Q1 2024 United Airlines Holdings Inc Earnings Call

Krista: Good morning and welcome to United Airlines Holdings' Earnings Conference Call for the first quarter of 2024. My name is Krista, 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 would like to ask a question, please press star one on your telephone keypad. And if you would like to withdraw that question, again, press star one.

Good morning, and welcome to United Airlines Holdings Earnings Conference call for the first quarter. What do you 24. My name is Krista and I will be your conference facilitator today.

Speaker Change: Following the initial remarks from management, we will open the lines for questions.

Krista: That time, if you would like to ask a question. Please press star one on your telephone keypad and if you would like to withdraw that question again press Star one.

Kristina Munoz Edwards: This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed, or rebroadcast without the company's permission. 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, Kristina Edwards, Managing Director of Investor Relations. Please go ahead.

Krista: This call is being recorded and is copyrighted. Please note that no portion of the call maybe recorded transcribed or rebroadcast without the company's permission your participation.

Krista: The patient implies your consent to our recording of this call.

Krista: 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 Christina Edwards managing director of Investor Relations. Please go ahead.

Kristina Munoz Edwards: Thank you, Krista. Good morning, everyone, and welcome to United Airlines' first quarter 2024 earnings conference call. Yesterday, we issued our earnings release, which is available on our website at ir.united.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 on information currently available to the company. However, a number of factors could cause actual results to differ materially from our current expectations.

Kristina Munoz Edwards: Thank you Christina good morning, everyone and welcome to United's first quarter 2024 earnings Conference call yesterday, we issued our earnings release, which is available on our website 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.

Kristina Munoz Edwards: Or beliefs concerning future events and financial performance.

Kristina Munoz Edwards: All forward looking statements are based upon information currently available to the company a number of factors could cause actual result 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 FCC by United Airlines Holdings, and United Airlines for more thorough description of these factors.

Scott Kirby: Please refer to our earnings release, Form 10-K and 10-Q, and other reports filed with the SEC by United Airlines Holdings and United Airlines for a more thorough description of these facts. Unless otherwise noted, we will be discussing our financial metrics on a non-GAAP basis on this call. Please refer to the related definitions and reconciliations in our press release. 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 release.

Kristina Munoz Edwards: Unless otherwise noted we will be discussing our financial metrics on a non-GAAP basis on this call. Please refer to the related definitions and reconciliations in our press release for a reconciliation of these non-GAAP measures to the most directly directly comparable GAAP measures. Please refer to the tables at the end of our release George.

Scott Kirby: 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 Mike Leskinen. In addition, we have other members of the executive team on the line available to assist with Q&A. Now, I'd like to turn the call over to Scott.

Speaker Change: 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, Mike Muscadine. In addition, we have other members of the executive team on the line available to assist with Q&A and now I'd like to turn the call over to <unk>.

Scott Kirby: Thanks, Kristina, and welcome everyone to the call today. Before we dive into our Q1 earnings performance, I want to start by talking about the issue that always comes first at United, safety. Safety is the fundamental pillar of our core four nets: Safe, Caring, Dependable, and Efficient. And in that, we're Safety is at the core of everything we do at our airline to make United. As you've read, the FAA recently began evaluating several elements of our operation to ensure we're doing all we can to drive safety.

Kristina Munoz Edwards: Scott.

Scott Kirby: Thanks Kristina.

Scott Kirby: Welcome everyone to the Goldman.

Scott Kirby: Before we dive into our Q1 earnings performance I wanted to start by talking about the issue that always comes first.

Safety is the fundamental pillar of our core four net.

Scott Kirby: Caring dependable and efficient and in that order.

Scott Kirby: Safety is at the core of everything we do at our airline to make it a success as you Brad the FAA recently began evaluating several elements of our operation to ensure we're doing all we can to drive safety compliance.

Scott Kirby: We welcome the FAA's engagement, and we are embracing this review as an opportunity to take our safety culture standards to an even higher level. As we undergo this review, I have confidence that, first, we have a strong foundation and a culture of safety here at United, including training, systems, processes, and reporting. That's backed up by our strong track record and the success of our safety protocols. Through the FAA review, I'm confident that we'll uncover opportunities to make our airline even safer.

Scott Kirby: Welcome to the FAA is engagement.

Scott Kirby: Breaking this review as an opportunity to take our safety culture standards to an even higher level.

Scott Kirby: As we undergo this review.

Scott Kirby: Confidence first we have a strong foundation and a culture of safety here, including training systems processes and reporting culture, and that's backed up by our strong track record and the success of our safety protocols second.

Scott Kirby: Through the FAA review I am confident that we will uncover opportunities to make our airline even safer.

Scott Kirby: At United, we have the best team of airline professionals in the world, and we're committed to embracing this opportunity to make the best airline in the world even better for our customers and employees. Now to our Q and A. We delivered a strong first quarter, and it's clear the United Next plan continues to put our hairline on a brighter. Notably, we saw meaningful year-over-year margin improvement in the first quarter, and if the Boeing MAX 9 hadn't been grounded, we would have been profitable.

Scott Kirby: Best team of airline professionals in the world and we're committed to embracing this opportunity to make the best airline in the world even better for our customers important now to our Q1 earnings with.

Scott Kirby: We delivered a strong first quarter and it's clear the United next plan continues to put our airline and a bright path, notably we saw meaningful year over year margin improvement in the first quarter.

Scott Kirby: Boeing Max nine hadn't been grounded we would have been profitable for the quarter.

Scott Kirby: Next Plan continues to demonstrate resilience in challenging industry conditions as we face further significant aircraft delivery delays this year, but we've been able to find ways to offset most of those headwinds. On demand, we see continued positive momentum and bookings across all customers, from the most price-sensitive customers to domestic road warriors and up to the premium global. Our cost management and clear demand for the United product continue to support our confidence in the United Next strategy and full year 2024 EPS of $9 to $11.

Scott Kirby: <unk> continued to demonstrate resilience and challenging industry conditions as we faced further significant aircraft delivery delays. These delays are driving temporarily higher costs. This year, but we've been able to find ways to offset most of those headwinds on demand. We see continued positive momentum in bookings across all customer segments.

Scott Kirby: From the most price sensitive customers two domestic road warriors and up to the premium global customer.

Our cost management and clear demand for the United product continued to support our confidence in the United next strategy and full year 2024, EPS of nine to $11 <unk>.

Scott Kirby: In conclusion, I'm proud of the United team for delivering top-tier operational and financial performance. Thank you for all the work you do that makes us the airline that customers choose to fly. And with that, I'll hand it over to Brett.

Scott Kirby: In conclusion, I am proud of the United team for delivering top tier operational and financial results. Thank you for all the work you do it makes us airline customers choose to fly and with that I'll hand, it over to Brett.

Brett J. Hart: Thank you, Scott, and good morning. I'd like to thank our employees for their hard work this quarter as we navigated through the grounding of the Boeing MAX 9 fleet. We recovered well and got our customers to their destinations with limited disruption. As Scott mentioned, together with the FAA, we have begun an in-depth review of our processes and procedures. These reviews are being taken very seriously.

Brett J. Hart: Thank you Scott and good morning.

Brett J. Hart: I'd like to thank our employees for their hard work this quarter as we navigated through the grounding of the Boeing Max nine fleet, we recovered well and got our customers to their destinations with limited disruption.

Brett J. Hart: <unk> mentioned together with the FAA, we've begun an in depth review of our processes and procedures. These reviews are being taken very seriously.

Brett J. Hart: We will see this as an opportunity to further strengthen our commitment to safety. As we work through this safety review with the FAA, certain certifications will be delayed. As a result of this, we expect a small number of aircraft scheduled for delivery in the second quarter to be delayed. We expect this to have a minimal impact on our 2024 capacity.

Brett J. Hart: And we will see this as an opportunity to further strengthen our commitment to safety.

Brett J. Hart: As we work through this safety review with the FAA certain certifications will be delayed.

Brett J. Hart: As a result of this we expect a small number of aircrafts scheduled for delivery in the second quarter to be delayed.

Brett J. Hart: We expect this to have a minimal impact to our.

Brett J. Hart: 2024 capacity plans.

Brett J. Hart: I am confident that we will be able to successfully look back on this review process, resulting in an even better airline for our customers, employees, and shareholders. On the employee front, we reached a tentative agreement with the IBT for a four-year extension to their existing contract. We expect to hear if it is ratified by their membership in the next few days.

Brett J. Hart: I am confident that we will be able to successfully look back on this review process, resulting in an even better airline for our customers employees and shareholders on.

On the employee front, we reached a tentative agreement with the IBD for four year extension to their existing contract.

Brett J. Hart: We expect to hear if it is ratified by the membership in the next few days.

Brett J. Hart: Taking a look at our operation in the first quarter, we delivered top-tier service for our customers. We had our second-best on-time departure performance in the first quarter in our history, excluding the pandemic year. This resulted in being second in the industry and on-time departures for the seventh month in a row. Additionally, our wide-body operation had the company's best on-time performance since the pandemic. We accomplished all of this while having the highest heat factor for any first quarter in our history.

Brett J. Hart: Taking a look at our operation in the first quarter, we delivered top tier service for our customers.

Brett J. Hart: We had our second best on time departure performance in the first quarter in our history, excluding pandemic years. This.

Brett J. Hart: This resulted in being second in the industry in on time departures for the seventh month in a row. Additionally.

Brett J. Hart: Additionally, our wide body operation had the company's best on time performance since the pandemic.

Brett J. Hart: We accomplished all of this while having the highest seat factor for any first quarter in our history.

Brett J. Hart: This is a great testament to the hard work of our employees. In addition to strong operational performance, we also continue to make customer enhancements that have driven up our net promoter score. Some of these include:

Speaker Change: This is a great Testament to the hard work of our team.

Speaker Change: In addition to strong operational performance. We also continue to make customer enhancements that have driven up our net promoter scores.

Speaker Change: Some of these include.

Brett J. Hart: Continuing to retrofit our existing mainline fleet with Signature Interior. [inaudible] Signature Interior aircraft score nine points higher in on-time NPS compared to the rest of the narrow-body fleet. We are on track for 50 percent of our North America fleet to have Signature Interiors by the end of the year. And we were the first U.S. airline to offer mileage plus pooling, allowing customers to share and use miles with their friends and family. We've also partnered with the TSA to launch TSA PreCheck Touchless ID at O'Hare and LAX, which uses biometrics to enable customers to pass through the TSA line faster and without having to pull out their ID.

Speaker Change: Continuing to retrofit our existing mainline fleet with signature interiors. This feature larger overhead bins in flight entertainment and every seat back and Bluetooth connectivity.

Speaker Change: Nature interior aircrafts were nine points higher and on time NPS compared to the rest of the narrow body fleet.

Speaker Change: We're on track for 50% of our North America fleet signature interiors by the end of the year.

Speaker Change: We're the first U S airline to offer mileage plus cooling, allowing customers to share and use miles with their friends and families.

Speaker Change: We've also partnered with the TSA to launch TSA pre check touchless idea at O'hare and L. A X, which uses bio metrics to enable customers to pass through the TSA lines faster and with and without having to pull out.

Andrew P. Nocella: Running a reliable operation and enhancing the customer experience continues to differentiate United. These encouraging operational results and improved net promoter scores, combined with our focus on safety, are creating strong momentum for the rest of 2020. We'll now turn it over to Andrew to talk about the review.

Speaker Change: Running a reliable operation and enhancing the customer experience continues to differentiate United using.

Speaker Change: These encouraging operational results and improved net promoter scores combined with our focus on safety are creating strong momentum for the rest of 2024.

Speaker Change: I will now turn it over to Andrew to talk about the revenue environment.

Andrew P. Nocella: Thanks, Brett.

Andrew P. Nocella: United's revenue and financial performance will be top tier in Q1, and as Scott and Brett mentioned, we also had strong operational results. Without the ground being sold into the Maxine, we clearly would have produced a profit in the quarter.

Revenue in our financial performance will be top tier in Q1, and as Scott and Brad mentioned, we also had strong operational results.

Andrew P. Nocella: Without the grounding of the Max nine we clearly would have produced a profit in the quarter.

Andrew P. Nocella: Looking back at 2023, we did have a great year, particularly in Q2 and Q3. However, United's relative financial performance in Q1 of 2023 did not meet our expectations. Improving United's absolute and relative Q1 margin is something we're very focused on to achieve our long-term financial targets. Q1 has always been our most challenging quarter financially, and post-pandemic Q1 seasonality worsened due to decreases in corporate

Andrew P. Nocella: Looking back at 2023, we did have a great year, particularly in Q2 and Q3, however, United relative financial performance in Q1 of 2023 did not meet our expectations.

Andrew P. Nocella: Improving united's absolute and relative Q1 margin is something we're very focused on to achieve our long term financial targets.

One has always been our most challenged quarter financially post pandemic Q1 seasonality worsen due to decreases in corporate business.

Andrew P. Nocella: For the first quarter of 2024, we took the lessons from 2023 and carefully refined our commercial plan with encouraging results. A few of our domestic capacity changes in Q1 included Florida capacity increasing 20% with financial results well above our system average. Las Vegas capacity increased 7% again with strong financial results.

Andrew P. Nocella: For the first quarter of 2024, we took the lessons for 2023 and carefully refined our commercial plan with encouraging results.

Andrew P. Nocella: A few of our domestic capacity changes in Q1 included Florida capacity increased 20% with financial results well above our system average.

Andrew P. Nocella: Vegas capacity increased 7% again with strong financial results.

Andrew P. Nocella: Day, margins on off peak early AM and late PM flights improved by 12 points year-over-year, and margins on off peak days improved by 11 points, driven by United changes and the industry. In making these changes to how we deploy capacity in Q1, we sacrificed about one point of narrow-body utilization year-over-year, but in exchange, we offered a schedule that was more attractive to passengers with better departure and arrival times and more profitable for United. Lower utilization has also enhanced our reliability.

Andrew P. Nocella: Margins on off peak early and late P. M flights improved by 12 points year over year and margins on off peak days improved by 11 points driven by United changes in industry changes.

Making these changes to how we deploy capacity in Q1, we sacrificed about one point of narrow body utilization year over year, but in exchange. We offered a schedule that was more attracted to passengers with better departure and arrival times and more profitable for United Lower utilization also enhanced our reliability.

Andrew P. Nocella: We believe our Q1 2024 results set United up for producing profitable first quarters in the upcoming years and show our agility in adjusting our plan to meet new challenges. Turning to our overall revenue performance in the first quarter, revenue increased 9.7% on 9.1% more capacity. Consolidated TRASM was up 0.6%, and PRASM was up 1%.

We believe our Q1 2024 results at United up for producing profitable first quarters in the upcoming years and show our agility on adjusting our plans to meet new challenges.

Andrew P. Nocella: Turning to our overall revenue performance in the first quarter.

Andrew P. Nocella: Revenue increased nine 7% on nine 1% more capacity consolidated <unk> was up six tenths of a percent in PRASM was up 1% domestic.

Andrew P. Nocella: Domestic prosim increased 6.1%, which we expect to be industry leading year over year, while international prosim was down 4.2%. Domestic revenue results were also well above our expectations on strong demand and did help offset low arousals year-over-year from global fly-in and Latin America. United's domestic rateling gains since 2019 lead the industry, even with United having the largest increase in aircraft gauge of any U.S. airline. United's domestic network has been starved of gauged historic, I think our domestic RASM results in Q1 yet again show that not all industry capacity is created equally, considering the marginal RASM performance of growth ASMs at other airlines versus United. Cargo revenue decreased 1.8% year-over-year, and we're hopeful that this is the last year-over-year decline we'll see in the near term.

Andrew P. Nocella: Domestic PRASM increased six 1%, which we expect to be industry, leading year over year, while international PRASM was down four 2%.

Andrew P. Nocella: Domestic revenue results were also well above our expectations on strong demand and.

Andrew P. Nocella: And did help offset lower RASM year over year from global client in Latin America.

Andrew P. Nocella: <unk> domestic RASM gains since 2019 lead the industry, even with United having the largest increase in aircraft gauge of any U S. Airline United's domestic networks has been starved of gauge historically.

Andrew P. Nocella: I think our domestic RASM results in Q1, yet again showed that not all industry capacity is created equally considering the marginal RASM performance of growth ASM set of other airlines versus United.

Andrew P. Nocella: Cargo revenue decreased one 8% year over year and were hopeful that this is the last year over year decline, we'll see in the near term.

Andrew P. Nocella: MileagePlus had another strong quarter with revenue up 15%. United's premier frequent flyer numbers are more engaged than ever by flying and using one of our co-brand credit cards. Managed Corporate Travel in Q1 was up 14% year-over-year.

Andrew P. Nocella: <unk> had another strong quarter with revenue up 15% United Premier frequent flyer members are more engaged than ever by flying using one of our co brand credit cards.

Andrew P. Nocella: Managed corporate travel in Q1 was up 14% year over year yield for managed travel will be faster than non managed travel due to stronger close in pricing and refined discount and guidelines the strength of the business traffic rebounded as a nice development for an airline like United.

Andrew P. Nocella: Yields for managed travel grew faster than non-managed travel due to stronger closing pricing and refined discounting guidelines. The strength of the Business Traffic Rebound is a nice development for an airline like United. Latin American Prism was down 12.7%.

Andrew P. Nocella: Latin American PRASM was down 12, 7% weakness was felt in near Latin American markets for the most part versus South America.

Andrew P. Nocella: Weakness was felt in near Latin American markets for the most part versus South America. However, we were pleased with our capacity growth across the Pacific, where capacity was up 66% and parasm was down 12.9%. However, we do plan to make capacity adjustments to a small number of underperforming routes later this year. Q1 performance for United's Atlantic flying was up, with strong passenger growth 11% up. We saw a material rebound in London, where Polaris revenues were up 8% on 11% less capacity. We saw weakness in Germany offset by strength in Southern Europe and Africa, where we increased capacity.

Andrew P. Nocella: We were pleased with our capacity growth across the Pacific where capacity is up 66% and PRASM was down 12, 9%. However, we do plan to make capacity adjustments to a small number of underperforming routes later this year.

Q1 performance for United's Atlantic Flying was up with strong PRASM, 11% up we saw a material rebound in London, where Polaris revenues were up 8% on 11% less capacity.

Andrew P. Nocella: We saw weakness to Germany, offset by strength in Southern Europe, and Africa, where we increase capacity.

Andrew P. Nocella: United's efforts to build our brand in premium product choices while reducing customer friction are having a noticeable positive impact on our results as we gain share across the network for leisure and business travelers. For our Road Warrior Frequent Flyer business customers, United's elimination of change fees, the functionality of our app to manage their entire travel experience, improvements to MileagePlus, and the steady increase in United Club facilities has resulted in an improvement in share. However, we cannot understate the importance of the elimination of change feeds, which is a game changer for how people feel about United.

Andrew P. Nocella: Efforts to build our brand and premium product choices, while reducing customer friction is having a noticeable positive impact on our results as we gained share across the network for leisure and business travelers.

Andrew P. Nocella: For a road warrior frequent flyer business customers, United elimination of change fees, the functionality of our app to manage their entire travel experience improvements to mileage plus and the steady increase in United Club facilities is we're relatively in an improving share.

Andrew P. Nocella: However, we cannot understate the importance of the elimination of change fees, which is a game changer for how people feel about United.

Andrew P. Nocella: United is focus on premium products that match well with increased consumer demand for our premium seat choices. We believe this focus is diversified and made our revenues less cyclical in the long run.

Andrew P. Nocella: United's focus on premium products has matched well with increased consumer demand for our premium seat choices. We believe this focus has diversified and made our revenues less cyclical in the long run. Premium Passenger Revenue Mix improved 1.9 points versus Q1 2023 and 3 points versus Q1 2019. In other words, we're seeing near-term acceleration.

Andrew P. Nocella: Premium passenger revenue mix improved one nine points versus Q1, 2023, and three points versus Q1 2019 in other words, we're seeing near term acceleration.

Premium revenues were up 14% year over year on 10% more capacity and we estimate that United's premium revenue streams lead the industry.

Andrew P. Nocella: Premium revenues were up 14% year-over-year on 10% more capacity, and we estimate that United's premium revenue streams lead the industry. While our largest focus is on growing premium revenues, we also believe our rollout of basic economy is a critical competitive tool and important to attracting customers of all types in our core geography. Basic Economy Sales Trends in Q1 were up 35% year-over-year.

Andrew P. Nocella: While our largest focus is on growing premium revenues. We also believe our rollout of basic economy as critical a critical competitive tool and importantly, attracting customers of all types in our core geography.

Andrew P. Nocella: Basic economy sales trends in Q1 were up 35% year over year basic has clearly changed our competitive stance versus the <unk>.

Andrew P. Nocella: Larger narrow body jets are also increasing <unk> faster with more premium seats than any other U S airline where resorbing. This gauge increase well, which can be easily measured in our continued domestic RASM growth relative to others. We continue to plan for further gauge growth between 2025, and 2027, who would've expanded Max nine and <unk>.

Andrew P. Nocella: Basic has clearly changed our competitive stance versus the ULC. Larger narrow-body jets are also increasing United's revenue gauge faster with more premium seats than any other U.S. airline. We are absorbing this revenue gauge increase well, which can be easily measured in our continued domestic RASM growth relative to others. We continue to plan for further gauge growth between 2025 and 2027 with our expanded MAX 9 and A321 fleets. Other product innovations are planned with the goal of increasing choice for customers, expanding premium revenue streams, and segmenting demand.

Andrew P. Nocella: <unk> hundred 21 fleet.

Andrew P. Nocella: Their product innovations are planned with the goal of increasing choice for customers expanding premium revenue streams and segment and demand.

Andrew P. Nocella: <unk> growth will also create further cost convergence more importantly gauge growth provides consumers a wide range of premium seat choices that they want and that we've proven we can monetize.

Andrew P. Nocella: For Q2, we continued to see strong domestic and Atlantic demand with positive RASM results tempered by the Pacific where do you expect a negative result year over year. We also expect Latin America will have a materially negative PRASM result year over year in the quarter.

Andrew P. Nocella: Gates Growth will also create further cost convergence. But more importantly, Gage Growth provides consumers with a wide range of premium seat choices that they want and that we've proven we can monetize. For Q2, we continue to see strong domestic and Atlantic demand with positive prosimum results tempered by the Pacific, where we expect a negative result year over year. We also expect Latin America will have a materially negative prosimum result year over year in the quarter.

Andrew P. Nocella: As we think about the second half of 2024, we do like the macro setup, particularly for domestic capacity, where we think we can continue a RASM growth above industry average, we're focused on building connectivity and our core non coastal hubs in 2024 with both new mainline jets and with enhanced RJ capabilities with that I wanted to.

Andrew P. Nocella: Gratulate the entire United team on a job well done and turnover the call to Mike to discuss our financial results and updated fleet plan Mike.

Andrew P. Nocella: As we think about the second half of 2024, we do like the macro setup, particularly for domestic capacity, where we think we can continue RASM growth above industry average. We're focused on building connectivity in our core non-coastal hubs in 2024 with both new mainline jets and enhanced RJ capability. With that, I wanted to congratulate the entire United team on a job well done and turn over the call to Mike to discuss our financial results and updated fleet plan.

Unknown Attendee: Thanks, Andrew and thank you to the United team for the tremendous effort as we work through the grounding of the Boeing Max nine fleet.

Entered the peak spring break travel season.

Unknown Attendee: In the first quarter, we produced a pretax loss of $79 million, a $187 million improvement over the first quarter of last year.

Unknown Attendee: Our loss per share of <unk>, <unk> was better than our guidance and well ahead of consensus expectations driven by both strong revenue results and disciplined expense management.

Unknown Attendee: The grounding of the Boeing Max nine fleet negatively impacted our earnings by more than $200 million and without it we would've had a profitable quarter.

Unknown Attendee: We also generated $1 5 billion in free cash flow and our adjusted net debt to EBITDAR of two seven times is back to pre pandemic levels.

Michael Leskinen: Thanks, Andrew. And thank you to the United team for the tremendous effort as we worked through the grounding of the Boeing Max 9 fleet and entered the peak spring break travel season. In the first quarter, we produced a pre-tax loss of $79 million. A $187 million improvement over the first quarter of last year. Our loss per share of $0.15 was better than our guidance and well ahead of consensus expectations, driven by both strong revenue results and disciplined expense management. The grounding of the Boeing MAX 9 fleet negatively impacted our earnings by more than $200 million, and without it, we would have had a profitable quarter. We also generated $1.5 billion in free cash flow.

These are strong results and what is our seasonally weakest quarter and then provide another proof point better United next plan is working.

Speaker Change: Before I turn to the outlook I'd like to address the changes, we made with Boeing and Airbus to optimize the delivery skyline.

Speaker Change: Boeing's repeated delivery delays had created an impractical bow wave of aircraft deliveries that both United and Boeing had to address and we have in 2024, we now expect to take delivery of 61 narrow body aircraft and five wide body aircraft.

Speaker Change: This compares to our contractual deliveries of 183 narrow body aircraft at the at year end and 101 aircraft. We were planning for at the start of the year.

Speaker Change: Due to these fleet changes, we now expect full year 2020 for total capital expenditures to be approximately $6 5 billion down from $9 billion at the start of the year.

Michael Leskinen: And our adjusted net debt to EBITDAR of 2.7 times is back to pre-pandemic levels. These are strong results in what is our seasonally weakest quarter, and they provide another proof point that our United Next plan is working. Before I turn to the outlook, I'd like to address the changes we made with Boeing and Airbus to optimize the delivery skyline. Boeing's repeated delivery delays had created an impractical backlog of aircraft deliveries that both United Airlines and Boeing had to address, and we did.

Speaker Change: We've also made changes to level out our fleet plan for 2025 through 2027.

Speaker Change: This modified fleet plan allows us to execute on our long term goals, while also smoothing out the pace of deliveries and our annual Capex spend.

Speaker Change: We've converted a near term portion of our Max 10 deliveries scheduled through 2027 into Max Nines.

Speaker Change: Additionally, we have signed letters of intent to lease 35, new Airbus <unk> hundred 21 news with CFM engines scheduled for delivery in 2026 and 2027.

Michael Leskinen: In 2024, we now expect to take delivery of 61 narrow-body aircraft and five wide-body aircraft. This compares to our contractual deliveries of 183 narrow-body aircraft at year-end and the 101 aircraft we were planning for at the start of the year. Due to these fleet changes, we now expect full year 2024 total capital expenditures to be approximately $6.5 billion, down from $9 billion at the start of the year.

Speaker Change: With these changes we now anticipate taking delivery of approximately 100 narrow body aircraft on average each year. During this three year period. This.

Speaker Change: This delivery schedule provides fleet renewal with steady growth and addresses the bow wave of aircraft delivery delays that had been building.

Speaker Change: These changes bring our total adjusted capital expenditures in 2025 through 2027 to the 7% to $9 billion range in each of those years.

Speaker Change: Balancing our United next growth plan and managing the business towards positive free cash flow remain top priorities.

Michael Leskinen: We've also made changes to level out our fleet plan for 2025 through 2027. This modified fleet plan allows us to execute on our long-term goals while also smoothing out the pace of deliveries and our annual capex. We've converted a near-term portion of our Max-10 deliveries scheduled through 2027 into Max-9. Additionally, we've signed letters of intent to lease 35 new Airbus A321neos with CFM engines scheduled for delivery in 2026 and 2027. With these changes, we now anticipate taking delivery of approximately 100 narrow-body aircraft on average each year during this three-year period.

Speaker Change: And with the rebalanced skyline, we're targeting positive and growing free cash flow over the next three years.

Speaker Change: While we will provide an updated long term earnings target. Later. This year. We are confident we are on a path to higher earnings better margins and materially stronger free cash conversion.

Speaker Change: Now turning to costs.

Speaker Change: Unit costs trended as expected during the quarter and were up four 7% year over year on nine 1% capacity growth.

Speaker Change: As I mentioned it was challenging to re optimize our expenses with the uncertainty created by the Max grounding.

Speaker Change: And continued delays to aircraft deliveries.

Speaker Change: While our underlying costs are consistent with our forecast at the beginning of the year. It is important to understand that the continued reduction in capacity from delivery delays will continue to temporarily pressure our CASM ex for all of 2024.

Michael Leskinen: This delivery schedule provides fleet renewal, steady growth, and addresses the tidal wave of aircraft delivery delays that had been building. These changes bring our total adjusted capital expenditures in 2025 through 2027 to the $7 to $9 billion range in each of those years. The Next Growth Plan and Managing the Business Towards Positive Free Cash Flow remain top priorities. And with the Rebalance skyline, we are targeting positive and growing free cash flow over the next three years.

Speaker Change: As we entered the year, we built the business plan for a larger airline and deliveries have fallen more than 40 aircrafts short of our expectations.

Speaker Change: We continue to incur most of the expenses as we hired for that capacity, despite flying fewer <unk> and it is driving almost a point of CASM ex pressure.

Speaker Change: We are working diligently to reduce these costs as much as possible and our higher completion factor has helped to offset some of it.

Speaker Change: For the second quarter, we expect CASM ex to be similar on a year over year basis versus the first quarter.

Michael Leskinen: While we will provide an updated long-term earnings target later this year, we are confident we are on a path to higher earnings, better margins, and materially stronger free cash conversion. Now, turning to cost. Unit costs trended as expected during the quarter, and we're up 4.7% year-over-year on 9.1% capacity. As I mentioned, it was challenging to reoptimize our expenses with the uncertainty created by the max ground and continued delays to our aircraft delivery.

Speaker Change: Given our expectation for costs and our current outlook for revenue and fuel, we expect second quarter earnings per share to be between $3 75 and.

Speaker Change: And $4 25.

Speaker Change: We have great we have great momentum our United next plan is working and the future for United and our industry has never looked brighter.

Speaker Change: Our margins are already near the top of the industry and we still have significant and unique network engage opportunities in front of us.

United has never been in a stronger competitive position.

Speaker Change: We have developed a wide variety of products that are compelling to a wide variety of customers and as a result, they are increasingly choosing to fly United.

Michael Leskinen: While our underlying costs are consistent with our forecast at the beginning of the year, it's important to understand that the continued reduction in capacity from delivery delays will continue to temporarily pressure our CASM-X for all of 2024. As we enter the year, we built a business plan for a larger airline, and deliveries have fallen more than 40 aircraft short of our expectations. We continue to incur most of the expenses as we hired for that capacity despite flying fewer ASMs, and it is driving almost a point of CASMX pressure.

Speaker Change: I remain excited about our future and believe we're firmly on track to deliver $911 and earnings per share this year.

Speaker Change: With that I'll pass it over to Kristina to start the Q&A.

Kristina: Thanks, Mike we will now take questions from the analysts please limit yourself to one question and if needed one follow up question Christa. Please describe the procedure to ask a question.

Kristina: Thank you if you'd like to ask a question. Please press star one on your telephone keypad and if you'd like to withdraw your question Press Star one.

Michael Leskinen: We are working diligently to reduce these costs as much as possible, and our higher completion factor has helped offset some of them. For the second quarter, we expect CASMX to be similar on a year-over-year basis versus the first. Given our expectation for costs and our current outlook for revenue and fuel, we expect second quarter earnings per share to be between $3.75 and $4.25.

Kristina: Your first question comes from the line of Andrew <unk> from Bank of America. Please go ahead.

Andrew P. Nocella: Hi, Good morning, everyone. Thanks for the question first.

Andrew P. Nocella: First one is for Mike or Scott I guess, what's your new Capex forecast.

Andrew P. Nocella: I'm sure not yet set in stone given there are a lot of moving parts here and it certainly implies much more consistent free cash flow generation over the next few years. How are you thinking about maybe deploying that deploying that capital where do you see the best fit for that going forward.

Kristina Munoz Edwards: We have great momentum, our United Next plan is working, and the future for United and our industry has never looked brighter. Our margins are already near the top of the industry, and we still have significant and unique network and gauge opportunities in front of us. We have never been in a stronger competitive position. We've developed a wide variety of products that are compelling for a wide variety of customers, and as a result, they're increasingly choosing to fly United. I remain excited about our future and believe we're firmly on track to deliver $9 to $11 in earnings per share this year. With that, I'll pass it over to Kristina to start the Q&A.

Speaker Change: Hi, Andrew Nice to hear from you I'll take that question Andrew as I said in my prepared remarks, our net leverage is currently two seven times.

Speaker Change: Our net leverage was two seven times, which puts us back in the range of pre pandemic levels. In fact in 2019, we were at two five times in 2018 were at three times as we look at the path forward I expect to see continued deleveraging.

Speaker Change: We also have we also still have some high coupon debt outstanding.

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

Speaker Change: Piece of our mileage plus debt $1 8 billion becomes pre pre payable in July.

Speaker Change: That is still yielding over 10%.

Speaker Change: So that will be my near term priority is to take care of that debt after that with <unk>.

Krista: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. And if you'd like to withdraw your question, again, press star 1. Your first question comes from the line of Andrew Didora from Bank of America. Please go ahead.

Speaker Change: <unk>.

Speaker Change: On our way to investment grade credit metrics.

We're going to have a tremendous amount of flexibility and we will revisit other uses of free cash at that time, but you're going to have to stay tuned.

Speaker Change: Great. Thank you for that Mike.

Andrew George Didora: Hi, good morning, everyone. Thanks for the questions. First ones for Mike or Scott, I guess, you know, with your new CapEx forecasts, which I'm sure are not yet set in stone, given there are a lot of moving parts here, it certainly implies much more consistent free cash flow generation over the next few years. How are you thinking about maybe deploying that, deploying that capital? Where do you see the best fit for that going forward?

Speaker Change: Just a follow up question for.

Speaker Change: Andrew just on the corporate commentary and the strong Trans Atlantic.

Speaker Change: You cited Heathrow in your prepared remarks should we read into.

Speaker Change: That that corporate was a big driver of the results in <unk> on Trans Atlantic or any other callouts that you would have just to get a sense for for what's driving the outperformance there. Thank you.

Andrew P. Nocella: Corporate was strong across the board not just in London Heathrow to be clear, we saw strength domestically.

Michael Leskinen: Hi Andrew. It's nice to hear from you.

And around the globe. So it was great to see we saw I think nine of our top 10.

Michael Leskinen: I'll take that question. Andrew, as I said in my prepared remarks, our net leverage is currently 2.7 times, which puts us back in the range of pre-pandemic levels. In fact, in 2019, we were at 2.5 times. In 2018, we were at three times.

Andrew P. Nocella: Corporate booking days this year in our history, which was also really strong really across the board.

The strongest industries or professional services.

Andrew P. Nocella: And industrials.

Andrew P. Nocella: But every I think just about every sector was up in the numbers this year.

Andrew P. Nocella: And I think it reflects on where that's going in.

Michael Leskinen: As we look at the path forward, I expect to see continued deleveraging. We also still have some high-coupon debt outstanding. A piece of our mileage plus debt, $1.8 billion, becomes prepayable in July. And that debt is still yielding over 10%. So that will be my near-term priority to take care of that debt. After that, on our way to investment grade credit metrics, we're going to have a tremendous amount of flexibility, and we'll revisit other uses of free cash at that time. But you're going to have to stay tuned.

Andrew P. Nocella: As you know as I said in my earlier script Q1.

Andrew P. Nocella: Corporate is really important to us and the fact that Q1 is gaining strength.

Andrew P. Nocella: Corporate is really very good for our outlook for future Q1s.

Speaker Change: Great. Thank you.

Speaker Change: Your next question comes from the line of Sheila <unk> from Jefferies. Please go ahead.

Sheila: Good morning, everyone, great job great quarter.

Sheila: I wanted to ask on.

Sheila: Domestic PRASM was up 6% year over year in Q1 was double that of one of your peers that have reported so far curious how you would attribute that to the strong performance.

Michael Leskinen: Great. Thank you for that, Mike.

Andrew P. Nocella: Just a follow-up question for Andrew, just on the corporate commentary and the strong Transatlantic. I know you cited Heathrow in your prepared remark. Should we read into that that corporate was a big driver of the results in 1Q for Transatlantic or any other call-outs that you would have just to get a sense for what's driving the outperformance there? Thank you.

Sheila: Mid con restoration corporate share gains in either a premium or basic you've touched upon that a little bit, but then maybe as a follow up as well how are you thinking about that sustaining domestic unit revenues.

With industry capacity.

Andrew P. Nocella: As I say, I mean, corporate was strong across the board.

Speaker Change: Thank you I'm going to start it and then turn it to Andrew for the more technical answer, but I'm going to take a bigger picture I think more strategic approach to the question.

Andrew P. Nocella: As I say, corporate was strong across the board, not just in London, Heathrow, to be clear; we saw strength domestically and around the globe, so it's great to see. We saw, I think, nine of our top 10 corporate booking days this year, which is also really strong. So really across the board, the strongest industries are professional services, tech, and industrials. But I think just about every sector was up in the numbers this year.

Andrew P. Nocella: And I'd start by saying we've been.

Andrew P. Nocella: Trying to tell you over the last several years, how we thought the industry was developing the strategy behind the United matter.

And essentially everything that we've said and that has worked but it hasnt resonated. So I'm going to try a different approach today and really what is happening and there's a couple of airlines that have what im describing but what has happened is we have the industry has structurally changed.

Andrew P. Nocella: And I just think it reflects on where that's going. And as I said in my earlier script, Q1, corporate is really important to us. And the fact that Q1 is gaining strength for corporate is really important to us as well. So I think it's great to see that we're able to do that.

Andrew P. Nocella: And United in at least one other have.

Andrew P. Nocella: Essentially a moat around our business now that never existed before the moat by the way to be clear is a moat that is based on having a better proposition for customers. We have a better product we have a better network, a better loyalty program and they choose to fly us.

Sheila Karin Kahyaoglu: Your next question comes from the line of Sheila Kahyaoglu from Jeffries. Please go ahead.

Sheila Karin Kahyaoglu: Good morning, everyone, and great job, great quarter. I want to ask you, you know, domestic problems up 6% year over year in Q1 were double that of one of your peers that have reported so far. Curious how you would attribute that to the strong performance, you know, across the mid-con restoration, corporate, and share gains in either premium or basic. You've touched upon that a little bit. But then, maybe, as a follow-up as well, how are you thinking about

And what makes it unique other airlines can have a piece of that will make a couple of airlines unique.

Andrew P. Nocella: We have a great product with great service, we have a global network that is hard to replicate we can get you to Singapore to destinations in Australia or in New Zealand, Australia, Capetown, Amerigas, Rob, Nick Paris, and hundreds more.

Andrew P. Nocella: And we also have a great loyalty program and the ability to go to the exciting aspirational destinations causes people to want to be a part of the program and it's really sticky when youre doing it well and you are doing it right.

Scott Kirby: Thanks Sheila. I'm going to start it and then turn it to Andrew for the more tactical answer, but I'm going to take a bigger picture, I think more strategic approach to the question, and I'd start by saying we've been at least trying to tell you over the last several years how we thought the industry was developing the strategy behind United Next and essentially everything that we've said in that has worked but it hasn't resonated so I'm going to try a different approach today and really what is happening and there's a couple of airlines that have what I'm describing but what has happened is we have the industry has structurally changed and United and at least one other have essentially a moat around our business now that never uses The moat, by the way, to be clear, is a moat that is based on having a better proposition for customers.

Andrew P. Nocella: But in the past that moat was breached in two ways two significant ways.

Andrew P. Nocella: One.

Andrew P. Nocella: There are a large segment of customers for whom change fees trumps everything else.

Andrew P. Nocella: Particularly small business travelers, what I call domestic road warriors.

Andrew P. Nocella: And when we had change fees and you got it.

Andrew P. Nocella: A large competitor that didn't they would choose that large competitor, even though all of our advantages may have existed.

Andrew P. Nocella: Change fees trumped it.

Andrew P. Nocella: Turns out that segment of the traveling public appears to be even larger than I appreciate it.

Andrew P. Nocella: And we're now winning them because our natural advantages win.

Scott Kirby: We have a better product. We have a better network. We have a better loyalty program, and they choose to fly us. What makes that unique? Other airlines can have a piece of that, but what makes the couple of airlines unique is we have a great product. We have a great service. We have a global network. It's hard to replicate.

Andrew P. Nocella: Closed off that bridge the second breach that we had was for price sensitive customers, who wanted disaggregated price.

Andrew P. Nocella: And that took us time to repair that and to address that to create a product for those customers, but there are two things that we had to do one we had a great a great basic economy product, which we've done.

Scott Kirby: We can get you to Singapore, two destinations in New Zealand, three in Australia, Cape Town, [inaudible] [inaudible] So we've closed off that breach. The second breach that we had was for price-sensitive customers who wanted this aggregated price. And that took us time to repair that and to address that and to create a product for those customers. But there were two things that we had to do. One, we had to create a great basic economy product, which we've done.

And maybe more importantly, we had to have higher gauge, we had to be able to sell those seats profitably.

Meaningful numbers in order to make that product real and make that competitive and to seal up that breach.

Andrew P. Nocella: We have now done those two things that is a huge part of what United next was about.

Andrew P. Nocella: And those are structural changes the moat that I described where we have great service, but we also have a great global network, which leads to a great loyalty program is structural and it is permanent and to your point about is this temporary or is it going to go on this is the new normal there's a couple of airlines the fitness category, where the highest margin airlines now.

Scott Kirby: But secondly, and maybe more importantly, we had to have a higher gauge. We had to be able to sell those proceeds profitably and in meaningful numbers in order to make that product real and make that competitive and seal up that breach. And we have now done those two things. That is a huge part of what United Next was about. And those are structural changes. The moat that I described, where we have great service, but we also have a great global network, which leads to a great loyalty program, is structural, and it is permanent. And to your point about whether this is temporary or is it going to go on forever. This is the new version.

Andrew P. Nocella: It is going to be the case going forward because this was a structural change no longer theoretical this has happened Andrew.

Andrew P. Nocella: Well, it's hard to follow that.

Andrew P. Nocella: On the on the tactics the one that I would bring up at a very high level would be we went into the quarter and not trying to maximize aircraft utilization, particularly in the seasonally Q1, which is weaker we went in and trying to maximize our profitability and I think it works.

Scott Kirby: Speaker 1 – It's hard to follow that on the tactics, the one that...

Andrew P. Nocella: And.

Andrew P. Nocella: Proud of the team for all the changes we made across the network because I think they are incredibly effective.

Scott Kirby: Great! Thank you so much.

Great. Thank you so much.

Conor T. Cunningham: Your next question comes from the line of Conor Cunningham from Malias Research. Please go ahead.

Andrew P. Nocella: Your next question comes from the line of Conor Cunningham from Melius Research. Please go ahead.

Conor T. Cunningham: Hi everyone. Thank you. Just going back to the comment on you taking advantage of the number of opportunities in the US domestic market, can you maybe elaborate a little bit more on that? You talked a little bit about Florida and Las Vegas. Are there any lessons that you can take away that you can apply to peak season? Or is it more of just a shoulder comment as you kind of take advantage of some of the other issues that some of the other carriers are dealing with in general? Thank you.

Conor T. Cunningham: Hi, everyone. Thank you.

Conor T. Cunningham: Just going back to the comment on you're taking advantage of the number of opportunities in the U S to match in the domestic market can you just.

Conor T. Cunningham: Maybe elaborate a little bit more on that you talked a little bit about Florida. Las Vegas is there any learnings that you can you have that you go into into peak season or is it more of just the shoulder comment.

Conor T. Cunningham: As you kind of take advantage of some of the other issues that some of the other carriers are dealing with in general. Thank you.

Conor T. Cunningham: As Scott said, the United next.

Andrew P. Nocella: Next, you know, vision here goes across all quarters, but in Q1, we definitely did see a lot of opportunity to continue to take advantage of things that were in our control. And within our control was the ability to continue to pivot the airline to more sunshine-type markets like Florida and the Caribbean, and we did so, I think, with great success. In Las Vegas, we put it in that category as well because our capacity deployed there was incredibly effective.

Speaker Change: Did you hear it goes across all quarters, but in Q1, we definitely did see a lot of opportunity.

Speaker Change: To continue to take advantage of things that were in our control and within our control is the ability to continue to pivot the airline to more Sunshine type markets like Florida, and the Caribbean and we did so I think with great success.

Speaker Change: In Las Vegas, we put in that category as well.

Speaker Change: Our capacity deployed there was incredibly effective.

Andrew P. Nocella: The other thing is, you know, we knew off-peak periods in Q1 were not a time to maximize utilization, and we took this opportunity to reschedule the airline to make sure that we were not offering unproductive capacity, and I think that worked very effectively. Below all that, or above all that, depending on how you look at it, was just the core building of connectivity across our hubs. It's working exactly as we intended it to do, but we still have a ways to go on this front. I think it'll be 2026 or 2027 before, you know, the connectivity reaches, I think, our desired levels, and so we're pretty bullish on our ability to continue to outpace domestic razzle-girth offered up by our competitors.

Speaker Change: The other thing is we do off peak period in Q1 is not a time to maximize utilization and we took this opportunity to reschedule the airline to make sure that we were not offer an unproductive capacity and I think that worked very effectively.

Speaker Change: Hello, all that are above all thats been on how you look at it. It was just the core building of connectivity across our hubs. It's working exactly as we intended to do we still have a ways to go.

Speaker Change: On this front it will be 2026 or 2027 before the connectivity reaches I think our desired levels.

Speaker Change: So we're pretty bullish on our ability to continue to outpace domestic RASM growth.

Speaker Change: By our competitors.

Speaker Change: Maybe actually sticking with that specifically.

Speaker Change: The fact that you have in Delta.

Speaker Change: Distance yourself from some of your competitors.

Speaker Change: It's pretty obvious at this point I think.

Conor T. Cunningham: Maybe actually sticking with that specifically, I get the fact that you and Delta have distanced yourselves from some of your competitors, and that's pretty obvious at this point, I think. But your performance relative to Delta sticks out pretty meaningfully. Maybe you could just elaborate a little bit more on what's uniquely United, because when I think about it, I think that you have a bigger opportunity for premium. You talk a lot about upgaging, but a lot of that has to do with fleet delivery. So I'm just trying to understand how you kind of close the gap or continue to separate yourself, I should say, from your peers this year. Thank you.

Speaker Change: But your performance relative to Delta sticks up pretty meaningfully and I was just maybe you could just elaborate a little bit more on what's uniquely United because when I think about it I think that you have a more a bigger opportunity on premium you talked a lot about <unk>, but a lot of that has to do with fleet deliveries. So I'm just I'm just trying to.

Speaker Change: On how you're kind of close the gap or continue to separate yourself I should say.

Speaker Change: From the peers this year. Thank you.

It's a great question, we continue to drive the United Index strategy and Youre, absolutely correct with the aircraft that we will take delivery of come with a lot more premium seat options are our premium mix. This year is up one one points year over year in terms of revenue, which is I think a very significant change in a very short periods of time.

Andrew P. Nocella: It's a great question. We continue to drive the Unite Index strategy, and you're absolutely correct; the aircraft that we'll take delivery of come with a lot more premium seat options. Our premium mix this year is up 1.1 points year over year in terms of revenue, which is, I think, a very significant change in a very short period of time. And we are going to continue to push that. But we're also going to continue to push the basic economy.

Speaker Change: And we are going to continue to push that but we're also going to continue to push basic economy. So our premium mix is up while our basic economy is up.

Speaker Change: That's exactly the kind of the recipe we're looking for in our diversified revenue stream streams.

Speaker Change: Briefly on the global network, it's second to none.

Speaker Change: It's number one across the Atlantic and everyone across the Pacific.

Speaker Change: And the changes we've made which has been I think pretty productive and efficient and accretive and there is actually quite a bit of more of that to come. So I don't know if that exactly answers your question, but the the outlook I think is very bright.

Andrew P. Nocella: So our premium mix is up while our basic economy is up, and that's exactly the kind of recipe we're looking for in our diversified revenue streams. And, you know, briefly, on the global network, it's second to none. It's number one across the Atlantic and number one across the Pacific.

Speaker Change: The premium revenue strategy is working incredibly effectively.

Andrew P. Nocella: And the changes we've made have just been, I think, pretty productive and efficient and accretive. And there's actually quite a bit more of that to come. So I don't know if that exactly answers your question. But the outlook, I think, is very bright. The premium revenue strategy is working incredibly effectively, and we're going to continue to push it, and we think there's more room to close that gap.

Speaker Change: And we're going to continue to push it.

Speaker Change: We think theres more room to close that gap.

Speaker Change: Okay I appreciate it thank you.

Speaker Change: Your next question comes from the line of Jamie Baker from Jpmorgan. Please go ahead.

Jamie Nathaniel Baker: Oh, Hey, good morning, everybody first one probably for Andrew So I've been following this Polaris.

Jamie Nathaniel Baker: Press for Champagne topic.

Jamie Nathaniel Baker: Media and I'll admit it.

Jamie Nathaniel Baker: Seriousness as an analyst.

Jamie Nathaniel Baker: I'm intrigued by the notion of potentially unbundling the forward cabin the evolution.

Conor T. Cunningham: I appreciate it. Thank you.

Jamie Nathaniel Baker: Your next question comes from the line of Jamie Baker from JP Morgan. Please go ahead.

Jamie Nathaniel Baker: Oh, hey, good morning, everybody. First one, probably, for Andrew.

Jamie Nathaniel Baker: I mean, he is well chronicled at this point, but we havent seen much change upfront.

Jamie Nathaniel Baker: So I've been following this Polaris, you know, press for champagne topic, you know, on social media. And I'll admit, in all seriousness, as an analyst, I'm intrigued by the notion of potentially unbundling the forward cabin. You know, the evolution in the economy is, you know, well chronicled at this point, but we haven't seen much change up front. You know, the passenger that books last pays the most but has the same experience as the passenger that books early and pays the least, the way it used to be in the old economy.

Jamie Nathaniel Baker: Passenger that books last pays the most but it has the same experience in the passenger the books early and paid the least.

Jamie Nathaniel Baker: Used to be an economy.

Speaker Change: Is this something that we should even be thinking about or is it a waste of my time.

Speaker Change: Yes.

Speaker Change: I won't dictate how you use your time, Jamie but.

Speaker Change: I would just add delete ticked up.

Speaker Change: Well.

Speaker Change: That wasn't the point.

Speaker Change: Yeah.

Speaker Change: What I would say.

Speaker Change: As we continue to believe that there's ways to further diversify our revenue streams and segment.

Andrew P. Nocella: Is this something I should even be thinking about? Or is it not?

Andrew P. Nocella: I won't dictate how you use your time, Jamie, but I would have said delete TikTok. Well, that wasn't the point.

Speaker Change: And we continue to believe that there is more opportunity for premium products that you don't have onboard the aircraft today.

Speaker Change: Incremental premium products are not going to I'm not going to announce it today, but I can tell you how many teams of people work on how to further innovate and provide more and more choice.

Andrew P. Nocella: What I would say is, you know, we continue to believe that there are ways to further diversify our revenue streams and segment, and we continue to believe that there's more opportunity for premium products that we don't have on board the aircraft. And those incremental premium products, I'm not going to announce them today, but I can tell you that you have many teams of people working on how to further innovate and provide more and more choice and to monetize that choice on our behalf, obviously, in the future.

Speaker Change: And to monetize that choice on our behalf obviously in the future. So I think that headline was just a hint of more to come in a lot of people working hard to United and make sure that we can differentiate ourselves not only from our U S competitors, but many of our competitors around the globe.

Speaker Change: Okay. That's very helpful. And then second then.

Speaker Change: Whoever wants to take this but when you initially introduced United mixed in.

Andrew P. Nocella: So I think that the headline was just a hint of more to come and a lot of people working hard at United to make sure that we can differentiate ourselves, not only from our U.S. competitors but many of our competitors around the globe.

Speaker Change: Its growth plan.

Speaker Change: Aircraft are being delivered on time the discount model wasn't appear domestically you. So it's pretty easy for us to map out how your capacity share would ramp over time.

Speaker Change: Obviously everything has changed since that my question is on a relative basis to the U S industry. So considering these constraints on capacity does the new fleet plan.

Jamie Nathaniel Baker: Okay, that's very helpful. And then second, then whoever wants to take this, but when you initially introduced United Next, and you know, its growth plan, aircraft were being delivered on time, the discount model wasn't impaired domestically, so it was pretty easy for us to map out how your capacity share would ramp over time. Obviously, everything has changed since then.

Speaker Change: Keep your relative position.

Speaker Change: On track with the United next plan it actually seems to me like you might be somewhat ahead.

Speaker Change: The plan on market share, but there are quite a few OE assumptions that I have to make there.

Jamie Nathaniel Baker: My question is on a relative basis to the U.S. industry. So considering these constraints on capacity, does the new fleet plan keep your relative position, you know, on track with the United Next plan? It actually seems to me like you might be somewhat ahead of the plan on market share, but there are quite a few OA assumptions that I have to make there.

Speaker Change: There's a lot of moving pieces, so I am not going to specifically answer the question our market share across every single one of our hubs is obviously, improving and improving quicker than our capacity share. This year were domestically I think.

Speaker Change: Six months or growing less than our competitors.

Andrew P. Nocella: There are a lot of moving pieces, so I'm not going to specifically answer the question.

Speaker Change: TBD on what our competitors are going to do but we're focused on delivering the United Explant, we created and all the value that's being generated from that and our coastal hubs or the second to none as we've talked about a million times, but getting our core mid continent hubs up to their critical connectivity levels is a big big focus.

Andrew P. Nocella: Our market share across every single one of our hubs is obviously improving and improving quicker than our capacity share. This year, we're domestically, I think, for six months, we're growing less than our competitors. It's TBD on what our competitors are going to do, but you know, we're focused on delivering the UnitedX plan we created and all the value that's being generated from that. And, you know, our coastal hubs are second to none, as we've talked about a million times.

Speaker Change: And it just paying back dividends left and right and we think it will continue to do so what exactly our competitors you I. Just don't know we will continue to face struggles on the deliveries gains from Boeing and Airbus, but hopefully as Mike talked about we built in the appropriate insurance plans for all right. So what you can say better on but.

Andrew P. Nocella: But getting our core mid-continent hubs up to their critical connectivity levels is a big, big focus and is just paying back dividends left and right. And we think it will continue to do so. What exactly our competitors do, I just don't know. We will continue to face struggles on the delivery schemes from Boeing and Airbus. But hopefully, as Mike talked about, we've built in the appropriate insurance plans for all that, so we can sit better on that.

Speaker Change: Got it.

Speaker Change: But suffice to say you haven't fallen behind on a relative basis to the industry.

Speaker Change: It depends on what you are measuring if you're measuring market share in our hubs absolutely not.

Speaker Change: Okay Jamie.

Jamie Nathaniel Baker: I'd encourage you to measure profitability in our relative profitability. That's certainly what we're focused on here.

Speaker Change: Preaching to the choir. Thank you very much I appreciate it.

Speaker Change: Your next question comes from the line of Ravi Shanker from Morgan Stanley. Please go ahead.

Jamie Nathaniel Baker: But suffice to say you haven't fallen behind on a relative basis in the industry.

Jamie Nathaniel Baker: Okay, that's better. Jamie, I'd encourage you to... I'd encourage you to do...

Ravi Shanker: Great. Good morning, everyone. So speaking I'll stick dock.

Ravi Shanker: Scott your industry commentary is usually very insightful, so I'd love your thoughts on the current.

Jamie Nathaniel Baker: Preaching to the Choir. Thank you very much. I appreciate it.

Ravi Shanker: Headline risk to the industry.

Ravi Shanker: Your next question comes from the line of Ravi Shanker from Morgan Stanley. Please go ahead.

Ravi Shanker: From the incidents.

Ravi Shanker: That may be out there kind of is this just a.

Ravi Shanker: Good morning, everyone. So speaking of TikTok, Scott, your industry commentary is usually very insightful. So I'd love your thoughts on the current headline risk to the industry from the incidents that, you know, may be out there. Is this just a social media kerfuffle? Is it a post-pandemic hangover thing? Is the lack of new aircraft a thing? Is it a labor thing? What's your view on how the industry can assure customers that flying is as safe as it can be?

Ravi Shanker: Media Kerfuffle or is it a pandemic hangover of the thing is the lack of new aircraft staying as the labor thing what's your view on how the industry kind of ratio of show our customers that flying is that say, if that's going to be.

Speaker Change: Well. Thanks D is the is the number one priority, but I also know it is the number one priority at all of our U S. Competitors. This is one of the places where we don't compete.

Speaker Change: Wanted to actually reasons that aviation is not.

Not just the safest way to travel it is by far the orders of magnitude better than other forms of travel and one of the reason is because.

Scott Kirby: Well, safety is the number one priority at United, but I also know it is the number one priority at all of our U.S. competitors. This is one of the places where we don't compete, and one of the actual reasons that aviation is a priority. Not just the safest way to travel, it is by far, orders of magnitude, better than other forms of travel.

Speaker Change: Safety, we share data with each other we share all of that.

Speaker Change: Incidents and events that happened we learn from each other.

Speaker Change: And.

Speaker Change: And that's what makes us so strong.

Scott Kirby: And one of the reasons is that in safety, we share data with each other, we share all the incidents and events that happen, and we learn from each other. And and that that's what makes us so strong. I also know at United, we have a great foundation, you know, it's a leading foundation, and we're proud of it, of our training, our systems, our process, and our reporting culture. But it's also true that there was, while they were unrelated, a cluster of several high-profile events that happened at United and in the U.S. And I think that is an opportunity for us to step back and take what is already a very high standard of safety and find ways to make it even higher.

Speaker Change: I also note we have a great foundation.

A leading foundation and we're proud of it.

Speaker Change: Our training our systems, our process and our reporting culture.

Speaker Change: But it's also true that there was while they were unrelated a cluster of several high profile events that have happened in the industry.

Speaker Change: And I think that is an opportunity for us to take what is already to step back and take what is already a very high standard of safety and find ways to make it even higher that's why certainly United we are embracing this as an opportunity there's already a lot of things we've done, but they're going to be more than we do embracing this is true.

Speaker Change: Really an opportunity to take the already high standards to even higher level and I'm confident that we will do that.

Scott Kirby: That's why, certainly at United, we're embracing this as an opportunity. There are already a lot of things we've done, but there are going to be more that we do. Embracing this as truly an opportunity to take the already high standards to an even higher level, and I'm confident that we will do that. We can do that while running a great airline for our customers, for our employees, and for our shareholders. We can do all those things at the same time, and we'll come out even better on the other side. Not just at United, but for the whole industry.

Speaker Change: We can do that while running a great airline for our customers for our employees and for our shareholders. We can do all those things at the same time, and we will come out even better on the other side, not just united but for the whole industry.

Speaker Change: Very helpful and maybe as a follow up the polling miles.

Speaker Change: Very interesting idea can you just unpack that a little bit kind of what maybe launch out of this time kind of what are some of the cost of revenue implications thereof. What do you think some of the benefits might be to United in Aero customers.

Unknown Executive: [inaudible] We're always trying to make mileage.

Speaker Change: Sure well, we're always trying to make mileage plus miles more useful for our members. So they can enjoy the benefits and.

Unknown Executive: Well, we're always trying to make Mileage Plus miles, you know, more useful for our members so they can enjoy the benefits. And, you know, there are a number of members that alone couldn't get that trip to Tahiti or wherever they're trying to go. And the pooling option allows them a better chance of doing that. I think it comes at a minimal, no cost to United, but it definitely enhances the value of the program. It's, I think, pretty Family Members, and see what you can do. [inaudible]

Speaker Change: There are a number of members that alone couldnt get that trip to.

Speaker Change: E D R.

Speaker Change: They are trying to go in the pool and option allows them a better chance of doing that.

Speaker Change: I think it comes at a minimal cost to United that it definitely enhances the value of the program is I think pretty unique among the largest airlines.

And we look forward to seeing how it goes so we urge you to pull your.

Speaker Change: Family members and see what you can do.

Speaker Change: Very helpful. Thank you.

Duane Thomas Pfennigwerth: Your next question comes from the line of Duane Senenworth from Evercore ISI. Please go ahead.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of Duane <unk>.

Duane: <unk> <unk> from Evercore ISI. Please go ahead.

Duane Thomas Pfennigwerth: Just on the longer term CapEx, I certainly appreciate you have to have a plan at a point in time based on the facts available. But how do you think about the path to pick-up and delivery required to hit that, you know, 2025 and beyond? What are the dependencies in your mind? And I guess, you know, what are the odds we enter 2025 the same way we did this year with that hundred or so more of a placeholder than a realistic target?

Duane: Hey, good morning, Thank you.

Duane: Just on the longer term Capex certainly appreciate you have to have a plan at a point in time based on the facts available.

Duane: But how do you think about the path.

Duane: Past, two a pickup and deliveries required to hit that 2025 and beyond.

Duane: What are the dependencies in your mind and I guess what are the odds we enter 2025 at the same way we did this year with that.

Duane: That 100, or so more of a placeholder than that a realistic target.

Michael Leskinen: Thanks, Duane. I appreciate the question. And I do want to kick off the question by reiterating how important generating free cash over the long term is to us here at United and, we understand, to our shareholders. So that is, that is something we are balancing. We gave you a range for CapEx of seven to nine billion dollars. We gave you that range because it's an acknowledgement that there's some uncertainty around the OEM delivery schedules and production rates.

Speaker Change: Thanks, Duane and I appreciate the question and I do want to kick off the question by reiterating how important generating free cash over the long term is to us here at United and we understand to our shareholders. So.

That is.

Speaker Change: That is something we are balancing.

Speaker Change: We gave you a range for Capex of $7 billion to $9 billion. We gave you a range because it's an acknowledgment that there is some uncertainty around the OEM delivery schedules and production rates.

Michael Leskinen: We also are managing this business to maximize profitability. And so, make no mistake, we'll manage our deliveries as well in a way that takes into account the macroeconomic environment at the time. In three years, a lot can happen in three years. As I think about uncertainty for 2025 and 2026 in a stable macroeconomy, 787 production rates, can Boeing continue to increase production rates? That's going to be really critical. Also, for the 737 line, are they able to increase production rates?

Speaker Change: Also are managing this business to maximize profitability and so make no mistake, we will manage our our deliveries as well.

Speaker Change: A way that.

It captures the macroeconomic environment at the time in three years of what can happen in three years.

Speaker Change: I think about uncertainty for 25 and 26 in a stable macro economy.

Speaker Change: 77 production rates.

Speaker Change: Can Boeing continue to increase rates.

Speaker Change: That's going to be really critical.

Also for the 737 line.

Speaker Change: Or are they able to increase production rates. So we'll watch that closely.

Michael Leskinen: So we'll watch that closely. I want to be clear that what we are giving is our expectation. Our expectation builds in some hedge that production rates don't increase at the rate that Boeing hopes. So there's upside risk and downside risk to CapEx as a result. But I think we're going to manage it in that $7 to $9 billion range, and that's why we wanted to share that with all of you.

Speaker Change: I want to be clear that we are giving is our expectation our expectation builds in some builds.

Builds in some hedge that production rates are.

Speaker Change: Production rates don't increase at the rate that Boeing hopes.

Speaker Change: There is so there is upside risk and downside risk to two capex as a result.

Speaker Change: I think we're going to manage in that $7 billion to $9 billion range and that's why we wanted to share that with all of you today.

Andrew P. Nocella: Appreciate that detail, Mike. And then maybe just a quick one for Andrew, and I've asked this before, and sorry if it's a little waste of time, but on international inbound, or maybe a different way to say it, you know, ex-US point of sale, where does that stand today? And as you think about your entities or geographies, you know, are any of those starting to pick back up in terms of ex-US point of sale? Are you seeing any inflections? Thanks for taking the question. I would say yes, we are seeing progress.

Speaker Change: I appreciate that detail, Mike and then maybe just a quick one for Andrew and I have asked this before I'm sorry, if it's okay.

Speaker Change: Total waste of time, but on international inbound or maybe a different way to say it ex U S point of sale.

Speaker Change: Where does that stand today and as you think about your entities or geographies.

Andrew P. Nocella: Are any of those starting to pick back up in terms of ex U S point of sale or are you seeing any inflections. Thanks for taking the questions.

Andrew P. Nocella: I would say yes, we are seeing progress. The one place we look to the most is Germany and core Europe, and that still trails. So hopefully, that will continue to move forward. But I think we're really seeing progress across the whole globe on rebalancing and being a little bit less dependent on the US consumer to drive the global economy.

Speaker Change: I would say, yes, we are seeing progress one place we look to the most is Germany in core Europe, and Thats still trails. So hopefully that will continue to move forward, but I think we're seeing really progress across the whole globe on rebalancing and being a little bit less dependent on the U S consumer to drive the global network.

Speaker Change: Thanks very much.

Asavi Saith: Your next question comes from the line of Asavi Saith from Raymond James. Please go ahead.

Okay.

Speaker Change: Your next question comes from the line of Savi site from Raymond James. Please go ahead.

Asavi Saith: Hey, good morning. I was just wondering on the 100 narrowbody aircraft per year, just what's the thought on the mix of growth versus replacement? And I guess I asked another way, Mike, you mentioned kind of taking into account macro realities, but what's the right level of kind of domestic growth as you kind of look over the next three to four years, assuming you can get the aircraft delivered?

Savi: Hey, good morning.

Savi: I was just wondering on that 100 narrow body aircraft per year just.

Savi: What's the thought on the mix of growth versus replacement.

Savi: Asked another way I appreciate it Mike you mentioned kind of taking into account macro realities, but what's the right level of kind of domestic growth as you kind of look over the next three to four years.

Savi: Get the aircraft delivered.

Michael Leskinen: It's a great question, Savvy, and for our growth rate in 2025, 26, and 27, you're going to have to wait for Investor Day later in the year. The 100 aircraft, we have the ability to fly some of our older aircraft longer, and given the delays from Boeing and Airbus, I would expect, again, macroeconomy-dependent, that we would continue to fly our existing fleet until the end of life when they're at heavy checks.

Unknown Attendee: It's a great question Savi and for our growth rate in $2025 26, and 27, you're going to have to wait for Investor Day. Later later in the year.

Unknown Attendee: The 100 aircraft.

Speaker Change: We have the ability to fly some of our older aircraft longer and given the delays from Boeing and Airbus I would expect.

Speaker Change: Again macro economy dependent that we would continue to fly our existing fleet until end of life. When they are at heavy checks, but we always have the optionality.

Michael Leskinen: But we always have the optionality, if yields are not strong, to early retire some of those aircraft, and it's an economic decision when an aircraft is late in its life, to early retire some of those aircraft that are less fuel efficient and have very heavy maintenance. So I think of that as the flexibility we have in the event of a macro event. If there is absent a macro event, you should expect us to sweat our assets until the end of life.

Speaker Change: Yields are not strong to early retire some of those aircrafts and it's an economic decision.

When an aircraft is late in its life.

Speaker Change: Early retire some of some of those aircrafts that are less fuel efficient and very heavy maintenance. So I think of that as flexibility. We have in the event of a macro event, but if there is absent a macro event you should expect us to sweat our assets.

Speaker Change: Until end of life.

Asavi Saith: Got it. And just to follow up, Mike, on a comment you made earlier on appreciating the two Q units cost color. But as you think about the year, just at a high level, wondering if you know what your headwinds are for the year that might kind of step down from now or maybe step up? I know your capacity is moderating a little bit from the levels in the first half. But just curious, given that you have more time, are you able to address more of the fixed costs as you get into the second half? It's a great question, Savi.

Speaker Change: Got it and just a follow up Mike to comment you made earlier on I appreciate the <unk> unit cost color, but as you think about the year just high level I'm wondering if you know what are the kind of year over year headwinds that Mike and then step down from now or maybe step up I know your capacity is moderating a little bit from the levels in the first.

Speaker Change: But just curious given that you have more time are you able to address more of the fixed costs as you get into the second half.

Unknown Attendee: It's a great question Savi.

Michael Leskinen: I would say you need to think about labor costs and when we lap and annualize some of those labor costs. So that would be the number one factor you should put into your model around differences between quarters.

Speaker Change: I would say you need to think about labor costs and.

When we when we lap and annualize some of those labor costs. So that would be the number one factor you should put into your model.

Around differences quarter to quarter.

Michael Leskinen: Number two, the CASM-X impact of flying 40 fewer aircraft than we planned for this calendar year; you should expect those costs to linger. As we get into the back half and particularly into the fourth quarter, some of those costs begin to moderate, but you should think about Q2 and Q3, those costs continuing to weigh us down. Again, we will offset some of that cost with the great operation we're running as we see completion factors move up. We'll offset it partially, but those costs don't go away overnight.

Speaker Change: Number two there.

Speaker Change: CASM ex impact of flying 40, less aircraft than we planned for this calendar year, you should expect those cost to linger.

Speaker Change: As we get into the back half and particularly in the fourth quarter. Some of those costs begin to moderate but you should think about Q2 and Q3 those costs continuing.

Weigh us down again, we will offset with the great operation, we're running as we see completion factors move up will offset partially but those costs don't go away overnight.

Michael Leskinen: And I'll use this as an opportunity also to talk about some longer-term cost initiatives that we've started since I took over as CFO. Number one, tech ops. There are significant opportunities for us to drive efficiency in our tech ops, and drive efficiencies in our supply chain by optimizing the volume of parts we purchase and improving the rates we pay for those parts. So we're undergoing a significant initiative there. I think the run rate you'll see from that initiative is more like 2025.

Speaker Change: And I'll use this as an opportunity to also to talk about some longer term cost initiatives that we've started since I've taken over in the Cfo's seat.

Speaker Change: Number one tech ops.

Speaker Change: There are significant opportunities for us to drive efficiency in our tech ops driving.

Speaker Change: Efficiencies in our supply chain by optimizing the volume of parts, we purchase and improving the rates we pay for those parts.

So we are undergoing a significant initiative there I think the run rate Youll see from that initiative is more like 2025, we're also undergoing a significant procurement bottoms up evaluation.

Michael Leskinen: We're also undergoing a significant procurement bottom-up evaluation. We're going to go through waves, going through different vendors to make sure we have the best pricing in the industry. I think this is going to be, in the fullness of time, measured $100 million-plus in cost efficiencies. Again, that's more like 2025 and 2026, but when I talk about unique united opportunities, I would put this in that category.

Speaker Change: We're going to go through waves going through different vendors to make sure. We have best pricing in the industry. I think this is going to be in the fullness of time measured $100 million plus in <unk>.

On cost cost efficiencies again, thats more like 25% and 26, but when I talk about unique United opportunities.

Speaker Change: I would put this in that category.

Michael Leskinen: And then, finally, I'll highlight that we have significant opportunities within our technology organization to help drive efficiencies throughout the entire airline. But one that I'll highlight is moving a lot of our mainframe computing into the cloud. That's something you don't save the cost of moving to the cloud until you shut down the mainframe. So, in many cases, we've moved 70, 80, 90% of the systems to the cloud, but we still have to maintain that mainframe with 10 or 20% of the systems on that mainframe. So there's a little taste.

Speaker Change: And then finally I'll highlight that we've got significant opportunities within our technology <unk>.

Speaker Change: Acknowledging organization to help drive efficiencies throughout the full airline, but one that I'll highlight is moving a lot of our mainframe computing into the cloud that's something that you don't save the cost of moving to the cloud until you shut the mainframe down. So many cases, we moved 70 80, 90% to the cloud, but we still have to maintain that.

Speaker Change: That mainframe with 10 or 20% of the of the.

Speaker Change: The systems on that on that mainframe, so theres, a little taste will forgive a lot more fulsome answer at our upcoming Investor day.

Scott H. Group: We'll give a lot more fulsome answers at our upcoming Investor Day.

Scott H. Group: Your next question comes from the line of Scott Group from Wolf Research. Please go ahead.

Speaker Change: Very helpful. Thank you.

Speaker Change: Your next question comes from the line of Scott Group from Wolfe Research. Please go ahead.

Scott H. Group: Hey, thanks. Good morning.

Scott H. Group: Hey, Thanks, good morning, so that was sort of helpful color on the back half.

Scott H. Group: So that was sort of helpful color on the back half. Chasm a little bit, maybe just a similar thought on back half RASM, comps get easier, is it fair to assume we see RASM accelerate in the back half of the year, are there any other puts and takes to be thought of?

Scott H. Group: I'm a little bit maybe just a similar thought on back half RASM comps get easier or is it fair to assume we see RASM accelerate in the back half of the year is there any other puts and takes to be thinking about.

Andrew P. Nocella: Just at a really high level, I'd say that the capacity set up domestically I think is roughest in probably Q2, but it gets better in Q3 and particularly better in Q4, our estimate based on what we look at. So I think that is a nice trajectory.

Speaker Change: Just at a really high level I would say that the fact is you sit up domestically I think.

Speaker Change: As Gruffish, probably Q2, but gets better in Q3, and particularly better in Q4 is our estimate based on.

What we look at so I think that is.

Speaker Change: Nice trajectory second we added considerable amount of Asia Pacific capacity middle to late last year, and so as we lap that capacity. So it's now fully spooled up we expect the plan to improve and as we make capacity adjustments to unproductive capacity in that region, but we also have.

Andrew P. Nocella: Second, we added a considerable amount of Asia Pacific capacity in the middle to late last year. And so as we lap that capacity, so it's now fully spooled up, we expect the flying to improve. And as we make capacity adjustments to unproductive capacity in that region, we also expect that's going to show some, you know, improvements. And that that always follows through, you know, Q1 of next year. In Latin America, the capacity picture has been particularly difficult for the first half of this year.

Speaker Change: <unk>.

Speaker Change: That's going to show some improve.

Speaker Change: Improvements in that that follows all the way through Q1 of next year.

Speaker Change: Latin America, the capacity picture has been particularly difficult for the first half of this year.

Andrew P. Nocella: As you all know, the second half looks, I think, very different. And so I'm optimistic that Latin is going to turn the quarter in Q3, although Q2 is still a very poor result. And in Europe, you know, I think we've really sharpened our pencils. We paused growth for the most part this year on purpose. And I'm particularly optimistic based on how we deploy capacity that Europe is going to look fine. So I'm not giving you the exact numbers, but that's how I look across the globe and see what's happening and think about positive or negative trajectories by region.

Speaker Change: As you all know the second half looks I think very different and so optimistic that Latin is going to turn the quarter in Q3, Although Q2 is still a very.

Speaker Change: Our results and in Europe I think.

Speaker Change: Really sharpened our pencil.

Speaker Change: We paused growth for the most part this year on purpose.

Speaker Change: I'm, particularly optimistic based on how we deploy capacity that Europe is going to look like so I'm not giving you the exact numbers, but thats, how I look across the globe and see what's happening and think about positive or a negative trajectory by region.

Scott H. Group: Thanks. And then, Mike, I appreciate all your comments on free cash flow. And I'd love, Scott, to get your perspective on this discussion as well. And maybe your thoughts on catbacks, like, you know, if we wake up in six months and Boeing can start delivering a lot more planes again, could that, in your mind, Scott, do that seven to 9 billion go up again? Or maybe, alternatively, is there something in your control that says, hey, maybe that seven to nine could come down even more? You know, I think the seven to nine is

Speaker Change: Okay. Thanks, and then Mike I appreciate all your sort of comments on free cash flow and I'd Love, maybe Scott to get your perspective on.

Scott: On this discussion as well and maybe your thoughts on Capex.

Scott: If we wake up in the six months and Boeing can start delivering a lot more planes again could that in your mind, Scott does that $7 billion to $9 billion go up again or maybe alternatively is there something in your control that says hey, maybe that seven to nine could come down even more.

Scott: I think the 79 is probably pretty good number.

Scott Kirby: You know, I think the seven to nine is probably a pretty good number. And I think of it as, you know, we've ordered a lot of airplanes, more than anyone in history has ever done. And when you combine that with the supply chain challenges, as Mike described, it's kind of a battle. You'd have 40 airplanes that were supposed to be delivered in 2023. They got pushed to 2024, and none of them got delivered. And then you had another 20 in 2023 that got pushed too. And so now you have 60 in 2025. That also wasn't just hard on the planning for us.

Scott: And I think of it as well.

Scott: We ordered a lot of airplanes more than anyone in history has ever done.

Scott: And when you combine that with the supply chain challenges as Mike described just come about.

Scott: You'd have 40 airplanes are supposed to be delivered in 2023, they got pushed to 2024 and none of them got delivered in yet another 20, and 323 that got pushed into <unk> 60 in 2025.

Scott: That also it wasn't just hard on the planning for US It made things like our flight training center really hard to run effectively because you are constantly changing capacity plant. Those are you thinking about upgrading pilots and things are about 18 months out decision. So one of the things we attempted to do was level out.

Scott Kirby: It makes things like our flight training center really hard to run effectively because you're constantly changing capacity plans. Those are, you know, you're thinking about upgrading pilots and things. Those are like 18-month-out decisions.

Scott: The capacity.

Scott: Aircraft deliveries, which we've done at approximately a 100 per year.

Scott: And so well.

Scott: Well a lot at.

Scott Kirby: So one of the things we attempted to do was level out the capacity, the aircraft deliveries, which we did at approximately 100 per year. And so, you know, we'll have a lot, or at least a lot less variance. The standard deviation will be a lot less than it's been in the past. It's also kind of split 60-40 between Boeing and Airbus. So there's a little more diversity in that number going forward. I don't think we'll take it up, but well, I know we're not planning to take it up because taking it up, you know, drives things at the flight training center and just drives a lot of other complexities. It's just not worth it.

Scott: At least a lot less variance.

Scott: The sooner deviation will be a lot less than it's been in the past. It's also kind of split 60 40.

Scott: Boeing Airbus.

Scott: So theres a little more diversity in that number going forward.

Scott: I don't think we'll take it up but well I know, we're not planning to take it out because I'm, taking it up drives things that the flight training center just drives a lot of other complexities is just not worth it and I think the other thing that we will I know that we're going to do now going forward is still a little hedge into the bigger hedge into our schedule and look if we think we're going to take.

Scott: <unk> airplanes. This year, we're going to we put 90 or some lower number into the schedule.

Scott Kirby: I think the other thing that we will, I know that we're going to do now going forward is build a little hedge into our schedule. And like, if we think we're going to take 100 airplanes this year, we're going to put 90 or some lower number into the schedule. And, you know, if everything is on time and on plan, then we'll have a few extra spares around for a couple of months.

Scott: And if everything is on time and on plan and we will have a few extra spares.

Scott: Around for a couple of months.

Scott: Sure.

Scott: That will cost a little bit, but it doesn't cost nearly as much as overstaffing by 40 airplanes and so I think it will give us not just certainty on capex. It will give us a lot more operational certainty.

Scott: We're running everything better and more efficiently.

Speaker Change: Okay. Thank you.

Speaker Change: Your next question comes from the line of Helane Becker from TD Cowen. Please go ahead.

Scott Kirby: That may, you know, that'll cost a little bit, but it doesn't cost nearly as much as overstaffing by 40 airplanes. And so I think it will give us not just certainty on CapEx, but it'll give us a lot more operational certainty for running everything better and more effectively.

Helane R. Becker: Oh, thanks, very much operator, hi team thanks for the time.

Helane R. Becker: I have two questions.

Helane R. Becker: I think Andrew you talked about.

Helane R. Becker: The quality of your product and the network and the loyalty and so on in your answer and if somebody's question.

Helane R. Becker: Your next question comes from the line of Helane Becker from TD Cowen. Please go ahead.

Helane R. Becker: When you think about some of your alliance partners. They don't have the same commitment to service and.

Helane R. Becker: Thanks very much, Operator. Hi, team. Thanks for your time.

Helane R. Becker:

Helane R. Becker: And any of the things that you just talked about that you have so as you think about alliances going forward and maybe this is a question for Patrick.

Andrew P. Nocella: So I have two questions. Um, I think, Andrew, you talked about, you know, the quality of your product and the network and the loyalty and so on in your answer to somebody's question. But when you think about some of your alliance partners, they don't have the same commitment to service and any of the things that you just talked about that you have. So as you think about alliances going forward, and maybe this is a question for Patrick, how do you think about getting everybody on board to the same standard that you're setting so that you don't distress your customers when they have to connect because you're not flying somewhere non-stop that they want Aspiration. Or, you know, they let your customers down.

Patrick: How do you think about getting everybody on board to the same standard that you're setting so that you would go.

Patrick: Distress your customers.

Patrick: They have to connect because youre not flying someplace nonstop that they want to go aspirational or.

Patrick: They.

Patrick: Let your customers down.

Patrick: Yeah.

Speaker Change: Okay, I will I'll start off with that I am not sure I agree with the premise of your question I think I think our core partners have the highest standards when I think about it.

And Air New Zealand to.

Andrew P. Nocella: Okay, I'll start off with that. I'm not sure I agree with the premise of your question. You know, I think our core partners have the highest standards. When I think about, you know, ANA and Air New Zealand, to name a few. And I also think that Lufthansa has the highest standards. Look, they've gone through a number of strikes recently, which has been, I think, rough on Lufthansa, the team, and the customers, but I think they're behind that now.

Speaker Change: To name a few.

Speaker Change: And also I think that Lufthansa has the highest standards looked at gone through a number of strikes recently, which has been I think rough on Lufthansa.

Speaker Change: The team and the customers, but I think they are behind that now and I think their commitment and all of our commitment to customer service.

Speaker Change: Is actually pretty consistent.

And we're so proud to be in joint ventures with each of these airlines and we sit around the table I'd like to say without lawyers.

Speaker Change: And we worked through difficult problems and we talked about how to make the level of customer service more and more seamless each quarter that being said we are from different countries and different cultures, and we have different ways of approaching our business and quite frankly, we think that some of those differences are really important they.

Andrew P. Nocella: And you know, I think their commitment and all of our commitment to customer service is actually pretty consistent. And we're so proud to be in joint ventures with each of these airlines, and we sit around the tables, I'd like to say without lawyers, and we work through difficult problems, and we talk about how to make the level of customer service more and more seamless each quarter. That being said, we are from different countries and different cultures, and we have different ways of approaching our business.

Speaker Change: To each of these airlines are.

Speaker Change: And their unique identity. So we don't we're not trying to harmonize across every single product detail on how we build alliances.

Andrew P. Nocella: And quite frankly, we think that some of those differences are really important. They reflect who each of these airlines is and their unique identity. So we don't, we're not trying to harmonize across every single product detail in how we build alliances. But that being said, I do think we have a similar alignment of customer first. And going forward, and I'll also plug in, we have the best alliance partners with the best hubs around the globe, which is one of the reasons that we have a leading network. And I think we're more profitable on this global network relative to our primary.

Speaker Change: But that being said I do think we have a similar alignment of customer first.

Speaker Change: And going forward and we are.

Speaker Change: Also plug and we have the best Alliance partners with the <unk>.

Speaker Change: Desktops around the globe, which is one of the reasons that we have the leading network and I think we're more profitable in this global network relative to our primary competitors.

Speaker Change: Okay. That's very helpful. Thank you and then just for my follow up question.

Speaker Change: Maybe Mike as we think about the earnings guidance for the second quarter, how should we think about like the percentage.

Helane R. Becker: Okay, that's very helpful. Thank you.

Michael Leskinen: And then just for my follow-up question, maybe Mike, as we think about the earnings guidance for the second quarter, how should we think about the percentage, corporate, leisure, domestic, international? Are you starting to skew more corporate international, you know, in the next six months than you have in the past? Or, you know, how should we think about that breakdown?

Unknown Attendee: Corporate leisure domestic international or are you starting to skew more corporate international.

Unknown Attendee: And the next six months than you have in the past or how should we think about that breakdown.

Speaker Change: Thank you.

Unknown Attendee: I would just say that.

Unknown Attendee: All of the above domestic domestic leisure has been really strong and despite that historically being an area where we were.

Michael Leskinen: Thank you. All of the above, domestic leisure has been really strong, and despite that historically being an area where we had less of an exposure than some of our peers, we've done an incredible job. Now, business demand is clearly continuing to come back, and that's wind in our sails from a relative perspective. So I think, as we've said, and this was the theme of the call, the current results at United are very strong, but the future is even brighter. So I feel great about business continuing to drive our relative results.

Unknown Attendee: Less than we had less of a exposure than some of our peers.

Unknown Attendee: Done an incredible job now.

Unknown Attendee: <unk> demand is clearly.

Unknown Attendee: Continuing to come back and that's a that's wind in our sales from a relative perspective. So I think as we've said it's been the theme of the call. The current results that United are very strong, but the future is even brighter so feel great about great about business continuing to drive our relative results.

Andrew P. Nocella: I'll add one. I'll add one incremental fact, Helane. The growth in Polaris load factors has been pretty significant year over year. And the growth in premium load factors across the board at United Airlines. Our paid premium load factor was up nine points year over year in the quarter, which is amazing. But as we revenue managed all of that, we kept all of the premium leisure passengers in their seats as we added more corporate customers to their seats.

Unknown Attendee: <unk>.

Speaker Change: Okay, I'll add one incremental effect in fact.

Speaker Change: The growth in Polaris load factors has been pretty significant year over year growth in premium load factors across the board at United Airlines are paid premium load factor was up nine points year over year in the quarter, which is amazing, but as we revenue manage all of that we kept all of the premium leisure.

Speaker Change: Passengers in their seats as we added more corporate into their seats. So we were able to do both.

Andrew P. Nocella: So we were able to do both. And that is one of the reasons for the great execution in the quarter is that, you know, we see corporate rebounds, but we see the desire for premium products by leisure customers continue to be strong.

And that is one of the reasons for the great execution in the quarter is that we see corporate rebounding, but we see the desire for premium products by leisure customers continued to be strong.

Helane R. Becker: So is the answer then you're putting more premium seats? Because if you have corporate demand for those same seats, you're pricing it up to lose some, right? Don't you have to price it up to lose some of that demand?

Speaker Change: So is the answer than youre, putting more pre.

Speaker Change: Premium seats, because if you have corporate demand for those same seats.

Speaker Change: Your pricing up to loosen.

Speaker Change: Don't you have to price up to loosen that up demand.

Andrew P. Nocella: What happened in this video case is that during the pandemic, we had very high preload factors in some of these premium cabins, and that number is coming down more towards normal.

Speaker Change: What happened in this video cases during the pandemic, we had very high load factors.

Speaker Change: And some of these premium cabins and that number is coming down more towards normal.

Helane R. Becker: Okay, all right, that's really helpful. Thanks, team.

Speaker Change: Okay, Alright, Thats really helpful. Thanks team.

Helane R. Becker: Thanks, Helane. Bye, Helane.

Speaker Change: Thanks, Helane finally.

Brandon Robert Oglenski: Your next question comes from the line of Brandon Oglenski from Barclays. Please go ahead.

Speaker Change: Your next question comes from the line of Brandon <unk> Glinski from Barclays. Please go ahead.

Brandon Robert Oglenski: Hey, good morning. Thanks for taking my question. Mike, can you give us some insight on how you're planning for the cost structure in 25 through 27, just given the variability that you gave us on CapEx and not, you know, I know it's aspirational to get 100 deliveries every year, and Scott spoke to it as well. Maybe you can filter in some buffer here on spare aircraft. But how do you think about hiring, especially given that some of these training events might be an 18-month decision?

Brandon Robert Oglenski: Hey, good morning, Thanks for taking my question.

Brandon Robert Oglenski: Can you give us some insight on how youre planning for the cost structure in 2005 through 2007, just given the variability that you gave us on capex in that.

Brandon Robert Oglenski: I know, it's aspirational to get 100 deliveries every year that Scott spoke to it as well maybe you filter in some buffer Huron spare aircraft, but how do you think about hiring, especially given that some of these training events might be an 18th month decision.

Michael Leskinen: I think by leveling out our aircraft delivery schedule and making the skyline stable, we're going to be able to better match our flight attendants, we're gonna be better matched with our pilot hiring, so that the inefficiencies that we're discussing right now around, again, the 40 less aircraft we have for this year, those inefficiencies will work themselves out. And so that's what's critical to this. But in addition to the overall cost structure, when we think about the inflationary world that we've been in, That pressure is going to, the industry is going to continue to face that, but at United, we have the gauge benefit, and that gauge benefit will be metered in in a smooth way. So I feel very excited, very psyched about that.

Brandon Robert Oglenski: I think by level loading our aircraft delivery schedule and making the skyline stable, we're going to be able to better match, our flight attendant, we're going to be better match, our pilot hiring so that the inefficiencies that we're discussing right now around.

Brandon Robert Oglenski: Again, the <unk> 40 less aircraft, we have for this year that those inefficiencies will work themselves out and so that's that's what's critical to this but in addition to two overall cost structure. When we think about the inflationary world that we've been in.

Brandon Robert Oglenski:

Brandon Robert Oglenski: That pressure is going to the industry is going to continue to face that but United United We have the gauge benefit and that gauge benefit will be metered in <unk>.

Brandon Robert Oglenski: Smoothed way so it would be very excited very excited about that.

Brandon Robert Oglenski: Okay, I appreciate that. And maybe just a quick one for you, Mike, I know you guys wanted to do an analyst meeting, you know, soon here, and it's going to get pushed back. But, you know, any strategic, you know, teasers you want to give us on MileagePlus? Because I know that's been a focus of yours and the team.

Speaker Change: Okay I appreciate that and maybe just a quick one for you Mike I know you guys had wanted to do an analyst meeting.

Speaker Change: Soon here and that's going to get pushed back but.

Unknown Attendee: Any strategic.

Unknown Attendee: Teasers, you want to give us a mileage plus because I know that's been a focus of yours in the team.

Michael Leskinen: Airlines. I will repeat what I've said in the past. Milos Plus is a crown jewel in the assets we have here at United Airlines. It was a critical source of collateral during the pandemic. But the dream is that the value of that asset, the value of that business, especially as we grow it, is recognized in our equity market cap. It's not there today.

Unknown Attendee: I will repeat what I've said in the past <unk> plus it's a crown jewel.

Unknown Attendee: In the assets, we have here at United Airlines. It was a critical source of collateral during the pandemic.

Unknown Attendee: But the dream.

Unknown Attendee: Is that it has recognized the value of that asset the value of that business, especially as we grow it is recognized in our equity market cap. It's not there today youre going to see us continue to give more and more disclosure more and more transparency to that business youre going to see us share more and more details on the <unk>.

Michael Leskinen: You're going to see us continue to give more and more disclosure, and more and more transparency to that business. You're going to see us share more and more details on the growth plans we have for the data in that business. And eventually, if we get no value in our market cap, we'll take more aggressive action. I've been a consistent message on that, and you'll hear even more at our Investor Day. Thank you. We will now switch.

Unknown Attendee: Both plans we have for the data in that business and eventually if we get no value in our market cap.

Unknown Attendee: We will take more aggressive actions.

Unknown Attendee: Been a consistent message on that and you'll hear even more at our Investor day.

Speaker Change: Thank you.

Krista: Thank you. We will now switch to the media portion of the call. If you would like to ask a question, please press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, again, press star one. We'll pause for a moment. While we assemble our queue. Our first question comes from the line of Mary Schlangenstein from Bloomberg. Please go

Speaker Change: Thank you we will now switch to the media portion of the call. If you would like to ask a question. Please press star followed by the number one on the telephone keypad and if you'd like to withdraw your question again press Star one.

Speaker Change: We will pause for a moment.

Speaker Change: While we assemble our queue.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Our first question comes from the line of Mary <unk> from Bloomberg. Please go ahead.

Mary Schlangenstein: Thanks, that was close, hey, I wanted to, I'm Mary Schlangenstein. So I wanted to see if you could give a little bit more detail on the aircraft that were delayed from second quarter to third quarter as part of the FAA review, whether you could tell us what, how many aircraft, what types of aircraft, and specifically how the FAA review resulted in the delays.

Mary: Thanks that was close.

Mary: I wonder if you'd like.

Mary: [laughter].

Mary: So I wanted to see if you could give a little bit more detail on the aircraft that were delayed from the second quarter to third quarter as part of the FAA.

Mary: Review, whether you can tell us what how many aircraft what types of aircraft and specifically how the FAA resulted in the delays.

Unknown Executive: I'll try. The truth is, I don't think we know for sure yet. I think we have three airplanes that are coming in the next few months. (Inaudible) As we go through that process, there will be some point along the way where we'll start taking aircraft deliveries again, but that is absolutely not our focus, nor should it be our focus.

Mary: Yeah.

Speaker Change: I'll try to do is I don't think we know for sure yet I think we got three airplanes that are coming in the next few months.

Speaker Change: Theyre Max aircraft Max.

Speaker Change: Max Nines.

Speaker Change: Three aircraft that are coming in the next few months and we will continue to work with the FAA.

Speaker Change: On.

Speaker Change: I'm going to change that.

Speaker Change: We're mostly focused on that.

Speaker Change: What we're focused on we're focused on figuring.

Speaker Change: Everything I've said in this call how to use this.

Speaker Change: Breaking this process.

Speaker Change: The opportunity.

Speaker Change: To set a new higher standard for safety.

Mary Schlangenstein: They haven't, the FAA hasn't prohibited any aircraft deliveries. Is that right? It's just the start of the use of some of those planes, or is it actually the deliveries themselves? It's putting them, it's not the delivery; it's putting them on the ship.

Speaker Change: And as.

Speaker Change: As we go through that process there'll be some point along the way, where we will start taking aircraft deliveries again, but that is absolutely not our focus nor should it be our focus.

Speaker Change: Okay. They haven't the FAA hasn't prohibited any aircraft deliveries is that right. Just the start of the use of some of those planes are or is it actually the deliveries themselves.

Speaker Change: Putting the it's not the delivery is putting them on the certificate.

Unknown Executive: Right, right. Okay. Okay. And you said it's just three for right now. Okay, great.

Speaker Change: Right right Okay. Okay.

Speaker Change: Just three for right now okay, Great and my second question was you all talked a lot about the corporate rebound and how that's playing out but is there anything different that you expect to see in summer travel this season.

Mary Schlangenstein: And my second question was, you talked a lot about the corporate rebound and how that's playing out. But is there anything different that you expect to see in summer travel this season? Like, it sounds like there might have been some geographic shifts for some areas that were strong last summer won't be as strong this summer. And do you expect the domestic market to be particularly strong this summer?

Speaker Change: It sounds like there might have been some geographic shifts where some areas that were strong last summer won't be as strong. This summer and do you expect the domestic market to be particularly strong this summer.

Andrew P. Nocella: You know, as we head into the summer season, we expect strength across the board. The United Network tilts in terms of our best seasonality towards Q2 and Q3, and particularly across the Atlantic, across the Pacific, and TransCon within the United States. So we expect all of those entities to perform really strongly this year, and everything we have in terms of data right now would say that's where we're at.

Speaker Change: As we head into the summer season, we expect strength across the board the United Network until in terms of our best seasonality towards Q2, and Q3 and particularly across the Atlantic across specific in transcon within the United States. So.

Speaker Change: So we expect all of those entities to perform really strongly this year and everything we have in terms of data right now I would say that's where that is.

Speaker Change: Where we stand.

Speaker Change: Do you expect will set another record for this summer for.

Mary Schlangenstein: Do you expect we'll set another record this summer for passenger numbers?

Speaker Change: Passenger numbers.

Andrew P. Nocella: Yes, we I think we will as an airline and as an

Speaker Change: Yes.

Speaker Change: We will as an airline and as an industry.

Leslie Josephs: Great. Thank you very much.

Speaker Change: Alright, Thank you very much.

Leslie Josephs: Your next question comes from the line of Leslie Josephs from CNBC. Please go ahead.

Speaker Change: Your next question comes from the line of Leslie Joseph from CNBC. Please go ahead.

Leslie Josephs: Hi. Good morning, everybody.

Leslie Josephs: Hi, good morning, everybody.

Scott Kirby: Can you tell us exactly what the FAA review prohibits you from doing? And is the change to the fleet plan for this year because of Boeing delays in production and deliveries or because of the FAA review? And then I have just a question on the mechanical issues lately. Have you had to update any kind of procedures or anything else for your technicians so that those things don't happen, maybe things that were getting overlooked or not part of checklists prior?

Leslie Josephs: Exactly what the FAA review prohibits you from doing and is the change to the fleet plan from this year because of the Boeing delays in production and deliveries or because of the FAA review.

Leslie Josephs: And then just a question on the.

Leslie Josephs: Mechanical issues lately have you had to update kind of procedures or anything else for your technicians. So that those things don't happen may be things that we're getting overlooked are not part of checklist. Prior thanks.

Scott Kirby: First, the delivery delays are 100% of the issue, and the main focus has been less about changing the policies and processes but really making sure that everyone keeps safety as a top-of-mind awareness. And spending a lot more time with the leadership team, out talking about it, really making sure that safety is a top-of-mind awareness, and we continuously look at ways to improve safety across the board, and that's continuing. It's at an elevated level right now of looking for ideas, but that's not something unique or new. That is, you know; we have hundreds of people whose full-time jobs are doing that day in and day out.

Leslie Josephs: First are the delivery delays for 100% of the issue.

Leslie Josephs: And.

Leslie Josephs: The main focus has been less about changing the policies and processes.

Leslie Josephs: But really making sure that everyone keeps safety as a top of mind awareness.

Leslie Josephs: And spending a lot more time with the leadership team I'm talking about really making sure that safety is top of mind awareness. We of course will go through with the FAA and go through.

Leslie Josephs: A pretty rigorous process.

Leslie Josephs: And we continuously look at ways to improve safety across the board and that's continuing it's at an elevated level right now of looking for ideas, but thats not something unique or new that is.

Leslie Josephs: Hundreds of people, whose full time jobs are doing that.

Leslie Josephs: And the review prevents you from putting new aircraft into service? And then what else? Is it a captain upgrade?

Leslie Josephs: Day in day out.

Leslie Josephs: And the review prevent you from.

Leslie Josephs: Putting new aircraft into service and then what else is it captain upgrade.

Unknown Executive: Anything else? No, that's not it. No, we can do it, Captain.

Speaker Change: No that's not it we can do cabin upgrades.

Unknown Executive: So it's just putting new aircraft into service; that's the primary objective. Okay, when do you expect the review to conclude? That's, again, the way we would think.

So, it's just putting new aircraft into service.

Speaker Change: That's the primary thing.

Speaker Change: Okay. When do you expect the review to conclude.

Speaker Change: That's again the way we would think of this as this is about going through a process to make it better.

Scott Kirby: That's again, the way we would think of this is this is about going through a process to make it better, using this as an opportunity to create a new higher standard, and it will conclude when it concludes.

Speaker Change: Using this as an opportunity to create a new standard and it will conclude when it would be good.

Speaker Change: We're not going to predict the time.

Kristina Munoz Edwards: Thank you. I will now turn the call back over to Kristina Edwards for her closing remarks.

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Thank you I will now turn the call back over to Christine Edwards for closing remarks.

Kristina Munoz Edwards: Thanks Krista and thanks to everyone who joined our great call today. Please contact IR or Media Relations if you have any further questions, and we look forward to talking to you next quarter.

Kristina Munoz Edwards: Thanks, Christine and thanks to everyone joining a great call today. Please contact IR media relations. If you have any further questions and we look forward to talking to you next quarter.

Krista: Thank you. Ladies and gentlemen, this concludes today's conference, and you may now disconnect.

Kristina Munoz Edwards: Thank you ladies and gentlemen, this concludes today's conference and you may now disconnect.

Kristina Munoz Edwards: Yeah.

Kristina Munoz Edwards:

Kristina Munoz Edwards: Yeah.

Kristina Munoz Edwards: Yeah.

Kristina Munoz Edwards: Yeah.

Kristina Munoz Edwards: Yeah.

Kristina Munoz Edwards: Yeah.