United Airlines (UAL) 22 Jan 212020 Q4 Earnings call transcript

Good morning, and welcome to the United Airlines Holdings Earnings Conference Call for the Fourth Quarter and Full Year 2020. My name is Jenny, and I'll be your conference facilitator today. [Operator Instructions]. This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed or rebroadcast without the company's permission.

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

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

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

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

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

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

going. gave for to us And all the United, back that during going you sincere I now as the airline from gratitude hell, a our the time. kept the want at change thank the XXXX call of few year of difficult structurally we'll for through a XXXX work better. but was team and opportunity United a we years joining Kristina, outstanding year look Thanks, such today. to express for my at the

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say the perhaps That's clear-eyed course true just in Gerry that pace has over. soon management You to will our by be made is take often us us appear the how be And from confidence likely nobody, though clear team crisis, has margins But term. that on -- from details of personal still instead on pessimistic, what exceed can CASM-ex either above will being XXXX a approach entire that recovery. possibly really give crystal our commitment earlier the demand our the ball as myself, that's today. target a you depending the I'd this of pessimistic, us, Andrew the the beginning XXXX, all challenges optimistic and us of levels. realistic, But gives the EBITDA including of XXXX. on more will we latest, perfect and But at been of EBITDAR margins it hit a recovery, near advantage. will the given has and flat or more about

in flexible, remains actual back our it hopefully least or plans not data. can you recovery. based the recovery first accelerate We our as the March, me and and our for true not heard remain is At strategy, it's delay that either As strategy. on hope we say a plan

them a we and our But of what over whether the for owners. in hand recovery is And airline world learned this we'll and went be is in coming, part We The our the close to the I'll of XXXX Airlines demand when best I So the airline and to United we're with of proud know is long weren't confident through team term. the tested a customers. Brett. unprecedented for it be and that, better the I'll it changed saying am our over be ways. how even the And easy. new, point profitable employees or aviation. fall, people we return that, in summer us hell, because spring, inflection more to in a by we'll lessons very and we've that forever. happens and XXXX our

the to gratitude want I their United words, perseverance entire by Scott. Thanks, to our throughout echoing start and XXXX. work family Scott's for expressing hard

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the countries contain restrictions. in that available states Newark the hubs. the way effective we And our and led the programs and San demonstrate put that testing is more for and an have around by alternative Hawaii to Francisco U.S. barriers As with alternative, travel of February, and travel very should -- It testing is as have all as a quarantines to such to and up an travel that testing safe. air advocated we London. pilot to for spread, to passenger We've world

public Centers to Control the vaccination, and Disease passenger governments transport also essential virus improved we During partnership contain contact spread employees mentioned announced both global first health more up our the the fourth collect and to been with quarter, CDC for for the the authorities in has of but which we information, customers. effectively. our will and already local safety effort working our of prioritization their vaccines, safety our state Scott have establish to the with to help move of for workers work

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the the for nation's to grateful are employees vital recognizing We airline economy. Congress role in play

and detail revenue as challenging. Andrew continues environment the to However, Gerry will be shortly,

about margins comes sooner. timing, by we XXXX XXXX, but While preparing for hope are the we remain exceeding realistic we recovery and it EBITDA its

plays with as in protecting our PSP United We are grateful prioritize we various agreements jobs in through in provides United for through prepare our recovery. voluntary labor continue pilots, costs that planning partners is our flexibility for the possible uncertainty We the unions, our to role term. PSP runs and working recovery agreement with on funding significant long which The and to our particular to October and work only demand, align with extension, with combined manage by of union XXXX, hard closely our the programs. with various

positions that turn With management annual to a leaner have I and and environment. to organization. discuss it administrative be revenue $XXX to we'll more Andrew by the that, as we savings strive of efficient will permanently we driven million over Additionally, reduce

total Thanks, ended Brett. down on the passenger XX%. We capacity down and with down fourth revenue revenue quarter XX.X% XX.X%

all quite the by capacity the expectations. initiatives. was shattered revenue versus initial customer I opposite. with our perform cancellations, Thanksgiving to momentum United where but our Within the commercial pandemic, was of and with performance, fewer below can't reduced Thanksgiving XXXX to performance with back the quarter, guidance demand think but than we see records, XXXX better lifted Obviously, our help nice close-in our Christmas tracking It

team the gained of of first of in traction proud revenue. we Europe, course, the to from done. an have continued very a in XX% we're which flying execute to with quarter impressive for vaccines cargo And bit Our the increase

in team As Scott very mentioned April our preparing of before, transport vaccine and has since role played been for the that precious critical a cargo. distribution

to VFR be total pressured destination XX% continued was leisure in and continued quarter. of be down revenue Our to some passenger strength. and source Unsurprisingly, almost a the

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passenger other down resiliency was in for Our business. the the of revenue the Domestically, about XX% was down revenue that showing loyalty quarter and XX%, quarter.

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in even we revenue we a has improvement on in -- don't and see material controls, the the border and XXXX results versus again XXXX Given first what -- quarter XX% the fourth other total we cases demand least tougher to stalled, spike based XX% down today. In over words, quarter down remain capacity with once expect revenue revenue XX%. expect at to

for. bookings potential QX to account in hoped driven we I for where Well, does vaccine of like recovery by time any customers, quarter like an and we many pretty the partners in agency will break. distribution look our coming outlook April nor our what spring curve. lot a a into see take expect and not positive had demand sober and normal The uptick to travel the really Our not have is relative it expect encouraging recovery is outlook guess know general talking long-term news a improved customers S corporate look in The to been that's spending a following. will

and confidence We and businesses part early curve long-term negative, as to XXXX. down. requirements remain that way international be come positive Recent on test to borders will expect a but to of a for for and flat short-term a the regain medium consumers

months Leisure in following that few to sharply in to travel and the remain improves. where related demand distribution to pent-up confidence correct, will sooner actions delayed correct, been driven by expect to eased are XXXX, recover. XXXX. Business remote are materially. demand the increased related down likely be in United increase travel Expect XX to part that work. and prior. been has we to in take assuming vaccine. by be will that months business Businesses the products to XX distributed vaccine quickly, Our expect will demand have that to in term, will less related getting And surveys beginning Demand implemented a not widely indicate offset increase and back second restrictions point at have medium for employee assuming testing but of half border that's vaccines we the have travel that that cleaning we pent-up internal possibly standard and demand to market production -- meetings if and the recover will

running domestic during recovery. expect We capacity will be demand of ahead the

expect international be be also Traditional industry to Europe many to demand structural We near major markets to international and industry-wide the be expect capacity in behind XXXX, in -- to in to term. Asia recover will high we emerging markets date. but changes due announced stronger

performance So analyzed. and and the gateway the Europe are overseas United of return network at diversified for well above margin United in India, and the margin in data best be in the post-COVID -- what domestic United Middle advantage the this -- United of domestic we we us. we stronger in are last increased to beginning short- medium-term these coastal best and Asia. under travel to positioned advantage positioned our be mean of Given cities that our these are take was positioned clearly will outlook, but of service have gateways quicker international may some demand for cycle, international optimally America, -- all to and Africa. the front given clearly pressure past international have we given does with last our simply the In of international, at less margins domestic. than of expect take cycle, next well expect recovery. opportunity was profits cities participate expected United's East sub and all recovery plans? Latin the performance expectations to We this to to the domestic cycle,

hubs up retire we on pushing connectivity with We as aircraft and gauge get back our to also XX-seat Mid-Con plan our in enhancing jets. single-class track

sufficient with we more Polaris, will on be Timing may offset trail to pressure better easy business of more. new the XX relative the gauge experience to our use single-class for innovations commitment drive customer development satisfaction under last, by margin. as with us, investments increased to the intend domestic that a in the and cycle versus of the that seaters, the and customer CASM-ex competitors via to the substantial our restarted, and are in margins connectivity, our such years. as investments many many changes have larger products future pressure is measurement we are right to key retire flat a in all With available innovations, consistency to liquidity through now digital of under customer next overbins coming for These XXXX restart CRJ-XXX contemplated While we XXXX. investments

is performance at no-excuse Prior the that look a to relative business knows, business industry our be team measurements to proud to resume, our commercial measurement in wanted the that long-haul in When that the were everyone job opposite. gateway has about portions What is note most performance and trail our to in exceeding As key our by performance. it relative managing every focus we to the right these our done that relative XXXX policy crisis. the the would of and our our of This coastal is a on RASM we and why fact I we should even otherwise have exposure. PRASM expect United. validated even we our XXXX. better this industry, just so EBITDA course, focus, the key part, margins pandemic, and much say I'm the also given forward focus quite great far

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the the to translate for into part possible enter half begin the we S of positive of really it's new that this year, While earlier. revenue to the curve second expect we

kids Just like to to thank are the Gerry. the United work with a family, for amazing entire wanted their I'll hand team Disney trip And demanding to in XXXX. off Kirby it my soon. I that,

Like our lining clean, ensure frontline for I of was a customers it's ensuring for our say it financially there sound to year, Whether and being working Andrew. silver at XXXX. employees, everything impressed every people maintain us, most above through safe last by are provided finance that happy members beyond you we good United long a the hours of to of entire doing. me, reliable and and experience riddance have if been Thanks, or was who you've have the been thank am to so my that the footing who gone in way. But organization number crisis, weekends

guidance. excluding XX% For reported special we $X.X ended including pretax quarter billion charges, operating with -- in quarter pretax total the expenses, down $X.X loss XXXX, loss billion. Fourth a and of our year-over-year, of fourth adjusted of an line

bring Our fourth measure, the and XXXX of quarter an full year results billion this any is adjusted By to loss $X.X pretax loss size $X.X our billion. of stunning. pretax loss

doesn't it of However, XXXX. full the tell story

of March, into the liquidity. crisis had around we $X Going last billion

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burn. cash to Turning

little our cash in recent mind than Our Including cash everyone average a burn that severance defines debt guidance. million. fourth daily quarter payments, $XX and cash differently. keep Please burn was better ended burn

As the enough an last raised as expenses cash performance no cash included last indicator on business. release, use metric made we cash better to once survive burn the of as throughout the previously was give of In we've we we and to our a call, to longer core best on core the progress and enough to our earnings said chart burn cut on the detail burn defined crisis, capital demonstrate year. you

from cash $X see In various negotiate burn payment chart daily burn. able how by respectively. for $X million, that we example, components were cash improved can and managed quarter, we second deferrals of this the million and You third average to

in quarter, we started expenses and engine as deferred While maintenance heavy support as back. those checks simply liquidity, fourth having sufficient our required pay the aircraft now to to we such we schedule. deferrals not grounded Similarly, overhauls

total, day for recovery, an per work. second However, improved the the we've of by per since to about that prepare burn in order restarted $XX In quarter, million from the cash half to $XX core in average fourth quarter dropping million day.

improve expect Program last February burn as $X.X under to with the to XXXX quarter first going currently about compared receive We extension. of end burn as additional liquidity expect the we first and billion quarter receive largely at we cash ended to though forward. and continues, expect fourth in much $X.X core continue to quarter amounts Even to the first and installment week the expect cash to Support March. remain the flat as due in least to billion We Payroll received we

In Department, may to borrow. available decide billion addition, May thanks under to loan we additional Treasury provided by until $X have we flexibility the now CARES the much of U.S. how Act the XX

XXXX, were on both not as focus In money to cost strong continued position spending on due necessary substantially as activity Our liquidity that control. operation. we was is activity well reduced able stop our capital-raising successful our our to for

the to with liquidity, our operational our in infrastructure strong into will are continue able resume focus we While investments this ready recovery. XXXX, to be for

to timing impossible that While this recovery, happens. no if the do fully one of be work it the start recovery now, the will we confidently don't be can when some of prepared we predict know

some closed the ready needs work the be example, I ramp work however, to last airframe to has our necessary. hubs can up as utilized. that cautious maintain to be on airport the earlier, restarted customers. For maintenance demand will done now or of since they some to lightly we and as we returns. heavy that work year welcome and same our time, be be ensure year back flexibility to Similarly, postponed Again, if schedule the to investments last we either these mentioned down At we slow engine overhaul postponed

expenditures. at Looking capital

around we where this expect we currently nonaircraft capital plan by have half, we necessary. a be can to While amount in XXXX, if billion expenditures reduce $X.X

be X about aircraft capital expenditures $X.X including XXXs year. delivery to MAXs, take We Embraer XX and in to XXXs we of XXXX expect XXX billion, this expect XX the

Just taking this that like finance. XXXX, new are fully aircraft we year can we only

benefit; inflationary Looking $X which far, $X.X contracts the billion consolidating strategy structural which made beyond a maintenance regional Thus base. in of head have of we permanently $XXX over path reducing first structural the annual count, across simplifying to identified $XXX of savings; renegotiating enable $XX drive forward, in have and million will X, some XXXX, to quarter changes million from partners ongoing, These our are management X examples cost representing by regional of our we our drives which reductions about savings but to include changes ramping just moving supply over operations, us cost at chain; pressures. to have offset annual million billion and streamlining and savings. least down

levels. XXXX these exceed earlier EBITDA margins flat in will our hope As but targeting make trajectory there achieve to to structural commitment confident We the are confident than are are we XXXX XXXX to XXXX XXXX. we in to that CASM-ex we get and into continue changes,

maintaining This debt to number valuable return to allocation. we and about another of our the a afforded has goal us strength This of balance profitability, As means and sheet reducing sufficient lessons sheet. assets. balance the restore primary liquidity, crisis unencumbering capital is

followed financial our Before It weren't worst-case based modeled impact we on the a turns close. we scenarios recession. COVID, of X/XX, out by even

Going forward, air we seeing demand focus travel sustained destruction being ready of are will on for like we today. global

source be the capital working need cash ticket we a cognizant not crisis. addition, of liability of may associated be fact advanced that reliable with In during to more a

minimum As higher the a we liquidity target crisis. to than establish a result, expect before

available liquidity unencumber our X quickly are our how to to will collateral over months. differentiate is as of On decisions the incremental we we of the the last steer higher-quality the collateral This a types. ensuring positive we've understanding assets, available side, as substantial that and that raise like just value collateral developed greater investors did assets various use

taken amount take of on, years restore of the sheet. to it we debt number balance the a will have Given

it we result, otherwise benefit a would customers make As all the the communities ability people, may to serve. our and our investments our constrain that our in business of

Kristina a paying Q&A. cost However, Taking choices structure, for approach the it With make a down turn achieve versus that, investments. start call with allocation, establishing comes and balanced will us combined thoughtful margin to to enable will XXXX when the EBITDA to debt to back capital our to sustainable making we I beyond. will

Thank you, Gerry.

describe We take a procedure the analyst community. will [Operator please Instructions]. the to now ask Operator, questions from question.

[Operator Instructions]. from And from question our Brandon Oglenski first comes Barclays.

if you here little outlook more bit we And would XXXX. the guess, more I Scott really But expand on and well. a team, that? Andrew, positive gauge talk guys maybe leisure do Is You through mentioned challenged with about be for really a efficiency thanks you Could that hubs? differentiate lead environment? domestic as you connectivity on it did your that How in recovery.

Sure.

on the there You in the I do it of gaps. on move plan our head right retire terms XX And you the see nail have the should And changed. we of to in connectivity gauge -- direction. right had in gauge really domestic starts these as then we we got seaters, terms hasn't think

well. as there shortfalls sufficient have We

close we a going we we the of structural than the exposure of that U.S. to performance is of relative largest will is that any as nice think, the our large there stronger think think component United that's there on lead tailwind. have to key over But gaps, a big carriers. and bunch us international I side, we And So other of of benefit changes that those do should more period competitors. the that time, provide

and -- difference So should connectivity international the in performance domestic level 'XX. we lever on the to we gauge side, have make, we big real a and think on that think, material our lever I side, which the have then

Yes. hey, to higher-density a The domestic as a investor more face competition. I might simple, lot maybe follow-up guess you're view be, just of quick that. to going negative

a for premium guys think differentiating revenue stay you actually that to these do low if you your lead network factors in could So fares domestically?

hubs look not cost imagine, Well, And the we're size have can with think will that to gauge, as a in, it, a located to you I the We -- are move airline. I gauge way But given we more is cities as move at the correct that. maybe a to RASM tailwind. that nice would absolutely. be the have suppose, undersized specific. premium, our the going we And of of

changes we structural you benefit, for think our really side, already a think frankly, them I environment And that They rattle a up we pull that, see gives in in almost I to relative big unique need going which outperformance. quite lever others And the speaks to have itself benefit the be again, network every So don't United. international on day. pulled, show It's a us is that the today. to headlines the in off. can

hit our those things to going a And no-excuse and make commitment. to believe why that to it. the up us it we're and be. 'XX So where And add policy that's excited gave performance so we in need ago, again, while Scott we we're that is

David next And our comes question Vernon from from Bernstein.

in the curve a that looking sort and kind yields to stabilize the recovery, there margins the we recovery? in about of out Is on this S about EBITDA Scott, breakeven XXXX, how thinking us as I then a EBITDA Andrew's should So above end think get something of back margin if is higher change better? bit guess, little you expecting where level, an get to the that XXXX help going given to get we're Like are S demand margin we where from to can rate EBITDA of commentary to of you're way improvement be the the come back and to of curve?

they going recover. is about and to is on when demand Gerry and if This pile really want. try, Andrew I'll can

S has team quickly down inflection has affirm been hit there's vaccinated. that get for you this to conclusion hasn't no are getting country it a if happened And think of cost be happen when COVID, I done very really from curve, point the for vector an a step the longer that recovery yet in will you the And needs and when of But scientific COVID. once a early vaccine, will And on at look demand. critical cash we that you pretty That's remarkable you're it guess immune increase the rapid quickly, in point now inflection the when a happens, of happens. when depends shape crisis. not happen. also only that it's burn a job that when an in And that the important and transmission demand. anybody catching on that we medical mass our

that is more will, we're year, increase fall, be there demand. well of is further Unfortunately, We I that in it's reason But whether it the the confident conservative, can demand suppose, back what levels. think right of than there'll sometime point. turning be XX go very to And to spring in a And little the while XXXX it's spring, rapidly as then or we happens XX% in XXXX hope call others. have we'll perhaps than summer S this realistic we curve days XX% we've it's steep to to, And in the point. the been happen from not really hit been now, really And so the a or it, said far. others. more I going perhaps

in a think, And of move of timing positive. to cash matter the a the gradually move being the not on we it's where I'm curve And months, dependent all within somewhere back part of we'll of on be bit from towards cash there then call I quite And when negative we'll top to, hard S level. precisely, sure timing happens. it's the because the XXXX demand recovery the

is you're think open, can shape the to capacity it, telling same be open is. of the looking and demand in think the by of employees in the That restaurant kind where and at need, people curve you that's because for XXX% environment you and been country capacity, buildings happens so everywhere time, day where go the to And we inflection you're of that at probably I way, I've we over go feel There's demand if think. go same Those surveys, back when when the the office aren't that's generators everyone of capacity, where happens, Disneyland happen. open really going limiting Broadway all to to with for in see are And demand like that what point, able it evidence. that's think vaccines. shows is you'll have demand. just almost can start we the lots at drive when a have XX% offices and restaurants where their a us aren't opinion And But are the I kind is huge a are when those are things -- probably months, the inflection on huge, I aviation. lots things pent-up of it point But steep matter of inflection people lots again. going aren't data, to weeks to and there's them -- again. of when -- the till we for those Those be open traveling there's again hit going until are are

question Helane and our comes Company. Becker from from And next Cowen

more is think, I completely I might from in talk environmental? Actually, and but about you. topic Scott, what know like... just doing be with I detail this just this program for you're Eco-Skies you off Can the like COVID, the

thanks. Well,

and investments business. the The should you guys goal that have for how think we that about in

I'm really sick but of COVID. sorry, And

have planet all really to the days. I to what's the right, I'm a the long back and produce as I we era. -- is address to X trees. plant we not personally you. that able than to important is clear of to that way to traditional opportunity what problem happen produce have. term. many nowhere love are room on now and we this Because programs as climate to climate many the of world, as an the change about in in is is enough for you're being something And well-meaning next And offset, more too, And close have going and emissions thank to are, cared we the XX many scale about been carbon simply did pre-industrial X,XXXx interested there make talk We society being this particularly a as as carbon as it 'XXs, the -- change sick Well, other they X,XXXx difference. the able simply

the solar a to so have be the thought the to think And math technology a wide-scale sequestration. the scale, And certainly project just I or to needs directly it's feasible climate out first solution. difference from add that get to investing underground. theoretical absent I maybe kind can breakthrough, economic. really And the make cost the government kind XX is large wind curve. ago, of we it with support change. make dent permanently we that real moving this to are a to start need to happen because aviation, happen. fusion were curve. to it for we up and it's make the and going a a and carbon of engage some to honored we take cost real, is difference. you to this XPointFive way partner need to actually for And of but It only and going economy in are industrial And in nobody in plant down like And move the sequester and down today, how atmosphere move actually that's investment Occidental even demonstration because were farms exponentially years carbon they call But not across

question. it but have So lot of for as obviously, thanks, asking not passion the world. about executives as Helane, citizens a of just the we aviation And

Ravi question And Morgan Stanley. from comes Shanker next our from

but expect period? ASMs that you margin the to XXXX and are guidance, levels just saying load get this, by back think confirm XXXX So that you also implied to factor I you've on to

Gerry Andrew? or

expect to else? it Andrew, add where is Gerry, target. to you to want This manage reach factors. definitely back to load don't but get do anything to to we We And that needs do RASM be

to be to hit XXXX have levels don't those margins. we to Yes, back

benefits the cost the full XXXX rate run but now, obviously. when we're even hit -- side, are today. to savings On capacity, back those We'll the cost results seeing get those starting we

way XXXX margins. So back get the those to to get have we back don't all to to

to saw Okay. mean, just side two-pronged we that but to the the Do for while do kind transitory traditional long-haul short-haul like that you you these I at some response continue previous you maybe clearly, on ESG feel initiatives. flying? a of vehicles. auto work that potential on on will as on projects while lower adopted follow-up carbon for of OEMs you work looking proposed get footprint need working travel? to And EV similar something a a and of they a ICE Got air something on approach it. EVs Is the solutions

Ravi, sorry. I'm on sorry. end We're Can you issues our technical question? your some here, having repeat

vehicle solution some question mobility electric solution OEMs or air if urban a technologies with on short-haul Sure. potential until drones was passenger studying similar green a emerges. I'm using that internal wondering you're of of traditional simultaneously combustion longer-haul kind drones, as working were to No electrification auto electrification engine. the My problem.

Leskinen. is Ravi, this is Mike The yes. answer

spending lot looking success time out we're different companies partnering the We And we everything here there where at of are electrification at a do are looking development stories. at we about United Airlines. potential see across and excited very

aviation. to right exciting you But that's stay in an tuned. ask I'd So out you're that, to point area

Baker Jamie from comes question next our And from JPMorgan.

guide. EBITDA the on question a Gerry,

more I on targeted little were basis to interest like sort where an of at give and that. what your prepared running You of stuff balance you remarks. be expense this corresponding XXXX you your leverage, guide, as on annual Mark envision liquidity, a But might color sheet to point, the that in sort touched could hoping during

for sheet because years into be is short going we is the a Sure, Jamie. really through of substantially get debt as going why to And run Interest the the than one has the high. to the expense use metric more balance next reasons EBITDA had few is to in honest, pretty know, better to crisis, crisis. the margin term you

priority which bring down. and this between year, where of that Scott be are on going I now. different be said, recovery, very But to expect I depending pace balancing wouldn't said, for next year the be sheet course, as from we're fair, the So as right the high to materially That's, pace to a we at of balance we us.

beyond we course, on really debt. we of Of and so some in still until decide could it's to the But -- CARES and Act May be about have end what adjustments. making XXXX that progress significant some the when flexibility loans, we start do have to there

that, totally XXXX. is this the not much and understand that Okay. for material on some and a the a follow-up, feel of That's Andrew's margins could we arguments comments, international but helpful. a structural side builds how the on likelihood tailwind that Could split understand in get And in to international building to share better the believe domestic-international from? so XXXX, you you you margin at choose domestic? least base that was what be answer, we could And are relative we if

or better. be will next approximately to a without want, In would try, probably international that Jamie, I I international numbers recent past giving crystal the I I'll in points. an slightly X give domestic think was obviously, the you so cycle, say, all the by don't cycle, it ball, ahead year trailed think. But do had you exact margin domestic of have I in the but domestic. And X

margin, your from not correct? to to And deficit relative aggregate just X X trailing X to clear, point to domestic, points, that's X be

No, from X domestic. to X points

from Our Vertical next from question Genovesi Darryl comes Research.

point. years. you internationally that anticipating a I balance times on supply-demand And a of domestically over you're follow-up a mean now said couple the than that better next just maybe Andrew, few

you're your investors that posit talking think I some just would book.

airlines you're So do us that high us country of can counting that particularly retired case? for that other be the you have give GDP been will some that, the just in sense of you? can -- mean you airlines I other have you degree a why just a Or give foreign confident are that you airplanes just growth? view? Or confidence away for from sort basis so

that AXXXs has longer the the in are One, the do States pointed by said of they're Two, portion looking globe. not going we're and number publicly a around no across operated at that XXXs counting flying been United that many at Atlantic of it to capacity have we're of fleets anymore. the that someone airlines the Sure, Darryl. -- significant

to facts. fleets there's the very large flying class decide one wide-body a when induct simply in -- those very -- least retire that's up cabins. retire. fewer longer are at around big particular, aircraft a you So harder There's, Those fleets business I competitor all And they're obviously no the you There to in the things back, with the the world. across lot large fewer fleet, Atlantic. those add bring then things to could than ones but

so of on next international a world we cycle confidence is the had where over different And than been. us that front very lot the gives the

you that out to cetera. signed, as everything call or anything the positive We pomp or And likely then Great. you prospectively, based on circumstance. had Brett. one much Scott administration would relates and an orders today, Too for else? maybe yesterday. COVID it there change Executive about were know regulatory either is or et But negative, anything environment

active going on Brett. is to this first environment, expect it's what run, we Darryl, but pretty activity be Obviously, and a it see be, in to the the today, focused yesterday immediate with addressing will issues.

for we've programs to we and to set for instance, mandate going require the a now build that the We've engagement them But may to executive And had -- on discussions. It's quite supportive a with foreign seamless country. and testing make take rest. to direct infrastructure from work of these time in in a are testing, as with very of it up some respect, U.S. the well strong related, ample certainly even here parts in any them So we engaged and we're create various to government really and orders respect make perspective of can in environment. seamlessly. those government frankly, that direct to engagement actively the replicate

our in is regulatory because So sides airline. bad with might Unusually, especially suggest the the the both both with active would not and from outset That environment while what of be unusual we thing. engagement an administration. a and an for of Congress aisle, anticipate

on the the our prepared happen early So to we and about ability in process as months have we're may feel that influence whatever for very an of good administration, well.

next Keay question Wolfe from Hunter Research. our comes And from

$XX half $XX last CapEx a Gerry, then a contractual Is about was you 'XX, this period, And billion billion. if that regional of EBITDA obligations talked invest. margin the look roughly you to XX-K you potentially constrained $XX year, had of ability CPAs. guidance billion year-end which comment? at in at over

shake in come down? out see XX-K? You when had is aircraft billion number Where will commitments. And now, to where a obligation the it next we that year will $XX and contractual where it going go from

Several questions.

Let me to paying the make investing. going start debt with down choices we're about and

revote that's And through. crisis to available was to us said, thoughtful down I it. get to unencumber that to be that is basically do to we'll of we the As assets build and able Part a to raise now comfortable we to really level. drive debt able allowing be quickly cushion our need critical back to during get this use were balances assets. about What do to ability for to that again. liquidity us is It

past same that we reduce and where debt balances in it's the time, thought the at critical So was above unencumber required. assets, we liquidity keeping

have that, be balanced friend an the about question, investments. that. investments pizza." to investments there's So without about limit. of the To operating of off going broadly, quote take -- both constrain some old mine, not So and But capital to cheese we to going "We're a talking is the

you have so experience know, balance. I you and we'll much. in think cut Luckily, can't too that, any that As we in cost exercise, achieve

a is of us little to flexibility some manage see better we better commitments you'll into thing other being the make. able The build

hand, look are, about in the we our is make how plan know whatever going that's that to necessary, if we the I you offerings. our if forward year, modify what $X.X If to on going while process have those sure nonaircraft said required. planning spend to to about embedded be And commitments this billion, one at CapEx

the in to not table. may show that But going critical, of Some up be going commitment think, forward. flexibility I is

long Kirby, badly. talked I'm about Burse. want with question. talk worded Doreen new. a about I return sorry, you. you Yes, that was to this I to I'm

some of your to post-COVID As generate the her are and corporate fit this you what in that's out pitch to budgets? with to you're tighter that going that into let unique field her travel year send things the corporate business, to a world corporate United presumably

us about brand price. the customers. of all than of the or aviation have value and in do that good a to I and phenomenal, team. be that getting to customers I'm of loyal have And had she's let United, one I'll And I'll to look, them, talked a myself, think hotels remarkably thing about to thing the excited win about change actually when is too that I joining Doreen, Andrew one many having as say answer. trying But to going focus getting I mentality way including excited price talked Well, be coming the reasons on us, to her about customers job like other to to for the her

single people up us like every of to any asked be, way trust on value I as she's for price meeting at us, to really approach us, about confidence they so competing the as us, and time, and to stand get to and And change they with should what that brand opposed customers to our us they throw us something more Andrew? find us for her compete, talking ways choose and stand have are us make -- us and valuable going to our get in like valuable, it because price. as like they as have to and we to

And what to off started that, What this excited her call United. and in Scott. much innovate great important add just paper, to to of and that a Doreen ideas we're new here to thoughts. to at ready to look come about will addition things talked a the say do And is And would can't opportunity, team. with few we differently. a competing you start weeks, sheet Doreen is blank continue to new to winning, she's we forward we as with and we and I I is have

next comes Evercore question from Our from Duane Pfennigwerth ISI.

range back CASM-ex guidance underlying point assuming that? the Just just could some are the of a want Or you inflation follow way flat in curve? margin to call. from up to finer capacity the XXXX, outcomes on fuel The there baked the we in is put respect in 'XX, And with fuel into that?

Yes, that. take I'll

deliver we've demand get look, and even number a So capacity to different of XXXX -- don't run our on to CASM commitment. to capacity. have scenarios we And on

thing fuel, cost do we But that get there On including we is can pre-COVID. a the these between I some and scenarios, but only I revenue are reasonable by look, assume the relationship lower out in it scenarios. numbers control, fuel is record back say of we fuel some the relationship and on including you about saw think, of XXXX, our capacity I'd things, pressures. the costs, from kind of our to part earn really us credibility, should inflationary of in depends So on track timing, couple costs think,

to the a just Or to follow-up of it industry think long-run margin revenue no initiatives? a Okay. is from a fees. on revenue? change offsets how how you my for fees? it perspective, function base change fare, Is function going Is From do is manage? about need of it these other And then cost

talk were had above. just brands we really all it's our fees, the biggest the -- our we need the and we're obstacle customers, when of everything mean getting change and I where Duane, to be. to NPS we it to

And the our when it calculation. different we the systems So in all not when to And do slightly this particular had choice slightly add think will we different management often be will it be customers will do maybe up, we past, I definitely been how be of different. we revenue first more our everything a is issue. and due

this positive to about up, and we calculation leading hard, our little a customers. change well. of about a add business positive a so year ago thought a you up made our bit late And all think that we the for shares in long that and as for we When it's this summer,

the we're we have right And know number line your is a that different calculation. that item many a And all revenue outcome. that's now line right this a what models, assessment went very the chosen. But which That's competing factors that fees. you it for have that spreadsheet change and in says problem path and And at decision made so we as models. looked we've understand you've the through it, path. a I that same was in is seen. And that's the it, what and has for of complicated item We

will the But towards confident started actually that model look So end it XXXX. that, model I when move crisis, process. fit this doesn't we and and this nobody's of did as through know we we your we're

And our comes Walton from next question UBS. Myles from

be was something you I is implied not quite top you sequentially -- obviously talk stable, but you're that. So would core talk And cash of could I having still the obviously know $XX hoping you seemingly want about a million to, burn another talked to but consumption. on

noncore so are really secondly, And and others It doesn't inflection. towards you maybe with have as more And advanced just been optimistic burn One, levels? like sound that taking an when cash cash then in does gravitate bookings XQ coming two normal confident. things. of

on So maybe both just those. touch

cash start burn. Let me with

So to cash generally, about first, our we nothing's when in breakeven. back get changed thoughts just

when So forecasting be versus range than our cash people that be XX% and we down some assisting than happens, less revenue optimistic whenever are drives planning. in seeing But perhaps demand that's to more XXXX, may we and the breakeven. start where

any This of is be well, have items, when manageable include, principal they We a normalize, keep on the year will for actually noncore In major of of these don't tower instance, mind due. some in payments. steady. payments. items coming very of debt And the terms sort year of some that that debt

year. that so the And throughout even already fairly

the away. we to some like these begin more numbers through of And as onetime severance of items some crisis, these get other go

and by fair that angst of bit even that a And we about this know to over. way the hope look your point inflection And turning do when in back known with you I'll other case the away. is the beginning turning the hope to the for unique a days tried turning are about from point also we look, is think. us is. point going at couldn't created demand if to think, of investors for is valid you're I base completely know. some None it's from coming. Gerry. little is others to we not listening said on is going is us that as we And We And willing that any than JPMorgan be the at be confident bit know what airlines. while that that same What turning all coming. we've ours going just is our thing it is the end. we've come exactly on. say not when around you to None the the coming a all is would maybe And later March just is being truth of perspective point have right conference as transparent beginning this data the we think add us, And today honest have don't Thanks, us the point. XX to And is strategy. because corner, the none amongst of time

really coming. is The versus doesn't point are our turning it forecasts So matter what is. tomorrow. it today what That's

going this in or about coming, is XX to we focus this XXXX really on conclusion. today. second XXXX. we year. message, earlier, at some year. I in the quickly in it it But it the happen that confidence think does is the sometime it to back, happen. point confident inflection that or term high scenarios And We create about it in comes on that happen can it back demand it's happen hope And EBITDA us, not we -- that happen confident short that summer earlier what's that we're does how most point it's at happen spring XXXX. turn ultimate of is to as than going for reasonable and margins March pretty reason all the the getting have biggest And important But is and about half but confident during is the does takeaway going the to that's we're XXXX

O'Brien our comes next Goldman Catherine from question from Sachs. And

$XXX structural Can by my the are biggest about you've -- call. just shared you million of rest math, And at biggest of what's you've I full the target? yet billion the identified or what million areas cost be drivers So looking quick areas you're identified? $X $XXX of just the $X.X billion the that think additional your share to on for what program of that

have I Catie. through a already little it not big X this, color. or Keep give were program mind going items. like Sure, we're items, a big that X when included. more been If can they or X you bit it's would in X

about processes, A all do some technology driven allowing and where of be investments All our our to this by as the just that's We're going facilities, things at up, is and to one start to of this labor innovation more the assets. going to look estate customers self-service. utilization keywords, So real and it's think the but add these and consolidating continue probably couple That's board. efficiency just from. biggest efficiency. comes be across lot to will better streamline a unlock both able combining technology that

to is But one in booking the to the trends which of of booking last kind the months distributed? only we trends headlines? of season, couple course, what over headlines. flow vaccine the question be start driving any. actions further XX-day the or the last correlated to Maybe be want vaccine you helpful. you hear see, you're changes out right But of if what's I maybe to today? I just Understood. less booking Are and like to more improved can sharing Okay. are many now, in from know that since any other restrictions confidence here. have seen ebb Is travel, next starting during pardon earnings for Andrew still and booking heard that industry true correlated COVID in

turned industry of but case. next be say are And they're true of today. and I'd where we our are is to look be not I recovery, line What ago, in do said would out I a definitely Sure. summer's straight down, we they lot than the down bookings, publicly we this less we've a general. think think that's And that that has at before. said long When

that. going advanced But given -- -- not we it severe was and are for numbers Whether than better we still down. difficult around people the our of this as So caused sure. that cancellation see as in Christmas where for performance I'm But The is obviously the based QX up. booking's to most moving guess vaccinated are not There's were about to on off There's on. headlines terms booking correlated cancellation country But where for nice saw surprised quickly time doubt our demand going outlook, rates. no to getting entering possible. headlines Thanksgiving around period a as I great, today, are much of next summer also rates our that today. is the for is that we Clearly, that our lot there's in headlines not I'm country. go so our not

guide realistic. that quarter, other a these revenue and of So all things and how ATL for optimistic, also drives relevant bunch And the that's but obviously created that our are we I'm our calculations. in I'm

that question come. So your know didn't more exactly answer to I headlines. on

more our see I get that. just kind we few a to think to end maybe of at saw it's a a we are reflects. of therefore, and in similar here sense straight-line And outlook, where more what today of it what weeks And the I not that's QX. better to that's or sluggish But we need maybe January more is recovery. what communicated

question Linenberg Bank. from Mike from next our And comes Deutsche

the to test negative that then also both just And XX-day it COVID government but of as fronts? next you Brett. this how on net they're in is cancellations kicks an sure that addition that, guess Are and the out effective as headline it, to people considering, in that becomes Just week, this I anything requirement you're from morning enforce administration either XX? notable on kind hearing the in probably quarantine. the relates Andrew seeing those or any to is change going to enforceable Not your that bookings

an impact. Mexico, very That the to impact in it frankly, do requirements extent though kick off. focused some on, new I Caribbean. was I'll destinations did -- have beach quite

Latin impact which down And business chunks on as Pacific our wasn't very it or the an we even destinations is our And we have impact broad considerably broad in business, that have it have earlier. of see. order impact Atlantic -- didn't already business, on didn't did a so close can our a communicated large American our but beach it on

quick follow-up a Okay. And then just here.

out getting been that a Amazon's there's the bandwidth? airline few tickets. something Amazon articles distribution United make Is possibly sense would about into for of that Just given

whatever for Distribution incredibly is Amazon makes well. That's sell Amazon. will we I have we just throughout at them that system. know it's Amazon -- need to and Obviously, the partners to ring, great also something if we but united.com, And that And important our I'm we distribution direction. will sure the if do we we don't will into us. entire work all joins distribution value that partners, will at industry, and tickets works entire in with sense partnering the efficient. But happen, as look

So see interesting where and development, we'll goes. it

comes from from DeNardi question Our Stifel. next Joseph

Gerry, call I'm in and to wanting how of a of assets. I talk side the or been think on role the amount increased Scott for equity liquidity other wondering there's about fair plays COVID on a unencumbered that.

think issue if I wondering that commentary. to plan Delta of do kind way provide say out other of you equity. they I'm similar to went their any not could

Yes.

the Look, have decisions need under release, going to the ATM the made We're program. earnings no we been structure. know, entire issuing sold amount understand to been forward. going As equity our of we capital with have you the equity balance

So way one the best equity. or I can say another is we've additional made decisions about no

what he return sees buying a invest new And to fit? it enough. capital or giving as million for Fair Scott, a on then, a $XX AXXX Luke generates Is Okay. higher United?

because set we the Luke buying to -- for in the to the by that those return. Well, go love years I've I'll can everyone is that with going EBITDA we to will program double Thank we an goal to million for airplane. some I do money will can find the given any loyalty more frequent higher if not the in helps make come that I'd few the business to And have scenes to confident that, invest more others. we're ready else, are it business which he the business that goal also a and new hard right assure through really to more mean loyalty ways because EBITDA. But By I'm loyalty your to about next of me the the high program return point now more way, program we makes ways but tell that and publicly that $XX the loyalty attractive produce stable invest invest well think earnings double you yet, as that the of in investments is don't airline a behind you. forward. on or flows can cash a to loyalty how even differently, thinking ways is airplanes you, The routes pandemic flying of from but finding working the program, taken and loyalty announcements program on of instead flyer that the that it

And our next question comes from Savi Syth from Raymond James.

given on little or talk Delta joining may could Avianca especially I Latam could the the some may then pre-COVID, mentioned that wondering and a landscape about Latam you I America, including in I and how bit you different competitive was notable But through changes gone if were your not -- Latin joining front. or talk look having underway Chapter know XX wondering restructuring. partner if partnership Delta international both was you

see you from both and changing, partnership competitive from how that standpoint. standpoint your curious a landscape Just

Sure, Savi. It's Andrew.

will was as continues and our prior And the to really what we changeover hurt date, rearranged that that a started partnership what strong to It has have COVID with as board to we're partners will have think and, And course, of with fallen, Azul portfolio partnership a to need those and really us. in that -- about partnerships we're the region. I dominoes result. the of not covers say excited be I Avianca cover. strong, sticking. We other And well. the fall in clearly Copa

think I fact, In helped it's us.

Our performance, better. think, gotten relatively I has

So pretty set And in sure we make good. can There's of to are have even but those a moving partnerships lot a region. of partners deeper. great set all the pieces, we're get ours

to slowed I been team get think driving are down partnerships at to our franchise in that due some make that last has it sure key the and the months of COVID back work the over so. these to or region. But X is entire ready

a question I ask If ticket sales might just helpful. That's quick on today.

maybe much that of credit what kind And voucher purchasing? of kind XXXX kind recovery And or mix Just as your use? progresses? you are a is in curious, of see of expectations can how

XX% sales we Sure. that in cash out XX% see. moving it we we've because see been down. quarter, of moves of nice sorry, XX% pieces XX% ATL amount the moving issuing continue And But were of refunds to also credits everything the continue which the amount that A down, in has number, move to a typical is like the normally is been ATL to The there. coming year. at not we in of have lot sales, cash past that the -- In else.

seasonality, But be watch the past this to to continue expect get until it crisis it a we we that different so carefully. And we and different has at point.

going of portion We're media. right. to All now the analyst questions and end to on the move the

I some on be might the think issues technical having we operator.

moment. a [Technical Difficulty]. Just

we Sider. have [Operator Instructions]. And Alison

the there? Aly, go one. to are we Maybe not hearing you need to Aly. We're next

we a take If to here. not, address the All media time right. questions. Give have separate us might minute to another

And Alison on queue. the we Sider have

Can now? hear me you all

Yes.

Yes.

Great.

some that's if with discussion or there's Okay. been was any Yes, another necessary. new revisiting the that kind all of some study you something if in look light that's emerging of I of DARPA the are adjust wondering or assumptions of of taking the even to did strains

conclusions of because about the I the much transmits. from how should guess it the I'll team. the start the size and ask the really virus study it's rest be same of The and

that mutation the results change a in of a slight virus the the change so wouldn't study. that makes of And surface

case really our need team, us aware I not and anything I'm Jon ops either study. different see or the Roitman, Toby in redo So have add. they DARPA to the on to sees that

think I no. saying they're

one guess I Great. And more.

kind your sort the given if any government continued of of thought seeking additional this of Just or spring. timing aid uncertainty, there's

is critically administration Yes. it's we and economic last the this overall evident recovery. This one. certainly Congress is that understand important appreciate we industry that in round Brett What Hart. how we and support I'll is as received the to of both an are take the

they So in our will the supporting continuing, of do confident to they us in in will communication direct that our as needs we always full understand, and industry. Congress. that at we're another is support, consideration we're And administration of that round these, there and with if overall terms give point time, the that

received our just funding. taken for interest confident industry. our into we're But and in future, that will We're there's the It's we that. So for for be the consideration consideration. grateful us important if really

question from next from comes Rucinski Tracy Reuters. our And

To indication you on have to yesterday may of follow to coming employees, did question would seem whether give you furlough some employees Aly's when us aid PSP furlough? need indicate or and you aid, round on how can't expires. you voluntary on Can through you many that up to more involuntary, count of more that this

as information Hart. focused future. have make of our position don't could time we're furloughs decisions. now play And any not point. between and this to demand for are in is these any we'll that right well. is about At decisions this assumptions we But welcome other factors opportunity employees engaged. about to And that to those No, don't. we But we're what we There We make we'll timely. look, is the obviously that the time, the environment. get this a mean, point have on now fully make front think number at focused way potential the go grateful the This on I in best a Brett -- and them we're the into to are on in change environment. that way back the when be demand they're to

service concern not and may frontline enough short-staffed if come quickly be a employees does aren't very could competitors demand as there that able that as have quickly, to? that furloughing Is be back you're saying, to who you demand as

No.

We front. no have concern on that

taking and at immediately. said that say, continue we have we As ensure the to point to react future, expect a fully that position some in to to in we return been we're steps demand and to have

So that concerns front. on don't have we

And Bachman Justin our from News. next Bloomberg question from comes

fleet the what an the -- whether two if includes transatlantic strategy on side overall if of your or of if play that then as low. a first, the sees 'XX will of any the United for And of type in regional to other terms or on international opportunity they targets second greater capacity of targets, may out sort about hard and question its the commentary situation capacity you on maybe was expect have I do competitive on remain -- part side. and upgauging larger or question the of fleet what that X retirement older alliances for part any Andrew's kind

maintain of number in took larger a are not the decided is This of we availability to on the made as the support aircraft particular, plan flexibility. I'll fleet upgauging on know that will on of And that are engines -- with ones mainline point there The are fleet reasons, the we've demand. the the much them that among a charge rest want so is in XX XXX start just MAX in The is XX that, process, we available only that quarter. retiring, The Gerry. on just And that's lot covered -- those are the the the aircraft there the out can XXX-XXX and to the going fleet. by related oldest terms flexibility decision fleet fleet, the maintain of are we in to as MAXs. to subset the fleet the the depend that about retiring of XXXX. which of we our until were for

targets So that's for XXXX. the not all into at factored

over the wants Andrew, he turn I'll regionals. it talk about Now if to to

make million retire Sure. What a ones I'd changes that you it's easy them in it's different but Thanks, business, reasons. say induct new lot aircraft, fleet for is Gerry. when this a to replace harder and to

see on over moves aircraft when go open is back of And move out as planning airlines world, over flexibility these look aircraft the made a retired. this said of have so being from kept our front, generally the And new and of we've some we've lot we perspective, one again. clearly and made to into markets. bigger to at different a We've we moves, they

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David from Business Slotnick And comes question next our from Insider.

the travel. for I you're same know question travel a know up ago, thing way a the were required months probably going is wondered better as trialing digital lot a the if picks for proof of platform I be test of validate for tests. a international vaccines doing I just PCR vaccine to negative you about to results, vaccine had secure few I passports. that a

guys Either to Linda you or want that? take Toby,

Sure. Thanks, Scott.

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Josephs And our question next from comes CNBC. from Leslie

talk -- was a you effect about requirement shorter demand vaccine Caribbean? testing and the some bit effect? trips on the trends goes maybe the Mexico announced the little since what's in sorry, of And the Could particularly, and the into

It's Sure, Leslie. Andrew.

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And our Today. next Gilbertson Dawn question comes from USA from

now such on week. at requirement have related there's confident that at to a for the next effect? the all bookings My Seasons. are releases especially the mean went infrastructure into traveler quantify you COVID takes do And cancellations, note, you popular in effect a a with Mexico, this Mexico, I'm to new and impact also on Andrew, testing place can in that getting questions to of average high-end press rims Mexico going hotels, Four stay like but destination travelers? from the right doesn't I since

So linked does it's of concern terms that demand? to at you all how in

is definitely It demand. linked Dawn. Sure, to

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Linda come like more So to said.

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to moving take So transparency need have we're know is we more our they a customers inbound. this that know know to and the going everybody. about trip we how is near how like what And this outbound it. need again, people important very, they way know what will on exactly and because will very do the on that. the to to we we in describe do And that to say very get the and that in that detail to future plans place lot We'd have shortly

No at time. this further questions

talking to quarter. call or Please contact Thanks, further you, Media the Investor everyone, Thank for Relations and Operator. to if joining any have you forward we look next questions, you today.

Thank gentlemen. This conference. ladies concludes you, today's and

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