Q1 2022 United Airlines Holdings Inc Earnings Call

April 21, 2022

Good morning, and welcome to United Airlines Holdings' Earnings Conference call for the first quarter 2022.

Brandon and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions at that time. If you have a question. Please tell zero on your Touchtone phone. Please though it is zero one Thats star one to ask a question.

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I will now turn the presentation over to your host for today's call and believes the Neatest manager of Investor Relations. You May go ahead.

Thanks, Brandon Good morning, everyone and welcome to United's first quarter 2020 earnings conference call.

Yesterday, we issued our earnings release, which is available on our web site at IR Dot United Dot Com.

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

All forward looking statements are based upon information currently available to the company.

A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release Form 10-K , and 10-Q and other reports filed with the SEC.

Airlines Holdings, and United Airlines for a more thorough description of these factors.

Also during the course of our call we will discuss several non-GAAP financial measures for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Please refer to the tables at the end of our earnings release.

Joining us on the call today to discuss our results and outlook are Chief Executive Officer, Scott Kirby President Brett Hart Executive Vice.

<unk>, President and Chief Commercial Officer, Andrew Nocella, and Executive Vice President and Chief Financial Officer, Gary <unk> and.

In addition, we have other members of the executive team on the line available to assess the Q&A.

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

Thank you Emily and thank you all for joining us today I want to start this morning by saying a huge thank you to the United team. Our mission is 90 people and connecting the world and the foundation of United success will always be the strength of our people in the first quarter of this year. Our team members continue to go above and beyond to take care of our customers and each other and what was it really.

<unk> industry operating environment, the United team is stronger than ever our customers are seeing.

Along with the entire leadership team are grateful to them.

<unk> strategy is firmly on track and we're well on our way to our goal to build the biggest best and most profitable major airline in the history of the industry.

Even during the early days of the pandemic, we were determined to do much more than just survive. The pandemic you can get back to normal. We've spent the last two years getting ready airlines ready for this moment. We finally reached the inflection point as we transition from pandemic to endemic and demand is stronger than I've ever seen in my career and Thats even before.

For business travel fully recovers. So it continues to accelerate at a rapid pace and before international, especially Asia fully recovers, we expect that will lead to the best <unk> and highest quarterly revenue in our history in <unk> and despite the higher fuel prices, we're forecasting approximately a 10% operating margin this quarter.

The rapid acceleration, we're seeing in business and long haul as they moved to catch up still strong domestic leisure demand gives us great confidence in the future outlook, but there are three reasons. We believe investors should think that the hard work and strategic thinking that where our focus during the pandemic.

<unk> best position going forward, the first the United brand and customer preference.

<unk>, we've talked about our desire to de Commoditize Air travel and we've told you how strong our NPS scores are.

I look back at history, what we're really doing is trying to replicate what continental successfully accomplished back in the nineties and Delta did about 15 years ago.

Those two airlines shifted to a strong customer focus and customers began to choose them because of their improved customer interactions and brands that result was rapid improvement in relative trasimene, which led to rapid improvement in cash flow and earnings which led to significant stock price outperformance.

Anyone paying attention there had been hit at the same thing was happening.

The pandemic as we led major carriers <unk> seven out of the last eight quarters, but that really was the warm up I recognize we still have a lot to prove and we must keep executing but our <unk> outlook for <unk> is another strong indicator that customers are now choosing united much like they begin choosing continental and Delta $30.

15 years ago second.

Second CASM ex.

A lot of industry pressures on capacity and CASM X, but I am confident that United is set up to outperform by a wide margin. We do have timing issues with triple Sevens Boeing delivery delays and all the industry infrastructure required to bring capacity back reliably and doing so reliably is our top focus but.

<unk>, our gauge is going to grow approximately 30% by 2026 and that more than anything is going to drive the significant CASM ex outperformance. We expect at the same time, improving proving the product for our customers three United is uniquely positioned to benefit from fading COVID-19 headwinds as Andy.

Drew will detail business travel is rapidly return, but it's still not fully recovered and we expect United will benefit more than any other airline is that recovery continues in international, especially Asia is far from fully recovered United is just more exposed to those sectors that we expect to have the most acceleration in the coming quarters.

If youre going to invest in airlines I think any of those three reasons should move United to the top of your pecking order, but I'll give you one more I think underappreciated. The reason for why you should invest in airlines in the first place.

At United We've talked in the past about the vastly improved supply demand mix in the long haul international markets, but we've been worried about the domestic market for reasons I will describe and I think the domestic market is also going to be robust I think every single person listening to this call that has a spreadsheet with a forecast of industry capacity in the years to come.

Wrong, and probably wrong by a lot.

Pilot shortage for the industry is real and most airlines are simply not going to be able to realize their capacity plans because there simply aren't enough pilot at least not for the next five plus years.

Given the work that we've done in our brand and customer experience.

Of course, having any problems hiring pilots, we're always top tier for pilot pay a ton of growth opportunities for pilots coming soon and we have by far the largest number of higher wide higher paying widebody flights and positions, but thats not all United increasingly is where employees, including airline pilots want.

To build a career they see the lucrative financial opportunities that I just mentioned, but they also recognize that United is an airline where they can be proud to work for running a consistently top tier operation to exciting new investments in our customers experienced a supersonic aircraft orders.

A force for good in the communities. We serve we're building an airline that leads and that is where the best in the industry want to build a long term career. In fact, we now see a lot of pilots from other airlines applying to be pilots at United and that new behavior.

While we are in a good position for the smaller and mid tier airlines there just arent enough pilots to staff their growth aspirations. The other really large airlines will also probably be able to attract enough pilots, but for anyone else I. Just don't think it's mathematically possible to meet the pilot demand for the capacity plans that are out there you can already see the issues that are occurring more.

Multiple smaller and mid tier airlines over pilot shortages and looking forward when United alone is ramping up higher about 200 pods per month that situation is only going to get worse. This is not a temporary issue because of that and I think the domestic <unk> environment is going to be much stronger in the years to come than we previously thought.

Because supply is going to be constrained by lack of pilots.

You put all that together and we feel very bullish for the last two years have obviously thought at that macro events can quickly change our outlook, but our <unk> base expectation has is just 350 basis points shy of.

Of our 2019 adjusted operating margin and we expect that our plans to bring the triple Sevens back continually to grid to continue to gradually add back capacity and grow gauge are going to drive CASM ex down significantly from there still COVID-19 elevated level. We're also confident that the robust business travel recovery still has a lot of room to.

And we anticipate improvement in long haul Asia that is not yet reflected in our revenue results that means we're more confident than ever that we will meet or exceed our approximately 9% adjusted pre tax margin target for next year, and particularly with our view of the supply dynamics in both domestic and international getting to at least our 14%.

Target for 2026 seems pretty straightforward.

I've been in this industry for a long time now and seen some ups in lots of Big Downs looking.

Looking back there seems to be about once in a decade opportunity for the cinema.

So bearish and the actual future outlook is.

Different from that sentiment that there is a significant outperformance for airline stocks for a few years I think supply constraints pilots being the biggest one means that this is that time again and when thats happened in the past the whole industry tend to do well, but usually one or two airlines do much better than the rest of the pack are already listed the reasons above and I suppose I'm not.

Entirely objective, but it sure seems like United as Bert do you want to make in that environment before I turn it over to Brett I want to congratulate our CFO Jerry Ladderman on becoming a first time grandfather I'm sure you'll hear the excitement in his voice later today, well, maybe not but I promised you Jerry is really excited and congratulations Keith baby.

Grants them Brett.

<unk>.

Thanks Scott.

Last month, we were honored to be included in times 100, most influential companies for 2022, our placement on Tom's lift last quarter coincide with the announcement of Scott's appointment to the Homeland Security Advisory Council and the White house's announcement of my appointment to President Vitamins Board of advisors on historically black colleges and.

Sure.

United continues to be firmly committed to being a leader in corporate America and investing in the future of our company for both customers and employees, we're proud to be recognized for the hard work the entire United family.

The last year.

Becoming the best airline not only being an industry leader on safety and innovation, but also reliably getting our customers where they want to go on time and with their bags.

Throughout the pandemic and during the recent recovery in commercial aviation system has been stressed by supply chain constraints and staffing shortfalls at the FAA.

Hey, <unk>.

And airport vendors among other factors all of which tests the stability of every airlines operation.

Some airlines built larger schedules that tested the limits what they could operate leaving their customers and their reputation to pay the price United chose a different path.

Anticipated many of these challenges even taking steps on our own to mitigate them. Importantly, we also made a conscious decision to prioritize our operational reliability.

Meaning the size of our scheduled that.

That decision may have cost us some profits in the near term, but it's the right long term decision for our customers our company and the bottom line.

We will continue to use that approach as we plan to add capacity in the months ahead.

In recent weeks, the people of United and our customers have come together to assist the people of Ukraine.

United has donated $100000 in more than 2 million frequent flyer miles to help transport relief workers and supplies to those on the frontline of the crisis.

As early as March we announced fund raising efforts to support our humanitarian relief partners and our customers stepped up being as they so often do.

They don't need a $12 6 million frequent flyer miles and nearly a half million dollars to provide healthcare shelter food and other lifesaving services to refugees. We appreciate our customers' generosity and are proud I'm proud to team with them to support the victims of the conflict in Ukraine.

We continue to make progress towards our hiring needs as we look towards United next this January we celebrated opening our Aviate Academy in Arizona and welcome. The next generation of pilot to the United family.

Flight training school is the first of its kind and we believe it will help to maintain a pipeline of qualified pilot candidates for United as our industry looks to combat. The pilot shortage, we are particularly proud of providing the opportunity for aspiring pilots from diverse backgrounds study and training at the Aviate Academy.

Over the next eight years, we plan to train 5000 pilots at 88 with the goal of at least have been women where people of color.

We are also continuing our path as an industry leader in sustainability.

<unk> remains the only airline that is committed to becoming 100% green by reducing 100% of our greenhouse gas emissions by 2050 without relying on traditional carbon offsets and in 2021, we established a strong mid term goal of reducing our carbon intensity, 50% compared to 2019 by the year two.

<unk> thousand 35.

Our dedication to creating a greener tomorrow real change is stronger than ever we are investing in solutions that have the potential to actually reduce and ultimately removed.

Emissions from flying in March we announced the collaboration with biotech and pizza.

To commercialize the production of sustainable aviation fuel.

While we are proud to have invested in more sustainable aviation production than any other airline in the world. We're also focused on making solutions like these scalable for the future.

We also continue to engage with cross industry partners and policymakers to support the case for urgent climate action.

Through these and other actions, we are committed to making a real difference in climate change.

A key part of our sustainability progress will be enabled by technology.

And we're also focused on using technology to enhance the travel experience currently nearly three quarters of our customers use our app on the day of travel.

<unk> tool that helps our customers manage their travel instead of having to call to contact center or speak with an agent.

While this helps our employees to be more efficient we know from our survey data that customers, who use our mobile app are more satisfied with their experience with United.

This is why we continue to invest in new features like enhanced flight search options better visibility into flight credits contactless payment through the United wallet, and a new bag drop shortcut, allowing you to zip through the airport lobby faster when you check in bag in the App before arriving at the airport.

As we adapt to COVID-19, becoming endemic.

We need our customer and employee experience to reflect this new phase we.

We are pleased to see into our mask requirements are now gone from 99% of the country as well as onboard domestic flight.

International flight, depending on arrival countries mass requirements and at U S airports.

We strongly believe the administration should eliminate the pre departure testing requirements for transportation as well.

Travel demand is surging, we believe eliminating these requirements will ease the travel experience for our customers.

In closing I.

I would like to express appreciation to our entire United team critical throughout this inflection point.

While we've always remained committed.

Two our United next strategy. The recent momentum in demand environment gives us even more competency United path forward.

I'll now hand it over.

Drew to discuss this in more detail.

Thanks, Brett.

I normally start each earnings call with an update on the previous quarter's revenue performance. However, today it seems more appropriate to start off with our Q2 outlook.

Clearly passed a major inflection point with demand and yields and have a confident view of the future.

<unk> is expected to be up 17% versus Q2 of <unk> 19.

Change increase from our Q1 <unk> of down 3%.

We're confident United is currently set up to achieve record try them and revenue results in the second quarter.

The revenue inflection point started in March with PRASM up 9% versus 2019.

Revenue momentum is coming coming from just about every category, including higher yield ancillary fee sales strong premium leisure demand mileage plus rebound in business demand and a record setting season across the Atlantic. This summer even parts of Asia are rebounded.

We often have talked about United high exposure to business traffic and the resulting headwind the pandemic caused.

United produced industry, leading tragic results during most of the pandemic, even when faced with this substantial headwind.

Now with business traffic rapidly recovering I expecting 90 to have a tailwind versus more leisure focused carriers.

I think we can see in our Q2 guidance.

Business revenue for the last few weeks has been down about 30% with the last week now down only 20% versus the same period in 2019.

Largest corporations are now returning to travel at a faster rate than small this is really important to United Q2 outlook.

As of last week business yields are now close to up 10% ahead of 2019.

Given these revenue trends.

<unk> contribution is expected to be approximately 100% of 2019 levels soon.

After all the debates about the return of business traffic, it's nice to see this important milestone insight even with many businesses not fully back in the office.

Demand for business leisure and cargo traffic continues to be strong even as we pass on 100% of the fuel price increase versus 19 <unk>.

United's bookings for Q2 are strong and we believe we still have sufficient room to sell peak period travel at robust yield.

Yield momentum is generally very strong across most of our regions across the Atlantic we expect to grow by 25%. This summer becoming the largest airline in that region for the first time.

We also see momentum in Australia, and many other countries that have opened their borders and expect further gains when the inbound U S statutory requirements are relaxed and.

In Q2, we expect the operating Pacific capacity down about 65% versus 19, and Latin American capacity up 9% versus 19.

Cargo continues to produce strong results with revenues up 26% in Q1 of 2022 versus 2021 and 119% versus 2019.

Ocean shipping and supply chain disruptions continue to boost our revenue outlook for cargo.

During the pandemic, we found many traditional United structural advantages, including our business centric coastal held and long haul network to be temporary disadvantages.

The United Network during the pandemic, even with all the changes we implemented was simply less focused on domestic market small communities, Florida, and near Latin America, which all performed better during the pandemic and our Pratt Whitney Triple Sevens were grounded, which meant we couldnt take full advantage of strength to and from Hawaii.

Imagine now United revenue potential in the context of our Q2 guide one areas, which had been structural advantages, including business traffic coastal gateways and global long haul fully bounce back combined with a new modern and fuel efficient fleet.

I imagine the United were 50, <unk> single class, yet only fly to small communities and don't compete against competitors operate mainline jets at a fraction of the unit costs.

In a world, where United offers premium seats everywhere, our competitors do with in the past, we often had none.

Do you have a hard time imagine in these things and the impact on our revenues I just want to point you to our Q2 revenue guide.

Global long offline is an area, where we have a structural advantage opening of the borders is transformational for US we are confident that retain and all of our wide body Jets joined the pandemic was the right call as we think about growth potential for the long haul we remain bullish on all of the long haul opportunities.

I've often talked about the challenges we expect on the domestic front in the coming years with supply growing faster than demand. However, we increasingly doubt the ability of the industry to execute on previously planned growth levels. There is no single fix to issues constraining capacity and as a result, there is no quick fix at a macro.

We expect less supply in the coming years. However, we still expect industry capacity growth to be more elevated in Florida.

Smaller communities, where United had less exposure.

With this updated domestic outlook, our view of the revenue performance and profitability of domestic flying has improved we.

We have confidence in our ability to execute our United next plan with known constraints the largest of course being a pilot shortage.

The pandemic delayed many of our commercial initiatives, including the full rollout full roll out of premium plus employers cabins on the long haul fleet, but today, we are nearing the end of these projects. So that we have a consistent and leading products.

We continue to offer basic economy, with even more flexibility to our customers seeking the best possible price.

Our investments in planes clubs and gates will be transformational will provide our customers with choices others don't offer across multiple product types and desired service levels, along with the very best Global network and the very best partners of any U S carrier.

I wanted to thank the entire United team for their dedication over the last two years, we're set up well for the future and that future begins today.

With that I will hand, it off to Jerry.

Thanks, Andrew and good morning, everyone.

For the first quarter of 2022, we reported a pre tax loss and an adjusted pre tax loss of around one $8 billion.

Our CASM X ended the quarter in line with the guidance, we provided last month at up 18% versus first quarter 2019.

Looking ahead, even with the elevated fuel prices, which we expect to persist for a while right now we're seeing our revenue more than cover the increased fuel costs and as a result, we expect to achieve meaningful pre tax income in the second quarter.

Furthermore, based on our current revenue expectations. We also expect to produce a pretax profit for the full year 2022.

We currently expect our CASM ex to be up around 16% from the second quarter on capacity down around 13%.

Both versus the second quarter of 2019.

We also expect that our unit costs will continue to sequentially improve over the remaining quarters of 2022.

As the 52 grounded triple seven aircraft returned to normal service, we start to take delivery of additional large narrow body aircraft and aircraft utilization increases.

We believe these capacity levers will drive a step function change in CASM X through 2022.

As the relationship between our capacity growth in CASM X improvement continues to meet our expectations.

Our team has done a tremendous job managing all the costs under our control and we expect that focus to continue.

However, the impact of continuing elevated inflation and the exact timing of the triple seven return to service generally makes precise forecasting difficult.

Nonetheless, we are confident that our CASM ex exit rate for the year will set us up well for 2023 and beyond.

Turning to fleet as you know new aircraft deliveries constitute the vast majority of our capital expenditures.

We are reducing our adjusted Capex expectations for the year by approximately $600 million.

The $5 3 billion.

As a result of supply chain and manufacturing challenges pushing some of our expected 787 and 737 Max deliveries from this year to next year.

While it is difficult to say with precision how many aircraft makes five right. Now we are assuming two of eight 787 and 753 737, Max is will slip to 2023.

Those aircraft were joined the 737, Max Eights nines and tens as well as Airbus <unk> hundred 21, <unk>, we expect to take delivery of next year.

Bringing to our fleet. The aircraft we have on order is critical to the success of United next and to our ability to continue to bring meaningful improvements in both CASM ex and fuel efficiency.

Turning to balance sheet and cash we ended the quarter with $20 billion in available liquidity.

Treasurer of Pam Henry and I regularly discussed our optimal level of cash now keep in mind, we've both been around the industry for a long time. So it is difficult to think in terms of too much cash. However, it is fair to say that as the recovery continues you will see us reduce our cash as we begin the <unk>.

<unk> journey.

In fact, we started this journey in that first quarter as we elected to prepay an unsecured maturity previously scheduled for repayment later this year in addition to making our normally scheduled principal payments.

This resulted in our total debt declining by over $700 million during the quarter.

Furthermore, in the first quarter, United produced $1 $5 billion of cash flow from operations, driven largely by an over $2 billion increase in our advanced ticket liability.

We're pleased that our operating cash generation is approaching 2019 levels as in additional indications of the recoveries progress.

I want to close by reiterating our confidence in our 2023 and 2026 earnings targets, we remain committed to achieving an adjusted pre tax margin of approximately 9% next year and continue to have confidence in our 2026 target of about 14%.

Presenting profitability well above 2019 levels.

As we move into the second quarter I want to thank my finance team for their dedication to remaining nimble and focused on our long term goals are.

Our profitability outlook for both the second quarter and full year is a welcome milestone for.

For all of US as we redouble our focus on United's path ahead.

Looking even further ahead since Scott mentioned my newborn grandson, Ezra I can tell you that I am now more focused than ever to ensure that when <unk> grows up he will recognize United the airline people want to fly and where employees are proud to work and perhaps most importantly for his generation the.

Airlines that has met all of its commitments to the environment and with that I'll pass it to Emily to start the Q&A.

Thanks, Terry we will now take questions from the analyst Q&A.

Please limit yourself to one question and if needed one follow up question Brandon. Please describe the procedure to ask a question.

Yeah.

Okay.

Zero Touchtone phone once again it is zero one star one if you'd like to be removed from the queue. Please tell the pump side of the hash key.

Speakers. Please make sure your mute function is switched off.

And what about your signal to repair equipment. Once again, if you'd like to ask a question. Please tell a zero one on your Touchtone phone.

Please hold for a moment, while we similar Q.

And from Raymond James We have Savi site. Please go ahead.

Hey, good morning.

I guess given the pilot commentary on the call I was kind of curious what role you see our regional partners claim and what that means to your kind of hub and spoke strategy.

Hi, Savi, it's Andrew.

When we developed the United next plan, a while ago, we assumed that there would be a much smaller contribution at regional flying in the plan.

And we're marching down that road it is more accelerated than we planned but it is.

Kind of where we thought this was going a while ago. So I think we're fine with that and I think we are.

<unk> and the network is probably the best term to make sure that we can generate the appropriate level of revenues with this new service New service level in these smaller communities and I think our outlook for Q2 says, we're actually doing that really well and so.

So our reliance on regional jets is going to be dramatically lower in the future that being said, we still plan to operate close to 300 of these aircrafts.

Most of them being large regional jets in the future along with our <unk>.

And so we have a spot at United find smaller communities.

Because that is the right aircraft.

A lot less than what it used to date.

Thanks, Jonathan.

Turning now to Andrew just to follow up on.

But could you.

Got it really helpful kind of revenue color, but I was just curious on that the peak versus off peak performance because that was a trend that you saw really strong peaks and maybe offtake is not as strong and how youre thinking about as we exit the peak summer travel period.

I think we're going to see.

I think one of the most important thing as I said earlier with the.

RASM from business travel as actually approach and will be 100% in 2019, So we now view business traffic.

Almost fully return, particularly given the level of capacity that we're often in the marketplace as we exit the summer we will rely on more on business traffic.

We have a high degree of confidence that that's just going to be perfectly fine and we're going to continue to accelerate as we go through the fourth quarter with October being an incredibly strong business months, given where we see business trends today. So we're very bullish on business and again, it's nice to see after all of the debates about how much would come back and when it would come back.

<unk> that we are approaching 100% from a revenue recovery and we have a long way to go because the offices have not fully returned yet everybody is still not in their office.

We think there's actually more upside there than maybe a lot of people thought just a few months ago.

Thank you.

Please go ahead.

Hey, everyone.

For the time.

I realize that earnings and margins matter most but.

A lot's changed since the Nymex plan and puts and takes are kind of evolving.

When you look at the United next plan.

Or are you willing to be the most flexible with like it just seems that the CASM ex target.

Is this two correlated to deliveries.

Most of it.

Again I realize that.

And as a matter of the most and all that stuff, but just how do you plan on navigating the timing issues some of that stuff.

I'll start and then let Jeremy add.

Youre, absolutely right that margins matter the most.

Things have changed a little bit.

But the basic vision the basic strategy remains intact.

And.

Inflation is higher than we thought we built high inflation in over a year ago.

And we thought we were being conservative, but I think everyone has been <unk>.

<unk> by how high inflation has been in place it is higher than we thought we could even got flipped. This year, we got a full point of CASM ex headwind from revenue related expenses, which is a good reason to have higher CASM.

So we do have higher inflation pressures.

So have separately timing issues. This is principally around the triple seven to a lesser degree Bowie deliveries, but the triple seven is our biggest lowest CASM airplane.

And that is going to be a step function change once we get the full fleet back up and flying we just don't know for sure what it's going to happen, it's taken longer than we had hoped.

Timing issues, but.

The absolute level will be higher just because of inflation I think.

But the important point is the real structural drivers that are important there for margin.

Or how we are going to be growing gauge and width gauge and growth mean and so.

<unk>.

Inflation raises the bar tied for everyone.

And we already see happening right now that tends to impact low cost carriers more than it impacts us.

It means that we more than recover.

100% of inflationary cost increases and so the most important thing is what sort of happens I think to the relative CASM and there's nothing that's changed about that because it's mostly about gate.

Or that is just gauge growth and thats just the math.

We are the last to big airline to do it.

And that's just math.

Of what's coming but I also think what's encouraging you've mentioned margin. The fact that were 350 basis points already.

From 2019 margins.

With whatever you think the CASM ex number is going to ultimately get to our high inflation is it's going to be meaningfully better I think the 16% we have in this quarter.

And that's going to go straight to the margin and the revenue environment look I think we're in the first day and it's really kind of the coming out party for the real return of business travel and international travel in this quarter were in the first inning of that recovery.

Gotta be upside on revenue as well.

Why.

Barring something bad happening in the World 'twenty, two 'twenty three getting to 2019 margin levels seems.

Pretty easy.

Terry.

Just to give you a little bit more comfort.

So in a world where what we're seeing continues for a while this sort of high single digit inflation.

That really only translates to a couple of percent on CASM ex.

And as Scott said revenues more than making up for that so youre not going to see dramatically different numbers.

On CASM ex.

But.

Everything we're seeing makes us very comfortable that those margin targets are going to be achieved.

Okay great.

And then I think next year, there's things to give us a misconception with your deliveries next year on the Max is out there like all Max 10, aircrafts and I don't think Thats. The case, but you guys haven't quantified how many deliveries you are expecting from from the Max 10.

<unk>.

Can you provide a number for that for 2023.

And then if there is a delay what's the optionality that you have.

To kind of backfill some of that capacity arent deliveries.

Next year, specifically thank you.

Yes, so we can't be specific because we don't know exactly.

When the Max first Max 10 delivery will be and that then dictates how many but we never had a plan to take.

All of next year's deliveries as Max 10 in fact, it was less than half.

The deliveries.

For next year.

And so we'll wait and see.

I am confident we'll get the Max 10, but you should talk to Boeing about the exact timing of when that first Max 10 will be delivered in the <unk>.

In terms of flexibility.

They are producing.

Plenty of Max eight to nine for us and so they can always be a little bit of a shift in timing of when <unk> or <unk> delivered versus 10.

But we're comfortable we're going to take eight to 910 next year.

Great. Thank you.

Yes.

Operator.

We have Duane <unk> words. Please go ahead.

Hey, thanks.

On the issue of constraints.

Pretty United in the industry.

Can you talk about.

Constraints for United This year, we've had some discussion in the past about.

Aircraft delivery rate, but in terms of your specific.

A reduction in growth how much of that is <unk>.

<unk> related versus aircraft delivery rate or the timing, which you referred to on the Triple Sevens.

And could you expand on why you think the industry is going to be short pilots for.

More and more than a little bit of time more certainly more than 2022.

Okay, I'll start and Andrew can add.

The biggest issue that we have.

First on capacity is.

We don't have a labor shortage, we've hired 6000 people. This year, we're hiring 200 pods a month, that's not an issue for us the biggest issue is triple Sevens.

Thats.

10% of our capacity.

And they're grounded the other issue is just.

Realizing that.

The whole infrastructure is not set up to snap back to these rapid growth rates I mean, it's not just us it's the FAA TSA fuel vendors.

There is all kind of even if we have enough that people, which we do.

All of those constraints getting the way of a reliable schedule and we're just not willing we made so much progress with customers.

The pandemic and really built in the United brand I think that's going to be the most enduring change that we're not willing to sacrifice that customer.

Goodwill.

Or the possibility of short term promise profit and so.

And month to date, we're number one in on time performance number one in completion factor so its paying off for our customers.

The pilot shortage I'll just give you some numbers. So we did a deep dive on pilots because we were trying to all of our regionals weren't be able to hire problems.

We've got 150 airplanes grounded right now.

They're never going to come back I assume.

And so we did a really deep dive on it turns out that the industry over historically produces between five and 7000 pilots here, mostly closer to five but can produce up to 7000 pile.

Pilots per year, Hello, lowered earn COVID-19 . This year the industry's intent is to hire 13000 pilots and given the growth aspirations of other airlines, it's even more next year.

But there are only 5% to seven available that was an epiphany for us.

And by the way it probably can't be fixed you could set up flight schools to get people to 25 hours and get their first license pretty easily but they've got to get from 25 hours to 500 hours and that just doesn't exist today.

At $5 to 7000.

Over a few years at 7000 could probably go up I don't think it's getting to 13000.

Anytime in the next five or six years. When you look at that 5000, if its a 5000 United Airlines is literally going to hire.

Half of them are coming to United Airlines. So this is.

I think an underappreciated.

Factor in.

It's just not quick fix.

That's great detail Scott appreciate that.

And I guess along those lines.

Is this idea of going to influence your capacity as well so given the epiphany.

Pilot math.

And you're in a couple of others willing to really kind of protect the operation does that influence more than 2022 is that a 2023 influence as well and beyond.

Not yet.

We're focused on getting to where we can hire 200 pilot.

And successfully get them all through the training all the upgrades happening.

I have watched this is pretty in the weeds, but if you read some of the blogs and.

What some of the other pilots and Youre, saying see a lot of struggle is not easy to upgrade to build to go from steady state kind of hiring to a step function increase and it's not just growth theres. So many retirements that happened going through COVID-19 that everyone sort of has a step function increase.

And it's amazing to read some of the stuff about the constraints that are happening at other airlines, we've gotten ahead of it.

Some bumps by the way we had some things where we were behind that had some bumps, but our team has gotten ahead of it and feel really good that we're going to hit the if we can get the 200 pilots a month.

But we've also learned a lot about having to metered and I'd like to take the triple seven.

We're going to go overnight from.

50, 442 airplanes that are 46 44 airplanes that are flying to 96, so we are going to more than double the fleet.

Earlier, we thought we would ramp that in really quickly realize that is going to take time. This is part of the CASM timing issue will probably even if we get them done into this month.

I'll, probably be nine months before we get all of them flying it's just going to take longer because systems are just not set up to do it and that's okay. Because it's just a timing issue.

<unk>.

But we feel really good about our ability to hire.

Want to make sure we're executing solidly before we decide to go any faster.

But.

I think it is a strategic advantage.

For United in particular, where the best place if Youre a pilot we are the best place to go if there is some other good ones and there are some that arent good.

I think it is a strategic advantage because it will be a shortage. It is a shortage.

I appreciate the thoughts.

Yes.

Yeah.

Okay.

Please go ahead.

Yeah.

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

Oh.

Good morning, everybody was kind of hoping for a bullish call.

Yeah.

So.

The best lines Jamie.

First I never want to get though is that all you got.

Alright, well don't earn it alright.

Mono syllabic claim to fame I suppose.

For Andrew recognizing that agent RASM was historically.

Lower than system is there a way to identify how much of that 17% RASM guide in the second quarter benefits from Asia still being shut down for the most part.

Good question I don't have that number off the top I had what I can tell you. There are parts of Asia that are rebound in pretty rapidly.

Australia, and Asia, and Korea is obviously in Asia, but Japan, and China have niamh.

What I will tell you is that our cargo strength in that direction is incredibly strong so from a travel point of view relative to 2019.

Compared to other regions of the world.

It is behind the other regions of the world, maybe less than you would otherwise think.

Okay.

That's helpful and then Scott.

Got to admit you piqued my interest when you made a quick reference to the Continental Renaissance.

I personally remember that both of the junior analysts to continental passenger.

And even for a period of time of Continental employees. So it definitely has struck a chord with me not sure Jerry would want to weigh in as well given he was there at the time that you referenced but can you expand on that bit of history and why it's even relevant for ual on your shareholders right now.

Yes.

A funny story to embarrass, both Terry and Andrew.

At the end of it but what happened 10 look delta deserves credit they did the same thing.

10 years ago, or 15 years ago as.

As they built brands around.

Customers choosing them that changed how people felt they still until the employees felt they changed how the customers felt.

And people customers started to choose to fly those aircraft, but the proof is that air travel does not have to be a commodity.

And everyone says it but very few people do it.

And I think those are two examples that we're done I think we've been doing it during the pandemic, we got a lot to prove.

Acknowledge we've got a long way to go we're not there.

But we've told you the NPS numbers like <unk>.

Anecdotes galore from customers from people on Capitol Hill.

From other Ceos and other industries.

About how different it feels to fly.

Our people are proud.

What we have done they are proud of what we stand for they are proud of Jerry mentioned sustainability for Ezra they're proud of that they are proud of the work we're doing for diversity into the Aviate Academy.

It feels like we're leading again.

And that flows through to an energy of taking care of customers and focusing on customers like look if you go on an airplane and ask employed as pilot as slight and its S. Data just how they feel about the airlines don't tell them, what you're going to get a different answer.

A bunch of airlines and Thats what happened at those other two airlines.

That's the key to where people business and Thats the key.

Greatness is to actually have a brand that customers. We've always had the best hubs.

At United Airlines, and that's been a frustrating thing for employees for investors like you look at the hubs at United and we never realized our potential realizing our potential was about one fixing the gauge which also fixes the product, but also building a brand or United Airlines.

And Thats what were doing now you can already see it I mean, the fact that probably will be number one this quarter again that'll be eight or nine quarters. Despite the fact that all of the last nine quarters I am including the second quarter. We have still the biggest headwinds business travel is not is recovered as domestic leisure and international but we still have the biggest headwind and yet we're number one like <unk>.

Wait until those two things are back.

And the embarrassing story I'll say I said this on one of our calls one of our 18 calls and Jerry like disappeared from the screen.

You've got to grab it.

It comes back and he has a T shirt from the days of Continental I don't remember, what I said on the front and on the back half the stock price.

Yes, it would be 500, and Andrew is like Oh, I've got that T shirts, somewhere too, but I can't find it.

Anyway, that's what is happening at United Derek <unk> add anything.

Jamie two things one this will be a great conversation you and I to continue next week when indeed.

At the wings club lunch.

I invite people to attend that.

The other thing is I.

I was there then youre right and I saw what was happening and this isn't just a this has been going on now for several years here. The same exact kind of focus everywhere in the business.

One example.

The aircraft not just.

Incredible new matches were taking with.

The most customer pleasing interiors in the industry, but the fact that we're retrofitting all of the older aircrafts.

Okay.

It's for our customers, but it's also for our crews it's a place they're proud to work.

It shows.

So.

Just a lot of similarities Im sure. The same thing happened with Delta 15 years ago I wasn't with their advantage both from the outside but.

But yes it is.

Very similar.

Alright, well thanks, everybody.

I'll add another point, which is this is going to be a record quarter for United but we didn't talk about was Q2 of <unk> 19 was a record quarter for United and I think that's really relevant.

Mentum is incredible and it's incredible off of the unbelievably great quarter in our history and one of the best ones ever so.

Well listen I appreciate you, bringing the topic.

Quite honestly something that I hadn't really.

Thought of yet so definitely gives me something too.

Thank you very much I appreciate it.

And you should all fly United and experiences.

Losses.

That doesn't imply.

I leave the wings club and I pack my bag Im leaving the next day. So I'll give you a report take care.

Yes.

Branded next question please.

Okay.

Brandon we have the next question please.

Yeah, Michael Lindenberg. Please go ahead.

Yeah, Hey, good morning, everyone.

Good good results good outlook Gary congratulations.

Get my my single question here and it has to just do with jet fuel phases, and the New York market.

I'm curious I mean I.

Realize that the colonial pipeline I think I guess it terminates about a mile South America.

We've heard that the.

Flows have been light lately.

Where are you addressing.

The fuel issue in the New York market and maybe you are getting fuel again.

From from the colonial or maybe your tank ring in.

What are you doing to address it and.

Maybe give us a sense like what percent of your and today, maybe is near Carver accretion.

I appreciate it thanks.

During my first let me point out that the dislocation in that market has moderated.

A different thing.

Crack spread two weeks ago.

As measured in dollars now can be measured at least.

It is.

Still elevated if you compare new York to Gulf Coast, Let's say.

And so we.

Yes, we do have a number of options.

One is.

The pipeline.

<unk> also can resort.

As needed to tank Green.

And so we're comfortable with our with our exposure.

And with the problem sort of going away.

That is helpful.

Great and then.

Quick one here just Andrew when we look at cargo revenue over $600 million I mean, it's been fantastic to run over the past couple of years.

No not really that's not not just the growth rate not being sustainable, but maybe the absolute level because I do believe you are still flying on airplanes.

Cargo only does that does that level off can we do we see that sort of Max out at some level as you move the airplanes back into passenger service just your thoughts on that thank you.

Yes, I think there is a little bit less room in the bellies when theres a lot of luggage onboard. So there is an offset in some of the airplanes to go to places that don't have strong cargo demand, but have strong passenger demand.

That's offset by the fact that there's 52 triple Sevens, which are gigantic cargo machine that are not clients. So those 52 aircrafts are going to add Scott said over the next nine months reenter service, providing a lot more overall belly capacity.

So that's my view on that should we expect yields which are <unk>.

Record highs for cargo to start to moderate a bit absolutely and we have that in our outlook and still feel really good about where we're going.

The belly capacity of the triple 7% coming back online from a total revenue perspective.

Very good thanks for that thanks, everyone.

Yes.

From Morgan Stanley we have record Ravi Shanker. Please go ahead.

Thanks, Good morning, everyone.

You said in your prepared remarks, often immediate yesterday Ed. This is an unprecedented revenue environment in your career with your commentary on the pilot shortage. It seems like a pretty unprecedented capacity constraint as well so that puts the industry in a pretty sweet spot.

When demand outstrips supply that results in a pretty strong pricing environment that youre seeing right now, but do you think the industry is also at the cost of a.

Multi quarter or long term.

Whereas the RASM or PRASM upside dynamic.

Kind of how long do you think that loss and B do you think there is a point of demand disruption here.

Consumers at some point it may not be able to take it.

Well I'll start with demand destruction, I don't think were anywhere close to that.

First to give you a micro view than a macro view.

We're just getting back on a.

Real dollar basis to where we were before the pandemic air travel remains a great value a great bargain I bet. Many of you. When you go on vacation pay more for one night at your hotel or pay more for your rental car or some cases pay more per your Uber taxi to get to the airport that you do for your airfare Air travel remains a great bargain I don't think we're going to.

We're close to the demand destruction point of the curve another macro way to think about this is we're just now getting back to 2019 level of revenue, but nominal GDP has grown by 16% since 2019 and normally we track nominal GDP and so from a macro.

Level I'd kind of look at it and think there is another 16th arguably theres another 16% to go when we got results that are strong as they are today, we got that.

And if you look at a micro level.

This demand not back yet international coming back like all of that makes sense.

That I don't know if it's exactly <unk>, but you would think that there is.

Good way to go on the revenue recovery, yet so yes, I think Travis is I think this is the first inning of the revenue first real any of the revenue in <unk>.

Turnaround.

Got it and then as a follow up I know, it's only been a few days, but have you seen any pickup in domestic travel interest post the dropping of the mosque mandates.

I don't think no is the short answer is not certain certainly not something we would be able to discern and data.

Great. Thank you.

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

Oh, thanks, very much operator, hi, everybody. Thanks for the time.

So Scott as you think about the improvement in traffic that you're seeing are you also seeing an increase or maybe Andrew.

Loyalty card loyalty sign ups and credit card acquisition.

We are seeing an increase in everything so in the mileage plus front, we're doing record card acquisitions record card spend and our retention rate for the card is better than it's ever been so.

But we're firing on all cylinders at this point and mileage plus.

Is doing a great job of contributing to these results.

That's very helpful. Thank you and then for Gerry.

The percentage of floating rate debt seems relatively.

Relatively high. So are you are you concerned about higher interest rates, causing an increase in interest expense from that or is that the first death that youre thinking about paying down.

Okay.

My first I don't view actually our floating rate exposure is all that high.

Relatively speaking.

The vast majority of our debt is fixed rate aircraft related debt. So thats.

That's really not.

Not something we're particularly concerned about.

And floating rate.

The.

LIBOR is still at a relatively low levels, so the floating rate debt.

Still perfectly attractive.

Of course, the good part of floating rate debt is generally pre payable.

Without premium so it is it is there to prepay generally not all of it right now, but a lot of it is.

So thats not that.

The current debt is not a concern obviously as we move ahead into.

Higher interest rate environment that may.

That will be factored in as to kind of how we manage the balance sheet.

That's very helpful. Thank you.

Yeah.

From Goldman Sachs, We have Catherine O'brien. Please go ahead.

Hey, good morning, everyone. Thanks, so much for the time.

So that's kind of touches on what you were answering to Robin's question Scott, but.

Conversation I was having a lot last year is when do we lap pent up travel.

It sounds like from your comments that both domestic and international markets and Trans Atlantic in Latam are running well ahead of 2019 at the same time for the summer I guess do you see that flowing at any point and I guess, if you do like how should we think about <unk>.

Long haul international and corporate travel, perhaps back filling that or is this just like the wrong conversation to be having and we should be talking about something structural has happened to where we think.

Demand for Air travel is would love your thoughts thanks.

I'll give you my opinion just opinion.

And.

Others can have different opinions, but.

I think you've almost answered the question.

The answer to the question is I think there has been a structural change and I'll go back one step like no one knows for sure but no one has gotten the pandemic more right than United Airlines from the very beginning two years ago. At this time, we werent just a minority when we said business travel will come back.

And in its entirety, we were a minority of one.

Nobody thought that and now we're going to do it this quarter.

And what I think is true certainly personally experienced talked enough people.

Is that once people get back traveling you realize how much you've missed it and took it for granted before its not pent up demand, it's a new higher level of travel.

Going to certain are confident at least for the rest of my life travel more both on personal or family and vacations and think and on business and.

And I think there are a lot of people like that.

Losing it for two years or for a year for a lot of people lost it.

We are social creatures, we need to be with each other we are more productive when were together at a conference or when we're at dinner with a customer or a client than when we're doing a simple <unk>.

Transaction on zoom and the kids are.

Talking in the background and you're reading your iPhone.

It's just not the same.

And once you get back traveling people realized it's even more important and we got a lot of people we see it in our corporate accounts.

They're kind of Flatlined doing nothing then they start traveling and the zoom past where they were.

I think thats whats going to happen you don't have to you got to believe that Dubai, United Airlines stock or airline stocks, because we are still 16% behind the trend line of where we were on GDP I happen to believe that that that we're going to surpass on a permanent and sustainable basis.

Where we were before but.

That's just one guy's opinion.

Okay, Great maybe one one for Terry.

I realize how difficult it is at the time the decisions of the FAA on the Triple seven in <unk>, but I guess just based on your latest conversations do you have any broad strokes kind of upper and lower limits of where we should be thinking about capacity for this year and then maybe what that means for unit cost. Thanks, So much for all the time.

Yes, as we said.

The capacity for this year is going to be driven largely by the.

Timing of the Triple seven.

So it will obviously improve over the course of the year.

It's tough to put a precise number to it as I said.

What we do know though is that.

The triple Sevens in particular as well as the large narrow bodies are all going to greatly benefit CASM, which is why we're comfortable there.

That.

We will.

That's where we want to be by the end of the year on CASM.

Okay. Thank you.

Okay.

From Barclays, We have Brandon <unk>. Please go ahead.

Hey, good morning, everyone and congrats on the strong outlook here and back to normal.

Andy I just wanted to follow up I think you guys explained it but 100% RASM on business travel. So that just means adjusted for year capacity relative to where you are is that correct.

That's correct because capacity is down a little bit yields are up for that component of traffic, 10% and volume is down about 20% right now so it all it all mathematically is getting as close to 100.

And I guess.

What is the outlook on recovery on international business travel demand is that ramping up this summer as well or do you really need to see the testing requirement removed.

Well it is ramping up so what I would tell you is in the current quarter.

The business cabins are filled more with premium leisure business and traditional corporate business.

Business bookings across the Atlantic have largely returned to normal.

So as we get into the summer, we do expect particularly you're going across the Atlantic really decent business traffic relative to 2019.

With revenue again at 100% or greater.

It's true in Latin America. It is a smaller business components in Europe .

Same is not true for Asia, where we really haven't seen a meaningful recovery in business traffic at this point because the bulk of our agent network.

Alright, thank you.

We have Chris <unk>.

Please go ahead.

Thank you.

Chris. Please go ahead.

Good morning, Thanks for taking my questions. So Scott Couldnt agree with you more on the why and need for travel.

The look forward.

For business, how much of that is small to mid sized versus corporates and then.

What are you seeing on your survey work or other data that you look out with respect to the mix of large corporate.

Buyers from health care Finance Tech consulting and the like any changes in the mix frequency <unk> seasonality there. Thank you.

I'll start the Muslim harvest changed its looking closer in than it did in 2019.

As the first part.

All sectors are returning some faster than others.

Media transportation industrial seem to be moving quicker than technology, all that being said I just want to point out San Francisco, which is a really important market to us.

Francisco the top 16 metros in the United States with lag and it was the number 16 in terms of recovery a.

A month ago, it's now number eight.

And so there's been a rapid bounce back in San Francisco, So I mean, I think we get the updated data.

We're going to see technology is that decline is the only way I can explain what I've seen in the macro numbers for that so I think we're we're really kind of bullish on that and the numbers are supported in that case.

Answer the question or follow up.

Yes, we'll follow up with separate thank you for that color. So the comments about industry capacity estimates out there being wildly off.

And what feels like a Renaissance if you will for unit unit revenues.

Assuming we can get oil and hold it below $100 and.

Sure Youre deliveries take place as expected and we move deeper into this new stage of the recovery is there an opportunity or what's holding you back from getting to those margin targets faster. Thank you.

I think we will get there faster.

Okay.

For the second for 2023.

Sure.

Thank you.

Okay.

Thank you and we will now take questions from the media as a reminder, if you have a question. Please <unk> zero one.

Getting back to your questions.

Yeah.

Okay.

And from Wall Street Journal, we have Alison Sider. Please go ahead.

Okay.

I was wondering if you could talk a little bit about some of the smaller communities, where regional services had to pull back now what do you think the future is for some of those markets like do you think we will ever have.

Are serviced by a network carrier again or are they just going to have to figure something out how do you see that developing.

We spent a lot of time talking to the small communities and it's been really frustrating that many of these communities have left the United Network.

That doesn't mean, they've lost all of their service in particular.

That's important to note, but I do think it's going to be a number of years.

For this can possibly change.

And in the meantime.

<unk> communities can expect.

Additional level of service on much smaller aircrafts.

As my expectation based on what I've seen in the industry to date, even that's going to take time to spool up.

So this is it is frustrating for United as it is for those small communities.

But this is where we are and we're doing our best to maintain service to as many of them as we possibly can.

But as.

We really are stretched refined dramatically fewer regional jets today than we were in 2019, and we don't expect that to improve at all in the next few years.

And then just a separate question are you seeing any signs of increased COVID-19 related absences. Among your employees is that something youre sort of getting any contingency planning for as the case numbers start to ryzen parts of the country.

We are not seeing that and in fact was the really good news yesterday for the first time in a long time, we have zero employees.

Hospitalized.

Or any complications from Covid, which is.

But the we track closely what's happening.

Zero, so quite the opposite of what we're seeing.

Alright. Thanks.

Yeah.

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

Hi, good morning, Thanks for the time I wanted to ask about some of the.

The mechanics around your Triple seven return.

What kind of work is still remains to be done what youre waiting on the FAA and then what you are hearing from Boeing as far as the Max certification. The Max 10 certification and where that goes that gives you confidence that those will start up in 2023.

Hey, Thanks for the question this is Greg Hart.

There is really two bodies of work underway on the Triple seven first as we work with Boeing and the assay to be able to start the modification work on those aircraft. We've got a number of aircraft complete and that work continues also there is the regulatory process that volume is working to end Pratt Whitney are working through with the FAA.

We are in the final legs of that and we appreciate.

<unk>, perhaps in the face of the issue and.

Obviously expect the FAA at some point in the not too distant future to allow those aircraft to return safely to the air.

Jerry you want to take that.

Nextgen certification.

As you can expect we are in regular communication with Boeing.

They have been.

Very good about keeping us informed on.

On the timeline for the certification for the Max 10, which is why I said earlier.

I'm confident.

That the Maxim will get certified and we'll fly it next year.

Great. Thank you on another topic on the masks and the change in that policy. This week.

You've talked about passengers being able to return.

Who are on our list for not complying with your policy.

Some of the issues that you're sorting through on who can return to United flights and who will not be allowed in the future.

Related to that issue. Thank you.

Yes. This is Bret Hart as you can imagine those who have been banned during this time period.

For a range of behaviors.

Behavior and some are relatively straightforward, it's just a refusal to wear a mask.

And those conversations we were able to handle in a reasonable manner.

But there are those who.

Hey beer.

Beyond just a.

Refusal to wear the mask and so we will evaluate that behavior and if that behavior.

Resenting a risk too.

R T.

Team members and to other customers.

And those are individuals who it is less likely that we will welcome back to our airlines.

But as you can imagine we're going to take a very thoughtful approach to <unk>.

Valuation this.

We'll be.

Getting in touch with individuals who have been banned.

As time passes.

Great. Thank you.

From CNN, we have Chris Isidore. Please go ahead.

Given that the.

Domestic yields are about where they were first quarter of two.

2019.

That.

Business fare business travel is not yet back up to normal level do you have any sense as to how the.

Leisure.

Travel yields are compared to.

The first quarter of 2019, they are they up X percent.

Can you give any guidance.

They are definitely up.

I'm sure all of our customers realized when they passed by a gas station out there that the price of fuel is dramatically higher.

And therefore, our largest really our second largest cost component is dramatically higher United to leisure yields along with business yields are running ahead business yields already pointed out were 10% ahead of.

2019 at this point as we look into the second quarter and leisure yields are above that at this point as we look into the second quarter above.

Above, 10%, but youre not giving.

Yep Yep.

Okay.

From.

From TPG, we have David Slotnick. Please go ahead.

Hi, good morning, Thanks for the question.

I was wondering if youre doing any contingency planning or have any plans in place to deal with.

Thats the issue that Newark.

Primary now that you've gotten sort of warning about problems with that again.

And just given the demand that we're quite sure how you're planning to Coca Cola.

Sure.

I'll try to stay calm.

Do this newer cancer.

Frankly, it's outrageous whats being allowed to happen at Newark is.

The airport has the theoretical capacity plus 79 operating profit that's what the FAA says.

That's a perfect conditions, which are rare at Newark is it was the most delayed airports in the country in 2016 again in 2017 again in 2018 again in 2019.

And the FAA has rules that limit the airport to 79 operations per hour and they are leading airlines violate those rules.

And they are just.

I don't know, it's unheard of behavior for me for the FAA to just let people break <unk>.

We break the rules the two biggest defenders, our spirit Airlines and Jetblue Spirit Airlines and Jetblue are paying the biggest price their customers I mean, it's a disaster for their customers because they are flying more flights in the airport can handle they've canceled over 20% of their flex one and five flight cancel cancel bundling canceled.

Newark, So far this month.

Ballpark, where their employees, it's awful for their customers. Unfortunately, our employees and our customers are collateral damage to that it is time for the FAA to enforce their own rule its bad for consumers. It's terrible for consumers what is being allowed to happen at Newark, It's simply time for the FAA to enforce the rules.

Putting aside from communicated and what's going on to customers is there any way that you can help customers.

Mitigate this quarter at <unk>.

We're adding capacity or something like that with customers, who book on because as bad as while it's tough for US our results are a whole lot better.

And our team has done a great job of taking care of customers I forgot fly out of Newark, I'd, certainly encourage you to book on United.

Okay. Thanks, Scott.

Yes.

Thank you we will now turn it back to Emily's Adidas for closing remarks.

Thanks for joining the call today, please contact Investor and media relations accounting further questions and we look forward to talking to you next quarter.

Thank you ladies and gentlemen. This concludes today's conference. Thank you for joining us.

May now disconnect.

Yeah.

Okay.

[music].

Okay.

[music].

Good morning, and welcome to United Airlines Holdings' Earnings Conference call for the first quarter of 2022. My name is Brandon and I'll be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions at that time. If you have a question. Please tell zero one on your Touchtone phone. Please no. It is.

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Your participation implies your consent to our recording of this call. If you do not agree with these terms simply drop off the line.

I will now turn the presentation over to your host for today's call and believes the Neatest manager of Investor Relations. You May go ahead.

Thanks, Brennan good morning, everyone and welcome to United's first quarter 2022 earnings conference call.

Yesterday, we issued our earnings release, which is available on our website at IR Dot United Dotcom.

All forward looking statements are based upon information currently available to the company.

A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release Form 10-K , and 10-Q and other reports filed with the SEC.

Airlines Holdings, and United Airlines for a more thorough description of these factors.

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

In addition, we have other members of the executive team on the line available to assess the Q&A.

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

Thank you Emily and thank you all for joining us today I want to start this morning by saying a huge thank you to the United team. Our mission as you 90 people and connecting the World and the foundation of United success will always be the strength of our people in the first quarter of this year. Our team members continue to go above and beyond to take care of our customers and each other and what was it really.

<unk> industry operating environment, the United team is stronger than ever our customers are seeing.

Along with the entire leadership team are grateful to them.

<unk> strategy is firmly on track and we're well on our way to our goal to build the biggest best and most profitable major airline in the history of the industry.

Even during the early days of the pandemic, we were determined to do much more than just survive. The pandemic you can get back to normal. We've spent the last two years getting United ready Airlines ready for this moment. We finally reached the inflection point as we transition from pandemic to endemic and demand is stronger than I've ever seen in my career and Thats even before.

First the United brand and customer preference.

<unk>, we've talked about our desire to de Commoditize Air travel and we've told you how strong our NPS scores are.

I look back at history, what we're really doing is trying to replicate what continental successfully accomplished back in the Ninety's and Delta did about 15 years ago.

I'm paying attention there had been hints at the same thing was happening at United.

15 years ago second.

Second CASM X there are a lot of industry pressures on capacity and CASM X, but I am confident that United is set up to outperform by a wide margin. We do have timing issues with triple Sevens Boeing delivery delays and all the industry infrastructure required to bring capacity back reliably and doing so reliably is.

Our top focus, but ultimately our gauge is going to grow approximately 30% by 2026 and that more than anything is going to drive the significant CASM ex outperformance. We expect at the same time, improving proving the product for our customers three United is uniquely positioned to benefit.

From fading Covid headwinds as Andrew will detail business travel is rapidly returning but it's still not fully recovered and we expect United will benefit more than any other airline as that recovery continues in international, especially Asia is far from fully recovered United is just more exposed to those sectors that we expect to have them.

Most acceleration in the coming quarters, if youre going to invest in airlines I think any of those three reasons should move United to the top of your pecking order, but I'll give you one more I think underappreciated reason for why you should invest in airlines in the first place.

At United We've talked in the past about the vastly improved supply demand mix in the long haul international markets, but we've been worried about the domestic market for reasons I will describe and I think the domestic market is also going to be robust I think every single person listening to this call as a spreadsheet with a forecast of industry capacity in the years to come.

Wrong, and probably wrong by a lot.

Given the work that we've done on our brand and customer experience.

Of course, having any problems hiring pilots, we are always top tier for pilot pay a ton of growth opportunities for pilots coming soon and we have by far the largest number of higher wide higher paying widebody slide 10 positions, but thats not all United increasingly is where employees, including airline pilots want.

As a force for good in the communities. We serve we're building an airline that lead and that is where the best in the industry want to build a long term career. In fact, we now see a lot of pilots from other airlines applying to be pilots at United and that new behavior.

While we are in a good position with a smaller and mid tier airlines. There just arent enough pilots to staff their growth aspirations. The other really large airlines will also probably be able to attract enough pilots, but for anyone else I. Just don't think it's mathematically possible to meet the pilot demand for the capacity plans that are out there you can already see the issues that are occurring more.

Multiple smaller and mid tier airlines over pilot shortages and looking forward when United alone is ramping up higher about 200 pods per month that situation is only going to get worse. This is not a temporary issue because of that and I think the domestic travel environment is going to be much stronger in the years to come than we previously thought.

Because supply is going to be constrained by lack of pilots.

You put all that together and we feel very bullish for the last two years have obviously thought at that macro events can quickly change our outlook, but are <unk> based expectation has is just 350 basis points shy.

Of our 2019 adjusted operating margin and we expect that our plan is to bring the triple Sevens back continually to continue to gradually add back capacity and grow gauge are going to drive CASM ex down significantly from there still COVID-19 elevated level. We're also confident that the robust business travel recovery still has a lot of room to.

And we anticipate improvement in long haul Asia. There is not yet reflected in our revenue results that means we're more confident than ever that we will meet or exceed our approximately 9% adjusted pre tax margin target for next year, and particularly with our view of the supply dynamics in both domestic and international getting to at least our 14%.

Target for 2026 seems pretty straightforward.

I've been in this industry for a long time now and seen some ups in lots of Big Downs looking.

Looking back there seems to be about once in a decade opportunity where the sentiment gets so bearish and the actual future outlook is so different from that settlement that theres a significant outperformance for airline stocks for a few years I think supply constraints pilots being the biggest one means that this is that time again and when thats happened in the past.

We'll industry tend to do well, but usually one or two airlines do much better than the rest of the pack are already listed the reasons above and I suppose I'm not entirely objective, but it sure seems like United is that that you want to make in that environment before I turn it over to Brett I want to congratulate our CFO Jerry Ladderman on becoming a first grandfather I am sure you.

Hear the excitement in his voice later today, well, maybe not but I promised you Jerry is really excited and congratulations Keith baby grandson Bret.

Thanks Scott.

Last month, we were honored to be included in times 100, most influential companies for 2022.

Our placement on Tom's list last quarter coincide with the announcement of Scott's appointment to the Homeland Security Advisory Council and the White House and the announcement of my appointment to President violence Board of advisors on historically black colleges and universities.

<unk> continues to be firmly committed to being a leader in corporate America and investing in the future of our company for both customers and employees. We're proud to be recognized for the hard work the entire United family over the last year.

Becoming the best airline not only being an industry leader on safety and innovation, but also reliably getting our customers where they want to go on time and with.

Their bags.

Route the pandemic and during the recent recovery in commercial aviation system has been stressed by supply chain constraints and staffing shortfalls at the FAA TSA and airport vendors among other factors all of which tests the stability of every airlines operation.

Some airlines built larger schedules that tested the limits what they could operate leaving their customers and their reputation to pay the price United chose a different path. We anticipated many of these challenges even taking steps on our own to mitigate them. Importantly, we also made a conscious decision to prioritize our operation.

Reliability limiting the size of our scheduled that.

That decision may have cost us some profits in the near term, but it's the right long term decision for our customers our company and the bottom line.

We will continue to use that approach as we plan to add capacity in the months ahead.

In recent weeks with people of United and our customers have come together to assist the people of Ukraine.

United has donated $100000 in more than 2 million frequent flyer miles to help transport relief workers and supplies to those on the frontline of this crisis.

As early as March we announced fund raising efforts to support our humanitarian relief partners and our customers stepped up being as they so often do.

We continue to make progress towards our hiring needs as we look towards United next this January we celebrated opening our Aviate Academy in Arizona and welcome next generation of pilot to the United family.

Flight training school is the first of its kind and we believe it will help to maintain a pipeline of qualified pilot candidates for United.

Our industry looks to combat the pilot shortage, we are particularly proud of providing the opportunity for aspiring pilots from diverse backgrounds study and trained at the Aviate Academy.

Over the next eight years, we plan to train 5000, new pilots at 88 with the goal of at least half men and women where people of color.

We are also continuing our path as an industry leader in sustainability.

<unk> thousand 35.

Our dedication to creating a greener tomorrow real change is stronger than ever we are investing in solutions that have the potential to actually reduce and ultimately remove the emissions from flying in March we announced a collaboration with biotechs and pizza.

To commercialize the production of sustainable aviation fuel.

While we are proud to have invested in more sustainable aviation reduction than any other airline in the world. We're also focused on making solutions like these scalable for the future.

We also continue to engage with cross industry partners and policymakers to support the case for urgent climate action.

These and other actions, we are committed to making a real difference in climate change.

A key part of our sustainability progress will be enabled by technology, but at United We're also focused on using technology to enhance the travel experience currently nearly three quarters of our customers use our app on the day of travel a valuable tool that helps our customers manage their travel instead of having to call to contact center or speak with an agent.

While this helps our employees to be more efficient we know from our survey data that customers, who use our mobile app are more satisfied with their experience with United.

This is why we continue to invest in new features like enhanced flight search options better visibility into flight credits contactless payments through the United wallet, and a new bag drop shortcut, allowing you to zip through the airport lobby faster when you check in bag in the App before arriving at the airport.

As we adapt to COVID-19, becoming endemic.

We need our customer and employee experience to reflect this new phase.

We are pleased to see into our mass requirements are now gone from 99% of the country as well as onboard domestic flight select international flight, depending on arrival countries mass requirements and at U S airports.

We strongly believe the administration should eliminate the pre departure testing requirements for transportation as well.

Travel demand is surging, we believe eliminating these requirements will ease the travel experience for our customers.

In closing I.

I would like to express appreciation to our entire United team critical throughout this inflection point.

While we've always remained committed.

Two our United next strategy. The recent momentum in demand environment gives us even more competency United path forward.

Now I'll hand, it over to Brian .

Drew to discuss this in more detail.

Thanks, Brett.

I normally start each earnings call with an update on the previous quarter's revenue performance. However, today it seems more appropriate to start off with our Q2 outlook.

Clearly passed a major inflection point with demand and yields and have a confident view of the future.

<unk> is expected to be up 17% versus Q2 of <unk> 19.

Change increase from our Q1 <unk> of down 3%.

We're confident United is currently set up to achieve record <unk> and revenue results in the second quarter.

The revenue inflection point started in March with PRASM up 9% versus 2019.

Revenue momentum is coming coming from just about every category, including higher yield ancillary heat sales strong premium leisure demand mileage plus rebound in business demand and a record setting season across the Atlantic. This summer even parts of Asia are rebounded.

We often have talked about United high exposure to business traffic and the resulting headwind the pandemic caused.

I did produce industry, leading <unk> results during most of the pandemic, even when faced with this substantial headwind.

Now with business traffic rapidly recovering I expecting 90 to have a tailwind versus more leisure focused carriers. A fact I think we can see in our Q2 guidance.

Business revenue for the last few weeks has been down about 30% with the last week now down only 20% versus the same period in 2019.

Largest corporations are now returning to travel at a faster rate than small this is really important to United Q2 outlook.

As of last week business yields are now close to up 10% ahead of 2019.

Given these revenue trends business travelers contribution is expected to be approximately 100% of 2019 levels soon.

After all the debates about the return of business traffic, it's nice to see this important milestone insight even with many businesses not fully back in the office.

Demand for business leisure and cargo traffic continues to be strong even as we pass on 100% of the fuel price increase versus 19 <unk>.

United is bookings for Q2 are strong and we believe we still have sufficient room to sell peak period travel at robust yield.

Yield momentum is generally very strong across most of our regions across the Atlantic we expect to grow by 25%. This summer becoming the largest airline in that region for the first time.

We also see momentum in Australia, and many other countries that have opened their borders and expect further gains when the inbound U S statutory requirements are relaxed and.

In Q2, we expect the operating Pacific capacity down about 65% versus 19, and Latin American capacity up 9% versus 19.

Cargo continues to produce strong results with revenues up 26% in Q1 of 2022 versus 2021 and up 119% versus 2019.

Ocean shipping and supply chain disruptions continue to boost our revenue outlook for cargo.

During the pandemic, we found many traditional United structural advantages, including our business centric coastal hubs and long haul network to be temporary disadvantages.

Imagine now United's revenue potential in the context of our Q2 guide one areas, which had been structural advantages, including business traffic coastal gateways and global long haul fully bounce back combined with a new modern fuel efficient fleet imaginary United were 50, <unk> single class yet only.

A lot of small communities and don't compete against competitors operated mainline jets at a fraction of the unit costs.

Imagine a world, where United offers premium seats everywhere, our competitors do when in the past, we often had none.

Do you have a hard time imagine in these things and the impact on our revenues I just want to point you to our Q2 revenue guide.

As we think about growth potential for the long haul we remain bullish on all of the long haul opportunities.

No single fix to issues constraining capacity and as a result, there is no quick fix at a macro level, we expect less supply in the coming years. However, we still expect industry capacity growth to be more elevated in Florida.

Smaller communities, where United has less exposure.

With this updated domestic outlook, our view of the revenue performance and profitability of domestic flying has improved we have confidence in our ability to execute our United next plan with known constraints the largest of course being a pilot shortage.

We have a consistent and leading product.

We continue to offer basic economy, with even more flexibility to our customers seeking the best possible price.

I wanted to thank the entire United team for their dedication over the last few years, we're set up well for the future and that future begins today.

With that I will hand, it off to Jerry.

Thanks, Andrew and good morning, everyone.

For the first quarter of 2022, we reported a pre tax loss and an adjusted pre tax loss of around one $8 billion.

Our CASM X ended the quarter in line with the guidance, we provided last month at up 18% versus first quarter 2019.

Looking ahead, even with the elevated fuel prices, which we expect to persist for a while right now we are seeing our revenue more than cover the increased fuel costs and as a result, we expect to achieve meaningful pre tax income in the second quarter.

Furthermore, based on our current revenue expectations. We also expect to produce a pre tax profit for the full year 2022.

We currently expect our CASM ex to be up around 16% from the second quarter on capacity down around 13%.

Both versus the second quarter of 2019.

We also expect that our unit costs will continue to sequentially improve over the remaining quarters of 2022.

Is the 52 grounded triple seven aircraft returned to normal service, we start to take delivery of additional large narrow body aircraft and aircraft utilization increases.

We believe these capacity levers will drive a step function change in CASM X through 2022.

The relationship between our capacity growth in CASM X improvement continues to meet our expectations.

Our team has done a tremendous job managing all the costs under our control and we expect that focus to continue.

However, the impact of continuing elevated inflation and the exact timing of the triple seven return to service generally makes precise forecasting difficult nonetheless.

Nonetheless, we are confident that our CASM ex exit rate for the year will set us up well for 2023 and beyond.

Turning to fleet as you know new aircraft deliveries constitute the vast majority of our capital expenditures.

We are reducing our adjusted Capex expectations for the year by approximately $600 million.

The $5 3 billion as a result of supply chain and manufacturing challenges pushing some of our expected 787 and 737 Max deliveries from this year to next year.

While it is difficult to say with precision how many aircraft may five right. Now we are assuming two of eight 787 and $7 53, 787, maxes will slip to 2023.

Those aircraft were joined the 737, Max Eights nines and tens as well as Airbus <unk> hundred 21, <unk>, we expect to take delivery of next year.

Bringing entire fleet. The aircraft we have on order is critical to the success of United next and to our ability to continue to bring meaningful improvements in both CASM ex and fuel efficiency.

Turning to balance sheet and cash we ended the quarter with $20 billion in available liquidity.

Treasurer, Pam Henry and I regularly discuss our optimal level of cash now keep in mind, we've both been around the industry for a long time. So it is difficult for us to think in terms of too much cash. However, it is fair to say that as the recovery continues you will see us reduce our cash as we begin to delever.

<unk> journey.

This resulted in our total debt declining by over $700 million during the quarter.

Furthermore, in the first quarter, United produced $1 $5 billion of cash flow from operations, driven largely by an over $2 billion increase in our advanced ticket liability.

We're pleased that our operating cash generation is approaching 2019 levels as in additional indications of the recoveries progress.

I want to close by reiterating our confidence in our 2023 and 2026 earnings targets.

We remain committed to achieving an adjusted pre tax margin of approximately 9% next year and continue to have confidence in our 2026 target of about 14% representing profitability well above 2019 levels as.

As we move into the second quarter I want to thank my finance team for their dedication to remaining nimble and focused on our long term goals our profitability outlook for both the second quarter and full year is a welcome milestone.

For all of US as we redouble our focus on United's path ahead.

Looking even further ahead since Scott mentioned my newborn grandson, Edinburgh I can tell you that I am now more focused than ever to ensure that when <unk> grows up he will recognize United the airline people want to fly and where employees are proud to work and perhaps most importantly for his generation the.

Airlines that has met all of its commitments to the environment and with that I'll pass it to Emily to start the Q&A.

Thanks, Terry we will now take questions from the analyst community. Please limit yourself to one question and if needed one follow up question.

Please describe the procedure to ask a question.

Okay.

Zero.

Once again it is zero one star one.

You'd like to be removed from the queue. Please tell the power side of the hash key.

<unk> got a speaker phone please make sure your mute function as well.

Without your signal to repair equipment.

If you'd like to ask a question. Please tell us zero one on your Touchtone phone.

Please hold for a moment, while we similar Q.

And from Raymond James We have Savi site. Please go ahead.

Hey, good morning.

Okay.

The pilot commentary on the call I, just kind of curious what role you see our regional partners claim and what that means to your kind of hub and spoke strategy.

Hi, Savi, it's Andrew.

When we developed the United next plan, a while ago, we assumed that there would be a much smaller contribution at regional flying in the plan.

And we're marching down that road it is more accelerated than we planned but it is.

Kind of where we thought this was going a while ago. So.

We're fine with that and I think we are.

And so our reliance on regional jets is going to be dramatically lower in the future that being said, we still plan to operate close to 300 of these aircrafts.

Most of them being large regional jets in the future along with our <unk> and <unk>.

So you have a spot at United find smaller communities.

Because that is the right aircraft.

A lot less than what it used to date.

Thanks, Jonathan.

Talking about Andrew just follow up on.

Could you.

Got it really helpful kind of revenue color, but I was just curious on the the peak versus off peak performance because that was a trend that you saw really strong peaks and maybe offtake is not as strong and how youre thinking about as we exit.

The peak summer travel period.

I think we're going to see.

One of the most important thing as I said earlier was.

From business travel is actually approach and we will be 100% of 2019, So we now view business traffic.

Almost fully return, particularly given the level of capacity that we're often in the marketplace as we exit the summer we will rely on more on business traffic.

And we have a high degree of confidence that that's just going to be perfectly fine and we're going to continue to accelerate as we go through the fourth quarter with October being an incredibly strong business months, given where we see business trends today. So we're very bullish on business and again, it's nice to see after all of the debates about how much would come back and when it would.

Come back that we are approaching 100% from a revenue recovery and we have a long way to go because the offices have not fully returned yet everybody is still not in their office. So we think there's actually more upside there than maybe a lot of people thought just a few months ago.

Thank you.

Please go ahead.

Hey, everyone. Thank you for your time.

I realize that earnings and margins matter of months, but.

What's changed since the Nymex plan and puts and takes are kind of evolving.

When you look at the United next plan.

Where are you willing to be the most flexible with like it just seems that the CASM ex target.

Is this two correlated to deliveries and that's the most aggressive again I realize that margins matter, the most and all that stuff, but just how do you plan on navigating the timing issues on some of that stuff.

Okay.

I'll start and then let Jerry at you.

Youre, absolutely right that margins matter the most.

And things have changed a little bit.

But the basic vision the basic strategy remains intact.

And.

Inflation is higher than we thought we built high inflation in over a year ago.

And we thought we were being conservative, but I think everyone has been surprised by how high inflation has been in place. It is higher than we thought we've even got flipped. This year. We've got a full point of CASM ex headwind from revenue related expenses, which is a good reason to have higher CASM.

So we do have higher inflation pressures. We also have separately timing issues. This is principally around the triple seven to a lesser degree Bowie deliveries, but the triple seven is our biggest slowest CASM airplane.

And that is going to be a step function change once we get the full fleet back up and flying we just don't know for sure what it's going to happen, it's taken longer than we had hoped to.

So theres timing issues, but the absolute level will be higher just because of inflation I think.

But the important point is the real structural drivers that are important there for margin.

How we are going to be growing gauge and width gauge and growth mean.

And so I think the.

Inflation raises the bar.

For everyone.

We already see happening right now that tends to impact low cost carriers more than it impacts us.

It means that we more than recover.

Hundred percent of inflationary cost increases and so the most important thing is what happens I think to the relative CASM and there's nothing that's changed about that because it's mostly about gauge.

Most of that is just gauge growth and that's just the math.

The last big airline to do it.

That's just math.

What's coming but I also think what's encouraging you've mentioned margin in fact that were 350 basis points already away from 2019 margins.

With whatever you think the CASM ex number is going to ultimately get to our high inflation is it's going to be meaningfully better.

16%, we have in this quarter.

That's going to go straight to the margin and the revenue.

Okay I think we're in the first day, and it's really kind of the coming out party for the real return of business travel and international travel in this quarter were in the first inning of that recovery.

Gotta be upside on revenue as well and Thats why it just.

Barring something bad happening in the World 'twenty, two 'twenty three getting to 2019 margin levels seems.

Pretty easy.

Jerry.

Just to give you a little bit more comfort.

So in a world where what we're seeing continues for a while this sort of high single digit inflation.

That really only translates to a couple of percent on CASM ex.

And as Scott said revenues more than making up for that so youre not going to see dramatically different numbers.

On CASM ex.

But.

Everything we're seeing makes us very comfortable that those margin targets are going to be achieved.

Okay great.

And then I think next year Theres seems to give us a misconception.

Deliveries next year on the maxing out there like all Max 10, aircrafts and I don't think Thats. The case, but you guys haven't quantified how many deliveries you are expecting from from the Max 10.

<unk>.

Can you provide a number for that for 2023.

And then if there is a delay what's the optionality that you have.

To kind of backfill some of that capacity or deliveries.

Next year, specifically thank you.

Yes, so we can't be specific because we don't know exactly.

When the Max first Max 10 delivery will be and that then dictates how many but we never had a plan to take.

All of next year's deliveries as Max 10 in fact, it was less than half.

Of the deliveries.

For next year.

And so we'll wait and see.

I am confident we'll get the Max 10, but you should talk to Boeing about the exact timing of when that first Max will.

It will be delivered in the right in terms of flexibility.

They are producing.

We have Max eights, and nines for us and so that can always be a little bit of a shift in timing of when <unk> or <unk> delivered versus 10.

But we're comfortable we're going to take eight to 910 next year.

Great. Thank you.

Yeah.

ISI, we have Duane <unk> Citigroup. Please go ahead.

Hey, thanks.

<unk>.

On the issue of constraints.

Pretty United in the industry.

Can you talk about constraints for United This year.

Had some discussion in the past about <unk>.

Aircraft delivery rate, but in terms of your specific.

A reduction in growth how much of that is pilot related versus aircraft delivery rate or the timing, which you referred to on the triple Sevens.

And could you expand on why you think the industry is going to be short pilots for.

More than a little bit of time more certainly more than 2022.

Okay, I'll start and Andrew can add.

The biggest issue that we have well first on capacity as well.

We don't have a labor shortage, we've hired 6000 people. This year, we're hiring 200 pods a month.

It's not an issue for us the biggest issue is triple Sevens.

Thats.

10% of our capacity.

And they're grounded the other issue is just we're realizing that.

The whole infrastructure is not set up to snap back to these rapid growth rates I mean, it's not just us it's the FAA TSA fuel vendors.

There is all kind of even if we have enough that people, which we do.

All of those constraints getting the way of a reliable schedule and we're just not willing we made so much progress with customers during the pandemic and really building the United brand I think that's going to be the most enduring change that we're not willing to sacrifice that customer.

Goodwill for the possibility of short term promise profits and so.

And the month to date, we're number one in on time performance number one in completion factor so its paying off for our customers.

The pilot shortage I'll just give you some numbers. So we did a deep dive on pilots because we were trying to all of our regionals weren't be able to hire problems and I think we've got 150 airplanes grounded right now.

Never going to come back I assume.

And so we did a really deep dive on it turns out that the industry over historically produces between five and seven pilots here, mostly closer to five but can produce up to 7000.

Pilots per your fellow lowered earn COVID-19 . This year the industry's intent is to hire 13000 pilots.

The growth aspirations of other airlines, it's even more next year.

But there are only 5% to 7000 available that was an epiphany for us.

And by the way I, probably can't be fixed you could set up flight schools to get people to 25 hours and get their first license pretty easily but they've got to get from 25 hours to 500 hours and that just doesn't exist today.

That 5% to seven.

Over a few years at 7000 could probably go up I don't think it's getting to 13000.

Anytime in the next five or six years. When you look at that 5000, if its a 5000 United Airlines is literally going on here.

Half of them are coming to United Airlines. So this is a.

I think an underappreciated.

Factor.

And it's just not quick to fix.

That's great detail Scott appreciate that.

And I guess along those lines.

Is this idea of going to influence your capacity as well so given the epiphany.

Pilot math.

And you're in a couple of others willing to really kind of protect the operation does that influence more than 2022 is that a 2023 endpoints as well and beyond.

Not yet.

We're focused on getting to where we can hire 200 pilots.

And successfully get them all through the training all of the upgrades happening.

I have watched this is pretty in the weeds, but if you read some of the blogs and.

What some of the other Biogen youre, saying see a lot of struggle is not easy to upgrade to build to go from steady state kind of hiring to a step function increase and it's not just growth theres. So many retirements that happened going through COVID-19 that everyone sort of has a step function increase.

And it's amazing to read some of the stuff about the constraints that are happening at other airlines, we've gotten ahead of it.

We had some bumps by the way we had some things where we were behind that had some bumps, but our team has gotten ahead of it and feel really good that we're going to hit the if we can get the 200 pilots a month.

But we've also learned a lot about having to metered and I'd like to take the triple seven.

We're going to go overnight from.

For 42 airplanes that are 46 44 airplanes that are flying to 96, so we're going to more than double the fleet.

Earlier, we thought we would ramp that in really quickly realize that is going to take time. This is part of the CASM timing issue will probably even if we get them done into this month.

I'll, probably be nine months before we get all of them flying it's just going to take longer because systems are just not set up to do it and that's okay. Because it's just a timing issue.

<unk>.

But we feel really good about our ability to hire.

Want to make sure we're executing solidly before we decide to go any faster.

But.

I think it is a strategic advantage.

For United in particular, where the best place if Youre a pilot like we are the best place to go but there are some other good ones and there are some that arent good.

I think it is a strategic advantage because it will be a shortage. It is a shortage.

I appreciate the thoughts.

Thank you.

Okay.

Please go ahead.

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

Oh.

Good morning, everybody was kind of hoping for a bullish call.

Yeah.

So.

Probably the best lines Jamie.

First question I never want to get though is that all you got.

Alright, well don't earn it alright.

Mono syllabic claim to fame I suppose.

For Andrew recognizing that agent RASM was historically.

Lower than system is there a way to identify how much of the 17% RASM guide in the second quarter.

Benefits from Asia is still being shut down for the most part.

Good question I don't have that number off the top I had what I can tell you. There are parts of Asia that are rebound in pretty rapidly to put Australia and Asia.

And Korea is obviously in Asia, but Japan, and China have niamh.

What I will tell you is that our cargo strength in that direction is incredibly strong so from a travel point of view relative to 2019.

Compared to other regions of the world.

It is behind the other regions of the world, but maybe less than you would otherwise think.

Okay.

That's helpful and then Scott you got it.

Got to admit you piqued my interest when you made.

A quick reference to the Continental Renaissance.

I personally remember that both as a junior analysts to continental passenger and even for a period of time of continental employees. So it definitely has struck a chord with me not sure Jerry would want to weigh in as well given he was there at the time that you referenced but can you expand on that bit of history and why it's even relevant.

Ual on your shareholders right now.

Yes.

A funny story to embarrass, both Jerry and Andrew.

At the end of it but what happened look delta deserves credit they did the same thing.

10 years ago 15 years ago as.

As they built brands around.

Customers choosing them that changed how people felt they still until the employees felt they changed how the customers felt.

And people customers started to choose to fly them.

<unk> is that air travel does not have to be a commodity.

And everyone says it but very few people do it.

And I think those are two examples that we're done I think we've been doing it during the pandemic, we got a lot to prove.

Acknowledge we've got a long way to go we're not there.

But we've told you the NPS numbers like biotech.

Anecdotally galore from customers from people on Capitol Hill.

From other Ceos and other industries.

About how different it feels to fly.

Our people are proud.

What we've done they're proud of what we stand for they are proud of Jerry mentioned sustainability for us. They are proud of that they are proud of the work we're doing for diversity into the Aviate Academy.

<unk>.

I feel like we're leading again.

And that flows through to an energy of taking care of customers and focusing on customers like look if you go on an airplane and ask employ as pilot as slight and its S. Gateway just how they feel about the airlines don't tell them, what you're going to get different answers.

Get it a bunch of airlines and Thats what happened at those other two airlines.

Thats, the key where people business and Thats the key.

Greatness is to actually have a brand that customer fleet, we've always had the best hubs.

At United Airlines, and that's been a frustrating thing for employees for investors. If you look at the hubs at United and we never realized our potential realizing our potential was about one fixing the gauge which also fixes the product, but also building a brand or United Airlines.

And Thats what were doing now and you can already see it.

Fact that probably will be number one this quarter again that'll be eight or nine quarters. Despite the fact that all of the last nine quarters I am including the second quarter. We have still the biggest headwinds business travel is not is recovered as domestic leisure and international but we still have the biggest headwind and yet we're number one.

Just wait until those two things are back.

And then embarrassing story I will say I said this on one of our calls one of our 18 calls and Jerry like disappeared from the screen.

You guys Pat graph it.

It comes back and he has a T shirt from the days of Continental but I don't remember what I said on the front and the back half the stock price.

500, and Andrew is like Oh, I've got the T shirts, somewhere too, but I can't find it.

Anyway, that's what is happening at United Derek <unk> to add anything.

Jamie two things one this will be a great conversation you and I to continue next week indeed the window.

At the right club lunch.

Invite people to attend that.

The other thing I would.

Was there then youre right and I saw what was happening and this isn't just a this has been going on now for several years here. The same exact kind of focus everywhere in the business.

One example are the.

Aircraft not just.

Incredible new matches were taking with.

The most customer pleasing interiors in the industry, but the fact that we're retrofitting all of the older aircraft.

Okay.

It's for our customers, but also for our crews it's a place they are proud to work at.

And it shows.

So just a lot of similarities Im sure. The same thing happened with Delta 15 years ago I wasn't there then that was from the outside but.

But yes it is.

Very similar.

Alright.

I'll add another point, which is.

This is going to be a record quarter for United but we didn't talk about was Q2 of <unk> 19 was a record quarter for United and I think that's really relevant the momentum is incredible and his incredible off unbelievably great quarter in our history and one of the best ones ever so.

Well listen I appreciate you, bringing them topic up it's quite honestly something that I hadn't really.

Thought up yet so definitely gives me something to ponder. Thank you very much I appreciate it.

You should all fly United and experiences.

Yes sure.

There is an implied.

I leave the wings club and I pack my bag I believe in the next day. So I'll give you a report take care.

Yes.

Brian The next question please.

Okay.

Yes, Michael Lindenberg. Please go ahead.

Hey, good morning, everyone.

Good good results good outlook Gary congratulations.

My My single question here and it has to just do with jet fuel phases, and the New York market.

I'm curious.

I realize that the colonial pipeline I think I guess it terminates about a mile South America, but we've heard that.

The flows have been light lately.

Or are you addressing.

The fuel issue in the New York market and maybe you are getting fuel again.

From from the colonial Omar.

Maybe your tank ring in.

What are you doing to address it.

Maybe give us a sense like what percent of your and today, maybe is near Carver.

I appreciate it thanks.

During my first let me point out that the dislocation.

That market has moderated.

The difference in.

Crack spread two weeks ago.

As measured in dollars now can be measured.

<unk>.

It is still elevated you compare new York to Gulf Coast, Let's say.

And so we.

Yes, we do have a number of options.

One is.

The pipeline, we also can resort.

Needed to tank Green.

And so.

We're comfortable with our with our exposure.

And with the problem sort of going away.

That is helpful.

<unk>.

Great and then.

Quick one here just Andrew when we look at cargo revenue over $600 million I mean, it's been fantastic to run over the past couple of years.

Presumably that's not.

Not just the growth rate not being sustainable, but maybe the absolute level because I do believe you are still flying some airplanes.

Cargo only does that does that level off do we do we see that sort of Max out at some level as you move the airplanes back into passenger service.

Thoughts on that thank you.

Yes.

I think there is a little bit less room in the bellies when theres a lot of luggage onboard. So there is an offset in some of the airplane to go to places that don't have strong cargo demand, but have strong passenger demand.

So that's my view on that should we expect yields which are rare.

Record highs for cargo to start to moderate a bit absolutely and we have that in our outlook and still feel really good about where we're going because of the belly capacity of the triple 7% coming back online from a total revenue perspective.

Good thanks for that thanks, everyone.

Yes.

From Morgan Stanley we have record Ravi Shanker. Please go ahead.

Thanks, Good morning, everyone.

Scott you said in your prepared remarks, often the media yesterday add this is an unprecedented revenue environment in your career.

With your commentary on the pilot shortage it seems like a pretty unprecedented capacity constraint as well so that puts the industry in a pretty sweet spot.

When demand outstrips supply that results in a pretty strong pricing environment that youre seeing right now, but do you think the industry is also at the cost of a <unk>.

Multi quarter or long term.

Whereas the RASM or PRASM upside dynamic.

Kind of how long do you think that loss and B do you think there is a point of demand disruption here.

Consumers at some point it may not be able to take it.

Well I'll start with demand destruction, I don't think were anywhere close to that.

To give you a micro view than a macro view.

We're just getting back on it.

The real dollar basis.

To where we were before the pandemic air travel remains a great value a great bargain I bet. Many of you. When you go on vacation pay more for one night at your hotel or pay more for your rental car or some cases pay more for Uber or taxi to get to the airport than you do for your airfare Air travel remains a great bargain I don't think we're anywhere close to the demand destruction point.

Of the curve another macro way to think about this is we're just now getting back to 2019 level of revenue, but nominal GDP has grown by 16% since 2019 and normally we track nominal GDP.

So from a macro level I kind of look at it and think Theres. Another 16, arguably theres another 16% to go when we got results that are strong as they are today, we got that.

If you look at a micro level business demand not back yet international coming back like all of that makes sense.

That I don't know if it's exactly <unk>, but you would think that there is.

A pretty good way to go on the revenue recovery yet so yes, I think Travis is I think this is the first inning of the revenue first real any of the revenue and <unk>.

Turnaround.

Got it and then as a follow up I know, it's only been a few days, but have you seen any pickup and domestic travel interest post the dropping of the mosque mandates.

I don't think we know the short answer is not certain certainly not something we would be able to discern and data.

Great. Thank you.

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

Thanks, very much operator, hi, everybody. Thanks for the time.

So Scott as you think about the improvement in traffic that you're seeing are you also seeing an increase or maybe Andrew.

Loyalty card loyalty sign ups and credit card acquisition.

We are seeing an increase in everything so in the mileage plus front.

And record card acquisitions record card spend.

Our retention rate for the card is better than it's ever been so it's just.

But we're firing on all cylinders at this point and mileage plus.

Is doing a great job of contributing to these results.

That's very helpful. Thank you and then for Gerry.

On the <unk>.

Percentage of floating rate debt seems relatively.

Relatively high. So are you are you concerned about higher interest rates, causing an increase in interest expense from that or is that the first jet that youre thinking about paying down.

Okay.

My first I don't view actually our floating rate exposure is all that high.

Relatively speaking.

The vast majority of our debt is fixed rate aircraft related debt. So thats.

That's really not.

Not something we're particularly concerned about.

And floating rate.

The.

LIBOR is still at a relatively low levels, so the floating rate debt.

Still perfectly attractive.

Of course, the good part of floating rate debt is generally pre payable.

Without premium so it is it is there to prepay generally not all of it right now, but a lot of it is.

So thats not that.

The current debt is not a concern obviously as we move ahead into.

Higher interest rate environment that may.

That will be factored in as to kind of how we manage the balance sheet.

That's very helpful. Thank you.

Yeah.

From Goldman Sachs, We have Catherine O'brien. Please go ahead.

Hey, good morning, everyone. Thanks, so much for the time.

So that's kind of touches on with what you were answering to Robin's question Scott but.

Conversation I was having a lot last year is when do we lap pent up travel.

It sounds like from your comments that both domestic and some international markets and Trans Atlantic in Latam are running well ahead of 2019 at the same time for the summer I guess do you see that slowing at any point and I guess, if you do like how should we think about <unk>.

Long haul international and corporate pent up travel, perhaps back filling that or is this just like the wrong conversation to be having and we should be talking about something structural has happened to where we think.

Demand for Air travel is would love your thoughts thanks.

I'll give you my opinion just opinion.

And.

Others can have different opinions, but.

I think you've almost answered the question.

And in its entirety, we were a minority of one.

Nobody thought that and now we're going to do it this quarter.

And what I think is true certainly personally experienced talked enough people.

Is that once people get back traveling you realize how much you've missed it and took it for granted before its not pent up demand, it's a new higher level of travel.

Going to certain are confident at least for the rest of my life travel more both on personal or family and vacations and think and on business and.

And I think there are a lot of people like that.

Losing it for two years or for a year for a lot of people lost it.

Transaction on zoom and the kids are.

Talking in the background and you're reading your iPhone.

It's just not the same.

And once you get back traveling people realized it's even more important and we got a lot of people we see it in our corporate accounts.

They're kind of Flatlined doing nothing then they start traveling and the zoom past where they were.

I think thats whats going to happen.

I believe that Dubai, United Airlines stock or airline stocks, because we are still 16% behind the trend line of where we were on GDP I happen to believe that that that we're going to surpass on a permanent sustainable basis.

Where we were before but.

That's just one guy's opinion.

Okay, Great maybe one one for Gerry.

I realize how difficult it is at the time the decisions of the FAA on the Triple seven and the 700.

But I guess just based on your latest conversations do you have any broad strokes kind of upper and lower limits of where we should be thinking about capacity for this year and then maybe what that means for unit cost. Thanks, So much for all the time.

Yes, as we said.

The capacity for this year is going to be driven largely by the.

Timing of the Triple seven.

So it will obviously improve over the course of the year.

It's tough to put a precise number to it as I said.

What we do know though is that.

The triple Sevens in particular as well as the large narrow bodies are all going to greatly benefit CASM, which is why we're comfortable that.

We will.

Get to where we want to be by the end of the year on CASM.

Okay. Thank you.

From Barclays, We have Brandon <unk>. Please go ahead.

Hey, good morning, everyone and congrats on the strong outlook came back to normal.

Andrew I just wanted to follow up I think you guys explained it but 100% RASM on business travel. So that just means adjusted for year capacity relative to where you are is that correct.

That's correct.

<unk> down a little bit yields are up for that component of traffic, 10% and volume is down about 20% right now so it all it all mathematically is getting this close to 100.

And I guess.

What is the outlook on recovery on international business travel demand is that ramping up this summer as well or do you really need to see the testing requirement removed.

Well it is ramping up so what I would tell you is in the current quarter.

The business cabins are filled more with premium leisure business than traditional corporate business, the corporate business bookings across the Atlantic have largely returned to normal.

So as we get into the summer, we do expect particularly going across the Atlantic really decent business traffic relative to 2019.

Revenue again at 100% or greater.

Same is true in Latin America. It is a smaller business components in Europe .

The same is not true for Asia, where we really haven't seen a meaningful recovery in business traffic at this point through the bulk of our agent network.

Alright, thank you.

We have Chris <unk>.

Please go ahead.

Thank you.

Chris. Please go ahead.

Good morning, Thanks for taking my questions. So Scott Couldnt agree with you more on the why and need for travel.

On the look forward for business, how much of that is small to mid sized versus corporates and then.

What are you seeing on your survey work or other data that you look out with respect to the mix of large corporate.

Buyers from health care Finance Tech consulting under like any changes in the mix frequency <unk> seasonality there. Thank you.

I'll start the harvest changed its looking closer in than it did in 2019.

As the first part.

All of the sectors or return in some faster than others.

Media transportation industrial seem to be moving quicker than technology.

That being said I, just want to point out San Francisco, which is a really important market in San Francisco at the top 16 metros in the United States.

<unk> and he was the number 16 in terms of recovery a.

A month ago, it's now number eight.

And so there's been a rapid bounce back in San Francisco. So women I think we get the updated data I think we're going to see technology is backed line. It's the only way I can explain what I've seen in the macro numbers for that so I think we're we're really kind of bullish on that and the numbers are supported in that case.

The question or follow up.

Yes, we'll follow up with separate thank you for that color. So the comments about industry capacity estimates out there being wildly off and.

And what feels like a Renaissance if you will for unit unit revenues.

Assuming we can get oil and hold it below $100 and.

Or your deliveries take place as expected and we move deeper into this new stage of the recovery is there an opportunity or what's holding you back from getting to those margin targets faster. Thank you.

I think we will get there faster.

Yes.

For the set for 2020.

Yeah.

<unk>.

Sure.

Thank you.

Okay.

Thank you and we will now take questions from the media as a reminder, if you have a question. Please tell zero one.

Standing by for questions.

And from Wall Street Journal, we have Alison Sider. Please go ahead.

Okay.

So I was wondering if you could talk a little bit about some of the smaller communities, where regional services had to pull back.

Do you think the future is for some of those markets like do you think we will ever have.

Are serviced by a network carrier again or are they just going to have to figure something out how do you see that developing.

We spent a lot of time talking to the small communities and it's been really frustrating that many of these communities have left the United Network.

That doesn't mean, they've lost all of their service in particular.

That's important to note, but I do think it's going to be a number of years.

For this.

Possibly change and in the meantime, the.

Smaller communities can expect.

Additional level of service on much smaller aircrafts.

<unk>.

My expectation based on what I've been seeing in the industry to date, even that is going to take time to spool up.

So this is it is frustrating for United as it is for those small communities.

But this is where we are and we're doing our best to maintain service to as many of them as we possibly can.

But.

We really are stretched refined dramatically fewer regional jets today than we were in 2019, and we don't expect that to improve at all.

In the next few years.

And then.

Just a separate question are you seeing any signs of increased COVID-19 related absences. Among your employees and is that something youre sort of getting any contingency planning for as the case numbers start to ryzen parts of the country.

We are not seeing that in fact was.

<unk> got really good news yesterday for the first time in a long time, we have zero employees.

Hospitalized.

Or any complications from Covid, which is.

But we track closely what's happening.

Zero so quite.

The opposite of what we're seeing.

Alright. Thanks.

Yeah.

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

Hi, good morning, Thanks for the time I wanted to ask about some of the <unk>.

The mechanics around your Triple seven return.

Kind of work is still remains to be done what youre waiting on the FAA and then what's you're hearing from Boeing as far as the Max certification. The Max 10 certification and where that goes that gives you confidence that those will start up in 2023.

Hey, Thanks for the question this is Greg Hart.

Theres really two bodies of work underway on the Triple seven first as we've worked with Boeing and the FAA to be.

Are you able to start the modification work on those aircraft. We've got a number of aircraft complete and that work continues also there is the regulatory process that Boeing is working to end Pratt Whitney are working through with the FAA.

Are in the final legs of that and we appreciate that.

Boeing's, perhaps and Facebook on the issue and.

Obviously expect the FAA at some point in the not too distant future to allow those aircraft to return safely to the air.

Jerry you want to take that.

Nextgen certification.

Yes, as you can expect we are in regular communication with Boeing.

<unk> been.

Very good about keeping us informed on.

On the timeline for the certification for the Max 10, which is why I said earlier.

<unk>.

That the Maxim will get certified and we'll fly it next year.

Great. Thank you on another topic on the masks and the change in that policy. This week.

You've talked about passengers being able to return.

Who are on our list for not complying with your policy.

Some of the issues that you're sorting through on who can return to United flights and who will not be allowed in the future.

Related to that issue. Thank you.

Yes. This is Bret Hart as you can imagine those who have been banned during this time period.

For a range of behaviors.

Behavior and some are relatively straightforward, it's just a refusal to wear a mask.

And those conversations we were able to handle in a reasonable manner.

But there are those who.

<unk>.

Beyond just a.

Refusal to wear the mask and so we will evaluate that behavior and if that behavior.

Resenting a risk too.

Our.

Team members and to other customers.

And those are individuals who it is less likely that we will welcome back to our airlines.

But as you can imagine we're going to take a very thoughtful approach to <unk>.

Valuation this.

And we will be.

Getting in touch with individuals who have been banned.

As time passes.

Great. Thank you.

From CNN, we have Chris Isidore. Please go ahead.

Given that the.

Domestic yields are about where they were first quarter of <unk>.

2019.

That.

Business fare business travel is not yet back up to normal level do you have any sense as to how the.

Leisure.

Travel yields are compared to.

The first quarter of 2019 are they up X percent.

Can you give any guidance.

They are definitely up.

I'm sure all of our customers realized when they passed by gas station out there that the price of fuel is dramatically higher.

And therefore, our largest really our second largest cost component is dramatically higher than United.

Leisure yields along with business yields are running ahead business yields already pointed out were 10% ahead of 2019 at this point as we look into the second quarter and leisure yields are above that at this point as we look into the second quarter above 10%, but youre not giving.

A number yet.

Yes.

Okay.

From TPG, we have David Slotnick. Please go ahead.

Hi, good morning, Thanks for the question.

Was wondering if youre doing any contingency planning or have any plans in place.

Deal with Capella.

Capacity issues that Newark.

Summary, I think we've gotten sort of wondering about problems with that again.

And just given the demand that we're quite sure how you're planning for a couple of months.

Sure.

I'll try to stay calm.

Do this newer cancer.

Frankly, it's outrageous whats being allowed to happen at Newark is.

The airport has the theoretical capacity plus 79 operators.

He says.

That's a perfect conditions, which are rare at Newark is it was the most delayed airports in the country in 2016 again in 2017 again in 2018 again in 2019.

And the FAA has rules that limit the airport to 79 operations per hour and they are leading airlines violate those rules.

Yes.

I don't know, it's unheard of behavior for me for the FAA to just let people break reasonably break the rules. The two biggest defenders, our spirit Airlines and Jetblue Spirit Airlines and Jetblue are paying the biggest price their customers I mean, it's a disaster for their customers because they are flying more flights in the airport can handle this.

Cancelled over 20% of their flights one in five flights canceled canceled underweight canceled.

Newark, So far this month.

Ballpark, where their employees, it's awful for the customers. Unfortunately, our employees and our customers are collateral damage to that it is time for the FAA to enforce their own rule its bad for consumers. It's terrible for consumers what is being allowed to happen at Newark, It's simply time for the FAA to enforce the rules.

Putting aside from communicated and what's going on to customers is there any way that you can help customers.

Mitigate this quarter at <unk>.

We're adding capacity or something like that with customers, who book on United because as bad as well its tough for US our results are a whole lot better.

And our team has done a great job of taking care of customers I forgot fly out of Newark, I'd, certainly encourage you to book on United.

Okay. Thanks, Scott.

Yeah.

Thank you we will now turn it back to Emily's Adidas for closing remarks.

Thanks for joining the call today, please contact Investor and media relations. If you have any further questions and we look forward to talking to you next quarter.

Thank you ladies and gentlemen. This concludes today's conference. Thank you for joining us.

May now disconnect.

Q1 2022 United Airlines Holdings Inc Earnings Call

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