Q2 2024 United Airlines Holdings Inc Earnings Call

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Kristina Edwards: I will now turn the presentation over to your host for today's call, Kristina Edwards, Managing Director of Investor Relations. Please go ahead.

Kristina Munoz Edwards: I will now turn the presentation over to your host for today's call Christina Edwards managing director of Investor Relations. Please go ahead.

Unknown Attendee: Thank you, Brianna.

Kristina Munoz Edwards: Thank you, Brianna. Good morning, everyone, and welcome to United's second quarter 2024 earnings conference. 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. All forward-looking statements are based upon information currently available to us. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release forms 10-K and 10-Q and other reports filed with the FCC by United Airlines Holdings and United Airlines for a more thorough description of these facts.

Kristina Munoz Edwards: Thank you Breanna good morning, everyone and welcome to United Second 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.

Scott Kirby: Good morning, everyone, and welcome to United's second quarter 2024 earnings conference call. Yesterday, we issued our earnings release, which is available on our website at ir.unite.com. Information yesterday's released in the remarks made during this conference call may contain forward-looking statements. All forward-looking statements are based upon information current, which is currently available to the company. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release, Form 10-K and 10-Q, and other reports filed with the SEC by United Airlines Holdings and United Airlines for a more thorough description of these factors.

Kristina Munoz Edwards: All forward looking statements are based upon information currently available to the company a number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release Form 10-K, 10-Q, and other reports filed with the SEC by United Airlines Holdings, and United Airlines for more thorough description of these factors.

Scott Kirby: Unless otherwise noticed, we will be discussing our financial metrics on a non-GAAP basis on this call. Please refer to the related definitions and reconciliation in our press release. For reconciliation of these non-gap measures to the most directly comfortable gap measures, please refer to our report. Please refer to the tables at the end of our earnings release.

Kristina Munoz Edwards: Unless otherwise noted, we will be discussing our financial metrics on a non-gap basis in this. Please refer to the related definitions and reconciliations in our for Reconciliation of these Non-Gap Measures to the Most Directly Comparable Gap Measures, please refer to the tables at the end of our earnings release. Joining us on the call today to discuss our results and outlook are Chief Executive Officer Scott President Brett Hart, Executive Vice President and Chief Commercial Officer Andrew Nocella, and Executive Vice President and Chief Financial Officer Michael. In addition, we have other members of the executive team on the line and available to assist. And now I'd like to turn the call over to Thank you. Good morning.

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 comparable GAAP measures. Please refer to the tables at the end of our earnings release.

Kristina Edwards: Joining us on the call today to discuss the resulting outlook are Chief Executive Officer Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer Angelina Salas, and Executive Vice President and Chief Financial Officer Mike Westman. In addition, we have other members of the executive team on the line and available to assist in the Q&A.

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, Adrian seller, and executive Vice President and Chief Financial Officer, Mike Watson and in addition, we have other members of the executive team on the line and available to assist in the Q&A and now I'd like to turn to turn the call over to Scott.

Scott Kirby: And now I'd like to turn to turn the call over to Scott. Thank you.

Kristina Munoz Edwards: Hi.

Scott: And thank you, Kristina. The United team produced another solid quarter. We did that while further sharpening our focus on improving our already strong safety culture. Looking at a wide variety of metrics, our airline is safer than ever before.

Scott Kirby: Good morning, and thank you, Kristina. The United team produced another solid quarter. We did that while further sharpening our focus on improving our already strong safety culture over the last several months. Looking at a wide variety of metrics, are airlines safer than ever before, with our culture rooted and constantly striving to make our airlines safer for our employees and our customers. So we're continuing to work closely with the FAA and other partners to do exactly that. Additionally, thank you to our employees for delivering top tier operational performance amidst challenging weather, including Hurricane Barrel and Houston, and getting our customers to their destination.

Scott Kirby: Thank you good morning, and thank you Christina the United team produced another solid quarter, we did that while further sharpening our focus on improving our already strong safety culture over the last several months looking.

Scott Kirby: I'm looking at a wide variety of metrics, our airline is safer than ever before.

Scott: Our culture is rooted in constantly striving to make our airlines safer for our employees and our customers, so we're continuing to work closely with the FAA and other partners to do exactly that. Additionally, thank you to our employees for delivering top-tier operational performance amidst challenging weather, including Hurricane Beryl in Houston, and getting our customers to their destinations safe and on time. While this was a quarter where industry capacity growth exceeded still solid demand, it was also a quarter that continued to show the industry developing along the lines that we've been anticipating for the past couple of years. The pressure other U.S. airlines are experiencing today is due, in large part, to their unprofitable flying in many domestic markets.

Scott Kirby: With our culture rooted in constantly striving to make her airlines safer for our employees and our customers. So we're continuing to work closely with the FAA and other partners to do exactly that Additionally, thank you to our employees for delivering top tier operational performance amidst challenging weather, including hurricane barrel in Houston, and getting our customers to their destinations.

Scott Kirby: And on time.

Scott Kirby: Well, this is a quarter where industry capacity growth exceeded still solid demand. It was also a quarter that continued to show the industry developing along the lines that we've been anticipating for the past couple of years. The pressure other U.S. airlines are experiencing today is due in large part to their unprofitable flying in many domestic markets. It was always inevitable that carriers would begin to cancel this unprofitable flying, and you see that happening in earnest in the second half of August. As a result, it appears that a domestic industry capacity growth will moderate by roughly five points by the fourth quarter compared to where we were in the second quarter, which should provide a constructive set up as we close out the year and a particularly beneficial backdrop heading into 2025.

Speaker Change: While this was a quarter where industry capacity growth exceeded still solid demand. It was also a quarter that continued to show the industry developing along the lines that we've been anticipating for the past couple of years.

Speaker Change: The pressure other U S Airlines are experiencing today is due in large part to their unprofitable flying and many domestic markets. It was always inevitable that carriers have begin to cancel this unprofitable flying you see that happening in earnest in the second half of August and the schedules.

Scott: It was always inevitable that carriers would begin to cancel this unprofitable flying, and you see that happening in earnest in the second half of August on the schedule. As a result, it appears that domestic industry capacity growth will moderate by roughly five points by the fourth quarter compared to where we were in the second quarter, which should provide a constructive setup as we close out the year and a particularly beneficial backdrop heading into 2025.

Speaker Change: As a result, it appears is it domestic industry capacity growth will moderate by roughly five points by the fourth quarter compared to where we were in the second quarter, which should provide a constructive setup as we close out the year and are particularly beneficial backdrop heading into 2025.

Scott Kirby: Since COVID began in early 2020, United has consistently been ahead of the curve on the big picture developments driving the industry. We're running the best operation in our history despite operating in the most difficult hubs in the world. Chicago, New York, and San Francisco. And despite having more exposure to the issues of Boeing than in the other than in the airline in the world. Our people are proud of United, and they have completely transformed the service and care for our customers. And we have the best commercial and revenue management teams in the world that are always on top of the demand environment, making strategic and technical adjustments to drive revenue.

Scott: Since COVID began in early 2020, United has consistently been ahead of the curve on the big picture developments driving the industry. We're running the best operation in our history, despite operating in the most difficult hubs in the world, Chicago, Newark, and San Francisco, and despite having more exposure to the issues of Boeing than any other airline in the world. Our people are proud of United, and they have completely transformed the service and care for our customers.

Speaker Change: Since <unk> began in early 2020, United has consistently been ahead of the curve on the big picture developments driving the industry, we're running the best operation in our history. Despite operating in the most difficult hubs in the World Chicago, New York, and San Francisco, and despite having more exposure to the issues at Boeing than any other than any airline in the world are.

Speaker Change: Our people are proud of United and they have completely transformed the service and care for our customers and we have the best commercial and revenue management teams in the world.

Scott: And we have the best commercial and revenue management teams in the world that are always on top of the demand environment, making strategic and technical adjustments to drive revenue. And the proof is in the pudding. We've now led the industry in domestic revenue growth for three years in a row. That cannot happen by accident.

Speaker Change: That are always on top of the demand environment, making strategic and tactical adjustments to drive revenue and the proof is in the pudding. We have now led the industry in domestic PRASM growth three years in a row that cannot happen by accident, United and X was a great strategy, but a great strategy only works with great execution and that has allowed us to structurally improve.

Scott Kirby: And the proof is in the pudding. We've now led the industry in domestic PRASM for three years in a row. That cannot happen by accident. United Next was a great strategy, but a great strategy only works with great execution. And that has allowed us to structurally and permanently change our position within the industry. And while we are proud of our relative outperformance to the industry, we also know that our absolute results are all that really matter. They're solid right now, but I can already see the impact that the schedule changes are having on our advanced bookings in yield as we hit the mid-August industry capacity and flexion point.

Scott: Next was a great strategy, but great strategy only works with great execution, and that has allowed us to structurally and permanently change our position within the industry. And while we are proud of our relative outperformance compared to the industry, we also know that our absolute results are all that really matter. They're solid right now, but I can already see the impact that the schedule changes are having on our advanced bookings and yields as we hit the mid-August industry capacity inflection. And we are absolutely committed to our no excuses philosophy and doing what we can to hit our guidance.

Speaker Change: Permanently change our position within the industry.

Speaker Change: While we are proud of our relative outperformance to the industry. We also note that our absolute results for all that really matters. There is solid right now, but I can already see the impact of the scheduled changes are having on our advanced bookings and yields as we hit the mid August industry capacity and flexible.

Scott Kirby: And we are absolutely committed to our no excuses philosophy and controlling what we can to hit our guidance. And so, while the industry is developing as we expected and our relative results are outperforming as we expected, we are not going to rely just on industry changes outside of our immediate control. We're also taking steps in the short term to ensure that we meet our target. That includes aggressive cost management and reducing domestic capacity, 300 bytes of points in the fourth quarter. The industry rationalization that we expected is beginning to play out, and we've reached the inflection point.

Speaker Change: And we are absolutely committed to our no excuses philosophy and controlling what we can to hit our guidance.

Scott: And so while the industry is developing as we expected, and our relative results are outperforming as we expected, we are not going to rely just on industry changes outside of our immediate control. We're also taking steps in the short term to ensure that we meet our targets. That includes aggressive cost management and reducing domestic capacity by 300 basis points in the fourth quarter. The industry rationalization that we expected is beginning to play out, and we've reached an inflection point.

Speaker Change: So while the industry is developing as we expected and our relative results are outperforming as we expected we are not going to rely just on industry changes outside of our immediate control.

Speaker Change: Also taking steps in the short term to ensure that we meet our target that includes aggressive cost management and reducing domestic capacity 300 basis points in the fourth quarter the.

Speaker Change: The industry rationalization that we expected is beginning to play out and we've reached the inflection point the United next plan continues to be the winning strategy for United and as a result, we continue to be do you expect to be within our full year 2024, EPS guidance range of nine to $11. Despite the tough industry environment around us.

Scott Kirby: The United Next plan continues to be the winning strategy for United. And as a result, we continue to expect to be within our full year 2024 EPS guidance range of $9 to $11, despite the tough industry environment around us.

Scott: The Unite Next plan continues to be a winning strategy for United. And as a result, we continue to expect to be within our full year 2024 EPS guidance range of nine to eleven dollars, despite the tough industry environment around us. And with that, I'll hand it over to Brett.

Brett Hart: And with that, I'll hand it over to Brett. Thank you, Scott, and good morning. This quarter, we continue to achieve record operational performance, delivering the best on-time performance, completion factor, and seek cancellation rates for a second quarter since the pandemic, while flying the most passengers in a quarter ever in our history over $44 million. Looking across our network, Newark, our largest hub, woke several of its own records into QQ with its April and May on-time departures in the Bethany Company. The FAA waiver allowing for better balance between the number of flights and what the runways, facilities, and air space, and safely and efficiently handle as Newark has enabled us to reduce these results for our customers.

Speaker Change: I'll hand, it over to Brett.

Brett J. Hart: Thank you, Scott, and good morning. This quarter, we continue to achieve record, Delivering the best on-time performance. Actors, NC Cancellation Rates for Second Quarter. Flying the most passengers in a quarter ever in our history, over 44.

Brett: Thank you Scott and good morning.

Brett: This quarter, we continued to achieve record operational performance delivering the best on time performance completion factor event cancellation rate for a second quarter since the pandemic flying the most passengers in the quarter ever in our history.

Speaker Change: $44 million.

Brett J. Hart: Looking across our network, Newark, our largest hub, set several of its own records in 2Q. April and May on-time departures, seeing the best in company history, the FAA waiver allowing for a better balance between the number of flights and what the runways, facilities, and airspace can handle efficiently. Enabled, Cities Results.

Looking across our network Newark, our largest hub spoke several of its own records in Q2, Q, whether it's April and May on time departures and the best in the company.

Speaker Change: The FAA waiver, allowing for better balance between the number of flights and what the runway facilities in aerospace and safely and efficiently handle at Newark.

Speaker Change: It enabled us to reduce these results for our customers.

Brett Hart: Operational excellence was not limited to Newark. Six out of our seven hubs departed more on-time flights than our primary competitors. The improvements were made over the last year to adapt to a more challenging operating environment. Have shown meaningful benefits to our reliability, particularly during times of irregular operations. Our strong operation, under 10 by our safety culture, is translating into an even better customer experience and driving efficiency benefits to the bottom line. This would not have been possible without the commitment to operational excellence from our frontline employees. So thank you to all of them for their hard work.

Brett J. Hart: Operational Excellence with not limited, Six out of our seven hubs departed more on-time flights. Improvements were made over the last, Adapt to a More Challenging Operating Environment. [inaudible] Our strong operation, underpinned by our safety culture, is translating into an even better Driving Efficiency Benefits. It has not been possible without the commitment to operations. Thank you to all of you.

Speaker Change: Operational excellence was not limited to Newark.

Speaker Change: Six out of our seven hubs departed more on time flights and our primary competitors improve.

Speaker Change: The improvements were made over the last year to adapt to a more challenging operating environment.

Speaker Change: Have shown meaningful benefits to our reliability, particularly during times of irregular operations are.

Speaker Change: Our strong operations underpinned by our safety culture is translating into an even better customer experience.

Speaker Change: Arriving efficiency benefits to the bottom line.

This would not have been possible without the commitment to operational excellence from our frontline employees.

Speaker Change: So thank you to all of them for their hard work.

Brett Hart: As I mentioned before, our strong operation is not only driving efficiency, but it is also positively impacting our customer experience. As a result, our NPS scores with highest quarter, highest second quarter results.

Brett J. Hart: As I mentioned before, our strong operation is not only driving, but it is also a positive result. Our NPS scores were the highest quarter, and highest second quarter results, investing in all aspects of our product, including the introduction of Telemark ice cream on board our aircraft. Act. References, Automatic.

Speaker Change: As I mentioned before our strong operation is not only driving efficiency, but it is also positively impacting our customer experience.

Speaker Change: As a result, our NPS scores with our highest quarter highest second quarter results since the pandemic, we're investing in all aspects of our product, including the introduction of Telemark ice cream onboard our aircraft. Additionally.

Brett Hart: Sonsipendemic. We're investing in all aspects of our product, including the introduction of telemark ice cream on board our aircraft. Additionally, the United App continues to be the most downloaded airline app, with new features like see preferences that automatically receives customers when the preferred seat becomes available. This summer, we also started texting live radar maps to customers during weather delays. So they can stay informed about how inclement weather in one part of the country can impact their journey. Investment in our leading product and customer experience will remain a key priority to United and will continue to differentiate us at the premier global US carrier.

Speaker Change: Additionally, the United App continues to be the.

Speaker Change: The most downloaded airlines app with new features like seat references automatically receipts customers in their preferred seat becomes available.

Brett J. Hart: This summer, we also started texting live radar, so they can stay informed about how the weather is changing in one part of. Investment in our leading product and customer experience will remain a key priority to United. We'll continue to differ. Shifting gears to our employees, I'm pleased to share that due to the Boeing delivery delays for the months of May and June, we resumed these classes in July.

Speaker Change: This summer we also started texting live radar map customers during weather delays.

Speaker Change: So they can stay informed about how increment weather in one part of the country get impacted.

Investment in our leading product and customer experience will remain a key priority to United will continue to differentiate us.

Speaker Change: Premier Global U S carrier.

Brett Hart: Chifting gears to our employees, I'm pleased to share that after a brief pause in pilots and flight attendant hiring classes due to the Boeing delivery delays for the months of May and June, we resume these classes in July. Looking ahead, we have a busy end of summer and front of us. The United team continues to innovate and adapt with a complex operating environment. While Andrew will describe the near-term trends, it's clear that United has a bright future and we remain on track to deliver $9 to $11 in earnings per year this year.

Speaker Change: Shifting gears to our employees I am pleased to share that after a brief pause in pilot and flight attendant hiring classes due to the Boeing delivery delays for the months of May and June we resumed these classes in July.

Andrew P. Nocella: Looking ahead, we have a busy end of summer. The United Team continues to innovate and adapt to a complex operating environment. Well, Andrew will describe the near-term trend. Let's make it clear that United has a great, [inaudible] I'll hand it over. Thanks, Brett. USA reported total revenues in Q2 of $15 billion, up 5.7% year-over-year.

Speaker Change: Looking ahead, we have a busy end of summer in front of us the United team continues to innovate and adapt to a complex operating environment.

Speaker Change: Andrew will discuss the near term trends. It is clear that United has a great future and we remain on track to deliver 90 to $11 and earnings per share this year now.

Andrew Didora: Now I hand it over to Andrew. Thanks, Brett. United today reported total revenues in Q2 of $15 billion. Up 5.7 percent year of a year. Trasm was down 2.4 percent on 8.3 percent more capacity year of a year. We expect United year-over-year unit revenues in Q2 to be the best of all our large peers. Domestic prasm fell by 1.9 percent on 5.3 percent more capacity, as widely discussed. Unprofitable industry capacity that exceeded still solid demand put pressure on domestic prasm into Q. International prasm fell by 3.6 percent on 12 percent more capacity year-over-year. Fights across the Atlantic had a small prasm gain, but flights to Latin America and Asia continue to see the clients year-to-year.

Speaker Change: I'll now hand, it over to Andrew.

Andrew: Thanks, Brett.

Andrew: The United to say reported total revenues in Q2 of $15 billion up five 7% year over year <unk> was down two 4%, an eight 3% more capacity year over year.

Andrew P. Nocella: Trazim was down 2.4% on 8.3% more capacity year-over-year. We expect United's year-over-year unit revenues in Q2 to be the best of all our large, Domestic Prasim fell by 1.9% on 5.3% more capacity. As widely discussed, unprofitable industry capacity that exceeded still solid demand put pressure on Domestic Prism. International Prism fell by 3.6% on 12% more capacity year; Flights across the Atlantic had a small prism gain, while flights to Latin America and Asia continued to see decline.

Speaker Change: Expect United year over year unit revenues in Q2 to be the best of all our large peers.

Speaker Change: Domestic PRASM fell by one 9% and five 3% more capacity is widely discussed unprofitable industry capacity that exceeded still solid demand put pressure on domestic PRASM into Q <unk>.

Speaker Change: National PRASM fell by three 6% on 12% more capacity year over year.

Speaker Change: Across the Atlantic had a small PRASM gain or twice to Latin America, and Asia continued to see declines year over year.

Andrew Didora: Cargo yields have also stabilized at higher levels and forecasted, which has helped and cushioned some of the prasm declines we have seen. Miley's Plus had yet another strong quarter of revenues, up 13 percent. Our three key revenue segments continue to gain ground. United gained ground in our key markets among frequent business road warrior travelers, which we continue to believe is due to our no-change fee policy, our diverse set of products, our leading global network, and our award-winning Miley's Plus program. Revenue from these road warriors was up 11 percent in the quarter; well, total passenger revenue was up 5 percent.

Andrew P. Nocella: Cargo yields have also stabilized at higher levels than forecasted, which is helping cushion some of the problems and declines. MileagePlus had yet another strong quarter with revenues up 13%. Our three key revenue segments continue to gain ground; United gained ground in our key markets among frequent business road warrior travelers, which we continue to believe is due to our no-change-fee policy, our diverse set of products, our leading global network, and our award-winning MileagePlus. Revenue from these road warriors was up 11% in the quarter.

Speaker Change: Cargo yields have also stabilized at higher levels than forecasted, which is health is helping to cushion some of the PRASM declines we have seen mileage plus had yet another strong quarter with revenues up 13% or.

Speaker Change: Our three key revenue segments to continue to gain ground United gain ground in our key markets amongst frequent business Road warrior travelers, which we continue to believe is due to our no change fee policy. Our diverse set of products are leading global network and our award winning mileage plus program revenue from these road Warriors was up 11.

Speaker Change: Sent in the quarter.

Andrew P. Nocella: Well, total passenger revenue was up 5. Consolidated premium revenues increased by 8.5% to $7.4 billion. Premium capacity was up 9.1%. Demand for United's premium capacity, including Economy Plus, was strong in the quarter, outperforming non-U.S. markets. Business Load Factor Contribution in the Polaris Cabin increased year-over-year by 2%.

Speaker Change: While total passenger revenue was up 5%.

Andrew Didora: Consolidated premium revenues increased by 8.5 percent to 7.4 billion. Premium capacity was up 9.1 percent. Demand for United's premium capacity, including the Continental Plus, was strong in the quarter, outperforming non-premium seeds. Business load factor contribution in the Polaris cabin increased year-over-year by 2.6 points. Polaris and premium plus risons were up 1.4 points year-over-year. We also continue to see strong demand for our premium domestic first class product, which sold sold load factors up 13 points.

Speaker Change: Consolidated premium revenues increased by eight 5% to seven 4 billion premium capacity was up nine 1% demand for United premium capacity, including the economy plus was strong in the quarter outperforming non premium seats.

Speaker Change: Business load factor contribution in the Polaris cabin increase year over year by $2 six points, Polaris and premium plus RASM or up one four points year over year.

Andrew P. Nocella: Polaris and Premium Plus RASMs are up 1.4%. We also continue to see strong demand for our premium domestic first-class products with sold load factors up 13.3%. [inaudible] Contracted business revenues are up 10% year-over-year. Basic Economy Revenue Strong, and we're up 38. United plans to continue to increase the total number of seats we offer in a BASIC as we grow our mainline. However, basic fares as a percent of sales will likely stay stable or decline. [inaudible] When United offers basic fares for sale at competitive rates, we believe customers will always choose United first over a ULCC, R, and LCC.

<unk> continued to see strong demand for our premium domestic first class product, which sold sold load factors up 13 points versus 2019 and eight points versus 2023.

Andrew Didora: Maintenance versus 2019, and 8.2023. Contracted business revenues were up 10% year-to-year. Basic economy revenues remained strong and were up 38% year-to-year. United plans to continue to increase the total number of seats we offer in a basic as we grow our mainline gauge. However, basic as a percent of sales will likely stay stable or decline as we continue to expand higher margin premium capacity faster. When United offers basic fares for sale at competitive rates, we believe customers will always use United first over a ULCC or an LCC given the features of a product which includes seat power and seat back entertainment, along with the unmatched benefits of MileagePlus.

Contracted business revenues are up 10% year over year.

Speaker Change: Basic economy revenues remained strong and were up 38% year over year, United plans to continue to increase the total number of seats, we offer in a basic as we grow our mainline gauge. However, our basic as a percent of sales will likely stay stable or decline as we continued to expand higher margin premium capacity faster.

Speaker Change: When United offers basic fares for sale at competitive rates, we believe customers will always choose United first over a U LCC or an LCC given the features of our product which include seat power in Seatback entertainment, along with the unmatched benefits our mileage plus.

Andrew P. Nocella: Given the features of our product, which include seat power and seat back, along with the unmatched benefits of MyLab, revenue Results United, and Industry Did Trail Expectations. Looking back at the quarter now, it is increasingly clear that demand was, in fact, strong, but could not keep up with the incremental industry domestic capacity added. Access Capacity Intern.

Andrew Didora: Q2 revenue results reunited and industry did trail expectations. Looking back at the quarter now, it is increasingly clear that demand wasn't back strong. It just could not keep up with incremental industry domestic capacity added in 2024. Access capacity in turn pressured yields. While July domestic industry capacity growth is published at similar levels to June, published capacity levels pivot in the second half of the quarter and beyond. Based on these schedules, we estimate that Q2, 2024 industry scheduled domestic capacity increased by 6.6%. As we head into Q3, we expect July and the first half of August will look very much like June and Q2.

Speaker Change: Q2 revenue results for United and the industry did trail expectations.

Speaker Change: Looking back at the quarter now it is increasingly clear that demand was in fact strong it just could not keep up with the incremental industry domestic capacity added in 2024.

Speaker Change: Excess capacity in turn pressured yields.

Andrew P. Nocella: While July Domestic Industry Capacity Growth is published at similar levels, published Capacity Levels pivot in the second half of the quarter. Based on these schedules, we estimate that Q2 2024 industry scheduled domestic capacity increased by. As we head into Q3, we expect July and the first half of August to look very much like. We do see a step down in the second half of the quarter to 2.5 to 3% and for the overall quarter at about 4%. We also see the industry altering capacity on peak travel days. More Than Usual. Peake Day Spill.

Speaker Change: July domestic industry capacity growth is published at similar levels to June published capacity levels pivot in the second half of the quarter and beyond.

Speaker Change: Based on these schedules, we estimate that Q2 2024 industry scheduled domestic capacity increased by six 6% as.

Speaker Change: As we head into Q3, we expect July and the first half of August will look very much like June in Q2, we do see a step down in the second half of the quarter to $2 five 3% and for the overall quarter at about 4%.

Andrew Didora: We do see a step down in the second half of the quarter to two and a half to three percent, and through the overall quarter at about four percent. We also see the industry altering capacity on peak travel days more than usual later this summer. Peak day spill traffic is no longer filling up excess capacity on off-peak days such as Tuesday, Wednesday, and Saturday as it did in 2023 for leisure-focused lower margin airlines. We can also see from our internal data that Latin America unit revenue trends have stabilized in Q3 and present declined will moderate significantly for the first time since Q2, 2023.

Speaker Change: We also see the industry altering capacity on peak travel days more than usual later this summer peak day spill traffic is no longer filling up excess capacity on off peak days, such as Tuesday, Wednesday, and Saturday as it did in 2023 for leisure focus lower margin Airlines.

Andrew P. Nocella: Traffic is no longer filling up excess capacity on off-peak days, such as Day, Wednesday, and Saturday, as it did in 2023 for leisure-focused lower, You can also see from our internal data that Latin America unit revenue trends have stabilized in Q3, and pros and declines will moderate significantly for the first time, but Latin America and Deep South unit revenues were strong. Look Good!

Speaker Change: We can also see from our internal data that Latin America unit revenue trends have stabilized in Q3, and PRASM declines will moderate significantly for the first time since <unk> 2023, but Latin America and deep South unit revenues were strong in Q2 and look good going forward.

Andrew Didora: But Latin America and Deep South unit revenues were strong in Q2 and look good going forward. In the third quarter, we do expect Pacific Prime to remain negative. We do not lap our 2023 expansion wave until the fourth quarter. During the fourth quarter, we'll also lap China's return and expect more normal unit revenues from China, which is currently a material headwind in the region. Growth rates for the Pacific will also moderate as we end the year. We expect premium cabin rathms in Q3 will once again outperform coach at a level stronger than Q2 as we continue to see growth of road-water customers ununited and the continued popularity of the many elevated products that we offer.

Andrew P. Nocella: In the third quarter, we do expect Pacific Prasim to remain and not lap our 2023 expansion wave until the fourth quarter. During the fourth quarter, we'll also lap China's return and expect more normal Chinese growth, which is currently a material headwind. Growth rates for the Pacific will also moderate as we expect premium cabin you will once again outperform coach at a level stronger than Q2. We continue to see growth in Road Warrior customers and United. popularity.

Speaker Change: In the third quarter, we do expect the Pacific PRASM to remain negative.

Speaker Change: We do not lap our 2023 expansion wave until the fourth quarter.

Speaker Change: During the fourth quarter, we'll also lap China's return.

Speaker Change: And expect more normal unit revenues from China, which is currently a material headwind in the region growth rates for the Pacific will also moderate as we end the year.

Speaker Change: We expect premium cabin RASM in Q3 will once again outperformed coach at a level stronger than Q2, as we continue to see growth of road warrior customers and United and the continued popularity of the many elevated products that we offer.

Andrew P. Nocella: Elevated Products Mid-August is clearly the pivot point we are expecting for some time as others race to adjust what we believe is unprofitable flying heading into the period of seasonally less Competitive Capacity Overlap on United Non-Stop Routes peaked in Q2, which will also help build better unit revenues for the second half of 2024. We believe it's clear in our internal advance revenue data for August that the pivot will be back. Antiprasant, United, Four to five points better in the second half of the quarter than the Unfortunately, this expected pivot occurs only for about half of Q3, so the revenue quality is impacted.

Andrew Didora: Mid-August is clearly the pivot point we are expecting for some time as others race to adjust what we believe is unprofitable flying heading into the period of seasonally less leisure demand. Competitive capacity overlap on United and nonstop routes peaked in Q2, which will also help build better unit revenues for the second half of 2024 for United. We believe it's clear in our internal advanced revenue data for August that the pivot will be beneficial to United. Currently above four to five points better in the second half of the quarter than the first. Unfortunately, this expected pivot occurs only for about half a Q3.

Speaker Change: Mid August is clearly the pivot point, we're expecting for some time as others race to adjust what we believe is unprofitable flying heading into the period of seasonally less leisure demand.

Speaker Change: Competitive capacity overlap on United Nonstop routes peaked in Q2, which will also help build better unit revenues for the second half of 2024 for United.

Speaker Change: We believe it is clear in our internal advanced revenue data for August that the pivot will be beneficial to United Advanced PRASM for United currently about four to five points better in the second half of the quarter than the first Unfortunately this expected pivot occurs only for about half of Q3 to the revenue quality, we will continue to be impacted for the <unk>.

Andrew Didora: To the revenue quality, we will continue to be impacted for the time being. We're encouraged by the yield improvement we see booked in the second half of the quarter. As we look towards Q4, we estimate that industry domestic capacity will only be up about one and a half to two and a half percent based on what is currently offered for sale. On off-tick days, capacity to be flat year-to-year.

Speaker Change: <unk> been very encouraged by the yield improvement, we see booked in the second half of the quarter.

Andrew P. Nocella: Courage by the Yield Improvement We see both. As we look towards Q4, we estimate that industry domestic capacity will only be up about one and a half to two and a half percent based on what is currently off. On off-peak days, capacity can be flat. While our relative results indicate that United Next's plan is working, we have decided to cut approximately 300 basis points of planned domestic capacity for the. While there are many macro issues outside of our control, the amount of capacity we offer is what they need. University, and the second half of Q3 into Q4.

Speaker Change: As we look towards Q4, we estimate that industry domestic capacity will only be up about one five to two 5% based on what's currently offered for sale on off peak days capacity could be flat year over year, while our relative results indicate that United next plant is working we have decided to cut approximately 300 basis points of planned domestic.

Andrew Didora: While our relative results indicate the United next plan is working, we have decided to cut approximately 300 basis points of planned domestic capacity in the fourth quarter. While there are many macro issues outside of our control, the amount of capacity we offer is within it. This change will help us accelerate rathms we see in the second half of Q3 into Q4 and beyond. As noted in our public schedules, we will be optimizing our capacity in Q4 by time of day and day week to be similarly to what we did in Q1 of 2024, which was very successful in increasing our relative raths and results.

Speaker Change: In the fourth quarter, while there are many macro issues outside of our control the amount of capacity. We offer is within it. This change will help us accelerate RASM as we see in the second half of Q3 into Q4 and beyond as noted in our published schedules, we will be optimizing our capacity in Q4 by time of day and day.

Gerry Laderman: As noted in our published schedules, we will be optimizing our capacity by time of day and day week, similarly to what we did in Q1, which was very successful in increasing our relative. With that, I'll say a great thanks to the United team for another strong quarter with industry-leading financial and operational results, and I will hand it over. Thanks, Andrew, and thank you to the United team for all of their hard work this busy summer. In the second quarter, we delivered pre-tax income of $1.8 billion.

A week similarly to what we did in Q1 of 2024, which was very successful in increasing our relative RASM results.

Mike Westman: With that, I'll say a great thanks to the United team for another strong quarter with industry-leading financial and operational results, and I will hand it over to Mike to discuss our financial details. Thanks, Andrew, and thank you to the United team for all of their hard work this busy summer season. In the second quarter, we delivered pre-tax income of $1.8 billion. Our earnings per share of $4.14 came in ahead of expectations, driven by good cost performance. In the quarter, we continued our no excuses approach to managing the business, to maximize profitability and to consistently deliver on our earnings guidance.

Speaker Change: With that I'll tell you a great. Thanks to the United team for another strong quarter with industry, leading financial and operational results and I will hand, it over to Mike to discuss our financial details.

Mike: Thanks, Andrew and thank you to the United team for all of their hard work this busy summer season.

Mike: In the second quarter, we delivered pretax income of $1 8 billion.

Gerry Laderman: Our earnings per share were $4.14, coming in ahead of expectations, driven by good cost. In the quarter, we continued our no excuses approach to managing the business, to maximize profitability, and to consistently deliver on our earnings guidance. The second quarter was another solid result, despite some capacity headwinds to the end of the Next Strategy. We have never been more confident that our United Next Strategy is working. We've successfully differentiated our business, and that will support sustainably higher profitability. Turning to costs in the quarter, unit costs excluding fuel were up 2.1% year-over-year on 8.3% capacity growth compared to the second quarter of last year.

Mike: Our earnings per share of $4.14 came in ahead of expectations driven by good cost performance.

Speaker Change: In the quarter, we continued our no excuses approach to managing the business to maximize profitability and to consistently deliver on our earnings guidance.

Mike Westman: The second quarter is another solid result despite some capacity headwinds to the industry. We have never been more confident that our United Next strategy is working. We have successfully differentiated our business, and that will support sustainably higher profitability. Turning the costs in the quarter, unit costs excluding fuel were up 2.1% year-over-year on 8.3% capacity growth versus the second quarter of last year. Our strong second quarter chasm exp performance was driven by 3 factors. First, over-the-year operations team has invested in technology and improved their processes to better recover from irregular operations. Our ability to recover faster leads to a more reliable operation, and a more reliable operation is a more cost efficient operation.

Speaker Change: The second quarter is another solid result, despite some capacity headwinds to the industry.

Speaker Change: We've never been more confident that our United next strategy is working well.

Speaker Change: We've successfully differentiated our business and that will support sustainably higher profitability.

Speaker Change: Turning to costs in the quarter unit costs, excluding fuel were up two 1% year over year on eight 3% capacity growth versus the second quarter of last year.

Gerry Laderman: Our strong second-quarter chasm X performance was driven by three factors. First, over the year, our operations team has invested in technology and improved their processes to better recover from irregular operations. Our ability to recover faster leads to a more reliable operation, and a more reliable operation is a more cost-efficient operation. Notably, crew-related disruption expenses, such as premium pay and deadheading costs, are much lower than we have seen during similar events in prior years.

Speaker Change: Our strong second quarter CASM ex performance was driven by three factors.

Speaker Change: Over the year, our operations team has invested in technology and improve their processes to better recover from irregular operations, our ability to recover faster leads to a more reliable operation and a more reliable operation is a more cost efficient operation.

Mike Westman: Notably, crew-related disruption expenses, such as premium pay and dead-heading costs, are much lower than we have seen during similar events in prior years. The full impact of these improvements drove approximately one point of chasm ex-improvement in 2Q compared to our own expectations. Second, as yields soften throughout the quarter, we double down on expense management to ensure we hit our EPS guidance. As we discussed before, we have a no excuses mentality with respect to hitting our EPS guidance, and we will do what is necessary in the quarter to achieve that. These specific actions led to another half point of chasm ex-improvement in the quarter versus our plan.

Speaker Change: Notably crew related disruption expenses, such as premium pay and dead heading costs are much lower than we have seen during similar events in prior years. The full impact of these improvements drove approximately one point of CASM ex improvement in <unk> compared to our own expectations.

Gerry Laderman: The full impact of these improvements drove approximately one point of CASM-X improvement in 2Q compared to our own expectations. Additionally, as yields softened throughout the quarter, we doubled down on expense management to ensure we hit our EPS guidelines. As we've discussed before, we have a no excuses mentality with respect to hitting our EPS guidance, and we will do what is necessary in the quarter to achieve that. These specific actions led to another half point of CASMX improvement in the quarter versus our. Finally, approximately half a point of Casimax is associated with the timing of maintenance events, which were delayed and will likely be seen in the second half of the year. As we look to the third quarter, we expect industry capacity rationalization is beginning to take effect starting in mid-August. Money-losing flights across the industry are being cut rapidly.

Speaker Change: Second.

Speaker Change: As yields softened throughout the quarter, we doubled down on expense management to ensure we hit our EPS guidance as we've discussed before we have a no excuses mentality with respect to hitting our EPS guidance and we will do what is necessary in the quarter to achieve that.

Speaker Change: These specific actions led to another half point of CASM ex improvement in the quarter versus our plan.

Mike Westman: Finally, approximately half a point of chasm ex is associated with the timing of maintenance events, which were delayed and will likely be seen in the second half.

Speaker Change: Finally, approximately half a point of CASM ex is associated with the timing of maintenance events, which were delayed and will will likely be seen in the second half of 2024.

Mike Westman: to 2024. As we look to the third quarter, we expect industry capacity rationalization is beginning to take effect starting in mid-August. Money losing flights across the industry are being cut rapidly, thus supporting our confidence in our trajectory for both the third quarter and the full year. Our own third quarter system capacity plan moderates by approximately three points versus the second quarter on a year-over-year basis. While this is the correct action to take for United, this reduction in capacity, along with the impact from Hurricane Barrel in Houston, puts pressure on Kazamax and makes the third quarter the high point for Kazamax for the year.

Speaker Change: As we look to the third quarter, we expect industry capacity rationalization is beginning to take effect starting in mid August.

Speaker Change: Money, losing flights across the industry are being cut rapidly thus supporting our confidence in our trajectory for both the third quarter and the full year.

Gerry Laderman: Thus, supporting our confidence in our trajectory for both the third quarter and the full year. Our own third-quarter system capacity plan moderates by approximately three points versus the second quarter on a year-over-year basis. While this is the correct action to take for United, this reduction in capacity, along with the impact of Hurricane Beryl in Houston, puts pressure on CASIMAX and makes the third quarter the high point for CASIMAX for the year. All together, with the revenue backdrop that Andrew described, we expect our third-quarter earnings per share to be in the $2.75 to $3.25 range.

Speaker Change: Our own third quarter system capacity plan moderates by approximately three points versus the second quarter on a year over year basis.

Speaker Change: While this is the correct action to take for United This reduction in capacity along with the impact from Hurricane Hurricane barrel in Houston puts pressure on CASM ex and makes the third quarter. The high point for CASM ex for the year.

Mike Westman: Altogether, with the revenue backdrop that Andrew described, we expect our third quarter earnings per share to be in the $2.75 to $3.25 range. As for the full year, we continue to expect to fall within our original EPS range of $9.11. I realize that many of you will immediately point out that this implies a better-than-normal seasonal pattern for Q4 versus Q3 earnings per share. That's accurate, and it's what we expect. It has nothing to do with seasonality and everything to do with a better balance between supply and demand in the fourth quarter, which should lead to significantly higher yields and therefore improve profitability.

Speaker Change: Altogether with the revenue backdrop that Andrew described we expect our third quarter earnings per share to be in the $2 75 to $3 25 range.

Gerry Laderman: As for the full year, we continue to expect to fall within our original EPS range of $9-11. I realize that many of you will immediately point out that this implies a better than normal seasonal pattern for Q4 versus Q3 earnings per share. That's accurate, and it's what we expect. This has nothing to do with seasonality and everything to do with a better balance between supply and demand in the fourth quarter, which should lead to significantly higher yields and, therefore, improved profitability.

Speaker Change: As for the full year, we continue to expect to fall within our original EPS range of nine to $11.

Speaker Change: I realize that many of you will immediately point out that this implies a better than normal seasonal pattern for Q4 versus Q3 earnings per share.

Speaker Change: That's accurate and it's what we expect it has nothing to do with seasonality and everything to do with a better balance between supply and demand in the fourth quarter, which should lead to significantly higher yields and therefore improved profitability.

Gerry Laderman: Andrew already touched on this, but I'd like to reiterate it. We aren't hoping for moderating industry supply. It's already happened, and you can see it in published schedules and with our own reduction. Despite the excess industry capacity, it's clear demand for the United product remains strong.

Mike Westman: Andrew already touched on this, but I'd like to reiterate it: we aren't hoping for moderating industry supply. It's already happened, and you can see it in published schedules and with our own reductions. Despite the excess industry capacity, it's clear demand for the United product remains strong, and we expect our revenue growth to out from the industry. Coupled with discipline, cost management, we expect United and one other airline to represent the vast majority of industry profits in 2024. On the fleet, in the second quarter, we took delivery of four Boeing MAX aircraft and five Air Force H321 Neo aircraft.

Speaker Change: Andrew already touched on this but I'd like to reiterate it we.

Art: Art, hoping for moderating industry supply, it's already happened and you can see it in published schedules and with her own reductions.

Speaker Change: Despite the excess industry capacity, it's clear demand for United product remains strong and we expect our revenue growth to outperform the industry.

Gerry Laderman: And we expect our revenue growth to outperform the industry. Coupled with disciplined cost management, we expect United and one other airline to represent the vast majority of industry profits in 2024. On the fleet, in the second quarter, we took delivery of four Boeing Max aircraft and five Airbus A321neo aircraft. We expect 66 aircraft deliveries in 2024, and with the movement of certain PDPs related to delivery in future years, we now expect total adjusted capital expenditures to be less than $6.5 billion for the year.

Speaker Change: Coupled with disciplined cost management, we expect to United in one other airlines to represent the vast majority of industry profits in 2024.

Speaker Change: On the fleet in the second quarter, we took delivery of four Boeing Max aircraft and five Airbus <unk> hundred 21 Neo aircraft, we expect 66 aircraft deliveries in 2024.

Mike Westman: We expect 66 aircraft deliveries in 2024, and with the movement of certain PDPs related to deliveries in future years, we now expect total adjusted capital expenditures to be less than $6.5 billion for the year. In the quarter, we generated $1.9 billion of free cash flow, while also continuing to invest in the business with almost $1 billion in capital expenditures. Earlier this month, we took advantage of this position to improve our balance sheet by voluntarily pre-paying the $1.8 billion outstanding balance of Mileage Plus term loan that had an interest rate near 11%. This reduction in high interest rate that significantly reduces our interest burden.

Speaker Change: And with the movement of certain <unk> related to deliveries in future years, We now expect total adjusted capital expenditures to be less than $6 5 billion for the year.

Gerry Laderman: In the quarter, we generated $1.9 billion of free cash flow while also continuing to invest in the business with almost $1 billion in capital expenditures. Earlier this month, we took advantage of this position to improve our balance sheet by voluntarily prepaying the $1.8 billion outstanding balance of the mileage plus term loan that had an interest rate near 11%. This reduction in high-interest rate debt significantly reduces our interest burden. As of the end of the quarter, our adjusted net debt to EBITDAR was 2.6 times.

Speaker Change: In the quarter, we generated $1 $9 billion of free cash flow, while also continuing to invest in the business with almost $1 billion in capital expenditures.

Speaker Change: Earlier. This month, we took advantage of this position to improve our balance sheet by voluntarily prepaying. The $1 8 billion outstanding balance of mileage plus term loan had an interest rate near 11%.

Speaker Change: This reduction in high interest rate debt significantly reduces our interest burden.

Mike Westman: As of the end of the quarter, our adjusted net debt to EBITDA was 2.6 times. I'm encouraged by our strong performance in the second quarter. Our team remains nimble as we've demonstrated our ability to adjust to an evolving environment.

Speaker Change: As of the ended the quarter, our adjusted net debt to EBITDAR was two six times.

Kristina Munoz Edwards: I'm encouraged by our strong performance in the second quarter. Our team remains nimble as we've demonstrated our ability to adjust to an evolving environment. Thanks to the whole United team for their hard work, the UnitedNEXT plan continues to run on all cylinders, and our confidence has never been higher about the trajectory of our business. With that, I'll pass it over to Kristina to start the Q&A. Thanks, Mike. We will now take questions from the floor. Please limit yourself to one question and, if needed, one follow-up question. Brianna, please describe the procedure to us.

I am encouraged by our strong performance in the second quarter.

Speaker Change: Our team remains nimble as we've demonstrated our ability to adjust to an evolving of our environment. Thanks.

Mike Westman: Thanks to the whole United team for their hard work, the United Next Plan continues to run on all cylinders, and our confidence has never been higher about the trajectory of our business.

Speaker Change: Thanks to the whole United team for their hard work the United next plant continues to run on all cylinders and our confidence has never been higher about the trajectory of our business.

Kristina Edwards: With that, I'll pass it over to Christina to start the Q&A. Thanks, Mike. We will now take questions from the analyst. Please limit yourself to one question, and if needed, one follow-up question.

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

Kristina: We will now take questions from the analysts.

Kristina: Please limit yourself to one question and if needed one follow up question. Please.

Unknown Attendee: Brianna, please subscribe to the procedure day. Question. Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please hold for a moment while we assemble our queue.

Kristina: Please describe the procedure to ask a question.

Conference Facilitator: Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again.

Kristina: Thank you.

Kristina: A question and answer session will be conducted electronically.

Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad to withdraw your question Press Star one again.

Conference Facilitator: Please hold for a moment while we assemble our queue. The first question comes from Jamie Baker with J.P. Morgan. Please go ahead. Oh, hey. Good morning. Good morning, everybody. First one for Andrew.

Speaker Change: Please hold for a moment, while we assemble our queue.

Kristina: Okay.

Jamie Baker: The first question comes from Jamie Baker with JP Morgan. Please go ahead. Oh, hey, good morning. Good morning, everybody. Up.

Kristina: The first question comes from Jamie Baker with Jpmorgan. Please go ahead.

Andrew P. Nocella: So, like American is still in the early innings of backpedaling on some, not all, but some of the distribution and corporate contract revisions that they made last year. Curious what United is experiencing and what you're seeing and hearing, your conversations with corporate partners, how you expect commissions to trend over time, that sort of thing. Thanks, Jamie. Well, first, I say, you know, we don't believe there was a sudden material or significant windfall for United Airlines when America attempted to disintermediate travel and force companies to book direct.

Jamie Nathaniel Baker: Oh, Hey, good morning.

Everybody first one for Andrew so.

Andrew Didora: First one for Andrew. So, like American is still in the early innings of back paddling on some, not all, but some of the distribution and corporate contract revisions that they may last year. Curious what United is experiencing and what you're seeing in hearing, you know, your conversations with corporate partners, how you expect commissions to trend over time, that sort of thing. Thanks, Jamie. Well, first I say, you know, we don't believe there was a sudden material for significant windfall. He and I did when American attempted to disintermediate travel agencies and forced companies to book direct.

Jamie Nathaniel Baker: American is still in the early innings of Backpedaling on some not all but some of the distribution and corporate contract revisions that they made last year.

Speaker Change: Curious, what United is experiencing and what Youre seeing and hearing your conversations with corporate partners. How you expect commissions to trend over time.

Speaker Change: Thanks.

Speaker Change: Thanks, Jamie well first I would say, we don't believe there was a sudden material or significant windfall to United and American attempted to dis intermediate travel agencies and force companies to book direct so I don't think there'll be a windfall as American flip flops again to this side.

Andrew Didora: I don't think there'll be a windfall as American flip flops again to this side. You know, we maintain really long-term partnerships with our agencies and corporate partners. And what we did during this time period is we made sure that we put in long-term arrangements to gain long-term market share and make the corporations and the travel agencies more sticky to United. We'll see if that actually occurs. But I think the benefits of that are actually to come more than they are currently in our current revenue outlook. So that that was our perspective on it. And we think there's no sudden windfall to United as a result of their change.

Andrew P. Nocella: I don't think there'll be a windfall of American flip-flops to the side. You know, we've maintained really long-term partnerships with our agencies and corporate partners. And what we did during this time period is we made sure that we put in long-term arrangements to gain long-term market share and make the corporations and the travel agencies more sticky to United.

Speaker Change: We maintain really long term partnerships with our agencies and corporate partners and what we did during this time period as we made sure that we put in long term arrangements to gain long term market share and make the corporations.

Speaker Change: Travel agencies more sticky to United we'll see if that actually occurs but I think the benefits of that are actually to come more than they are currently in our currently our current revenue outlook. So that was our perspective on it.

Scott: We'll see if that actually occurs, but I think the benefits of that are actually to come more than they are currently in our current revenue outlook. So that was our perspective on it, and we think there's no sudden loss. Okay, perfect. And then second, and maybe this is best for Scott, but I'm just looking now at industry revenue to GDP, and I tend to use A4A figures just to, you know, just remove forecast error. The recovery in this metric clearly stalled in the fourth quarter, and it remains stalled in the first quarter.

Speaker Change: And we think that there is no sudden windfall to United as a result of their change.

Scott Kirby: Okay, perfect. And then second, and maybe this is best for Scott, but just looking now at industry revenue to GDP, and I tend to use a for a figures just to is, you know, just to remove forecast error. The recovery in this metric clearly stalled in the fourth quarter. It remains stalled in the first quarter. So, you know, we're still below that pre-COVID trend line. We've talked about this in the past and, you know, the possibility that post-COVID increased consumer mobility could allow the metric to exceed the pre-COVID average.

Speaker Change: Okay, Perfect and then second and maybe this is best for Scott, but just.

Speaker Change: Looking now at industry revenue to GDP and I tend to use for a figures just to us.

Speaker Change: Just to remove forecast error.

The recovery in this metric clearly stalled in the fourth quarter. It remains stalled in the first quarter. So we're still below that pre COVID-19 trend line.

Scott: So, you know, we're still below that pre-COVID trend line. We've talked about this in the past, and you know the possibility that post-COVID increased consumer mobility could allow the metric to exceed the pre-COVID average. I'm just wondering if you still think that's a possibility and whether this even shapes how you think about growth.

Speaker Change: We've talked about this in the past and the possibility that post COVID-19 increased consumer mobility could allow the metric to exceed the pre COVID-19 average.

Scott Kirby: I'm just wondering if you still think that's a possibility and whether this even shapes how you think about growth or perhaps it no longer factors into your thinking at all, which is fine. Just any thoughts on that topic. Thanks.

Speaker Change: Just wondering if you still think that's a possibility and whether that's even shapes, how you think about growth or perhaps no longer factors into your thinking at all which is fine.

Scott: Or perhaps it no longer factors into your thinking at all, which is fine. Just any thoughts on that topic? Thanks. Well, this will be a little geeky economics. 202.

Speaker Change: Just any thoughts on that topic.

Speaker Change: Well.

Scott Kirby: Well, this will be a little geeky economics to to bring it on. Yeah, I think I think that absolutely the gd the airline revenue to GDP ratio is going to trend back. I don't not sure where it'll close, but it's going to trend back upwards. And I think if you went back and looked in history, which you'd find is every time capacity gets ahead of demand, this ratio declines. The reason that happens is because demand for air travel is inelastic. Like the very first project I worked on when I was an analyst at American Airlines was estimating demand elasticity.

Speaker Change: This will be a little geeky economics.

Scott: Yeah, I think that absolutely the airline revenue to GDP ratio is going to trend back. I'm not sure where it'll close, but it is going to trend back upwards. And I think if you went back and looked in history, you'd find that every time capacity gets ahead of demand, this ratio declines. The reason that happens is because demand for air travel is inelastic. Like the very first project I worked on when I was an analyst at American Airlines, estimating demand elasticity. It is inelastic.

Speaker Change: 202.

Speaker Change: Brian, Yes, I think I.

Brian: I think that absolutely the gd the airline revenue to GDP ratio is going to trend back I don't not sure where it will close but it is going to trend back upwards.

Brian: And I think if you went back and looked in the history of what you'd find is everytime capacity gets ahead of demand. This ratio declined. The reason that happens is because demand for air travel is elastic.

Brian: The very first project I worked on when I was an analyst at American Airlines with estimating demand elasticity. It is inelastic every bit of analysis you look at it says that demand is inelastic, but when airlines get over their skis on capacity.

Scott: Every bit of analysis you look at says that demand is inelastic. But when airlines get over their skis on capacity, they rush to get the load factors up, and they lower prices, and that lowers overall revenues. So it really is just as simple as this ratio goes down when supply exceeds demand. And so I'm not at all surprised to see that happen.

Scott Kirby: It is inelastic; every bit of analysis you look at says that demand is inelastic. But when airlines get over their skis on capacity, they rush to get the load factors up, and they lower prices, and that lowers overall revenues. So it really is just as simple as this ratio goes down when supply exceeds demand. And so I'm not at all surprised to see that happen. I am incredibly encouraged to see the rapid response that is happening. We'll talk about it more to go through the call today, but beginning at mid August, I mean, I've been through these.

Brian: They rush to get the load factors up and they lower prices and that lowers overall revenue. So it really is just as simple as this ratio goes down when.

Brian: When supply exceeds demand and so I'm not at all surprised to see that happen.

Scott: I am incredibly encouraged to see the rapid response that is happening. We'll probably talk about it more as we go through the call today, but beginning mid-August, I mean, I've been through the cycles with capacity many times in my career, but this is the fastest response.

Speaker Change: Incredibly encouraged to see the rapid response that is happening, we'll probably talk about it more as we go through the call today, but.

Speaker Change: Beginning in mid August I've been through these.

Andrew Didora: Cycles with Capacity, many times in my career. This is the fastest response. It's also the biggest gap between the leading airlines and the other airlines, which I think is part of the reason the response is so fast, but the fastest response I've ever seen. So I expect that to close; I think it's purely a function of capacity. Okay, that's great.

Speaker Change: Cycles with capacity many times.

Career. This is the fastest response.

Speaker Change: It is also the biggest gap between the leading airlines.

Scott: It's also the biggest gap between the leading airlines and the other airlines, which I think is part of the reason the response is so fast, but the fastest response I've ever seen. So I expect that to close, I think, but I think it's purely a function of capacity. Okay, that's great. Andrew and Scott, thanks so much.

Speaker Change: The other airlines, which I think is part of the reason the responses so fast.

Speaker Change: But the fastest response I've ever seen so I expect that to close I think but I think it's purely a function of capacity.

Speaker Change: Okay, that's great Andrew and Scott Thanks, So much Eric.

Andrew Didora: Andrew, Scott, thanks so much. Cheers.

Speaker Change: Yes.

Andrew Didora: Our next question. Question comes from Andrew Didora with Bank of America. Please go ahead. Hey, good morning, everyone. First question.

Scott: Cheers. Our next question comes from Andrew Didora with Bank of America. Please go ahead. Hey, good morning, everyone.

Andrew George Didora: Our next question comes from Andrew <unk> with Bank of America. Please go ahead.

Scott: First question, probably for Scott. Last night, you know, Alaska announced more premium seeding. Yeah, there are reports out there that JetBlue could do the same.

Andrew George Didora: Hey, good morning, everyone.

Andrew: First question for Scott.

Scott Kirby: Hi, for Scott. Last day, Alaska announced more premium feeding. Yeah, there are reports out there; Jeff Blue could do the same. You know, obviously a lot of discussion on your premium strengths on the call today. Certainly a tailwind. Just how do you think, you know, some of this premium rasm growth, you know, can can trend from here. Do you think some of it will be computer? Or is the United product so unique that you feel like you can hold on to most of it here? Just would love your thoughts.

Speaker Change: Last night, Alaska announced more premium seating there are reports out there jetblue could do the same.

Speaker Change: Obviously, a lot of discussion on your premium strength on the call today, certainly a tailwind just how do you think some of this premium RASM growth.

Ken trends from here or do you think some of it will be competed away or.

Speaker Change: Guided products. So unique that you feel like you can hold onto most of it here just would love your thoughts.

Scott: You know, obviously, a lot of discussion on your premium strength on the call today, certainly a tailwind. But just how do you think some of this premium RASM growth can trend from here? Do you think some of it will be competed away? Or, you know, is the United product so unique that you feel like you can hold on to most of it here? Just let us know in the comments.

Scott Kirby: I'll try to take that on this, Andrew.

Speaker Change: I'll try to take that on this is Andrew.

Scott Kirby: Well, you know, I'll start off with first, and it's really important. United is a premium business airline, not because it's the latest fad, but because it's core to the hub system we operate from. Our hubs are in premium markets. Given the success of us and one of the airlines with a similar setup, it's no surprise that others are copying us with new cabins or expanded cabins, as we've seen in the last few days. I think attempting to copy our segmentation plan when it's something that we've been implemented in earnest for more than seven years will be a challenge for anyone that does not operate from business center cubs.

Andrew: I'll start off with first and its really important United is a premium business airline not because it's the latest fad that because it's core to the hub system. We operate from our hubs are in premium markets.

Speaker Change: Given the success of <unk>.

Speaker Change: And one other airline with a similar setup. It's no surprise that others are copying us with new cabins are expanded cabins as we've seen in the last few days I think attempting to copy our segmentation plan when it's something that we've been implementing in earnest for more than seven years will be a challenge for anyone that does not operate from business centric hub.

Scott Kirby: You know, our segmentation strategies built on a complex set of products, along with deliver an excellent customer service. The ULCC business model, in particular, is built on simplicity, not complexity. So, you know, our belief is our lead in the premium front is generational and not short term. And I'm not at all concerned about the changes of others. Maybe we're a little bit slattered as they copy us. Got it. Very interesting.

Speaker Change: Yes.

Speaker Change: Our segmentation strategy is built on a complex set of products along with delivering excellent customer service. The <unk> business model in particular is that built on simplicity complexity.

Speaker Change: Our belief is our leading the premium front is generational and not short term.

And I'm not at all concerned about the changes and others, maybe or even a little bit flatter does they copy us.

Andrew P. Nocella: We'd love your thoughts. I'll try to take that on. This is Andrew.

Mike: Got it very interesting. Thank you for that Andrew and just a quick question, Mike for Mike very nice cost execution in the quarter.

Mike Westman: Thank you for that, Andrew. And just a quick question, Mike. For Mike, you have very nice cost execution in the quarter. He may have helped me understand some of the near-term cost levers that you're able to pull, you know, as you see those revenues coming in a little bit softer than expected.

Mike: Help me understand some of the near term cost levers that you are able to pull you know as you see those revenues coming in a little bit softer than expected in <unk>.

Mike Westman: Are these just kind of timing related, or are these costs that can permanently come out? Thank you. It's a mixture. As I said, and thanks for the question. As I said in the call, running a strong operation is the best thing we can do for cost efficiency in the near term, and the operational team has done a great job. We have some opportunities within tech ops also in this quarter, though some of those costs simply pushed to the right and we're timing related. So you will see some pressure in 3Q. As we look longer terms, some of the headwinds around chasm include labor deals that we're looking forward to, we're looking forward to finalize.

Or are these just kind of timing related or are these costs kind of permanently permanently come out. Thank you.

Speaker Change: It's a mixture as I said and thanks for the question.

On the call running a strong operation is the best thing we can do for cost efficiency in the near term and the operational team has done a great job.

Speaker Change: We have some opportunities within tech ops also in this quarter, though some of those costs simply pushed to the right and were timing related.

Speaker Change: So you will see some pressure in <unk>.

Speaker Change: As we look longer term some of the headwinds around CASM.

Include labor deals that we're looking forward to we're looking forward to finalize.

Mike Westman: We also expect to see some uplift in regional flying in the future. That'll work against the gauge benefit that we expect over a two to three year time frame, and so that another headwind. And look, as Andrew spoke about, our premium product is in great demand. And so we continue to make investments in our product, in our airports, in our catering, and those will add costs, but we expect to add even more revenue. So those are some of the headwinds. Now tailwinds, and we've been on this several years, but we have an idiosyncratic tailwind of gauge that is like no one else in the industry.

Speaker Change: We also expect to see some uplift in regional flying in the future that will that will work against the gauge benefit that we expect over two to three year timeframe and so that's another headwind.

Andrew P. Nocella: Well, you know, I'll start off with the first, and it's really important. United is a premium business airline, not because it's the latest fad, but because it's core to the hub system we operate from. Our hubs are in premium, given the success of us and one other airline with a similar setup. It's no surprise that others are copying us with new cabins or expanded cabins. I think they are attempting to copy our segmentation plan.

Speaker Change: Look as Andrew spoke about our premium product is in great demand and so we continue to make investments.

Speaker Change: In our product and our airports and our catering and those will add cost, but we expect to add even more revenue. So those are some of the headwinds now tailwind.

Andrew P. Nocella: Something that we've been implementing in earnest for more than seven years will be a challenge for anyone that does not. Our segmentation strategy is built on a complex set of products, along with delivering excellent customer service. The ULCC business model, in particular, is built on simplicity, not. So, you know, our belief is our lead in the premium front is generational and not, and we're not at all concerned about the changes of others. Maybe we're even a little bit flattered.

Speaker Change: On this for several years, but we have a idiosyncratic tailwind of gauge that is like no one else in the industry and we continue to see we continue to see some real opportunity from that as.

Scott Kirby: And we continue to see; we continue to see some real opportunity from that. As we spoke about last quarter, we've now level loaded our skyline for aircraft. That's going to create a more stable growth pattern, which will allow us to hire more efficiently and make sure that every asset is staffed appropriately, allowing for more efficient and more efficient growth. And then longer to longer time, I do expect to have a more efficient, a more efficient operation. So a little bit of the puts and takes.

As we spoke about last quarter, we've now level loaded our skyline for aircraft, that's going to create a more stable growth pattern, which will allow us to hire more efficiently and make sure that every every asset is staffed appropriately.

Speaker Change: Boeing for more efficient more efficient growth and then longer term longer term I do expect to have a more efficient.

Speaker Change: Our morpheus maintenance operation, so little bit of the puts and takes.

Scott Kirby: I'm going to actually pile on and give kudos to Mike, Jonathan Ireland, and Toby, because much of what you see in this is a real structural changes. I mean, Mike talked about the benefit that we've gotten from irregular operation. That team, the three of them combined with a lot of support from Jason Burmbaum, our Chief Information Officer who's sitting in here with technology, are really identifying the places where there's opportunity to pull the permanent cost out. To me, like there's other places that it's happening, but the irregular operations expense improvement is one of the biggest proof points.

Andrew P. Nocella: Got it. Very interesting. Thank you for that, Andrew. And just a quick question, Mike, for Mike. Yeah, very nice cost execution in the quarter. Can you maybe help me understand some of the near-term cost levers that you're able to pull, you know, as you see those revenues coming in a little bit softer than expected? And, you know, are these just kind of timing-related?

Speaker Change: I'm going to actually.

Speaker Change: Pile on and give kudos to Mike, Jonathan Ireland and Toby.

Gerry Laderman: Or are these costs that can permanently, permanently come out? Thank you. It's a mixture.

Speaker Change: Because much of what you see and this is.

Speaker Change: A real structural changes I mean, Mike talked about the benefit that we've gotten from irregular operations.

Gerry Laderman: As I said, and thanks for the question. As I said on the call, running a strong operation is the best thing we can do for cost efficiency in the near term, and the operational team has done a great job. We have some opportunities within tech ops also. In this quarter, though, some of those costs simply pushed to the right and were timing-related. So you will see some pressure in 3Q.

Gerry Laderman: As we look longer term, some of the headwinds around CHASM include labor deals that we're looking forward to finalizing. We also expect to see some uplift in regional flying in the future, which will work against the gauge benefit that we expect over a two to three-year time frame, and so that's another headwind.

Speaker Change: That team the three of them combined with a lot of support from Jason Birnbaum, Our Chief Information Officer, who is sitting in here.

Gerry Laderman: And look, as Andrew spoke about, our premium product is in great demand. And so we continue to make investments in our product, in our airports, in our catering. And those will add costs, but we expect to add even more revenue. So those are some of the headwinds.

Speaker Change: Technology are really changed really identifying the places where there's opportunity to pool permanent cost out to me like there's other places that it's happening, but the irregular operations expense improvement is one of the biggest proof point.

Gerry Laderman: Now tailwinds, and we've been on this for several years, but we have an idiosyncratic tailwind of gauge that is like no one else in the industry, and we continue to see some real opportunity from that. As we spoke about last quarter, we've now leveled our skyline for aircraft. That's going to create a more stable growth pattern, which will allow us to hire more efficiently and make sure that every asset is staffed appropriately, allowing for more efficient growth.

Gerry Laderman: And then, longer term, I do expect to have a more efficient maintenance operation. So a little bit of the puts and takes. I'm going to actually pile on and give kudos to Mike, Jonathan Ireland, and Toby, because much of what you see here is a real structural change. I mean, Mike talked about the benefit that we've gotten from irregular operations.

Gerry Laderman: That team, the three of them combined, with a lot of support from Jason Birnbaum, our chief information officer who's sitting in here with technology, is really identifying the places where there's an opportunity to pull permanent costs out. To me, there are other places that it's happening, but the irregular operations expense improvement is one of the biggest proof points. And we just have a great team that is doing those kinds of things.

Scott Kirby: And we should have a great team that is doing those kinds of things. We didn't build that into the budget at the start of the year. We didn't realize how successful it would be. They're doing a lot of other work like that. And I think we should have a really solid process in team for cost. And so well, it's great to hit that in these quarters. That's something that is an example that is permanent and will always spend less on irregular operations than we did in the past. And I think there's a lot more of that.

Speaker Change: We should have a great team that is doing those kinds of things we didn't build that into the budget at the start of the year, we didn't realize how successful it would be doing a lot of other.

Gerry Laderman: We didn't build that into the budget at the start of the year because we didn't realize how successful it would be. (inaudible) That's great. Thanks so much.

Speaker Change: Work like that.

Speaker Change: I think we just have a really solid process and team for cost and so while it was great to hit that in these quarters. That's something that is an example that is permanent and we will always spend less on Iraq or operations that we did in the past and I think theres a lot more.

Speaker Change: Of that to come.

Speaker Change: Yeah.

Speaker Change: That's great. Thanks, so much.

Conor T. Cunningham: Our next question comes from Conor Cunningham with Melius Research. Please go ahead. Hi everyone. Thank you. I think that many of us can buy into the idea that capacity is going to be rationalized near term, but the fear, you know, over the longer term is that someone's going to start to cheat again. So what's United's plan if the capacity reductions are just temporary? You know, clearly, your margin structure has slipped, you're playing from an area of strength, but just curious about how you're going to approach a competitor set that's always looking to add supply at some point. Thank you. Well, let me let me start off with my views.

Our next question comes from Conor Cunningham with Melius Research. Please go ahead.

Unknown Attendee: Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor Conor. So many of us can buy into the idea that capacity is going to be rationalized near-term, but the fear, you know, over the longer term, is that someone is going to start to cheat again.

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

Speaker Change: I think that that many of us can buy into the idea that capacity is going to be rationalized near term but.

Conor T. Cunningham: Sure.

Conor T. Cunningham: Over the longer term is that somebody is going to start to cheat again, so what's United's plan. If the capacity reductions are just short term clearly your margin structure is swept plant from an area of strength, but just curious on how youre going to approach a competitor set that's always looking to add supply at some point. Thank you.

Scott Kirby: So, what's United's plan if the capacity reductions are just short term? You know, clearly your margin structure has slipped, you're playing from an area of strength, but just curious on how you're going to approach a competitor set that's always looking to add supply at some point. Thank you. Well, let me let me start off my views. I mean, it's a unprofile capacity is just not sustainable. And you know, we see the changes occur and has gotten better. But as you think about this question, you know, you normally look at the pretext margins and liquidity and margins, but we do the same.

Conor T. Cunningham: Yeah.

Andrew P. Nocella: I mean, the unprofitable capacity is just not there. We see the changes occurring, as Scott and others have said. But as you think about this question, you normally look at the pre-tax margins, liquidity, and margins. We do the same.

Speaker Change: Well, let me, let me start off my views.

Speaker Change: Unprofitable capacity is just not sustainable and we see the changes occur and as Scott.

Speaker Change: But as you think about this question you normally look at the pre tax margins liquidity in and margins, but we did the same how are I think even more insightful is looking at the network health of our competitors and how that is different today than it's ever been in the past to answer your question about will the capacity come back.

Andrew P. Nocella: However, I think even more insightful is, you know, looking at the network health of our competitors and how that is different today than it's ever been in the past to answer your question about whether the capacity will come back. You know, our estimate is margins for the worst core column flying. The Five Least Profitable Domestic-Centric Airlines is negative 25 to 35%. We estimate that the severely unprofitable capacity is almost 10% of domestic and, the magnitude of the worst wine, in my view, has never been this bad.

Scott Kirby: However, I think even more insightful is, you know, looking at the network health of our competitors and how that is different today than it's ever been in the past to answer your question about will the capacity come back? You know, our estimated margins for the worst quartile of lion for the five least profitable domestic-centric airlines is negative 25 to 35 percent today. We estimate that the severely unprofitable capacity is almost 10 percent of domestic ASMs. In the past, the magnitude of the worst line, in my view, has never been this bad and from the lower margin airlines.

Our estimated margins for the worst quartile of Lion with a five lease profitable domestic centric airlines is negative 25% to 35% today, we estimate that the severely unprofitable capacity is almost 10% of domestic ASM in the past the magnitude of the worst flying in my view, there's never been this.

Speaker Change: Bad and from the lower margin Airlines and the lower margin Airlines never had such an overall gap to the higher margin airlines like United.

Scott Kirby: And the lower margin airlines never had such an overall gap to the higher margin airlines like United. You know, I don't think one low margin airline fail under shrinking dramatically in any way will change the outcome for the others at this point given the magnitude of the losses of the worst line. And the other thing that's really occurred that's very interesting is the growth line by these carriers is also extremely unprofitable. Just the business land in some cases have largely run their course, and there's just no new opportunities available today. And so that set up is just really different and provides us with a backstop that we think that permanent change is on its way.

Andrew P. Nocella: [inaudible] you know I don't think one low-margin airline failing or shrinking dramatically will change the outcome for the others. The other thing that's really occurred that's very Growth Blind by these carriers is also States Society. I'm Steve, and I'll see you, I guess, next week.

Speaker Change: I don't think one low margin airlines fail under shrinking dramatically.

Speaker Change: Any way, we will change the outcome for the others at this point given the magnitude of the losses of the worst flying and the other thing Thats really occurred.

Speaker Change: Very interesting is the growth flying by these carriers is also extremely unprofitable, but just the business planned in some cases have largely run their course and Theres just no new opportunities available today, and so that set up as she is really different and provides us with a backstop that we think that permanent change is on its way exactly wanted.

Andrew P. Nocella: I'm sorry, I'm a little nervous. I think I'm going to meet a lot of new people. I'm not sure if I'm going to be able to do it. I'll see you then.

Andrew P. Nocella: Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. So that setup is just really different.

Andrew P. Nocella: It provides us with a backstop that we think that permanent change is on its way, exactly when it occurs over the next quarter or two or three, to say. But it does feel like when you look at these facts and the magnitude of what's going on in the United States, it does feel like there are a lot of things that are going on in the United States. Worst Quartile Profitability: that this is a very different environment and the capacity. Hopefully, we'll be slow to come back, but you know, it's only time for actually super helpful.

Scott Kirby: Exactly when it occurred over the next quarter or two or three, it's hard to say, but it does feel like when you look at these facts and the magnitude of the worst quartile profitability, that this is a very different environment and the capacity, hopefully, will be flow to come back, but you know, it's all you time will tell.

Speaker Change: Occurs over the next quarter or two or three it's hard to say, but it does feel like when you look at these facts in the magnitude of the worst quartile profitability that this is a very different environment and the capacity hopefully will be slow to come back.

Speaker Change: Only time will tell.

Unknown Attendee: So actually super helpful. Thank you, Andrew. And then, you know, realize it's early, but, you know, you're making adjustments to the fourth quarter and, you know, the implications for 2025, you know, could be significant.

Andrew P. Nocella: And then, you know, realize it's early, but you're making adjustments for the fourth quarter, and you know, the implications for 2025 could be significant. I know, again, realize you're not trying to give 2025 capacity plans, but you know, the United Next plan called for like four to 6% annual growth. Has that thought process changed, given what's happening in the current environment today? Thank you.

Speaker Change: That's actually Super helpful. Thank you Andrew and then.

Speaker Change: I realize it's early but you.

Speaker Change: Youre, making the adjustments in the fourth quarter and the implications for 2025, it could be significant.

Unknown Attendee: Again, I know again, realize you're not trying to give 2012 capacity for plans, but you know, the United Next plan called for like four to six percent annual growth. You know, has that thought process changed, given what's happening in the current environment today. Thank you. You're right.

Speaker Change: Ken realized you are not trying to give 25 capacity plans, but the United next plan called for like 4% to 6% annual growth has that thought process changed given what's happening in the current environment today. Thank you.

Andrew P. Nocella: You're right, we're not going to give capacity guidance. What we are going to say is we're going to continue with some of the fundamentals of United Next. [inaudible] Next, The Large Narrowbody Gate, The Large Narrowbody Gate, The Large Narrowbody Gate. And as of today, we're 110 aircraft short on that. We kept smaller aircraft around to compensate for that.

Speaker Change: You're right, we're not going to give the Cassidy guidance. What we are going to say is we're going to continue with some of the fundamentals of United next which improve improving connectivity was really really important and we will continue to do that as we go forward, but the other thing to bear in mind is one of the key ingredients to United next was the large narrow body gauge in fleet size.

Scott Kirby: We're not going to give the capacity guidance. What we are going to say is we're going to continue with some of the fundamentals of the United next, which improve, you know, improvement connectivity was really, really important. And we'll continue to do that as we go forward. The other thing to bear in mind is one of the key ingredients to the United next was the large, narrow body gate. Page, and Fleet Thys. And as of today, we're 110 aircraft short on that. We kept smaller aircraft around to compensate for that. But the A321 at United today is operating with eight margin points above that of the rest of the neurobody fleet.

Michael John Linenberg: But the A321 at United today is operating with eight more, Above that, of the rest of the narrowbody, and we're really bullish as we get to the right one that all of our competitors already have. We are getting, if you ask anybody in the commercial team, they realize, and we're all being real. Great, thank you. Our next question comes from Michael Linenberg with Deutsche Bank. Please go ahead. Oh, hey, good morning.

Speaker Change: And as of today were 110 aircrafts short on that we kept smaller aircraft around to compensate for that but the <unk> hundred 21 at United Today is operating with eight margin points above that of the rest of the narrow body fleet and we're really bullish as we get to the right fleet mix one that all of our competitors already have in their business.

Scott Kirby: And we're really bullish as we get to the right fleet next. One that all of our competitors already have in their business plan. We are going to continue to push the margins in the right direction. I think if you have anybody in the commercial team, they realize the importance of getting into a double-digit margin team. And we're all, you know, rowing the vote in the same direction to achieve that.

As planned we are going to continue to push the margins in the right direction I think if you ask anybody in the commercial team they realize the importance of getting to a double digit margin June and we're all rowing the boat in the same direction to achieve that.

Unknown Attendee: Great. Thank you.

Speaker Change: Great. Thank you.

Speaker Change: Yeah.

Michael Linenberg: Our next question comes from Michael Linenberg with Deutsche Bank. Please go ahead.

Speaker Change: Our next question comes from Michael Lindenberg with Deutsche Bank. Please go ahead.

Michael Linenberg: Oh, hey, good morning. I know we have focused a lot on domestic capacity. And it does feel pretty good as we move through the year. I guess one question on domestic, the three point reduction that you talk about in the fourth quarter. What's kind of the base, or is that already loaded in the schedule, or is that on the come? Well, we're not going to use guidance for key for this point.

Andrew P. Nocella: I know we have focused a lot on domestic capacity, and it does feel pretty good as we move through the year. I guess one question on domestic capacity, the three point reduction that you talk about in the fourth quarter. What's the kind of base, or is that already loaded in the schedule? Or is that on the horizon?

Michael John Linenberg: Hey, good morning, I know, we have focused a lot on domestic capacity and it does feel pretty good as we move through the year.

Michael John Linenberg: One question on domestic the three point reduction that you can talk about in the fourth quarter.

What's kind of the base or is that is that already loaded in the schedule or is that on the come.

Andrew P. Nocella: Well, we're not going to give guidance for Q4 at this point. We haven't finalized our Q4 schedules, but... Okay. Okay, that's helpful.

Speaker Change: Well, we're not going to give guidance for Q4 at this point, we haven't finalized our key four schedules, but leave it at that.

Andrew Didora: We haven't finalized our key for schedules, but okay, that's helpful. And then Andrew, since I have you on, you know, flipping over to international.

Andrew P. Nocella: And then, Andrew, since I have you on, you know, flipping over to international, I'm sure you've seen the headlines recently from Lufthansa, even Qatar Airways, you know, making a deal about too much capacity, although, at times, it seems like, you know, pot calling the kettle black here. But what are you seeing internationally, as from, I guess, competitively as things move over time, and I do realize that some of the great things coming out of the European carriers are an influx of capacity from Asian carriers into Europe. But maybe what you are seeing in some of your other major traffic lanes?

Speaker Change: Okay. That's helpful and then Andrew since I have you on.

Speaker Change: Flipping over to international.

Andrew Didora: I'm sure you've seen the headlines recently from LaTonza, even Cutter Airways, you know, making a deal about too much capacity, although at times it seems like, you know, pot calling the kettle black here. But what are you seeing internationally as from, I guess, competitively as things move over time? And I do realize that some of the great coming out of the European carriers is an influx of capacity from Asian carriers to Europe, but maybe what are you seeing in some of your other major traffic? Is that a potential issue as we move from 24 to 25?

Speaker Change: I'm sure you've seen the headlines recently from Lufthansa.

Speaker Change: Even Qatar Airways.

Speaker Change: Making a deal not too much capacity.

Speaker Change: At times it seems like.

Speaker Change: Calling the kettle black here, but.

What are you seeing internationally as from I guess competitively as things move over time and I do realize that some of the great coming out of the European carriers is an influx of capacity from Asian carriers to Europe, but maybe what are you seeing in some of your other major traffic lanes is that a potential issue as we move from 'twenty to 'twenty five.

Andrew P. Nocella: Is that a potential issue as we move from 24 to 25? Thank you. Sure, it's a good question. And obviously, the Asia-European dynamic that I think a lot of airlines have cited now is not, Airlines. All that relevant to United Airlines. So I don't think that's a bad thing. States, and the United States.

Andrew Didora: Thank you. Sure. It's a good question.

Speaker Change: Yes.

Speaker Change: Sure. It's a good question and obviously the Asia European dynamic that I think a lot of airlines have decided now is not really one.

Andrew Didora: And obviously the Asia European dynamic that I think a lot of airlines excited now is not really one that all that relevant to United Airlines. So I don't think that negativity translates through to where we are. But, you know, what I would say is, and we've been saying this for a while, but, you know, we do see a pivot. First, in the Pacific, we, you know, last few four, we are up 83% year-rear in capacity. Is we more or less have gotten the Pacific back to pre-pandemic levels. And this year we're going to be up high single digits, so we're, you know, we're obviously bullish about that transition.

All that relevant to United Airlines, So I don't think that negativity translates through to where we are but what I would say is and we've been saying this for a while but we do see a pivot.

Andrew P. Nocella: So we're going to be looking at the transition to where we are. But what I would say is, and we've been saying this for a while, but we do see a pivot. First, in the Pacific, last Q4 we were up 83% year over year in capacity. We have more or less gotten the Pacific back to pre-pandemic levels, and this year we're going to be up high single digits.

Speaker Change: <unk>.

Speaker Change: In the Pacific last Q4, we were up 83% year over year in capacity as we more or less have gotten specific back to pre pandemic levels and this year, we're going to be up high single digits. So we're we're obviously bullish about that transition and then Latin America, South America is already pivoted to positive in <unk>.

Andrew Didora: And then Latin America, South America is already pivoted to positive, and we expect a close in Latin America to pivot as well and do dramatically better. And then the last point is, you know, we have said over and over again, we were taking a positive year on the Atlantic. Clearly, others did not choose to do so. And our results across the Atlantic, I think, are shining a star of our planet work. And so we really happy with the Atlantic. The Atlantic continues to look good going forward with extremely solid profitability. And so, overall, you know, I think international is fundamentally different than it was pre-pandemic.

Speaker Change: That close in Latin America to pivot as well and do dramatically better and then the last point is we have said over and over again, we were taken a pause year on the Atlantic.

Andrew P. Nocella: So we're going to be looking at ways in America to pivot as well and do dramatically better. And then, the last point is, you know, we have said over and over again that we were taking a pause year on the Atlantic. Clearly, others did not, so, and our results across the Atlantic, I think, are a shining and a star of our plan. It worked.

Speaker Change: Clearly others did not choose to do so.

Speaker Change: Across the Atlantic I think our shining star of our plan at work.

Scott H. Group: And so we are really happy with the Atlantic, the Atlantic... [inaudible] Our next question comes from Scott Group with Wolf Research. Please go ahead. Hey, thanks. Good morning.

Speaker Change: And so we are really happy with the Atlantic The Atlantic continues to look good going forward with extremely solid profitability and overall.

Speaker Change: I think international is fundamentally different than it was pre pandemic.

Andrew Didora: And we'll show that. Great.

Speaker Change: Show that.

Scott Group: Thank you. Our next question comes from Scott Group with Wolf Research.

Speaker Change: Great. Thank you.

Speaker Change: Okay.

Speaker Change: Our next question comes from Scott Group with Wolfe Research. Please go ahead.

Scott Group: Please go ahead. Hey, thanks.

Gerry Laderman: Mike, just want to clarify a couple of things. So you've you had a comment about the implied fourth quarter guidance. Just want to make sure you feel like we should be tracking towards the midpoint of the full year guidance. And then there was a comment in the release that says that you guys expect to have leading unit revenue performance among peers in the second half of the quarter.

Scott H. Group: Hey, Thanks, Good morning, Mike just wanted to clarify a couple of things. So your you had a comment about the implied fourth quarter guidance just want to make sure you feel like we should be tracking towards the midpoint of the full year Guide and then there was a comment in there.

Scott Group: Good morning. Mike, just want to clarify a couple of things. So you had a comment about the implied fourth quarter guidance. Just want to make sure you feel like we should be tracking towards the midpoint of the full year guide. And then there was a comment in the release that says that you guys expect to have leading unit revenue performance among peers in the second half of the quarter. I know Delta talked about domestic RASM inflecting back positive in September. So I just want to make sure we're all on the same page and you think that you'll be positive on RASM exiting the quarter.

Speaker Change: In the release that says that you guys expect to have leading unit revenue performance among peers in the second half of the quarter I know delta talked about domestic.

Gerry Laderman: I know Delta talked about Domestic RASM inflecting back positive in September, so I just want to make sure we're all on the same page and you think that you'll be positive on RASM exiting the quarter. Well, thanks for the question, Scott, and I'll let Andrew talk about September PRASM.

Speaker Change: Domestic RASM inflicting back positive in September so I just want to make sure. We're all on the same page and you think that you'll be.

Speaker Change: Positive RASM exiting.

Speaker Change: In the quarter.

Mike Westman: Well, thanks for the questions, Scott, and I'll let Andrew talk about September Prasm. I will say that at this point in a year, $2 range on earnings per share, $9.11. So that's arranged that in a more normal environment. I would have liked to narrow. You would expect to have more certainty now than we had back in January when we initially set it. But while we see this incredible inflection upon us in the industry, the precise timing in magnitude is difficult to call. And so, as we look out to the third quarter and fourth quarter, current trends based on current yields, based on the current published capacity, will put us at the low end of the nine, in the lower half of the nine to $11 for the full year.

Andrew: Well thanks for the question, Scott and I'll, let Andrew talk about September PRASM I.

Speaker Change: I will say that.

Gerry Laderman: I will say that, at this point in the year, a $2 range on earnings per share, $9 to $11, that's a range that, in a more normal environment, I would have liked to narrow. You would expect to have more certainty now than we had back in January when we initially set it. But while we see this incredible inflection upon us in the industry, the precise timing and magnitude are difficult to call.

Speaker Change: At this point in the year $2 range on earnings per share $911. So that's a range that in a more normal environment I would have like to narrow.

Speaker Change: You would expect to have more certainty now than we had back in January when we initially set it but while we see this incredible inflection upon us in the industry the precise timing and magnitude is difficult to call and so as we look out.

Speaker Change: To the third quarter and fourth quarter current trends.

Gerry Laderman: And so as we look out to the third quarter and fourth quarter, current trends, based on Current Yields, based on the Current Published Capacity, would put us at the low end of the nine, in the lower half of the nine to eleven dollars for the full year. But there are a ton of reasons to expect further reductions in unprofitable flying to push us higher. And so we very deliberately, and we had significant discussions internally, but very deliberately left the range wide.

Speaker Change: Based on current yields based on the current published capacity.

Speaker Change: Put us at the low end of the nine in the lower half of the 9% to $11 for the full year.

Mike Westman: But there are a ton of reasons to expect further reductions of unprofitable flying to push us higher. And so we varied deliberately, and it had significant discussions internally but very deliberately left the range wide. And we will we are committing to hit something in that range. And you can all read the tea leaves as the data develops to decide where you want to make your own estimate. We're committing to the range. All this out.

Speaker Change: But there are a ton of reasons to expect.

Speaker Change: Further reductions of unprofitable flying to push us higher and so we very deliberately and it had significant discussions internally, but very deliberately left the range.

Gerry Laderman: And we are committing to hit something in that range, and you can all read the tea leaves as the data develops to decide where you want to make your own estimate. We're committing to the range. I'll just I'll yeah, I'll confirm the point we do think that September, perhaps, will be the worst quarter of the year, probably, sorry, July.

Speaker Change: <unk>.

Speaker Change: And we will we are committing to hit something in that range.

And you can all read the tea leaves as the data develops to decide where you want to make your own estimate we're committing to the range.

Speaker Change: I'll just I'll, yes, I'll confirm the point, we do think.

Andrew Didora: Yeah, I'll confirm the point. We do things September, perhaps, and per domestic will flip positive at this point, based on the four to five point improvements we're seeing so far. We think that's going to hold.

Speaker Change: September PRASM for domestic will flip positive at this point based on the four to five point improvement were seeing so far we think thats going to hold.

Andrew Didora: We also just July will be the worst quarter of the year. Sorry, July will be the worst month for the year.

Speaker Change: Also just July will be the worst quarter of the year or sorry July will be the worst month for the year.

Speaker Change: Yes.

Unknown Attendee: Helpful, and then I don't know if you have any early thoughts on cat backs for next year, less than six net billion this year, and any thoughts on directionally higher, lower, or similar for next year. I think a very little change from our prior guidance. We're targeting that hundred narrow bodies per year as we rebase line the skyline, and nothing, nothing that we see right now would cause me to change that today.

Gerry Laderman: Helpful. And then I don't know if you have any early thoughts on CapEx for next year, less than $6.5 billion this year, and any thoughts on directionally higher, lower, or similar for next. I think very little change from our prior guidance. We're targeting 100 narrowbodies per year as we re-baseline the skyline, and nothing that we see right now would cause me to change that today.

Speaker Change: Helpful. And then I don't know if you have any early thoughts on Capex for next year less than <unk> 5 billion. This year and any thoughts on directionally higher lower or similar for next year.

Speaker Change: I think very little change.

Speaker Change: From our prior guidance.

Speaker Change: We're targeting that 100 narrow bodies per year as we re baseline the skyline.

Speaker Change: Nothing nothing that.

Speaker Change: That we see right now would cause me to change that today.

Unknown Attendee: Thank you, guys.

Duane Thomas Pfennigwerth: Thank you, guys. I appreciate the time. Our next question comes from Duane Pfennigwerth with Evercore ISI. Please go ahead. Hey, thanks. Good morning.

Speaker Change: Thank you guys appreciate the time.

Dwayne Pfennigwerth: Appreciate the time. Our next question comes from Dwayne Feningworth with Evercore ISI. Please go ahead. Hey, thanks. Good morning.

Duane Thomas Pfennigwerth: Our next question comes from Duane <unk> with Evercore ISI. Please go ahead.

Andrew P. Nocella: Just on corporate, I think the last time we were together, you talked about improvement in the March quarter and basically holding serve in 2Q. I wonder if you could remind us, you know, your view on how recovered it is, both on a volume and on a revenue basis, and your thoughts on potential improvement from here. Basically, what's baked into the guidance in terms of incremental improvement in corporate? The most important thing is it's a slow but steady improvement. I don't think we will see a rapid change in the current. You know, it's recovered roughly to 100%. Obviously, that's far behind where it would otherwise be on a typical.

Duane: Hey, Thanks, Good morning, just on corporate.

Dwayne Pfennigwerth: Just on corporate, I think the last time we were together, you talked about improvement in the March quarter and basically holding serve in two queue. I wonder if you could remind us of your view on how recovered it is both on a volume and on a revenue basis. And your thoughts on potential improvement from here, basically what's baked into the guidance in terms of incremental improvement on corporate? The most important thing is it's a slow but steady improvement. I don't think we see a rapid change of current any time soon. You know, it's recovered roughly 200%. Obviously, that's far behind what otherwise be on a typical GDP relationship.

Speaker Change: The last time, we were together you talked about.

Speaker Change: Improvement in the March quarter, and basically holding serve in <unk>.

Speaker Change: I Wonder if you could remind us your view on how recovered it is both on a volume and on a revenue basis.

Speaker Change: And your thoughts on potential improvement from here.

Speaker Change: Basically what's what's baked into the guidance in terms of incremental improvement on corporate.

Speaker Change: The most important thing is.

Speaker Change: A slow but steady improvement.

Speaker Change: I don't think we see a rapid change occurring anytime soon.

Speaker Change: It's recovered roughly to 100%, obviously, that's far beyond where it would otherwise be.

Speaker Change: On a typical GDP relationship and the load factor contribution of corporate is down more than a few points relative to 2019. So it is a much smaller percentage on the airplane, but as we look for example in Polaris This last.

Andrew P. Nocella: Leadership and the Load Factor, Corporate is down more than a few points. So it is a much smaller percentage on the airplane. But as we look, for example, in Polaris this last month.

Andrew Didora: And the loads after contribution of corporates is down more than a few points relative to 2019. So it is a much smaller percentage on the airplane. But as we look for example in Polaris this last few months, we found the Polaris business load factor to be up a point and the leisure premium leisure demand was down a point as we slowly transition back to corporates. But it's going to take a while, but it is happening.

Andrew P. Nocella: We found the Polaris business load factor to be up, and the leisure premium leisure demand was down a point as we slowly got back to corporate. But it's going to it's going to take a while, but it, Thanks. And then maybe one for Mike.

Speaker Change: Few months, we found the Polaris business load factor to be up a point in the leisure premium leisure demand was down a point as we slowly transition.

Speaker Change: Back to corporate.

Speaker Change: It takes a while but it is happening.

Mike Westman: Thanks.

Gerry Laderman: Can you just remind us what the next opportunities might be to pay down high coupon debt? Obviously, you took down loyalty debt, high coupon loyalty debt, as soon as it was prepayable? What are the next two to three opportunities on that front? Thank you.

Speaker Change: Thanks, and then maybe one for Mike can you just remind us what the next opportunities might be to pay down.

Mike Westman: And then maybe one for Mike, can you just remind us what the next opportunities might be to pay down a high coupon debt. Obviously, you took down loyalty debt, high coupon loyalty debt. As soon as it was prepayable, what are the next two to three opportunities on that front? Thank you. Thanks. Thanks for the question, Dwayne. As I mentioned in my prepared remarks, we're now at 2.6 times, trailing 12 months in that debt to EBITAR back in 2019. We are at 2.5 times. So we're already at pre-pandemic levels, pre-pandemic levels of leverage. We've got a tremendous amount of cash on the balance sheet.

Mike: High coupon debt, obviously, you took down a loyalty that high coupon loyalty debt.

Speaker Change: As soon as soon as it was pre payable what are the next two to three opportunities on that front. Thank you.

Gerry Laderman: Thanks for the question, Duane. As I mentioned in my prepared remarks, we're now at 2.6 times trailing 12 months net debt to EBITDAR. Back in 2019, we were at 2.5 times.

Speaker Change: Thanks, Thanks for the question Duane.

Speaker Change #100: As I mentioned in my prepared remarks, we're now at two six times.

Speaker Change #100: Trailing 12 months net debt to EBITDAR.

Gerry Laderman: So we're already at pre-pandemic levels of leverage. We've got a tremendous amount of cash on the balance sheet, and I feel really good about the balance sheet for those reasons. We are also funding all of the organic growth to drive United Next. We are investing in our airplanes. We are investing in our people. Those two buckets are the first two priorities in calls on cash. The third call on cash is investor return.

Speaker Change #100: Back in 2019, we were at two five times. So we're already at pre pandemic level pre pandemic levels of leverage we've got a tremendous amount of cash on the balance sheet feel really good about the balance sheet for those reasons.

Mike Westman: Feel really good about the balance sheet for those reasons. We are also funding all of the organic growth to drive United Next. We are investing in our airplanes; we are investing in our people. Those two buckets are the first two priorities and calls on cash. The third call on cash is investor returns. And given where a balance sheet is and given the level of organic growth that we are funding, we now have a lot of flexibility to start to consider investor returns. And to start to look at some further de leveraging. And so we'll see; I see a mix of that going forward.

Speaker Change #100: We are also funding all of the organic growth to drive United next.

Speaker Change #100: We are investing in our airplanes, we are investing in our people.

Speaker Change #100: Those two buckets are the first two priorities and calls on cash the third.

Speaker Change #100: Third call on cash is investor returns and given where our balance sheet is and given the level of organic growth that we are funding. We now have a lot of flexibility to start to consider investor returns and to start to look at some further deleveraging and so we'll see I see a mix.

Gerry Laderman: And given where our balance sheet is, and given the level of organic growth that we are funding, we now have a lot of flexibility to start to consider investor returns and to start to look at some further deleveraging. And so we'll, we'll see, I see a mix of that going forward. Specifically to your question, really, there are no instruments that are prepayable right now that are of such high coupon rates, like the 11% debt we just prepaid. There are no near-term opportunities of that magnitude to prepay any more debt.

Speaker Change #100: Of that going forward specifically to your question.

Mike Westman: Specifically to your question. Really, there are no instruments that are prepayable right now that are of such high coupon, like the 11% debt we just prepaid. There are no near-term opportunities of that magnitude to prepay any more debt.

Speaker Change #100: Really there are no instruments that are pre payable right now that are of such high coupon like the 11% that we just prepaid there are no near term opportunities.

Speaker Change #100: Of that magnitude to prepay any more debt.

Dwayne Pfennigwerth: Thanks, Dwayne. Very clear.

Speaker Change #100: Wayne.

Sheila Kahyaoglu: Thank you. Our next question comes from Sheila. Kyle Glue with Jeffries. Please go ahead. Thank you. Good morning, guys.

Wayne: Very clear thank you.

Gerry Laderman: Thanks. Very clear. Thank you. Our next question comes from Sheila Kahyaoglu with Jeffreys. Please go ahead.

Sheila Karin Kahyaoglu: Our next question comes from Sheila <unk> with Jefferies. Please go ahead.

Sheila Karin Kahyaoglu: Thank you. Good morning, guys. Andrew, maybe this one's for you or Scott.

Wayne: Okay.

Sheila: Good morning, guys.

Andrew Didora: Andrew, maybe listen for you with God. I believe you made a comment that the spread of the unit revenue performance is going to widen between the premium mix and the economy cabin. So slightly different than the comment on premium, your competitor made. So I think your premium revenues were actually down on a present basis. So wonder how much of that is premium softening or is that more revenue management actions you guys are taking to help the economy cabin. Sure. I'll give you the distinction. The premium cabin rasm was up. The premium rasm contribution was down.

Sheila: Andrew maybe this one's for you or Scott I believe you made a comment that yes.

Speaker Change #104: The unit revenue performance.

Speaker Change #104: Widen between the premium maximal economy cabin so.

Andrew P. Nocella: I believe you made a comment that the spread of the unit revenue performance is going to widen between the premium mix and the economy cabin. So, slightly different than the comment on the premium your competitor made. So I think your premium revenues were actually down on a prism basis. So I wonder how much of that is premium softening, or is that more revenue management actions you guys are taking to help the economy?

Speaker Change #105: Slightly different than the comment on premium your competitor. So I think your premium revenues were actually down on a PRASM basis.

Speaker Change #106: So I wonder how much of that is.

Speaker Change #106: Premium softening or is that more on a revenue management actions you guys are taking.

Speaker Change #107: We're helping the economy.

Andrew P. Nocella: Sure I'll the Distinction, the premium cabin RASM was up. The premium RASM contribution was down, and that's because of the definition of whether it includes Economy Plus or not. Economy Plus is obviously part of the main cabin, but it was infiltrated by the Yield, Cabin.

Speaker Change #107: Sure.

Speaker Change #108: Indeed, the distinction the premium cabin RASM was up the premium RASM contribution was down and Thats because of the definition of whether it includes economy plus or not economy plus is obviously part of the main cabin and economy plus was infiltrated by the yield weakness in the main cabin and.

Andrew Didora: And that's because of the definition of whether it includes Economy Plus or not. The Economy Plus is obviously part of the main cabin. Anderson and Economy Plus was infiltrated by the yield weakness of the main cabin. And so we did, we did see that issue, and it resulted in the number that you just saw. But if you look at just the present contribution of Polaris and Premium Plus and domestic First Class, you would find that was up low single digits year of year. Okay, got it. Apologies for that.

Andrew P. Nocella: And so we did, we did see that issue, and it resulted in the number, Workers Law. But if you look at just the PRAZM contribution of Polaris and Premium Plus, and First Class, you would find that it was low.

Speaker Change #108: And so we did we did see that issue and it resulted in the number that you just saw that if you look at just the PRASM contribution of Polaris and premium plus and domestic first class you would find that was up low single digits year.

Speaker Change #108: Year over year.

Andrew P. Nocella: Okay, I got it. Apologies for that. And then maybe if we could talk about following up on, I think Mike's question about the Atlantic and regional capacity around the world. On the Atlantic, how do you think that will trend over the next four quarters? Do we have the same sort of oversupply issue? You don't seem to see that. And is that just given the fleet dynamics with widebodies and the premium cabin there? Can you maybe elaborate on that?

Speaker Change #109: Okay got it apologies for that and then maybe.

Andrew Didora: And then maybe if we could talk about following up on I think Mike's question about Atlanta. And regional capacity around the world on Atlantic, how do you think that trends over the next four quarters? Do we have the same sort of oversupply issue? You don't seem to see that. And is that just given the sweet dynamics with wide bodies and the premium cabin there?

Speaker Change #109: If we could talk about following up on next.

Speaker Change #110: Next question about Atlantic and regional capacity around the world on Atlanta, but how do you think that trends over the next four quarters do we have the same sort of oversupply I assume you don't do that and is that just given.

Speaker Change #109: Dynamic.

Speaker Change #111: With wide bodies in the premium cabin there can you maybe elaborate on that.

Andrew Didora: Can you maybe elaborate on that? Well, I think the Atlantic, well, if you go back the last year, particularly June of last year, had one of the most unbelievable quarters we've ever seen in unbelievable month in June. And we're actually doing a little bit better year by year until we're really proud of that. And we again think we made the right capacity allocation choices to create that outcome better than our competitors did, quite frankly. What I would say is capacity to Southern Europe, which is up 31% year to year this summer, has pushed the limits of demand to Southern Europe.

Andrew P. Nocella: Well, I think the Atlantic, well, if you go back to last year, particularly June of, the Most Unbelievable Quarters We've Ever Seen, and I'm, and we're actually doing a little bit better year over year. We're really proud of that. And we, again, think we made the right capacity allocation choices to create that outcome better than our competitors. You know, what I would say is, you know, capacity to Southern Europe, which is up 31% year-over-year this summer, has pushed the limits of demand for Southern Europe. fact, but the overall combination for United.

Speaker Change #112: Well look I think the Atlantic.

If you go back the last year, particularly June of last year had one of the most unbelievable quarters, we've ever seen an unbelievable month in June and we're actually doing a little bit better year over year and so we're really proud of that and we again think we made the right capacity allocation choices to create that outcome better than our competitors did quite frankly.

Speaker Change #112: What I would say is capacity to southern Europe.

Speaker Change #112: Which is up 31% year over year this summer.

Speaker Change #112: Has has pushed the limits of demand to southern Europe.

Andrew Didora: And she's just a fact. But the overall combination for United, including our Southern European performance, I think has been pretty darn good given the comp from last year. And we're very careful on our scheduled plan for this year, and that careful nature continues all the way to the end of the year with our public schedule. So we feel good about the setup that the Atlantic will continue to look pretty, pretty good going forward.

Just the fact, but the overall combination for United including our Southern European performance I think has been pretty darn good given the comp from last year.

Andrew P. Nocella: Including our Southern European performance, I think it has been pretty darn good this year, and we were very careful on our schedule plan.

Speaker Change #112: And we were very careful on our schedule plan for this year and that that careful nature.

Andrew P. Nocella: And that careful nature continues all the way through the end of the year with our, I feel good about the setup that the Atlantic has. Pretty good. Great, thank you. Our next question comes from Brandon Oglenski with Barclays. Please go ahead.

Speaker Change #112: Continued all the way through the end of the year with our published schedule. So we feel good about the setup.

Speaker Change #112: The Atlantic will continue to look pretty pretty good going forward.

Unknown Attendee: Great.

Speaker Change #113: Great. Thank you.

Brandon Oglinski: Thank you.

Brandon Oglinski: Our next question comes from Brandon Oglinski with Barclays.

Brandon Robert Oglenski: Our next question comes from Brandon <unk> with Barclays. Please go ahead.

Brandon Oglinski: Please go ahead.

Brandon Oglinski: Hey, good morning, and thanks for taking my questions. Mike, just a point of clarification here. I think maybe last quarter or two quarters ago, you said, beyond 2024, CapEx should be in the $7 to $9 billion range. Is that with that anticipation of 100 narrow-body aircraft deliveries? That's precisely correct.

Brandon Robert Oglenski: Hey, good morning, and thanks for taking my questions. Mike, just a point of clarification here. I think maybe last quarter or two quarters ago, you said beyond 2024, CapEx should be in the $7 to $9 billion range. Is that with the anticipation of 100 narrow-body aircraft deliveries baked in? That's precisely correct.

Brandon: Hey, good morning.

Brandon: Thanks for taking my questions, Mike just a point of clarification here I think maybe last quarter or two quarters ago. You said beyond 2024, capex should be in the 7% to $9 billion range is that with that anticipation of a 100 narrow body aircraft deliveries baked them.

Speaker Change #116: That's precisely correct.

Brandon Oglinski: Okay, then I guess, you know, maybe from my follow-up for Scott or for Mike. I mean, I really appreciate the no excuses mentality here. I think the street likes, you know, you're just EPS guidance and focusing on bottom line results. But I think, you know, you both would agree that you're below your next targets on margins right now. And you are below profitability of last year too. And I think part of the challenge for investors here because your multiple is quite low. And I think you both would agree on that as well. You know, your CapEx outlook here is roughly matching your operating cash flow.

Gerry Laderman: Okay, then I guess, you know, maybe for my follow-up to Scott or for Mike, I really appreciate the no excuses mentality here. I think the street likes, you know, you're just giving EPS guidance and focusing on bottom line results. But I think, you know, you both would agree that you're below your next targets on margins right now, and you are below the profitability of last year, too. And I think part of the challenge for investors here is that your multiple is quite low, and I think you both would agree on that as well. You know, your capex outlook here is roughly matching your operating cash flow, and I realize if you hit higher margins, you could offset some of that.

Speaker Change #117: Okay, and I guess, maybe for my follow up for Scott or for Mike I really appreciate the no excuses mentality here I think the street likes Youre, just EPS guidance and focusing on bottom line results, but I think you. Both would agree that you are below your next targets on margins right now and you are below profitability.

Speaker Change #117: Last year, too and I think part of the challenge for investors here because your multiple is quite low and I think you both would agree on that as well.

Speaker Change #118: Your Capex outlook here is roughly matching your operating cash flow and I realize if you had higher margins that you could offset some of that but I think what investors are saying is hey, why can't we see a more balanced capital allocation strategy, maybe a little bit less capex and I think maybe investors are a little bit frustrated with the Boeing delivery delays.

Scott Kirby: And I realized if you hit higher margins that, you know, you could offset some of that. But I think what investors are saying is, hey, why can't we see a more balanced capital allocation strategy? Maybe a little bit less capex. And I think maybe investors are a little bit frustrated that with the Boeing delivery delays, the Mac 10 issues, you guys didn't back off capital spending a little bit more.

Scott: But I think what investors are saying is, "hey, why can't we see a more balanced capital allocation strategy, maybe a little bit less capex?" And I think maybe investors are a little bit frustrated that with the Boeing delivery delays and the Max 10 issues, you guys didn't back off capital spending a little bit more. So can you put that in context for folks and explain why taking, you know, so many aircraft in the future should be relatively beneficial? Thanks, Brandon.

Speaker Change #119: The Max 10 issues, you guys didn't back off capital spending a little bit more so can you put that in context for folks and why it's taking so many aircraft in the future should be relatively beneficial.

Scott Kirby: So can you put that in context for folks and why taking, you know, so many aircraft in the future should be relatively beneficial. Council. Thanks, Brandon. Really appreciate the question and 100% understand where you're coming from. I care very deeply about creating shareholder value and free cash flow, driving free cash flow to shareholders over time. It's critical to driving our multiple higher. We get that. But our United Next strategy is working; our confidence that based on the relative margins, the divergence between the halves and the halves knots, it's never been wider. So all of the evidence, you know, it's not about being in a tunnel and wondering what that light in front of you is.

Scott: I really appreciate the question and 100% understand where you're coming from. I care very deeply about creating shareholder value and free cash flow, driving free cash flow to shareholders over time. It's critical to driving our multiple hire business. We get that. Next Strategy. But our United Next Strategy is working. Our confidence that, based on the relative margins, the divergence between the haves and the have-nots, has never been wider. So all of the evidence, you know, it's not about being in a tunnel and wondering what that light in front of you is. That light in front of us is very bright, and it's a sunny day.

Speaker Change #120: Thanks, Brendan really appreciate the question and 100% understand where youre coming from.

Speaker Change #120: I care very deeply about creating shareholder value.

Speaker Change #120: Free cash flow driving free cash flow to shareholders over time.

Speaker Change #120: It's critical to driving our multiple higher we get that.

Speaker Change #120: But our United next strategy is working our confidence that based on the relative margins the divergence between the haves and the have nots, it's never been wider so all of the evidence it's not about being in a tunnel.

Speaker Change #120: I'm wondering what that right in front of you is that light in front of US is very bright and it's a sunny day, we don't know exactly how or how much longer the tunnel is but we're coming out the other side in a very strong competitive position with a premium product that can't be copied and emulated by competitors with moats around our business.

Scott Kirby: That light in front of us is very bright, and it's a sunny day. We don't know exactly how much longer the tunnel is, but we're coming out the other side in a very strong competitive position with a premium product that can't be copied and emulated by competitors with moats around our business that are going to drive higher margins. And so, as those margins increase, we're going to have higher free cash flow, and you're going to see those returns to our shareholders. I'd ask for a little bit more patience as we drive through, but all evidence is that the strategy is working, and therefore you're not going to see us pull back.

Savi Seiss: We don't know exactly how much longer the tunnel is, but we're coming out the other side in a very strong competitive position with a premium product that can't be copied and emulated by competitors, and there are moats around our business that are going to drive higher margins. And so as those margins increase, we're going to have higher free cash flow, and you're going to see those returns to our shareholders. I'd ask for a little bit more patience as we drive through, but all the evidence is that the strategy is working, and therefore, you're not going to see us pull back.

Speaker Change #120: That are going to drive higher margins.

Speaker Change #120: And so as those margins increase we're going to have higher free cash flow and youre going to see those returns to our shareholders I would ask for a little bit more patients as we as we drive through but all evidence that the strategy is working and therefore, youre not going to see us pull back.

Savanthi Prelis: Thanks, Mike. Our next question comes from Savvy Sites with Raymond James, please go ahead.

Mike: Thanks, Mike.

Speaker Change #120: Okay.

Savi Seiss: [inaudible] Our next question comes from Savi Seiss with Raymond James. Please go ahead. Hey, good morning, everyone. Just on the Pacific comments made earlier, I realized that Pacific is not kind of back to where it was in 2019, but the mix there is different.

Savanthi Nipunika Prelis: Our next question comes from Savi <unk> with Raymond James. Please go ahead.

Andrew Didora: Hey, good morning, everyone. Just on the Pacific comments made earlier, I realized that Pacific is not kind of back to where it was in 2019, but the mix fair is different. Notably, like China, is a lot lower. Are there any kind of meaningful implications on that mix change and just, you know, how are you thinking about is there an opportunity for China to be much stronger than this?

Savanthi Nipunika Prelis: Hey, good morning, everyone.

Savi <unk>: Just.

Speaker Change #123: Pacific comments made earlier I realize that Pacific is now kind of back to where it was in 2019 by the mix. There is difference, notably like China is a lot lower.

Andrew P. Nocella: Notably, like China is a lot lower. Are there any kind of meaningful implications for that mix change? And just, you know, how are you thinking about it? Is it an opportunity for China to be much stronger than this? Or do you think this is kind of the new normal?

Speaker Change #125: Are there any kind of meaningful implications on that mix change and how.

Speaker Change #124: How are you thinking about it.

Speaker Change #126: Is there an opportunity for China to be much stronger than this or do you think this is kind of a near normal.

Andrew Didora: So do you think this is kind of a new normal? So I think it's the new normal demand for China down dramatically than where it was in 2019, and, you know, it's also difficult to fly there because of the lack of Russian overflight ability. So those two combinations just make this the new normal. And so, you know, we adjust Pacific. We're back to pre-pandemic capacity. We've reallocated the capacity; I think in a more profitable way. Pacific is generating the solid margin. And obviously the negative rathms, particularly driven by China, as China has fallen back to normal revenue performance, cause you every year numbers for the Pacific to look a little funny.

Andrew P. Nocella: I think it's the new normal. Demand for China is down dramatically, and it's also difficult to fly there because of the lack of White Fability. Those two combinations just make this. So, you know, we've adjusted to think we're back to pre-pandemic capacity, we've reallocated, and [inaudible] because you every year. People are funny.

Speaker Change #127: So I mean, I think it's the new normal demand for China down dramatically than where it was in 2019.

Speaker Change #127: It's also difficult to fly there because of the lack of Russian overflight ability.

Speaker Change #127: So those two combinations just make this the new normal and so we adjust so I think were back to pre pandemic capacity, we've reallocated capacity I think in a more profitable way Pacific is generating a solid margin, obviously, the negative RASM, particularly driven by China.

Speaker Change #127: As China has fallen back to normal revenue performance cause year over year numbers for the Pacific to look a little funny. We again laughed at later this year and we'll be definitely I think beyond that after Q4.

Andrew Didora: We can laugh at later this year, and we'll be definitely, I think, beyond that after Q4.

Andrew P. Nocella: We again will lap that later this year. [inaudible] Very helpful. Thank you, Andrew. And maybe if I can ask, just on the domestic market, like last year, there were a lot of domestic players hurt and maybe an overcapacity situation, but United didn't really experience it.

Andrew Didora: Very helpful. Thank you, Andrew.

Speaker Change #131: Very helpful. Thank you, Andrew maybe I'll see if I can ask just on the domestic market like last year. There were a lot of kind of domestic players hurting and maybe an overcapacity situation but.

Scott Kirby: And maybe I can ask just on the domestic market. Like last year, there were a lot of kind of domestic players hurting, and maybe I know the capacity situation, but, you know, United didn't really experience it. I'm just curious about what might be different, like second half 23 versus what you were seeing today. Is that just a composition of the capacity? Is that kind of passenger behavior? Is it pricing behavior? Just why is it? Why are you seeing that they in a little bit more today than and not necessarily in the second half of the last year?

Andrew P. Nocella: I'm just curious about what might be different, like second half 23 versus what you're seeing today. Is that just a composition of the capacity? Is that kind of passenger behavior? Is it pricing behavior? Just why is it like that?

Speaker Change #129: United didn't really experience it and then just curious about what might be different like second half 'twenty three versus what youre seeing today is that just the composition of the capacity is that kind of passenger behavior is it pricing behavior or just why is that.

Andrew P. Nocella: Why are you seeing the pain a little bit more today than in the second half? Well, you know, I think it's all of the above, all of the. As I said, we've worked very hard to insulate ourselves from the changes, sometimes not very sound changes that are being made. I think we did a great job, and in this particular quarter, the capacity growth was just so significant that it pressured Way that it didn't aim for, [inaudible] on, along with The Atlantic, our schedule. Executive, particularly during the off-peak period. May be less effective in a peak period than Q2. And that's one of the reasons I think we're excited to see how P4 turns out.

Speaker Change #128: Why are you seeing a little bit more today than and not necessarily in the second half of the Arsenal.

Scott Kirby: Well, you know, I think it's all above all those issues. You just said, "we've worked very hard to inflate ourselves from the changes." Sometimes, not very found changes that are being made in industry. And I think we did a great job. of Insurance Assoils, against that, but it's not a 100% insurance plan, and in this particular quarter, the capacity growth was just so significant that a pressure yield in a way that it didn't in, for example, just in Q1. And our schedule changes in Q1, if you look at our ratham change domestically in Q1, along with the Atlantic, our schedule changes were incredibly effective, particularly during an off-peak period.

Speaker Change #130: Well I think it's all of the above all those issues. You. Just said we've worked very hard to insulate ourselves from the changes sometimes not very sound changes that are being made in industry and I think we did a great job of ensuring ourselves against that but it's not 100% insurance plan.

Speaker Change #130: And in this particular quarter.

Speaker Change #130: <unk> growth was so significant that it.

Speaker Change #130: Pressured yields in a way that it didn't mean for example, just in Q1.

Speaker Change #130: Our schedule changes in Q1.

Speaker Change #130: You look at our RASM change domestically in Q1, along with the Atlantic our schedule changes were incredibly effective.

Speaker Change #130: Particularly during the off peak period.

Scott Kirby: And maybe less effective than a peak period as Q2.

Speaker Change #130: Maybe less effective in a peak period as Q2.

Scott Kirby: And that's one of the reasons I think we're excited to see how Q4 turns out, because not all of us have taken the same rest of the book for Q1 and put it into Q4, which again had ratham changes that I don't think anybody in the industry expected out of the United, but this time, the industry itself is, I think, even remarkably more different in Q4 of this year than it was in Q1, and how it's reacted, and how it's changed. And again, it's changing because that flying has extremely negative margins by many of our competitors.

Speaker Change #130: And that's one of the reasons I think we're excited to see how Q4 turns out because not only we have taken the same recipe book for Q1 and put it into Q4.

Andrew P. Nocella: Not only have we taken the same recipe book for Q1 and, for which, again, there have been rather changes that I don't think anybody, United, but this time, the industry itself. [inaudible] Again, it's changing because that client has extremely negative margins. So that's a long answer. It was a very sufficient amount, so thank you.

Ed: Which again add Ed RASM changes that I don't think anybody in the industry expected out of the United.

Ed: But this time the industry itself is I think we've been remarkably more different in Q4 of this year than it was in Q1 and.

Ed: And how it reacted and how it's changed and again, it's changing because that flying as extremely negative margins by many of our competitors. So that's a long answer to your I think very simple question.

Scott Kirby: So that's a long answer to your, I think, very simple question. No, it was a very sufficient answer.

Speaker Change #133: It was a very sufficient asset thank you.

Scott Kirby: Thank you.

Ravi Shankar: Our next question comes from Ravi Shankar with Morgan Stanley. Please go ahead. Thanks, morning, everyone. Just a couple of follow-ups here. I know you said you didn't want to commit to your own 4Q capacity plans, but do you have a sense of how much industry capacity is still needed to come out for the fourth quarter to get that demand and supply and balance, especially enough that would help push your guidance up to the top half of the range? You know, I can't, I don't know for sure what I would tell you is our expectation is Q4 domestic capacity to be up approximately 2%. A little above or a little below is kind of our expectation.

Ravi Shanker: Our next question comes from Ravi Shanker with Morgan Stanley. Please go ahead. Thanks, everyone. Just a couple of follow-ups. I know you said you didn't want to commit to your own 4Q capacity plans, but do you have a sense of how much industry capacity still needs to come out for the fourth quarter to get that demand and supply in balance, especially that would help push your guidance up to the top half of the range?

Speaker Change #134: Our next question comes from Ravi Shanker with Morgan Stanley. Please go ahead.

Ravi Shanker: Thanks, Good morning, everyone. Just a couple of follow ups here I know you said you didn't want to commit to your own capacity plans, but do you have a sense of how much industry capacity is still needs to come out for the fourth quarter to get that demand.

Speaker Change #136: And balance, especially taken up that would help push your guidance up to the top half of the range.

Speaker Change #137: I can't I don't know for sure.

Ravi Shanker: I don't know for sure, but what I would tell you is our expectation is for Q4 domestic capacity to be up approximately 2%. A little above or a little below is kind of... (inaudible) Hey, Ravi, thanks for the question. We don't have a date scheduled yet.

Speaker Change #138: I would tell you is our expectation is Q4 domestic capacity to be up approximately 2% a little above or little below is kind of our expectation.

Speaker Change #137: Sure.

Speaker Change #139: Understood that's helpful and maybe the second one.

Ravi Shankar: And maybe the second one, I think it's pretty clear that investors are looking forward to your investor day as a pretty significant catalyst for the stock, especially for long-term earnings and the updated next target. Do you have a sense of when the timing of that would be and when we'll hear more about that? Hey, Ravi, thanks for the question. We don't have a date scheduled yet. We're working on it. We are still targeting later this year, and we'll be back if and when we schedule and finalize that date.

Speaker Change #140: I think it's pretty clear that investors are looking forward to your Investor day is a pretty significant catalyst for the stock, especially kind of for long term earnings and kind of the updated.

Speaker Change #141: Targets do you have a sense of when the timing of that would be in kind of when we'll hear more about that.

Conference Facilitator: We're working on it. We are still targeting later this year, and we'll be back if and when we schedule and finalize that date. Group, thank you. Our next question comes from Tom Fitzgerald with TD Cowan. Please go ahead. Hi everyone.

Speaker Change #141: Hey, Ravi Thanks for the question.

We don't have a date scheduled yet we're working on it we are still targeting later this year and we'll be back if and when we schedule and finalize that date.

Unknown Attendee: Great. Thank you.

Speaker Change #142: Great. Thank you.

Tom Fitzgerald: Our next question comes from Tom Fitzgerald with TD Cowan. Please go ahead. Hi, everyone. Thanks for the time.

Speaker Change #142: Our.

Speaker Change #142: Next question comes from Tom Fitzgerald with TD Cowen. Please go ahead.

Thomas John Fitzgerald: Thanks for the time. I was wondering if you could talk a little bit about connective media and what the feedback from customers has been, what the feedback from brands has been, and just the timeline for that business to ramp up. Before Andrew answers the question, I'll use this time, since you've replaced her, to say, yeah, big cues to fill in Helane. I wish her the best. I'm jealous of all her travels.

Tom Fitzgerald: Hi, everyone. Thanks for the time I was wondering if you could talk a little bit of a connected media and what the feedback from customers has been what the feedback from brands has been and the timeline for that business to ramp.

Tom Fitzgerald: I was wondering if you could talk a little bit about connected media and what the feedback from customers have been, what the feedback from brands have been, and just a timeline for that business to ramp. Before Andrew answers the question, I'll use this Tom since you've replaced her to say you have big to use to fill in a lane. I wish her the best. I'm jealous of all her travels. She tells me she's going to Greenland. I don't know if she's listening. Maybe she's already in Greenland. I can't get the comfortable there. And I hope she'll still continue to send me book recommendations.

Scott: She told me she's going to Greenland. I don't know if she's listening. Maybe she's already in Greenland.

Speaker Change #144: Before Andrew answers. The question I'll use this time since you've replaced or let's say big shoes to fill and Hawaii I wish you the best.

Speaker Change #145: Jealous of all her travel it.

Speaker Change #146: It tells me go into Greenland.

Speaker Change #147: Just lastly, just maybe she's already agreements I can't get the conference call there.

Speaker Change #148: And it helps us still continue the semi book recommendations Andrew right.

Andrew Didora: Andrew. On connected media, you know, first, you know, I think it's important that from a commercial perspective, we are always trying to innovate and come up. but see things to drive earnings. And there's a lot of things on our book here that we haven't even begun to discuss, but Connected Media is one that we have announced. We expect in a significant roundabout next year. And we will discuss it in a lot more detail at the investor day, but it's going to be innovative. It's going to be really meaningful and really impactful for United Airlines going forward.

Scott: I probably can't get the conference call there. But I hope she'll still continue to send me book recommendations. Andrew.

Andrew P. Nocella: On connected media, you know, first of all, I think it's important that from a commercial perspective, we are always trying to innovate, to Drive, Ernand, and there's a lot of things on our book here to discuss, but Connected Media is one that we have in. We expect a significant ramp-up next year, and we will discuss it in a lot more detail later, the Innovative, it's going to be really Okay, thanks very much.

Ah connected media first.

Speaker Change #149: I think it's important that from a commercial perspective, we are always trying to innovate and come up with new things to drive earnings.

Speaker Change #149: And Theres a lot of things on our arm book here that we haven't even begun to discuss but connected media is one that we have announced.

Speaker Change #149: We expect a significant ramp up next year and.

Speaker Change #149: And we will discuss it in a lot more detail at the Investor day, but.

Speaker Change #149: It's going to be innovative it is going to be really meaningful and really impactful for United Airlines going forward.

Andrew Didora: Okay, thanks very much. Excited to hear more.

Andrew P. Nocella: I'm excited to hear more. And then just a quick one. Is there any noise around lapping the Tel Aviv flying into the fourth quarter this year that we should think about in our models? Thanks very much again.

Speaker Change #150: Okay. Thanks, very much excited to hear more and then just a quick one is there any any noise around lapping the Tel Aviv flying into fourth quarter. This year that we should think about in our models. Thanks very much again.

Andrew Didora: And then just a quick one, is there any noise around laughing to Tel Aviv flying in the fourth quarter this year that we should think about in our models? Thanks very much again. I don't think so. I mean, Tel Aviv, you know, when we pulled it out, was obviously about 2% of United Airlines. I think that number surprised everybody. And obviously it is lucrative flying for United, you know, just at least. And so its loss was, you know, significant. I think we worked on, reestablished in service safely for our colleagues, and we're flying at double daily today.

Andrew P. Nocella: I don't think so. I mean, Tel Aviv, you know, when we pulled it out, it was obviously about 2% of United Airlines, Republic of China, and many more.

Speaker Change #151: I don't think so I mean Tel Aviv.

Speaker Change #152: When we pulled it out was obviously about 2% of United Airlines, I think that number surprised everybody and obviously is lucrative flying for United to.

Andrew P. Nocella: Thank you. Thank you, so its loss was, you know, significant. I think we worked on re-establishment and service safely for our colleagues, but we don't think resume until the end is going to be a drag. We will now switch to the media portion of the call. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 1 again. Please hold for a moment while we assemble our queue. Our first question comes from Mary Schlangenstein with Bloomberg News. Please go ahead.

Speaker Change #153: At least and so its loss was.

Speaker Change #153: Significant.

Speaker Change #154: I think we've worked on reestablishing and service safely for our colleagues and we're flying a double daily today, and we intend to continue to expand in Tel Aviv and get back to our normal schedule.

Andrew Didora: And we intend to continue to expand Tel Aviv and get back to our normal schedule. But we don't think resume in Tel Aviv is going to be a drag on Rasm if that's the heart of your question.

Speaker Change #155: But we don't think resume in Tel Aviv is going to be a drag on RASM. If that's the heart of your question.

Unknown Attendee: We will not switch to the media portion of the call. If you would like to ask a question, please press star one on your telephone keypad. So if you draw your question, please press star one again. Please hold for a moment while we assemble our queue.

Speaker Change #156: We will now switch to the media portion of the call. If you would like to ask a question. Please press star one on your telephone keypad to withdraw your question. Please press star one again please.

Speaker Change #156: Please hold for a moment, while we assemble our queue.

Speaker Change #156: Yeah.

Speaker Change #156: Yeah.

Speaker Change #156: Yeah.

Mary Schlangenstein: Our first question comes from Mary Slingenstein with Bloomberg News. Please go ahead. Thank you. Scott, you've been pretty vocal about your views on the UACCs and the low-margin airlines in the industry.

Speaker Change #157: Our first question comes from Mary <unk> with Bloomberg News. Please go ahead.

Mary Schlangenstein: Thank you. Scott, you've been pretty vocal about your views on the USCCs and the low margin airlines in the industry. But I'm wondering, given the comment earlier about the fact that they seem to be complicating their models now when their model was originally built on simplicity, do you see that as being sort of an extra step that they're taking that may further speed their demise or whatever their eventual future is? Andrew, let me try to take it and Scott will correct me where I'm wrong.

Speaker Change #157: Thank you Scott you've been pretty vocal about your views on that.

Speaker Change #158: The U T season.

Speaker Change #159: Low margin airlines in the industry, but I'm wondering given the comments earlier about the fact that they seem to be <unk>.

Scott Kirby: But I'm wondering, given the comment earlier about the fact that they seem to be complicating their models now when their model is originally built on simplicity, do you see that as being sort of an extra step that they're taking that may further speed their demise, or whatever their eventual future is?

Speaker Change #160: <unk> their models now when their model as originally built on simplicity do you see that as being sort of an extra step that they're taking that may further speed.

Speaker Change #160: Their demise or whatever their eventual future is.

Mike Westman: Mary Slingenstein, let me try to take it, and Scott will correct me where I'm wrong. You know, I think, like when you, first of all, you have to understand that the world has changed fundamentally. With no change fees and basic economy, things are just not as they were pre-pandemic. And I think this core fact is often ignored, and how people kind of set up the answer to what's going on today. But I'll give you a rundown of what I think the playbook is, and Scott can kind of add to it. At first, when you face this type of problem, airlines generally push to grow out of the problem, but that usually doesn't work.

Andrew P. Nocella: You know, I think, first of all, you have to understand that the world has changed. Fundamentally, with no change fees and a basic economy, things are just not as they were pre-pandemic. I think this core fact is often ignored in how people kind of set up the answer to what's going on today, but I'll give you a rundown of what I think the playbook is and Scott can kind of add to it. At first, when you face this type of problem, you know, airlines generally push to grow out of the problem. But that usually doesn't work.

Speaker Change #160: Various Andrew let me, let me try to take it and Scott will correct me, where I'm wrong.

I think when you.

Speaker Change #161: First of all you have to understand that the world has changed fundamentally with no change fees in basic economy things are just not as they were pre pandemic and I think this core fact is often ignored.

Scott: And how people kind of set up the answer to what's going on today, but I'll give you a rundown of what I think the playbook is and.

Scott: Scott can kind of add to it first when you face this type of problem.

Scott: Airlines generally pushed to grow out of the problem.

But that usually doesn't work and this happened in the previous quarters and I can recall it back when I worked for Continental Airlines in the late 19, 90% quite frankly in regards to something we called Cal light at that time I was just a junior analysts I remember it very well.

Scott Kirby: And this happened in the previous quarters. And I can recall this back when I worked for Continental Airlines in the late 1990s, quite frankly, in regards to something we called Cal Light at the time. I was just a junior analyst. I remember it very well. You know, the second step is network turn, where you think, well, we picked the wrong markets, and we can fix that. But the next set of markets are usually worse than these markets you're flying today. Ray, then the next change is business model changes, right? We noticed airline X is doing something different from us.

Andrew P. Nocella: And this happened in the previous quarters. And I can recall this back when I worked for Continental Airlines in the late 1990s, quite frankly, in regards to something we called Cal Light at the time. I was just a junior analyst. I remember it very well.

Andrew P. Nocella: You know, the second step is network churn, where you think, well, we picked the wrong markets, and we can fix them. But the next set of markets is usually worse than the markets you're flying today. Then the next change is business model changes, right? We noticed Airline X is doing something different from us. Let's map, that's really hard, and Then I think the next step is everybody thinks, well, let's go premium, you know, but that's a generational adjustment that just does not occur over a few quarters. And then the next one is, let's push capacity on good days and months but cut hard on off-peak. And that's really hard to do because it's an inefficient use of assets.

Scott: Second step is network churn, where you think well we picked the wrong markets and we can fix that but the next set of markets is usually worse than these markets you're flying today and the next changes business model changes right. We noticed airline exit is doing something different from us let's match.

Scott Kirby: Let's match. That's really hard and slow. I think the next step is that everybody thinks, well, let's go premium. You know, but that's a generational adjustment that just does not occur over a few quarters. And then the next one is, let's push capacity on good days and months hard on off-beak. And that's really hard to do because it's an inefficient use of assets. And then the next one is, you know, close-in schedule changes because you're really concerned about your P&L and what's going on. And I think we see a lot of close-in schedule changes today from many of our competitors.

Speaker Change #163: That's really hard inflow.

Speaker Change #163: I think the next step is that everybody things so lets go premium.

Speaker Change #163: But that's a generational adjustment that just does not occur over a few quarters.

Speaker Change #163: And then the next one is let's push capacity on good days and months hard on off peak and that's really hard to do because it's an inefficient use of assets.

Andrew P. Nocella: And then the next one is, you know, closing schedule changes because you're really concerned about your P&L and what's going on. I think we see a lot of closing schedule changes today. Many of our competitors, and then the last part is, and so I think these business models are. [inaudible] so hopefully that helps. The play is almost over.

Speaker Change #163: And then the next one is closing schedule changes as you're really concerned about European al and what's going on and I think we see a lot of closing schedule changes today from many of our competitors and then the last part is judicious shrink.

Scott Kirby: And then the last part is you just shrink. And so I think these business models are simplistic and will be very difficult to make complex, but I add in a lot of costs. So hopefully that helps to answer the questions.

Speaker Change #163: And so I think these business models are simplistic and there'll be very difficult to make complex without adding a lot of cost.

Speaker Change #163: So hopefully that helps answer the question Scott anything to add to that.

Scott Kirby: Got anything to add to that? The play is almost over.

Speaker Change #164: The play is almost over.

Scott Kirby: There you go.

Scott: There you go.

Scott: Okay.

Claire Bushy: Our next question comes from Claire Bushy with Final Times.

Claire Bushy: There you go. Our next question comes from Claire Bushy with the Financial Times. Please go ahead.

Claire <unk>: Our next question comes from Claire <unk> Financial Times. Please go ahead.

Scott Kirby: Please go ahead. Hello.

Scott: Hello, this is a question for Scott. How worried are you that delays by manufacturers in delivering new, more fuel-efficient jets are hampering the industry's progress on cutting emissions as carriers are forced to fly older planes for longer? I don't think that's really the issue.

Claire <unk>: Hello. This is a question for Scott.

Scott Kirby: This is a question for Scott. How worried are you that delays by manufacturers and delivering new, more fuel-efficient jobs is tampering the industry's progress on cutting emissions. As carriers are forced to fly older planes. I don't think that's really the issue. I think the only way to decarbonize aviation, it really is sustainable aviation fuel. And, you know, the ability to get more-efficient airplanes is nice, but that's, you know, sort of measured in the 1%, 2% kind of improvements across the industry. Really getting a sustainable and viable staff industry is how you get to ultimately 100%, which is our goal to get to 100% grain.

Speaker Change #166: Worried are you that delays by actuaries and delivering new more fuel efficient.

Speaker Change #166: Hampering the industry's progress on cutting emissions as carriers are of course decline older planes.

Scott: I think the only way to decarbonize aviation is really sustainable aviation fuel. And, you know, the ability to get more efficient airplanes is nice, but that's, you know, sort of measured in the One, 2% kind of improvements across the industry. Really getting a sustainable and viable SAF industry is how you get to 100%, which is our goal to get to 100% green. And that's why United is leading around the world.

Speaker Change #167: I don't think Thats really the issue I think the only way to Decarbonize aviation.

Scott: It really is sustainable aviation fuel.

Scott: And.

Scott: The ability to get more efficient airplanes is nice, but thats sort of measured in the.

Speaker Change #170: One, 2% kind of improvement across the industry really getting a sustainable and viable SaaS industry is how you get to ultimately, 100%, which is our goal to get to a 100% Green and that's why he is leading around the world are United Aviation Aviation Fund.

Scott Kirby: And that's why United is leading around the world: our United Aviation Fund. We're investing - this is an industry that's still being built. It's in the nascent phases today. It's in the investment, it's in the R&D, it's in the research. We understand the chemistry; we understand the technology, but we're now on the point where we got to commercialize that. And so, I think that keeping our eye on that ball is critical to decarbonizing what is an otherwise really hard to decarbonize industry. Thank you.

Scott: In our United Aviation Fund, we're investing. This is an industry that's still being built. It's in the nascent phases today.

Scott: We're investing this is an industry that is still being built it's.

Scott: In the nascent phases today.

Scott: It's in the investment, it's in the R&D, it's in the research. We understand the chemistry, we understand the technology, but we're now at the point where we've got to commercialize that. And so I think that keeping our eye on that ball is critical to decarbonizing what is otherwise a really hard to decarbonize industry.

Speaker Change #168: And the investments in the R&D and the research we understand the chemistry, we understand the technology, but we're now at the point, where we got to commercialize that.

Scott: And so I think that keeping our eye on that ball is critical to.

Scott: To decarbonize, the what is an otherwise really hard to decarbonize the industry.

Speaker Change #169: Thank you.

Scott: Yeah.

Kristina Edwards: We'll now turn the call back over to Christina Edwards for closing remarks. Thanks, Brian. Thanks for everyone joining the call today.

Kristina Munoz Edwards: Thank you. I will now turn the call back over to Kristina Edwards for closing remarks. Thanks, Brianna. And thanks for everyone joining the call today. Please contact Investor Media Relations if you have any further questions. Hope everyone has a great summer and look forward to talking to you next quarter. Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.

Scott: I will now turn the call back over to Christina Edwards for closing remarks. Thanks.

Kristina Munoz Edwards: Thanks, Brian and thanks for everyone joining the call today.

Unknown Attendee: Please contact Investor, Media Relations if you have any further questions. Hope everyone has a great summer and look forward to talking to you next quarter. Thank you, ladies and gentlemen. This concludes today's conference. You may now disconnect.

Kristina Munoz Edwards: Please contact Investor Media relations. If you have any further questions I hope everyone has a great summer and look forward to talking to you next quarter.

Speaker Change #171: Thank you ladies and gentlemen. This concludes today's conference you may now disconnect.

Scott: Okay.

Scott: Hmm.

Yeah.

Scott:

Scott: [music].