United Airlines (UAL) 21 Jul 222022 Q2 Earnings call transcript

Good morning, and welcome to United Airlines Holdings' Earnings Conference Call for the Second Quarter 2022. My name is Hilda, and I'll be your conference facilitator today.

Following the initial remarks from Management, we will open the lines for questions. [Operator Instructions] This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed, or rebroadcast without the company's permission.

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

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

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

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

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

Q&A. of the In addition, the to the line I'll team executive available with have Scott. that hand assess over to other it And on we members

fuel return thanks our for quarter, to profitability aviation. of great call for the navigating everyone. margin morning, risk and slowdown achieving today. despite through we as of global net earnings levels unprecedented the of and adjusted for infrastructure the thanking that managing on pandemic seen by start joining prices margins, world, targets. remain an employees our continuing since of first going like the and supports and as our pandemic still to focused back challenges to well a rising the XXXX improvement first or expect to short United the growing Thanks, start pre Christina. about worries margin then recession, forward. we We're and time our the customers return pretax XXXX on legitimate Good getting And of revenue, around I'd It's profitability, and this XXXX

drive emerge, And to next During for at we're will months. narrative prepared for around United, XQ very XX the strong industry pose. six the our risks the they and United clouds here

First, we've to impose disruptions, and constraints significant on seen ability industry wide constraints industry's operational that grow. have the created

likelihood Second, fuel slowdown the sharply third, economic prices. recession. or growing of elevated an And

we've entire that is ecosystem and utilization there external challenges will can't prioritize catches elected to in the that planes and cost by means, that overstaffed continue return to normal. more to traditional handle We'll of the to constraints to reliability staffing. overstaffing First, returns until today, can by the the these control. we we also up just to it and address to until number against infrastructure What be aviation pressures smaller aviation operating us that posed Airlines buffer keep United commercial give straining order

long-term that XXXX. for normal something this happen we're plans, with the of fuel second United, that price. trend for be building What worth, this billion The is through fuel $X to United prices. would new question news prices, current rising largely good our macro course, going assuming fuel At a expense what's at than fuel today. demand. become costs are is the finally, least bill we've higher And it's about that all there's seen And fuel The affects is pass airlines.

to thing that for COVID unique one the that see is inning in general, of or probably and particularly aviation still strong demand. we're continue We seventh sixth And is recovery. in the United

So out there recovery now, least across recovery, COVID exceeding and trends, are the And at arguably macro recession COVID two demand versus economic cancelling is for least, the purposes. trend working continuing headwinds. at

remain given the future. to XX Asian term. X% over we toward and all for narrative we think significantly optimistic bias most fly, are as possible capacity constraints, the all looming however, as us amazing about three six us delays, it's long reducing leave is shortfall industry infrastructure fuel the reduction clouds, economic that does look But we higher prices constraints to the of months. and infrastructure slowdown, other short risks, delivery flying, Clearly where much the three known that is all next an and regionals, an storm despite So physically to and truth about about aircraft aviation. what's impacting Perhaps this, haul as

that our results back shortly. CASM-ex link Lower Jerry margins. and to lead see growth stage means that expected XXXX can does and are XQ slower pressures to towards You accelerate will detail continue ASM to what

XQ we Brett. continue up perhaps to whatever EPS. here in United, closer and is huge XXXX to in $XX to the decelerated levels, adjusted We to margin utilization most XQ. will and next the results about our to and far over they've track, get during current takes get TRASM customers eight do I'll regardless. summer to so to at same of But get but the year encouraged higher NPS employees busy our travel for levels to to this improvement again season. to Thank tough, will our We still operating we're it Boeing lead deliveries That our been in these pretax by per and important And June, which point, help pretax target. that believe hit to to could order that, step with in target. from share normal It's hit CASM-ex. And we to to points return keys turn customer a on However, and July. and translates done year, are X% margin the see factors our we'd next all it also adjusted you will TRASM back in going hit made margin I'm

want work I Scott. hard by United you, months. entire team their Thank to past thanking the start the few for

see how recovery loosen border We International taken hold up. made and began in are as has to to pleased testing requirements business, our progress the and

industry traffic severely over weather few through mentioned, have air last constraints Scott months. As and the the impacted entire

of network, United unwavering work, we for teams were operational the -- of the Newark. XXXX the the of because our of to in hard to able most exception with quarter However, performance second return because levels

has for the need the completion The FAA, and and of seen most for operational find progress the the of last received is challenges to good significantly, performance staffing month partnership peers month for June partnership with levels nearly United grateful early partner disruptions the infrastructure Newark, in waiver Late utilization to active and improved. reduce operate address solutions government, news on-time, disruption have far. Transportation legacy proactively demonstrated. improved united the we we’ll the XXXX, challenges constraint While our ease FAA schedule Newark the we has main U.S. seen and since signs and our challenging our By higher improves. a But impacting these mainline having aviation was the and Also, until points our aviation operational customers. broader among industry our hope over Newark it Department on together. are and XX continues lower congestion quarter. and month the to at to has with of one We've an leadership to we was the operation number customers. biggest ranked so drivers at collaborate

face industry continue economy, to staffing operate need in we manage broader the that the lower maintaining aviation at we'll the levels, utilization. higher to challenges infrastructure and strategically we're As

schedule capacity most adjust can. to to fly term continue our We plans the near reliable we

higher including XXX needed, grow for team most towards long-term hard to to to this place In industry. operation broader pilots to aircraft -- United a and United to are can month. training and advance shortage we career airline dedicated at gratitude we remains are team proper sincere at And quarter. they build to career best larger that goals. as work job and high confident, their my earning a I body members receive closing, scheduled continues classroom potential, hiring we our with the our want and routes, United International our extend when impact the of wide a pilot for is pilots hiring least entire The are United career. to on plan Finally, so support

my call Enqvist. Chief way the leads to that good our And friend colleague, the I'd new and the our truly are to like Toby Officer, hand now employees Our for airline. over Operating

that across recent is working time. team industry-wide changed. helped Brett, and our the reliable XX for operation destination operational We Thank safely the for their as to kind customers After Agent the such over have not tools, our Customer great And airline it well. thing wave was with customers for value only our years, on of not most need the them that on most the as Officer, success. Chief innovative Demand disruptions employees the a moderate as from recently to you, the stress, a critical and get ConnectionSaver for our to and for Hence, introduction. that this running but globe,

the a bounce data-driven for and back to our to continue letter meaningful to ever ensure we'd be XXXX We way our were with will we could only when have in pilots decisions in the time. for that of ready. United, operation demand in At We in has, preparing than and the signed innovate that returns, been airline to agreement efficiency we've imagined, improve demand more fall it a of this reliability some make of future.

prior For the to of have pilots available versus broke XX% example, for bays we more simulator new blocked to pilots ground hours pandemic. the Further, XX support we amount on today,

stand Your shortly. conference resume will Please by.

Thank you, everyone.

technical to we Toby. Sorry, some going with difficulties. had We're start

trait for the not After to mostly most the Customer value working for Chief thing this Thank customers destination our to years get on need We to for has airline over and changed. Brett, Officer, their as and them safely kind you, XX time. introduction. the

success. employees moderate Agent our operational operation industry-wide team a not for our And only to on as across customers, was the critical the so as ConnectionSaver And reliable Demand that our well. of our it helped tools, such disruption but stress running wave the innovative the recent globe, from is and for

the pilots will our it meaningful in bounce this fall with for We airline we'd We of back data-driven be reliability has operations were agreement improve innovate time. a ever to a in to only the that in could and future. demand signed been our in At demand have decisions of some when prepared continue we've make that efficiency we than to and ready. the United, and XXXX returns, letter of ensure imagined more for way

to XX% and long on ground example, broke we will For to term pilot have meet required available our we of XX new growth the that to hours more be for in plan. the support today, the we amount pandemic. Further, block training bays expect medium versus pilots prior simulator near,

We infrastructure actively demand back. started to addressing began also come before well our

those and on at are returned control, We O'Hare, completed broke-ground Denver. many in new and we Houston to constraints focus to worked future. There projects other big COVID During infrastructure normal. projects on infrastructure to the the of with get airport Chicago them support outside our partners Newark, or

weekend completion operation our is significantly [indiscernible since in FAA, July XXXX. that partnership X:XX:XX] zero improving Finally, reason performance was this for the with best Newark our fourth In month.

of seen likely the XX,XXX impact day. XX% have FAA highest the look pass revenue the are is forward which system. to rest our even an less And of delays view industry the great more operational operating As results. challenge on Andrew customers mirror. the delivery, we call, by whole are airlines. each that now a XX, be today The and it in of I in our discuss our I'm capacity on rear will additional hopefully to post-pandemic to day-to-day this on-site reduction, ingrained being means this the faces time I'll month July which next every to

ever versus Thanks, down with on June report the accelerated $X.X Toby. of early the the XX% the quarter capacity, to line and month revenues. higher XX%. few or up and billion XX% was continued but XX% for demand yields QX quarter to Top demand were our pleased slowed has rebound our grow previous to largely 'XX. were continues TRASM saw above XX% exceptionally compensating capacity. QX. in revenues leisure successfully growth I'm and of we quarter. we less XX% capacity levels revenues for higher the 'XX revenue the to in finished costs managed QX rate strong, versus XX% of in pressures. from weeks fuel volume Business Passenger Business inflationary progress of into demand last best XQ

business above cargo up With in the total recovery, XXXX and demand we'll XXX% travel remained economy carefully. potentially watching 'XX. was be worsening strong remained revenue XX% QX. Yields and Cargo versus levels something

see, strong we solidly MileagePlus sign it. of volumes up 'XX. by As had a strong passenger only recession, the constrained expect are passenger above in also XX% space I versus quarter industry revenues want don't early cargo remain remained revenues we is the will with decline cargo levels. a we now our luggage. cargo future to schedules, XXXX used If see note pulls an up yields a back to normal XQ drop-off that months, in and but by available being

broke co-branded can you about Our every credit cards of new of card retention in think issued. and just spend, record terms

premium was almost up revenue XX% also versus are and onboard revenue Ancillary ancillary per doing streams passenger great. 'XX. Our

were product XX%. Additionally, almost per our revenues steep passenger up

domestic continues faster premium premiums I've cabin is the with Next capacity second important be the revenue leisure spot bright grows over next even years. cabin really before, to the trend few plans United the cabin a main This As quarter. growth economy mentioned our than as in outpacing premium

a other the XX%, increased PRASM of up PRASM on 'XX, XX% PRASM with an the XX%. was X% combined a in up of any capacity capacity X% of reduction a in TRASM and many Latin capacity increased RJ gauge, optimal limit PRASM deployment. backdrop Atlantic was macroeconomic X% in Pacific Domestic Overall, that's QX, in constraints, XX%, enabling even headwinds, strength constraints traffic and and versus on X%, post-COVID was feeder PRASM capacity. versus results. growth that the a increase in For offset material with 'XX, capacity albeit quarter The down up record backdrop international XX%. are recovery, more QX

the turning carefully can schedules and with focused on reliably to managing deliver. and capacity, third Now yield we profitably operation quarter. our We're

to relationship, to XXXX revenues seating, curve way returning outlook. airline us trends. industry positive We're third in important quarter is counting and versus the just to all in ancillary XX%. up further. approximately XX% in expect targets capacity will domestic revenue below XXXX of The improve be We premium pleased fourth XX% appears not original material for the down quarter to will passengers, XX% our quarter in same business different bookings into XXXX. at a TRASM and capacity QX period than capacity meet remain XXXX. our quarter rebound approximately International MileagePlus by are revenue the third spooling GDP materially on well expected is fees, that to the booking environment It QX with in cargo down TRASM is now also the are TRASM really 'XX. We're planning our the the rapidly a to United's which guide. versus

over We to to and We assess We are execute lower now growth to expect X%. capacity outlook transparent, next of is two, we expect. industry growth. three going and One, for for entire moderating focus, concerns. fuel choice up for plans taking to will and planned comfortably. United the be our plan allow core growth able XX be us to previous industry feel customers achievable and challenges capacity levels believe the will service XXXX it number growth that high United significantly At at months. capacity is XX about be -- our our than at do our To infrastructure faces The three, our least shortfall; is and prices; United. right customers United care X% continue deliver our growth one X% macroeconomic

have industry may others revenue considering having material that risk positive impact constraints a production. prices airlines, a Boeing. United, not faced from may clearly capacity. delays macro-economic Some are fourth not fuel delivery impacted Higher including alone all and These on face,

bone industry recruiting, believe, be will However, retention, infrastructure constraints and and are training constraints to and for for to years we take fix cannot Pilot the come. ignored. time delivery real delays

the get how margin of As earlier, said our changed. guidance Scott we has XXXX calculation to has

discuss We fuel, but it will higher capacity, revenues. to I lower higher to And cost, Thanks team. our have results. United with entire importantly, to most that, Gerry hand over higher the financial will

morning, good everyone. and Andrew, Thanks,

my the of add like the to United since of our entire start the would team I quarter to pandemic. First, for thanks profitability achieving first

$XXX income the million of adjusted on pretax of million, basis. we For reported $XXX quarter second XXXX, an

air Our XX% XXXX, story about despite the with of not from quarter price second ability for midst pressure fuel the line was the by second our to quarter cost unusual certain of about the But of in versus we opportunity limited exposure. capacity our CASM-ex, fuel while quarter which coming on lower regions in volatility expected. CASM-ex the exacerbated industry than ended in pandemic, and prices was jet in was up was to high had The withstand guidance previously prices. mitigate where record prior recovering the fuel it geographic fuel

our and quarter operating the several in often fuel than gallon Newark second adjusted dollars pricing April performance higher attained most margin For jet enabled of us we of over the of on harbor as pressure offset per example, cost strong Coast Gulf X%. was to unit based fuel. just jet Nonetheless, fuel revenue the in May, an

of While to the $XXX difference mostly in we lower versus XX%, May. for expense than approximately million fuel is quarter incremental of due the our guidance forecasted May what

up the versus XX% the of be to CASM-ex capacity down approximately expect quarter in currently We third quarter and outlook. both forward XXXX. third XX% our XX%, to Turning to

operating by impacted quarter costs Our are environment. current the third

issues, overstaffing challenges shortages COVID period chain capacity. labor economy our to our are limiting we and where the supply variants and throughout During by recovery operation the the mitigating and create customers impact

we creates profitability. is CASM headwind, it do thing for this believe our to for near-term While our the customers and right ultimately

infrastructure We due also to more various cancellations to closing manage have issues.

reducing in For cancellations we are pressure variable example, runway schedule types CASM-ex in day weeks XXX September, Newark expect cannot the avoided a construction. about of price expect costs as fuel simply gallon a as the to time our for many result several per profitable of These result in flights in be additional for short again on we XX% to adjustments. and per lead the be Nonetheless, $X.XX. due be adjusted to based schedule of by operating quarter third once margin our

continue expect an for adjusted we Additionally, profit the pretax to year full XXXX.

beyond Looking up third year prudently. quarter CASM-ex the capacity next our into our manage XX%. growth We continue will XX% to currently expect with quarter, we our capacity fourth down

of we would And adjusted what our Scott target. and we've would CASM-ex United of eight pretax United In Andrew XX%. fuel no to Even XXXX the than next it United expect the we can Using year XXXX. assumptions feel approximately be next pressure of our achieve this about be capacity next about on the for much XXXX, about more taking adjusted full versus lower as a curve, will described, ASMs levels, into addition, per current lower example, we up inflationary up causing, for unit as we capacity, down at capacity revenue margin fewer goal margin our forward X% to decline as gallon commitment. fixed achieving versus do be expect to change, from and good year, takes X% current pretax now three cost deliver account from of seen, among points spread we based After by the Next points as still as on mentioned, to X% impact $X.XX price original target.

Turning to fleet.

We adjusted a more this no the billion, delivery schedule few week delivery started during $X.X be expect year continues finally little currently in weeks, We which the take to than aircraft aircraft about will and aircraft fewer delivery to shift XX new the new and first Our XXX MAX delivery last now CapEx aircraft. aircraft of in during to taken to full actually MAX year lower June, of expect we the our delivered. of right. We the XXXs year for taking five extent have last XXXX the of four are year. of

appropriate aircraft to continue macro of way our environment. for pay in context to position, new deliveries uses the We in evaluate of cash current our our other the most liquidity the potential

already we of opportunistically Given base, balance hand, to purchase more of aircraft delivered on and these expect with continue billion though and our year, a XXXX the as half we maturities for with we to paying pay with remain debt than liquidity for quarter our for the to to aircraft deliveries second ended cash we while $XX monitor the recovery. build cash aircraft hand and current total that and sheet. down on the we used about unencumbered flexible currently, this economy certain cash win-win Paying asset prepaying the four

we our core So to balance $X will XXXX far pretax more we to by several will on our the scheduled normal our strategy, to sheet $X to between debt every this year, conclusion, as through payments have cost we In and we over day deliver have the reduced grow annually debt margin network with amortization. our years, United and form I with ability hand balance start adjusted that, target. which over XXXX we execute delever for it of next our continue sheet Q&A. the billion, billion plans, the billion $X Next Kristina that will total and confident and And

Thank Gerry. you,

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

Instructions] Mike Deutsche Please go a We [Operator from have Linenberg from Bank. question ahead.

plan X, points, on to were getting but Andrew, XX math, profitability. or maybe up it's And drill you based be a you probably you more is our capacity ago. headwind the that? like to on XX% change now lot of is dig sort looked give increase can that a driving it's Scott, for Is and engage. to can changes, those back Congrats touched more in or from maybe you Like, the just if that's at of about into this everyone. Thanks sort down, But CASM. it year you previous Good sizable on of going morning, under back a little restoration that bringing a what's slower us XXXs? gradual obviously, a obviously, bit improvement and a to

Hi, Andrew. Mike, it's

Let me shot give it a here.

we looked us year, of a As that big out there into that where buckets to, projecting. different are the get the you to referring we're currently are and are from couple XX%

The first one is flying the change at United fewer Express where lower and airplanes, we're utilization. at simply flying we're dramatically them

to because of definitely And that many ASMs. X total. the points, is these our shorter-haul X routes United lowered simply points over that's that think is There fact of really on -- So produce and taken less ASMs. shorter-haul as mainline have aircraft substantial, as X flying routes that part to that those X in a of

that So explains, difference. the bigger I of of the think, one buckets

network and the Asian bucket long-haul airspace. flying significant global overfly assumptions is of difference Russian our ability recovery our our second about The and a of to

there relative next to in although are departures. to produce second big flying originally in we of in thought and X a as that expect them haul X, as what what of material So and They difference have very, now Asia aircraft recovery take the the year. fewer simply routes. our we're the Those similar much points Think are of ASMs, half space. fly in buckets it to of number we that another Russian a ability relative route represent very X, we air what the potentially long overfly different shorter terms a of

airline productivity. So to buckets change we worth the that flying were two the to on do get is those plan. of plan the we anyway. United our noting were going Next RJs second going. in And structure where materially the the we next of full This on year, point ASM half In but this it’s

an is this So acceleration.

not in coming of the does or that second really believe parts future. the come Asia the the it ASMs that then. of I we is don't XXXX the certain there and are important, will CASM-ex near airline not it change So thing productivity back, our be And think have the back or

they While low CASM, RASM. had lower they had very also

forward don't look forward while bringing these TRASM fact, so that doing. look we're quarter, such a at of those are all, in our I Asian XXXX. two the endpoint think way just think, we'll long-haul geopolitical performance them United part moves, And back in the higher look today. notice be we And part the at is deferral, some at come answer in to we and performance exactly back, a global the where that to margin. to you'll face We back an they the critical given change which and is if what route they routes Express here, in a acceleration bringing is you our of The the issues we

is or year Okay. you. that assumes guide quick Great. right that a not? And and next deal for Is target pilot done? just a follow-up, just the CASM pretax Thank

assume we our next that So the for would all costs expect numbers CASM year.

Okay, thanks.

labor It deals. Yes. includes

Thanks, Thanks, Scott. Gerry. Great.

question next go Please Cowen. comes Our Helane ahead. from from Becker

talk whether strategic the you routes continue? not a and for in plan focused everybody. of routes that to they're like new Hi, relative Thanks the operator. the Atlantic performing little or part and expectations you much, the bit very that about Thanks to leisure will started, time. how increase capacity that other Could markets

it's Helane, Andrew.

all last RASM their that the TRASM quarter, those never and the to they spooling they're as up. is in international guide up, RASM even incredibly as this the started good quarter. well for try up of look for flying acceleration route an our of and really next this I'll destinations catching spin And embedded of did at season, the of few the weeks note we at well. they're looked we including is are in into go you Let it give I things first past, guide, new one us all think when operation, me beginning all We a and and third that where

to we're and this So be successful you RASM bit QX it's business accelerating. traffic our tracking. to given on based heading think growth try something We where going was a little they're where summer, we how wanted see with guide, we international can in different and is that pleased think

Got the it. at they runway that were plan what thinking Thank I'm you. sure are were they to also operations. they Newark and their construction going finished. And relative How not to Terminal then just would impacting situation. the that on when where relative I they is -- be think was A

for I'll a Well, flights something runways a September. construction out me chunk. in one going out the But a XXX that big the service weeks take I miss if wrong time let correct of going to to September. We're take is here. It's day Toby of in during runway few

of terminal, beautiful which be So fewer our that It's chunk it's is cost nightmare. customers trying times our done. great for that's with new a that. that been a delays pounds won't Obviously, in that it to XX the But And bag in for capacity. is while got have a X-pound any when when there crossed all be fingers place you airport new one it's terminal. our to terminal already is do delayed going a stay several and more do we basically the reasonable

quarter. fourth it hopefully, And for the will on so be schedule

you. perfect. That’s Thank

Please The from next America. question ahead. go from Bank Didora comes Andrew of

Good morning, everyone.

booking dynamic on now? do had the way the mentioned your clients concerned in have bookings Scott, I How corporates about maybe any across traveling conversations of you big influence or corporate you operational So you that's remarks, late. think guess, right right your corporate are I the the prepared softer some now? difficulties with or think Andrew, you industry

some amount we there's you level the at -- per tell can particularly have large flights frustration of I good, day impact on And Atlantic, the having RASMs out chart a there, And said, are with situation, clearly bookings. this and XX London That our of bookings still growing Heathrow. have. Heathrow where accelerating. the of We off are across a is level our being London

we return negative So on run, And read. this it's hope are can that on just safely to appropriate and getting action to get we having are the the our I these disturbing we that want headlines make those up. resolved United look And business think forward to quickly to where airports but short we taking impact in at the catch really a to get be sure they obviously. time to customers

Got it. business. on your And just corporate

missed in of XQ and sort it what are recovered head back as much your the And XQ? Sorry how remarks, if year? the this we was I prepared half of your into in expectations

revenue. on still for was it the -- XX% and with the It domestic, good, on for has still international headlines XX% volume improvement XX London even volume, of looks improvement slowed really about is on Heathrow. sorry, XX% improving, the of And rate rate while

in perform and we're about obviously, really the international to going excited, it's So quarter. the network how

it to is trajectory in again, in type And weren't September. remarks, in reach counting the change we frustrating. I on said of prepared our So my as current some target heroic

rebounded there when some we've this back go on going there's not change. think again, do point. bigger outlook upside kids a the at gotten for to I a significant school, it's While assuming business be TRASM feedback does the slow based We're count our to on

you. That’s great. Thank

go Please Syth Savi from from ahead. comes James. question Raymond next Our

good Hey, Thank morning. you.

labor regional kind of the think factors very eliminates really expecting mentioned recently, of of is one increase though we've been your but the that kind pay versus one regional suit? not I You the small outlook, essentially maybe And gap was inflation, pay and aircraft. XXXX the the impacting I with was of the industry rest an regional different view competitors the work on all provided of historical impact follows XXXX. shortfall large curious kind your I kind those important of of thought routes mainline to of on economics the which component what assuming was of also this, making between pilots, those

Savi, is big change that but anticipated. change say this a that a we I'll

of So RJ think, be ASMs. X.X%, to our X I used ASMs point-something

because it head happen, X.X% to going of were to but X% think business as it economics of this to the of exactly ASM we didn't when know. how XXXX, we We would and now As change. know

the we're so think to We've small we've -- is aircraft to for economic I this. prepared to this planned that materially reliant has going profile communities because changed. as different. And to going service of much the we means be RJs as And for it and be not used on

means appreciate opportunity. also those day. are the scheduled at in to the Here end that that's the we going aircraft think markets of more profit depth, our and with United, And a maximizing it customers aircraft mainline mainline lower at we think

and on size will operations community’s strained point be structures the changed smaller stressed it as the can in will the we're think cost to ability the makes sense and scope high in the -- RJs support did to their where we we don't past. as to fly and that many yields profitability future So plan, and but have of these have offer RJ differential

increase RJs. We is for shift. this a a a it's not cost temporary This So increase This RJs. is cost permanent a for permanent is think shift.

address next That's might kind And market? of enough narrow the have address to Or United I follow up, plan of but and I lot then regional the to aircraft small much fleet you helpful, -- it? body guess about mix up you Andrew. really a gauging. is of do have kind right do if that And just

to and what in have XXXX change profitability is type looked in at and we And need maximizing to we targets, we frequency, can our different we And network will financial look our aircraft. think we communities fleet than mix we by always small the shaped As profit again, less to we the simply it, and will have aircraft do XXXX. a make hit did but opportunity. that to a XXXX service or at bigger

we our appropriate already It's or that we we've may to looks to. down an but shut And that is adjustments of fly make cities, can't anxious point. XX the XX the make at RJs network time, MAX lack can change we maximize some our this profitability, will we so what in this And sure think the this not we to to point XXX-seat at gap time. do outcome like narrow-body can are mind outlook and and Obviously, at our we to because into are to XX where a of point. this But be and fill the any the there XXX way of that. unfortunate we are, jump at

Got it. you. Thank

comes Jamie go from JPMorgan. Please from question next The ahead. Baker

initially on just Savi's everybody. Andrew, part as envisioned morning, scope Good Next? United of Was continuing topic. relief

in The it. RJs had our Next more XX-seat in never than XXX United plan

Okay.

I was TA, right? the part as explain no guess there would why of scope in that So change

going what answer. right after years figured this to team, and get we of the out number collaborate right. we to We're ago, say, need a it we I'm we -- and as to a And we got

No. Cool. Yes. Okay.

just wanted check Okay. that. I to No, double

planned to in X question suggesting the if United Obviously, pipeline, But training right all simulator or my current should and Second was -- be Gerry. need question whether easier sense? makes not is Cutting actually strains, make operational it reducing does capacity that that to capacity reduce the the I'm different things. shrinking that environment. the that there exist for some growth are pressures do so, actually now, harder if

are temporary aircraft ensuring key for the the utilization issues us full and of Those all we is -- on-premises. that have

So to we any hours. aircraft the that appropriate have, amount want we fly of

the have So reducing want capacity said he mix. we doesn't decides Andrew aircraft really all there. fleet flying. flexibility plenty is as If And as about before, we of many

flexibility of delivery we'll retirement aircraft, and schedule the look way. at the at we that the share on adjusting oldest the look will it We and have

me question Well, the slightly ask may. I differently, let if

have the to airline strain Where it like to does to past, level capacity. hear of what that before applied was bar in decided but think relative had you that I'd be to higher It to economic the past? they the me, where seems in reduce an rest to you say. today If to

more on Andrew -- like mean Jamie, at the trying much said more flying just profitability constraints. It's economy, the in of physical prices constraint and with aligned constraint. being so fuel next be They trend to think factor. maximize about physical constraints The I'll not fly what try is margin. to to, It's able are in sort everyone now. constraints. we'd on capacity but at the I on physical to I else the try for current his it or worried us are right more everyone is moment, about hinted and industry this. profitable happen the if the quarter's I'd is we the about were and physical

it. Got

color gentlemen. Okay, thanks care. Take for the

next question go Please David from comes Bernstein. The from Vernon ahead.

guys. morning, Good

XQ. So a mentioned Areas bookings and Andrew, in Can strength seeing little of quarter? the by in ordinary you you're bit that's weakness talk what were the shaking might September what relative you to see you normally up? you out of about more encouraged anything in or how

through booking We're here curve the Sure. two-thirds for almost the quarter.

international would what into acceleration of which our we see. a do the think So is And the at. board, network see the we I lot have looking thing great first, across say is we're visibility I biggest on to the

Asia. Second, I'll out really point

way. the leading is Asia

rest absolutely in back close I we by more think had where for maybe equal were comes back versus way better. in we're profitable historically it back margin a that's And than bringing critical in gap Asia that XXXX. to me, or, the that fact, bringing we to domestic, had, the that it of in international even

demand. I think we is pivotal less to looking more which thing would towards switch September, we other you, everybody moment demand The I business-focused this go is where leisure-focused into tell as from

curves into and June. go August than we were month, and for better As you our are the even September of I tell they all July can

it we as better approach better yields. booked with So September, approach we

by remain the gave I see shaping were quarter is higher into a that a for up really lower bullish I right is think, where we think, fantastic we place quarter tell yield only a can to you TRASM really still little way bit and causing that lower And and a you, September the The positive. what a marketplace, but that's now division, well in where we than yields back the lot substantially really capacity simply so cargo have are Obviously, that. environment, guide I long times. leading in in of the on we And wide-body go. many XXXX really optimistic. more are, But a indicators we in reflection coming

really fantastic color, and some a quarter, this head but as opinion. momentum So hopefully, gives into we from good, great that perspective my in you TRASM

CapEx across CapEx is? it of impact Thank expectations down on kind least you Or Next, then, timing as to at into plan? to the comes sort the or taking for of are capacity All Gerry, an have the for as to right. that. the you targets United plan guys going fleet And going the keep is shifting we're when some of of

to schedule, delivery everybody the is XXX% necessarily that, of said going Having which keep CapEx. as don't bulk We're have we as No. the now. aircraft is everything confidence in knows, the

I going to some aircraft year, not following of next is some year. the as this to shift my would many take So expect to we're opinion next shift -- year, year

to big So we But you'll that. those out. because is everything of to we laid the some the now as as make need that is track. be expected going We on airline time see investments frame else in

Thank you. Alright.

comes Please next International Group. Christopher The Susquehanna from ahead. go from question Stathoulopoulos

in Scott, the outlined here year. ASM the achievable or Good how in for -- points, derivative confident that here of a realistically think guide we you plan, up your are much assuming And happens domestic ultimately of new the was slowdown? guide should And year that from is fairly I next moving sounded a with of you. you last the X Thank in And your of really points morning. assume frequency any those routes it recession. target that a and economy. what gauging

the for can if capacity me exactly. understand Boeing correct then risk next Andrew think guide didn't or primarily. year delivery tell we you can The sure I'll to I question And I'm not -- get answer question us -- the I'll is the well question. our Yes. as try. the I

attempted delivery we the capacity this XX baseline on months a to Band-Aid going we'll about we're on is to think off that call, to have get we Boeing are rip for see. think, what next so But But exposed hit. realistic And clearly and we delays. I to the

But moving CASM-ex. perhaps some the this -- that so in about. and all is is of parts it's big well part as two talked explained think is it many huge I lost and capacity things getting of there's point a in a Andrew haven't we that of

our flying. CASM which to long-haul increase jet. utilization be has are used which in shorter means that and routes the length, very haul, lower stage is less That an lowers flying airplanes also to also RASM flying flown mainland Asia, by have a thing We low lot is CASM. now And flying. It's that low other

are they're flying So mainline routes. airplanes to high differently. a used to RASM. lot happen not being They're of are high it is Asia happening be and very very not also short-haul They CASM. the just is They flying

see we're that TRASM. part stage lead the flying across the of X Part a link. how the what that is of row on is airplanes in proud You we're but change in quarters are that X or of just doing, industry, in

what's of happening that a expected to time some in it's immediately. and over as Andrew going and So, CASM, XXXX, to of And gradually a that's between period but now headwind said, on happen, a now it's tailwind here sort is RASM. longer which to switch, we to big come of big

margin I see you think results. reflected our that in

you being think expected. it -- the are of development margin in is XXXX, is kind of If lot than to amongst what XXXX see is acceleration the But the we important you strip differently is out you best, kind I a to into statistic, headline or moment the quarter-to-quarter airplanes single your that because of used if RASM if differences are and us relative what's at things past results like the not look just -- or happening. originally of most headline least in the fuels best refineries, our our

Okay. Great color. Thank you.

it Is I'm And X your on cash Gerry, recession, so what and curious you. what versus or question. currently. they are want look cancellations? then Thank every compare desk data morning how the you or -- X morning? what a at Scott In to second points or just are those you every sales,

just what know. at me need I I that look Andrew's I to can tells expression start.

you to newspapers, legacy to will noting we're how than it's going six I'm has we happen. long look on built what's sheet. that I the operationally us, environment. the debt. thing. screw of same the great Look, liquidity like, going We're happen term. in and and that on really of were that, To and glad number back but the our up looking like by are in look close set tough They you they're team And hard give not at at recessions, down priority clear, which can focused is competitors, we And a mostly but I'll to yank a end. far, at because to aviation. Gerry But an We're balance next nowhere by you're of because going That's those forth. I'm the our operation. was paying on of stay saying airline And that look is Look, focused I'm -- the metrics. is kinds we're us most that you us just glad by our metric are operating I in And for the thing going one to to happening Right it's on months. of the we answer be have now, because team. great a long better far, -- every far, what's proud up hard we running at term.

And a even got While our good an not better that higher team be did standard it's customers. just prepare for we it and think I to we've We've the done enough want great than job. others. for

doing I five times metric, is and And at and metrics how day, one the now look the up a for it how in don't look or we're setting the I so, number future six at we're our morning, operating only there.

Great. you. Thank

from Jefferies. go from comes question next Kahyaoglu Sheila Please Our ahead.

so you much. Thank guys. morning, Good

levels by to X% keep points margin XXXX X You've maintained decelerate at current to versus level. pretax well that That's XXXX implied talked off guidance the about being the TRASM with guidance. still

bit how little environment thinking color about a of in that, supply-demand provide maybe about the you're about industry XXXX? you can So

opening don't a industry looked There's at next that opinion, that's an look rest for be, going said small expect achieve normal I be, going is probably I others and Band-Aid at a a because even And off where the I'm number. is of that they give number. will capacity have highly we're just at speculative think our is We've just think there ripped just look In about we'll industry would capacity are this at the relatively are of at know, industry But again, carefully. uncertainty going likely of OA think I I going I our the the significantly saying when we in point. We've going And I comments, year. educated it numbers to as it the point GDP, again, year, see. to most they're where my would to it look rest it's But that expect we the -- know won't. what this airlines And be I number. be where guess. hit at I'll next but wait lot my not less just fully fully try. I year that the in eloquently also Scott have, said. than I sure whatever to this, and to capacity,

get we we numbers the as match to ASM think appropriate to So numbers do up described what that outlook. the GDP just the to TRASM

on have that clarify, wanted does that does follow any in, And come up on I your incremental as And impact cost just they structure? to how Cool. XXX, capacity? then just back the the to change

the final -- Well, of this I to half they're one that many is overrides because this retrofit rest not are over all a our of of the mean underutilized. air. XXX, business there's waiting the But quarters. of of us aircraft few next And issue part the XXX we've their they're that made up that year underutilize decision just back constraints remainder They're first the airline. year are The at next flying for causing of them get the The to bigger are in point is the of kind that few and a the for applying that. types. structural just maintenance to being

pointing And team, year X the Boeing full And to also to get XXXX what, However, aircraft next as as X%, on. delivers deliver of assuming that's we June utilization. off-line these will that are planes and us. we XXX% at a we're the that said, summer of towards for the focused

Thank you. Sure.

The Pfennigwerth ISI. next comes question from Evercore Please ahead. Duane from go

plan growth be to the same? next we around XXXX? a understand confidence Is deliveries. just question. it the is in CapEx for where of total for the Appreciate you could think a lack capital say plan year set mark is that I But fair the but will lower, Thanks.

yes. answer the -- So is

So part aircraft deliveries it. are of the dominant

So the of this runs non-aircraft, same I year, sort about $X.X that as would in expect billion.

non-aircraft. spend, capital seeing $X.X our know deliveries done haven't we and yet. we're billion about just But and on based sort add aircraft We we plan what what take basically of of then

And billion, so it on side? to existing, is aircraft the is what way right think the $X.X it, $X about billion the

next year. $X than billion No, about $X.X That Total billion, $X.X about is for that. it's to $X higher aircraft It's billion aircraft billion. is

other on Thank revenue, you growth to 'XX just Okay. good despite relative you. no have And change there then fees.

And comment you can just you growth? anything How what's to so revenue fees on nonrecurring that? sort other about is biggest offsetting? lack drivers the of there much change are And are of what

on I our obviously and is we're And digital app just think how things, is our that marketing the particularly luggage we of all to our fee and seats answer on have boom. give the a and been and with fees change the credit seats. all loss, simple which all the do, I And ancillary team offsetting those front. we're accelerating

of I to not But the change we going excited ancillary something In about So cargo, look about the revenues, QX, particular, incredibly we're think that's XXX%. issue there. our But it's in QX. in other talked in is, already terms And the answer revenues it. very strong. yield it's some of

you. Thank Okay.

The from a to will We Please questions go Instructions] switch moment, media. from take this [Operator from Journal. have question at we Street Sider Wall And ahead. the Alison

Hi, thanks.

FAA that. the relationship outspoken the with with pushing been is there against issues there? progress I issues any the control. and other you're traffic scenes? on strong And the seeing there Like, they've like, Or guess, is back is You've behind any been at now? fairly staffing right air deterioration how

And the challenges. So everyone economy had in way, challenges. certainly had -- by we look, like have has the

-- airline it's really By a I'd what issues is So far, run issue control biggest far, encouraging. far. But not traffic without by been, but say air staff. important. that's cannot really, by have our The And criticism. really

the hour the and in structural. to XXXX, XXXX, we most it delayed in more is country the schedule system. good runways, very mid and I to per and do much only traffic challenges, was in control the airport Newark There's handle ago. pointed it's they, it's out that, secondly, the traffic news responsive. airport a XX is they've at the which best employees and control schedule all of parallel XX the extraordinary percent we right problem. Newark where to the flights appreciate. And the let per but huge us reduce is than was FAA The that day, problems exact When lengths time sure It's in designed desk compared throughout to ripples make improvement really things. -- number, forget XXXX, two XXXX, now reduction months management July A, by the we air having just in gone operations And the led delays really is a hub staffed, far to in performance the including and it couple air was XX-something so over

from all so can This we're that That's is to we and crossed they ask us are we is our the can a and the challenge been that And working solve government, that, they've lets us of going fingers any and on it affects very, together responsive. continue. have So very with you that partner, appreciative including them only that. together solutions.

it. Got

facilities feel that had So I still have Or ongoing it some that issues those of -- mean, addressed? facing, like issue? they whatever an do is been staffing you been

say everywhere. that a is the hope we're is it where willing staffed to But probably not going on the extraordinary Everyone to at broadly happen links responsive The the I to tight can is they higher COVID or is they're is calls levels And important. not to have really some is But for do that's tight get fact them. everywhere, comfortable everyone Look, and they're job U.S. focused they're that for. when really what quite doing of think to go being we good something unique economy, place critical. fact a time. most

from News. Mary comes Bloomberg Schlangenstein question ahead. next The go Please from

if to a bit little talk issues about a shortages beyond I facing sort what pilot you supply you you continue chain day, see regional when those lot need see the any of Are you could on of at planes just in that of basic every ease might of that of shortages parts to if level. shortages day? want face any equipment types still future? every And the you need indication you the

no, Gerry. not It's really. The answer is

Our We going a times good the be of supply recognize extended. preparing where that. done for chain were teams have job to

were for sure so sort game And done everything, anything that. essential to we've operation the for the particularly of that ahead on make of we

personnel affects a about airport what like include does supplies daily your for And on And aircraft? provisioning that operation that basis?

there where Look talk there parts -- all best the more are But other parts. probably are the and certain than I'm not of challenges country know we labor about to this. person Yes.

the food, So all tell we've I think, I you don't managing, we the get fully some we've not well wouldn't cheese. cracker, every one for margin, cracker is of of that's but at affecting make another say, to that But staffed, all. pretty let's At had time, changes, been necessarily process. maybe we type airport want the the instead and through different operation everything

from ahead. go We have question Please CNBC. from Josephs a Leslie

Thanks rest stand corporate things network the big also given curious for lately. the of of And some with the softness names negotiations the just just is sector, year on kind Apple for my thinking year about pilot that curious how XXXX, questions. in ice. now the seems I'm and and taking of last like you're other into where the

how going are just characterize how and how those -- labor curious you that's relations Thanks. broadly now. So

year schedules, that -- They be the from network thinner. we the available perspective, in the have Leslie, quarter thinner next a the term to early we have and I use capacity would as fly word will fourth the obviously, reliably.

bit a be So it different. little will

we more little in are We bit appointed a still leisure focused than XXXX. were

which on see for express Unfortunately, current have we're have the the our service prior XXX%. to many are as on any communities to the We plan. schedules operation already to serve. business that's remainder jet see we of partners, smaller we also today. we thinner had I issues from I that year to don't have also from flying appropriate regional said remove until more the communities earlier, return our think in to the think based going we've causing even And to we

run is it summer. be won't our until network, different rate bit and and So run not our a next network rate network, it's of a it

we our We and to COVID. in turns in even relationships the on It the there And the question, of things weeks airline for is about only I'll deal that pilots. do my like good with during substantive are a few out our enough with close pilots I fix partnership that were there to and We important great that where negotiations the pilots, unique a feel headed. the our company, pilot with and think a have short But pilots created done people agreed our come our union of we're more answer that unions four employees point want deal the something. say we ought things. employees answer the I first and a got some the with think to we didn't -- to those

and not get get ice. to on We're trying pilots. is out to this this the back it something quickly so that's And back

I booking where XXXX? in compares leisure ask to how for that corporate and could the even And stands follow-up, curve Okay. pandemic X now travelers or if and just early the

curve booking What XXXX. to is I'd is booking the the of curve the today similar say really very They're same.

Okay.

The question ahead. next Washington from go Lori Aratani comes Post. from the Please

staffing concerns but touched transportation its I thank it's this, we issues, but Yes, your on want statistics talk saying not out. you. sort know that it's Hi, the operations. that some have and the you've you pushback wanted respond. seem about of bureau the their They're could you on I impact from to bear -- stats raised us. know the and airlines if from I to Alison FAA gotten already see to I

that. on thoughts hear to like I'd your So

is all airlines created out. read equal. at the of staffed all been and least their are When comments, airline airline I'd I've And not are equal. not first created Well, industry they've have say we airlines

XX% more have pilots. We

than I've And deal issues to heard we've don't deal I have what never them had that. Our -- with. been with think dispute has different -- others what

didn't mean of characterized normally, that air from delays, we is weather way sent I but all employees have think that our did that. of I traffic because about in were anything XX% there's it to true, talking which the it's that -- if control it delays included got of because our is to characterized we we when was XX% weather a note

kind you so what And that's of expect.

with certainly read judge delays. East actually issues, there two, an and is that but read the it, better once that started what's don't were we running like the those issues anyone. for country down that's and we wasn't I a with are of the airline outside. And to people challenged we’ve XX% because the was staffing our gave talking about who It it directive to not XXXX. it he the a I that those Coast, traffic is really And with And it some good secret way to in between on due so control big that set air in did difference we've employees, of areas way improvement And control air than think actually far, But to we incremental read disaster. the it a on up East and But Heathrow to in delays kinds so and July Secretary was apologized we're seen even keeping those about personally he's of intended. news what staffing. Coast, not happening traffic the up that the

partnership the talk together. ability So and open, honest incredibly responsive conversation and the move and appreciate honestly and glad forward openly and we to the had

Do of next continuing said that do very Good. been issue though, responsive, the know this I you've into -- they've and year the rest you for see see you that or year?

theoretically I economy, I that these do And -- that It's capacity I it's that in if of sick, chunk there's tight. grow mean, that look, of aviation not touches a are strained. it's to that's -- system whole I weather calls is catches in mean, up. everything whole everything the work, sick. can the mean tight good mean, part scheduled, there call whole down staffing day, big people Well, reason waiting in touch almost the nobody is that think system FAA. and the pulling I is the to our we're unique and until weather the you're while everything a certainly, everywhere. and

the And our system that. more And -- sometimes, And create power to for deal customers. the have XX pulled that's the breaks like stuff to and and JetBridge with minutes core, that's resiliency we just its happens. out down doesn't more the schedule for at goes any buffer, buffer why

I for now remarks. Munoz turn over Thank the you. closing And to to would like Kristina call

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

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

You disconnect. may now