, is about feel we're about about All believe so with we is why that and our call United. today. why focus this XX,XXX-plus the team just strategy. multiyear but customer people the it's on our changing as interact how centricity, way important not coreX talking our that important as network customers it's

customers' or we everything for growing critical is service. expectations around running workforce the strong airline whether engaged our operation, the a strong A do, it's exceeding

Oscar quarter, the is flight behind great our we our role XX,XXX the the hosting Backstage, time share and flight a why XX As year, flight at events to last important we're This mentioned engagement leading decisions delivering Enqvist Customer XXX Toby attendants for Chief unique attendants experience Officer, a make, attendants. service. underscore for play our in

our events listen and flight and do these their we we hard both them can we attendants to of each flight but ideas for more over personally and thank customers. Through their our XX importantly, XX,XXX attendants. held June, work, And hosted of our for what one, better

both for customers, things isn't our As increasing the operating a callback employees, team make pre-scheduling before available. changes we're when like and our as provisioning courtesy a result, we buy-in such immediately

and customer I'm satisfaction sharing because drive of employees employees engaged Engaged and our results. and culture all empowered entire and strategy loyalty. improved enable this, deliver

of employee than are have at great who choose side, employee revenue our United. proving that That many Backstage XX% in rate to fly supports those have the a engagement On a commercial XX% and attended. great to yet network service increase higher corporate year-to-date been initiatives, not who have United, flight customers driving attendants a at including engagement

to customer customer-facing nearly is fly. Backstage we're who customers XX,XXX journey. serve improved United only similar make our differentiates choose continue over to airline service love but on our for will phone, product announcing and fly, not the the people believe momentum employees year next positively customer-centric at a our both That to why event airports We and our building

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

of start our quarter, In at X.X%. Kate. revenue which Thanks up the the unit up expectations high X.X%, growth revenue the was the end growth quarter. of was PRASM Passenger accelerated at second to

during our and the to ability revenue us we encountered navigate our challenging and commercial growing headwinds we through helped a successfully success environment are regardless. Overall, work with result pleased initiatives performance the our quarter. The revenue produce strong of

in America. was region second best-performing Latin the Our quarter

the than it was fact I in stellar described On better for our last outlook even and America as call, Latin that.

entity more any third last Second quarter which our albeit quarter our early Demand X.X%, above over strong and in we years. is of and for the represents increased is strong moderate quarter, for performance at expect region the a flights across growth and expectations the level. most PRASM the highest continued few

Performance Pacific our maybe I biggest in given had across saw the showing the year. we say trade a the quarter X.X% was with negative earlier also have headlines to the in PRASM. Pacific surprise all increase strong this

While partner able China we're of quarter, did other in our portion our a entity performance. this the Pacific ANA the of some driver China Pacific clear of and between was joint the have offset. United to venture Increased parts to more -- collaboration than manage the region volatility in

versus holiday, the by where -- Easter expect a Atlantic first the PRASM to quarter the in to and impact expected increased X.X%. negative quarter We later inflect a did due

been X.X% points domestic a domestic hubs our note demand that the to excluding in X.X close-in is was X.X% is PRASM And our by increased Hawaii, at increase growth further in business in Mid-Continent the that up on our capacity, interesting working. the have This quarter. it's While quarter would PRASM strong. evidence

to be domestic QX, passenger looks and strong challenging the ahead XX% growth. environments capacity domestic going quarter, up X.X% The demand forward. outlook X.X%. a of to look our third consolidated to we Looking Hawaii positive had our with yield better the and revenue Latin expect but represents unit which

expect the we of plan of XX original to portion our result the that two routes XXX second short growth the jets of capacity flights. significant aircraft than in growth of suspension MAX full a will points the equivalent India aircraft, end By closure of capacity. MAX and less For grounding of two overall XXXX, were of XX we year and approximately India our another the the our represents quarter, XXX the due

We to than to expect no earlier flight the return MAX Xrd. November jets

As you're on service aware, Delhi Mumbai we XXnd. and April suspended on to Xth June

service hours reopened has soon as India relaunch as we excited October. that We're came Pakistan However, we to on after That India possible. received just Monday news to our night great this to resumption of their decided news airspace. back push week, late flights to

Our flight Mumbai now confirm X of team New has resume both can to we Delhi and started service procedures our resumption and York. September will from on

now to capacity make up up For year X% it. capacity all X%. some but able we'll to we to be full these We XXXX, expect year, lost next be anticipate not of of

focus Turning we our X% currently all buy-ups expect X% out. of to commercial buy-downs. increase for and on slide ASMs, and our represents between range RASM accounting XX, Premium continue we'll about Plus after and gains to Premium fully that to X% for when X% rolled Plus wide-body flights with to initiatives.

this first with are Our New set CRJ-XXXs service client later of year on prepared and Chicago to focus York. enter being

that have the to begin smaller will structural in We States. gap we United the expect with Premium customers XXX the across communities close

we Washington to Francisco existing Chicago flight industry-leading New downtown, Airport on and to upon expect building and from begin Los and Haneda to extended XXXX, In Japan. from service our Tokyo's complemented Angeles, York, our San service

rolled with from high in this service Newark our demand scheduled with to and fleet class unmet new seat We by later specialized on Switzerland type fares year operated -- All in fares XXX-XXX XXXX. followed London first counts Chicago United. premium cities are to out by be flights to our Heathrow of business this for

half needing Polaris who I'd seats. are the this team to the permitting operations capitalizing XXXs give commercial like a many with on on of not initiatives CRJ-XXX the aircraft destinations to develop premium markets. as of operate our product, high in These to focused configuration to volume with our the while shout-out typical along also a in remaining two team approximately unique to demand worked

revenue quarter, departure the top closer much with In second growth. increased revenues X% line corporate which consistent to our was

about results innovations Over eight our improved drive quarters, engagement. talked we've that and pipeline the customer ideas last of and financial

engagement of One new of initiatives more our the is three year characteristics United us. flyers many ways who at with we measure or the take per success trips of

flyers a We of a are more across flyers early achieving pleased increase with see cardholder that status What's were year-over-year. with strong including and multiple in new overall up share engagement to XXXX premier areas these United travel noticeable being co-brand a new MileagePlus. XX%, we spend,

repeat to securing millennial travelers our is also which been among next-generation Growth of has loyal especially strong, critical customers.

results Thanks we're as center strategy and the yet much results do, in this by put our of our customers even second the for we a we As faced the is believe significant quarter. financial everything another encouraged these that entire United headwinds. when by team to as great validation is working with

that, to over our with it results. financial Gerry I'll to turn And discuss

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

You can documents additional refer those details. to for

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

adjusted $X.X adjusted the another second XX.X%, marking We quarter for up up year-over-year third are pleased expansion. billion This XXX basis pre-tax pre-tax the ago. was to Adjusted and income of quarter, $X.XX points share consecutive versus report and adjusted execution. margin of pre-tax margin of represents quarter XX% a solid year earnings was per

second total for Slide cost XX forecast and XXXX. our shows third and quarter year unit for the quarter our full the

to half run lower first the capacity year the Turning ended year-over-year originally to X.X% of business XX. achieve this more than cost down for our our basis. Non-fuel that non-fuel X.X%. normal down unit offset inflationary cost second in cost means We X.X% pressures and non-fuel the to our unit continuing in guidance helped With quarter able planned. unit the increased first slide our were as to of cost drive a midpoint on quarter efficient the

year. the of the discussed in with ahead to put the will timing on Andrew maintenance the reduction The that second together growth capacity to moved of from some year unit costs. non-fuel the which year-over-year the certain events, pressure first Looking of half rest half

this and trend quarter expect the third the we For into to unit quarter. expect cost to we X% X% up XXXX, be to fourth continue non-fuel

full guidance. between prior X.X% our be X% we is unit last non-fuel a which as than expect year, cost result, to compared year up higher As to and

of the suspension is increase unit and However, all original MAX grounding of to flights year-over-year to essentially the cost, our plan by India. driven compared the our in

flatter with a is in goal I achieve non-fuel for am current to be cost. pleased XXXX XXXX, enter able to this to our planning broader as better put season for and to our report that To cost non-fuel context, we up unit make headwind our expectation year's fully to consistent have XXXX this flat multiyear unit

more the During took additional aircraft. new two quarter, used Dreamliners delivery and aircraft we two nine including of AXXX XXX-XX

aircraft, purchase XX year which delivered agreement be this December we Boeing of We used through to December will XXXX. an XXX-XXX also from reached expect

Opportunistic used fleet our remain aircraft strategy. key will a purchases of of part

last with next you Finally, as announced month year. Embraer heard EXXX XX aircraft incremental of new deliveries order starting we mid an

capital For billion. $X.X we the year XXXX, full forecasting approximately expenditures are now to be

this is to previous this projects higher on high-return shareholder is being long-term. non-aircraft continue that in find we execute While enhance driven to will largely and slightly as by CapEx our the than update guidance continue value

As years to ability of $XX.XX and in price average in meeting EPS we stock share. spent exceeding XX, repurchase to an second margins We shares the $XXX adjusted target you quarter to come. per XXXX remain our slide our on grow or million confident can our of at see in the in common

billion As a our authorized a program. share board result repurchase has new $X

of opportunistic will repurchases allocation We remains with our capital component and to this our program be share continue core plan. a

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

between speed the to expect we XXXX face, always we keep of adjusted range our year in the of we earnings guidance year. naturally and that into and more we Oscar certainly at not account risks As earlier, end come to hit full per in be Please the the high rest mind takes should this mentioned bumps $XX. expect $XX.XX now share any

the our Despite commercial financial targets laser our focus put on our limitations on capacity, shareholders. and we deliver track with well value us faced have our strategy create our on cost deploying coupled long-term for to

we'll Q&A. With that, begin Mike now the

Gerry. you, Thank

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

[Operator question-and-answer ahead. the we And electronically. Deutsche Thank you. conducted be Please will Michael session Linenberg. go And have Bank Instructions] from

questions everybody. Good Hi, here. thanks. Two morning

Just it seaters, I this XXX -- to as to Andrew. relates think maybe and is

in the that think hub. I of were make that used. have still XXX sense I bucket. And size little it yet been of sort past been AXXX. know but I There a call they're number maybe quarter. fall public of saying you they're you've inducting XXX this a sizable pretty your given they above realized seaters the into AXXX seat, two bit XXX

And XXX-XXX. a strategy hand. now the XXX the used plus seat on just -- And of flying is type curious news little or it I'm one out about like bit feels XXX

other get to an very attractively put opportunity a cost effective or On hand the it's just maybe lift. price

thoughts Your you. Thank on that?

the niche I just time. we aircraft at referring the for perspective, answer United is think for right right to our But hubs point concluded the is look things. aircraft us pretty time. and this you're our of difference XXX network have our XXX about seats. It's in this those a big at carefully and that for seater at the the From both not

But Gerry question. the on I'll other part of follow-up let that

No.

acquired, XXXs. very that we of was Andrew attractive with it the sourcing is that just And we've an took aircraft. transaction think in that been used like we the I for XXXs advantage right opportunistic

Great. then second just Andrew. to my And

the said, just were Your so Pac competitors you even you Asia versus -- week one surprised Asia more last you Pacific pleasantly given and their given your surprised were of performance headline as yours.

given more lot Did in there of a a more weakness drive some Or China. that exposure benefit of have Japan the obviously, They out move was were helped called the see being pieces FX? the moving that? What somewhat weak. in to You, it Japan? as you

our think first incredible Pacific moving Airlines Definitely But asset it entity and just I well. very of it's for and a think pieces. is I foremost shows lot an doing that United

performance, Our cite any performance weakness. was Japan's Japanese I last wouldn't quarter fine.

have we go Baker. And Please from ahead. JPMorgan Jamie

everybody. Hey, morning good

a is start original of a X% We to the the year and When one last second MAX over looking bear return question to recall the So been XXXX in me the how going on towards for of to to initially responded appear upside. January part market point There's add XXs with XX, of growth capacity. X% incremental don't the plan. all rate. here year-on-year which we have

can We'll me, case. if not correct You full there have India the in that's year presumably.

XXXX term we're looks setting a the above longer mean, like I growth rate up to it uncomfortably X%. for X%

we underlying results higher. and neutralize I So your fact But rate in the MAX for like does can't with quibble is date. to India, growth feel if moving it

an I to and my So to may I'm rate. investors right you've question concerned as guess I'm do accurate, expect that you how us view earned to the is done. assure growth that that's grow whether at to message egregious some what

me with is your of detail let which to start correct one our… Jamie, assumptions one

Okay.

we've The plan. acquisitions base used do and is actually aircraft of doing continue our part to been that

you view So as additive. that shouldn't piece

-- happy plan, prepared United here to just grounding lost the the been but we and we United its on I to obviously Jamie; of X.X Gerry been change that's opportunities there's that as plan, everything expect going his And I We've core growth so MAX in and this point of in to at up one remarks, at of the or all growth said say just no last couple year. with make would a plan. about else And the success no of guess really change not the years. capacity India

way those now sort despite have X.X of -- issues originally is the about given be expect the been of not with India that and would of we that to that all MAX we had issues. lower it plan, happened because another point saying XXXX So than if actually

they're mind customers could in Boeing's up exactly catch more one -- MAX their get deliveries. when nobody But Keep know -- point. fully to going assume right next none we And scheduled year. that that now Jamie, won't of one next

there very is guarantees under be it are tell? That's at too for in under to but -- next pretty that does comfortably never assure I we'll business, guess Okay. in X% -- or early that Or us all that the year? helpful.

too it's tell. It's to Jamie, Andrew. early

We haven't put together our year. for plan next

We Gerry haven't -- delivery Boeing really we don't plan have from as said. just a

we'll months So doing next are understand year. that where few be next over the to for we

it quick but trove Okay. I are United well se, there's trust And competitors then saw this you something a fairness opinion, follow-up like Oscar. And hope your you growing relates suggesting for CSX I not economy. and as a the meanwhile, don't it CSX seems your morning. to different as seeing more one in this data better. asking me domestic of per something mind challenging

trends. firming seeing You're

Because exists So airline wondering, longer on what seeing. seeing economic dichotomy been is driving demand this the the it's underlying do think between is I'm that than you economy going is trends. lag between what the industrial sort economy and and passenger of usual non-airline trends

think CSX it's light about hear me wanted thinking what it encouraging very opinion just to in I I about it. your observation. -- got is a yes,

little I that follow business still it and understand well. as well Listen No. a Yes.

time to about have things you want we economy As whole go be working, an use be how as and -- very the see a to the interesting as it speaks reason I aren't sector CSX there. look I results listened foremost, at because every you the to when careful why individual as to first name, this, and will

resurface the you're we've I had think if issues inventory all I buildup that tariff think of and years you you having issues over the think been prior that trade about there's that facing, sort year-over-year. some

of at their intermodal inside other lower, components moving. lanes and had I being changed they stuff explosion the mean, CSX, But look in as that revenues gas I business, natural they some are some refinery a impacted

us, think pieces near think economy. we I think back of our in it in I and what full I in and business analyzed through domestically the there's guide switches a And you're when thought moving seeing that to our our use lot year we have confidence the be lift. to putting see a in before term comfort

industry. a think are And final a of there And I a so making it's through have before analyze parts that moving different to decision. you lot

we from have Darryl Please ahead. Research, Genovesi. And Vertical go

Good time. But Andrew, I out Jamie Scott you Gerry a just who referenced initially in part best think rolled CRJ-XXX of for the that to morning the sure or guys. that longer-term is Thanks when this question. early prepared the plan not back or wasn't I'm XXXX, plan.

that points you've fewer CASM-ex at has capacity think jet you come wrong should have should we've so correct the economics unit you revenue this yet mainline think period. but I said a in also and your XX I'm guidance basis contemplated have have relative if out least And to taken plan now to held have regional fleet, at presumably the plan the than have seats. three-year the that and about you because certainly time, probably I me -- had you better but probably aircraft just worse unit your cost XXXX Plus that of better XX-seat might revenue for probably economics,

what of these the to XX relative the like offset also, if may So gotten have better seaters economics the this to you could items? just revenue that been you other the color of things a think provide pressure from look exactly aircraft that then adding? are around little And what bit you've

us continuing efficiency example. of that side business, what to utilization start. the the all, XXX Gerry. our large Look been gives regional on things comfort mainline we're scheme more next hit about gates first overall of the But a side. to CASM is like from that the I'll side, Andrew then number. the target revenue just Hey. our we've will that. cost the in that are that the It's of generally, in not going upgauging talk better And will more It better comes on come for the from year some asset do, things for importantly,

make that on We we're yeah increase very focused investments efficiency. And continue technology overhead. to

evolution going we're next that growing as overhead as Andrew good the grow row this way organization. is And the flat this example that sort dollars And over everybody throughout -- next our year be control let the a really But on seen will really I'll I've of year-over-year. process is year part not quickly year, importantly As we business see to the planning that time for second the business. and in our as revenue most we And a probably M&A -- culture be salary will side. of we're grow cost comment thinks. the is will

echo is all, routes. would United. And of of premium, a jets not the the next dial terms and XX, XX-seat dual the on aircraft class year a today the single to second Thanks, at it's large entire of move network then the across revenue Gerry. aircraft kind number first plan in overall regional -- same point of I we that

any have have how of that because dual So we revenue fact a can a a very much in regional market class good idea very, be that do specific in the aircraft. in of premium generated flight and on other market, flights there's

year, it do. later competitors So often year premium had. there more we it to this a And is as and well. be starting get get next of our will Many than we

well. fixed to in strategy, this with said is my getting happy which relates priority. working It Mid-Continent I very pretty we're comments, as structural communities decision. is hub smaller our disadvantage So in earlier a also And our

going to see what the and us. So do service to we're into XXX excited it's

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

continuation Yes. Hey, to of what it to going I'm it being the I'm of you, has guess, of perhaps reaction be commentary, the just that, morning, I happen? high guidance current Is right end very you're mean, I year, wondering thinking the Good about the hit now. layup, strong that. a is to perhaps this for if that you more guess, goal is trends? to to change just Gerry, seems And, knowing nothing? thanks. can back your my perspective I knee-jerk thinking demand around guys. just but provide

role. that, to beat in over additional of comfortable What things no surprises, little was look, I I anybody, in others, time you maybe we're can know that's range. the a say -- comfortable I'm this I more tend no my and comment happen than high tried But speed to going as conservative to that well be business. bumps assuming my our let's but more as But end even am one assume, for

Okay.

inefficiency now aircraft practical quarter? Second real-time, question, the perhaps, that the into practicality, in the the fourth then perspective, sometime overhead would grounded the is surplus quickly today the Or you wondering from could talk grounding. some something back about yet, can headcount and right And, I'm a if here. year? that there happen how from it MAX -- next Is get could in from be in you network?

required And that get So, as time is first, confidence airplane it the as should the help priority. anxious the as when much in as safely as agree and in MAX to we're -- one air. number the the we airplane But safety safety airplane the well. to anyone the ensure build take to get comes back we consumer of back

how to about really for sell the tent As to is ticket. the long in us have advance long we in timing, pole

prepared operationally back, much the being quicker can team get tickets. to and required just to maintenance and because do them want to checks get airplanes ops of the sell airplanes than able we're the Our everything to going is required that's they fly

we've today November through and the scheduled So up flying until MAX X. got

out fly don't did, even to sell short had happen, until so, available something if earlier tickets. And the if the wouldn't even fly time than we have that, was that X, to think it we we because wouldn't November found we term but will in we MAX

And us. so the in be long for pole the that's really going to tent

for at tomorrow. flying operational until September India need reasons much could not as we you some example, time the restart flying tickets to to start we're India not -- If we as, going because start But for India, we to sell look on technically flights.

that's drives really So what it.

Essentially, on track. we Gerry be for happened year year. those expect, a through we one-time as see back recover From you carrying make look next to can guidance the that to everything getting costs CASM perspective, And cost this talked the get But that flying that cost we it that all able to it's have and said, year Gerry some higher about. MAX and yes, safely are costs. we'll to forward a back next we in up

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

in it's hub little said, Good think, everybody. Scott Thank a four XXXX, a Mid-Continental Hi, the you're over you. question. Back I going track a follow-up bit you and This question January for progress morning. dimensions. is of to Darryl's of to changes

a connectivity, mentioned and plan Thanks. revenue scale, be hub you where Scott, bit. the You quality efficiency. you think and might I'm curious; beating asset you're lagging you think where it actually

we've see for Hopefully, across overall closely. we're in and like board, metrics. plan. we're track and confident numbers in can overall is earnings could large, So, say, It about beating year the by it added are really the where it our we and about our that next headed this hear I'd -- that Really year. others you do you metrics

I coming example replacing issues a of, growth, infrastructure. years -- been million working have of of where There new the infrastructure with way guess, system, the we accommodating along baggage doing in have Houston we've a facilities kind with $XXX here been, project good the to Chicago Denver on come. tactical in airport dealing impetus is kind extensively

well say it. the are track we metrics. customer plan, all really is on I'd on loyalty all of that ahead as is winning to slightly that important across it getting An have loyalty. of those and So on We're focused of the kinds we board customer plan shows data part almost incredibly

and this better as the And delivering operation just it's the more it's not operation, I the making effect about even gets kind guess, for talked better snowball resources together of things network, just that all and working, a investments service, customer the running remarks opening in customer. operations, we're commercial not are creates customer. today to kind good the the invest of I a we're my that in it's of the we're some

So is plan we feel coming dimensions on good, all really together. kind those how of, about the

right. All Thanks.

I could just if add. Scott,

we we've the And strategy. all, profitability of growth PRASM track. internally, want know the saying, think growth then, the be when is on to success we're the reflects hubs, our the we Mid-Continent of where domestically it I First at of right and been we look

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

morning, Hey. Good everyone.

question an on Following Dan's the question, it think, MAX. earlier up from was I

in on addressed, last regulators? if training? get process green the conversations do this once you throughout efforts, most the think and recertification that light the to there weeks the aircraft few need that light news based may mandatory would the there you is time of the be regulators for recent developments with do manufacturer ready And be issues now officially your Just over incremental some that in flight with that of what the so, a to from higher making for line simulator the likelihood

independent enhanced also to going for own speculate on MAX, not but our stayed into And the have for just simulator we at We've programs, very United. regulators. done We're the not started incorporating fact training that. close work already to training all in We've aircraft.

a so things aren't are unprecedented the great about We and industry. the just the better. safety culture opportunity waiting and do have we and And we get on in of safety in that airline regulatory levels to learn every industry take One we constantly of better learning airline is getting framework. the

framework. we anything what that expect from already that would is are expect will, in framework, beyond of we We meet but the beginning regulatory to regulatory we go course,

beyond so on required, Joe. us. always would that's add we I training introduced whatever above and will go base to that to that's Traditionally, just we do that, to the continue

consumed XXX in with products have believe, that MAX for Boeing launched or now my or your the market Got XX certainly follow-up. decisions the of Scott the at segment and next question that. fleet I with plans. make Gerry, helpful. Paris you that And the fleet right understandably Airbus I all some replacement Air is the is situation. it. That's appreciate then, one just one next sticking to Show.

EIS maybe the can from looking NMA official But right date you the how bit. make decision make bit, wait slips mid-XXXXs to launches before response like like to the the a you'd of right is, I'm it's the now if also long guess the to I a decision. competitive target before a slipping to there? you them sure you see question afford a

like of have we little a some we can to have we so choice. some make clarity bit we But the So see time time. right, wait. you're that do would But we can that

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

operator. And very have much, a Hi, question you for you very much everybody. Thanks time. the for Oscar. thank I

when maybe of on first little now next will you of in about think and just for be came you And translate the you'll the years outlook if kind kind could four into bit with and a wondering, airline that now. decade? you I then as I differences the was how September, the XXXX for talk into that see CEO versus

customers. that set folks questions. night confidence, continued proud just years the arguably full and best they're is the and and call of aspects. couldn't assembled industry. this and last obviously constituents energetic, be couple great of in team we as great more and a in front the of importantly, see frontline one of I that is on young vim our people of professionalism efforts and of with all and vigor And and for are you differences What reenergized The U.S. of investors. relatively today literally and the and all treat The day. We pride have And our many

lot forward look with for speak energy we sure. our together you momentum are plan sharing a But the It's We in thanks a of there's place as long-term putting future. Helane. that and we very and to different

Oscar. Thanks,

Wolfe Keay Research, Hunter Please from follow-up. we And with a ahead. have go

Okay.

to some not follow-up distribution is real strategic quick. be think on here risk-taking? Sorry. My you can maybe near-term Thanks. curious there My a longer-term angle by Expedia line dropped. about take pricing fixed that on this justifies or was relationship concessions. whether I'm your Or

Hunter, it's Andrew.

these we and United, we deals we the do when think various – really we about where we I a want long-term to our and it's question where want think are be. good distribution

be past Expedia or don't to so, a able these to the a some We conversations to get way And have in at issues. a we month have deal. point, conclude number of with this of we've yet and had around

off which which excited previously So our is the to move use app, of on But we'll said, we the it. is preparing impressive we to growing doing are where And charts we're incredibly distribution what us. long-term excited and we're about we the and go. with pretty as about and see we're united.com,

All Andrew. Thanks, right.

Please ahead. Syth. James Raymond go Savi From we have

good Hey, morning.

follow-up Just quick my – on before just a question. the

if means of down domestic Pacific, about maybe maybe comments be how it that quarter third you on of Atlantic thinking kind could the be that Wondering, that? up. mentioned On or last kind missed time I and should you're it

Yeah. talking. It's Andrew

particularly at Europe we're so look at environment, we pretty as domestically the As and in as LatAm, see we And of look has excited our August, last that's about August performance both great in in was which a unbelievably comp. I'd Atlantic Pacific, deal our created just last across we that. did September a created was QX, great say we a good, really and comp. the across and hard What hard performance trend and – clearly to summer

now. comps we're two pleased in things for where and where be think bullish lower overall, on a absolute year overall, we're basis. So and stand, things environment when the I United look within here But will particularly the stand number over and I year's year general the right Atlantic States. particularly given pretty last pretty think the we about the Pacific But

of asked Avianca and kind changes someone the going there. investments on the That's you. Thank helpful. And just

– was this where kind looking particularly discussion? kind view was your Is wondering the relationship Avianca that that together. that on of of this strategic delays JV updated is that if also on the working on and to three-way joint I is venture turnaround Just you're put

what's I let going can on of Savi me on start, comment So so there. kind down

through First, team the longer they airline. they be and great a the we're make should additional have loan respect that we if fact, for – a plan, we're said well through – we going as investment now plan place to is as in have short-term the both in to an deal get short-term they willing exactly doing. And term the what they management of have things

on venture. on. going let – Scott or the the So, on optimistic comment they I'll Andrew what very about have joint

carriers to the path. think On it's can and ahead that to Avianca's. that excited that speed the other large network alliance We in us with really compete be our together joint a down venture, continue on going full region, Copa's bring powerful help work against front. we the We're along to so

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

Andrew. I time. for the for Thanks Scott revenue a question and guess morning. Good Hi.

far As guide demand as dynamic quarter there the Expedia that's or some generally decline anything it like still to you targeting like you of about it's And that? or headwind fourth isn't on is particular that something year or the around sure then and notable positive aware look whether that? And anything your that as trying calendar think sort Just in of PRASM? make should be that or are at anything the to there Scott, full a revenue relating we for side.

kind our the expect at of is. changes about in think, nothing but fourth – refer is Gerry guide of it you where do guidance. probably I bumps, which we bumps at give contemplated I PRASM of And in what said, when be would a we at guidance there's said don't think unexpected the the our it I'll we guidance, earnings, hit be midpoint give which implied midpoint we've out And our to that So of what the on row Gerry as just contemplate the guidance. negative. based you're seven we didn't particularly if obviously you guess, the to We quarters had I speed guide. into being speed our quarter high-end further of guess backing PRASM numbers

in shouldn't fourth risk think that what PRASM any commentary – don't quarter – So be I number. reading unidentified our about anything or you into

Hey, full so analyst used – give that the to math do nerdy is take Listen, one and two as and Mike. I doing that. quarters, XQ, the minus the out year Rajeev, you well not quarter this we shouldn't be guidance

If you're going that, to the come do conclusion. to you wrong

Yep. for me on – as follow but Thanks nerd, Understood. calling a a

Leskinen me. To be was not clear that

a place better you've on it do actually we numbers you to All the right. targets comment But have appreciate in A even is if question that you assume for that the you you don't out the than previously. I deal hitting that, made Gerry about CASM fair laid pilot the should side, highlighted earlier?

is takes want going we with thing everything it, into account to guidance that, about groups. one need on have work specific I too to I remind CASM everybody be but don't our our

able add? that just we're and hope I done. the We get to going to Can be expect deal

are making We progress. it working towards and

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

morning, Good Hi. everyone.

since each comes out guess, that's market through the Scott and quarter this three-year So, the be team kind number seeing we'll next your you $XX your that with if of year. plan gotten Gerry's management year. think And has EPS both the to put target I I confidence $XX comfortable more

for about in us the headwinds, XXXX asking for another Thank you So, you plan maybe trajectory three-year earnings United how frame, but help macro? and beyond today, business outside tailwinds of see the you any can the you. I'm that maybe not think

point as CASM-ex -- year. saying of time not yet by in Well, what did one over of over margins driving that to XXXX for the have towards point where well a one kind our goal as several defined fuel internally grow have flat the we we point we by actually the are and X.X for a higher It's per way we increase CASM growing think prices. than to of point X.X -- we another internally the expect come, framework years can to we can RASM

then just Scott And for logistical if maybe you. Greg question Thank a there. you or is

supposed have XXXX. half you taking will and you aircraft taking be the the in MAX, to of So, I back with that know were be

begin to if and aircraft give can take your up Just all how aircraft to back delivery team that? a Thanks. get a get something sense does the or immediately, Is your of Boeing plane a where quickly running, you something you you're of the like wants can when limited few them? this month trying aircraft? So, how to taking quickly

the as aircraft quickly month past, peak able in them taken during will as We months eight to can be a aircraft We, make seven take to us. easily. the available to Boeing

won't to on is Boeing constraint the be deliver us. whatever We'll So, to take our end. able

gentlemen And today. and investor analyst the and call this portion ladies concludes of our

take media. have Tracy the questions We from we from will Please [Operator Reuters, ahead. now go Instructions] Rucinski. And

Hi, good morning.

last you? provide as first if MAX about I scheduling, that? July up can any statement a Is with And grounding you your You half. XX XX daily to the color second to to is you from about of of about catching timing the maintenance are said, cancellations half to in on moving in result in think XX the so, expect there doubling you the events go mentioned earlier, maintenance this events October. that And because from

it's to scheduled period. count was Andrew increase that time fleet speaking. over The of Hi, MAXes

intend So, we by aircraft. is to so higher. time when and dramatically cancellation number originally we I MAX was think and a rate of higher the is we But definitely grounded, the aircraft the dozen therefore be quarter, get fourth or late the the had quarter the into flying to third

I that's customer just cancellation think not a canceling we're load that It's just schedule. that's on in to clarify want not able the the It's a important We're I would we to have experiences And and cancellation. an canceling cancellations. not otherwise that flights distinction. that and have the We that to a grow we for fly. XX grown lost XX a now flights just flown day opportunity nor we be will day. flights XX flying XX can't

the -- and schedule and have that United aircraft those the routes what stayed MAX additional pretty struggling I'm versus understand as of Southwest? you same and they're changed not I beginning situation were has using much this Southwest that the American. to grounding, the you described still American the they're on larger the same. it yet flights understand it's deliveries at I and to know, for fly So, to yet also for accepting year and load were able They

sure numbers, but Well given they've I'm not that it's really simple.

should number we to many so It's May have you're that We had MAX fly many very twice as able or as of April in would that. the October simple. twice by have and twice as airplanes. is back We of have flights airplanes

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

whether and to hoping needs hi, Yes, go had decision about and I you clarity when a I needs may and that wanted what just greater to thanks time for be today. they of on United NMA Airbus And have made more that for the their Gerry some the decision. to said about little Boeing you when get some back the to time detail talked product? the product to sort about on question you've timing on was bit

conversations can't us is about I timing with have manufacturers aware also But, precise say, is their a little to really we have be to not industry the NMA. just we other it's do more that can I tell the on Boeing aware products. both that time. are And actually as you always than and know we they wanting

you. Great, thank

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

and Hello. there for if disparate bit second. was bit This juggle was things. section a some kind addressed of a was on I'm many to I'm muted a answers. sorry addressed trying This too little the I little analyst

to XXX-XXX extent MAX? used back to the MAX? the entirely there you Just grounding what to if and airplanes release last when night. of you bought are in And XX describe the go one for decided was to makeup buy to those you can Were those a those XX they that planes line the not, related

order aircraft, savings really of millions that flexibility, talking grounding These capital to complement to Sure. to aircraft before of greater It's to well transaction about flexibility. hundreds versus aircraft of a at specific just greater the gives to MAX the effort aircraft part us used it's When our a you This think XX ability the dollars And seller time. was new little ongoing take we book. lower actually. the and our new Gerry. They were of bit provides XX are tend grounding CapEx entirely to of transactions started. unrelated cost. It acquire used us grow

process ago. it's a that of that So, a continuation just that's really years we of started number --

thinking you And buying to up much. leasing so planes for make Thanks Okay. or MAX? the are about any

to Again, sure it's to the the fly strategy. the job we -- MAX, And but our we demands. network the that make much have aircraft really it's what have not network to so

Thank you.

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

you to much. quarter. Thanks Great. next very We'll talk

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

now may You disconnect.