Q4 2024 United Airlines Holdings Inc Earnings Call
The first time I've seen this, I've seen it in the past, but I've never seen it before.
This call is being recorded and is copyrighted. Please note that no portion of the call maybe recorded transcribed or rebroadcast without the company's permission your participation implies your consent to our recording of this call. If you do not agree with these terms simply drop off the line I will now turn the presentation over to your host for today's call Christina Edwards.
Christina Edwards: Managing director of Investor Relations. Please go ahead.
Speaker Change: Thank you Regina good morning, and welcome to United's fourth quarter and full year 'twenty 'twenty four earnings conference call yesterday, we issued our earnings release, which is available on our website at IR Dot United Dot Com information in yesterday's release and the remarks made during this conference call may contain forward looking statements, which represent the company's current expectations, which are.
Speaker Change: Based upon information currently available to the company a number of factors could cause actual results to differ materially from our current expectations.
Speaker Change: 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 more thorough description of these factors 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.
Speaker Change: 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.
Speaker Change: Joining us today on the call to discuss our results and outlook are Chief Executive Officer, Scott Kirby President, Brett Hart Executive Vice President and Chief Commercial Officer, Andrew Phillips, and Executive Vice President and Chief Financial Officer like Alaska and in addition, we have other members of the executive team on the line available for Q&A.
Scott Kirby: Now I'd like to turn the call over to Scott, Thanks, Kristina and thanks to everyone for joining us today I want to begin by saying that our thoughts are with those affected by the wildfires in the Los Angeles area, we've been in close touch with our employees and communities in the area and offer them support will continue to monitor the situation to see if there are more ways that we can help turning to earnings.
Scott Kirby: 24 was another solid proof point on our way to double digit margins.
Scott Kirby: The fall of 2020 several months after Covid struck.
Scott Kirby: And it had a clear vision of how our airline in the industry. We're going to have all in 2024 seems to have been the year that we gave broadened our mission from others. The division is playing out as we expected.
Scott Kirby: Our outlook has always been based on a realistic view of how the economics of the industry, we're going to change and how those changes have the potential to drive structural permanent and irreversible changes in the entire industry. Our 2024 plan developed for what that vision and our results were the culmination of years of thoughtful planning bold actions and strategic.
Scott Kirby: Investments I'd like to thank our employees for these stellar results and I'm proud to say that we'll be paying out $713 million in profit sharing this year in.
In 2020 for United to continue to make progress with our United next plant and once again delivered earnings within our original range our investments over the last several years have further differentiated from the rest of the industry and led to strong customer preference for the United brand, but the bigger point here is the changes led to this moment are structural and durable.
Scott Kirby: Cost convergence, which we first talked publicly about on this call at Houston two years ago, combined with effective revenue diversity, United for the first time ever.
Scott Kirby: And industry, leading products and services, causing customers to choose United are just irreversible structural changes that have created a competitive moat for United.
Scott Kirby: Answering an analyst question two quarters ago, I talked about how this feels very much like 2012 to 2014, but today I'll add that there are two additional tailwind at this time around the international environment, which Andrew will discuss in more detail is going to be far stronger for longer because of the structural supply constraints that are going to last at least for the rest of this decade.
Andrew Phillips: Wide body supply both airframes and engines is even more challenged the narrow bodies.
Scott Kirby: Second domestically.
Scott Kirby: These are the 2012 to 2014 errors demise were being sold at the time with 15% to 20% growth from the U S. A C. It's very hard to see that happening again.
Scott Kirby: Importantly, all of this means that the industry is evolving into an equilibrium where each airline driven by economic necessity will be primarily focused on flying where they have a competitive advantage different airlines have different competitive strengths and weaknesses in the post Covid era cost converted had been the most impactful at the big high cost airports in the country.
Scott Kirby: The cost per passenger and the three New York City airports is $48 compared to the average you OCC fair of $67 in those three airports when an airline is spending 72% of their fair on airport cost. It's hard for me to imagine that they could ever be profitable in those airports at the same time OCC do have an advantage it will always be able.
Scott Kirby: To be more profitable than United and point to point low cost airports. It really is a transformed industry and United more than anyone is leading the way with seven great hubs, we got well ahead of the curve and investing for the future and we're focusing all of our efforts and growth in our hubs, where we have the competitive advantage the combined virtues of our size and our innovative.
Scott Kirby: Culture is a competitive threat or not we know who we are we know our strength. We also know our weaknesses.
Scott Kirby: Going to focus on our strength and nothing else, but we won't rest on our laurels will never be complacent, we're satisfied with our results will continue to be an airline. We're good leads the way by focusing on ways to be even better airline for our customers garlic as one of the most obvious high profile investments for customers.
Scott Kirby: Really just the visible tip of the iceberg, our digital team is expanding our best in the world technology by making further improvements to make them, even more transparent and easy to do business with and our ops team is focused on changing the unchangeable and trying to solve problems that no. Other airline in the world has ever even tried to fix and we will continue to invest in our brand that as far as private.
Scott Kirby: Employees and customers alike. This year, we expect to grow our EPS by approximately 18% at the midpoint and will deliver strong free cash flow, while continuing to invest in the future that include society industry, leading contracts that they're United team, which is made up of the best aviation professionals in the World. We are the best airline in the history of aviation, we're going to continue to raise that.
Brett Hart: At bar, that's been and will continue to be increasingly good for our employees customers and our shareholders and with that I'll turn it over to Brett.
Brett Hart: Thank you Scott and good morning.
Brett Hart: 24 was an exceptional year for United.
Brett Hart: The investments we've made to improve our operational reliability.
Brett Hart: And resilience have driven top tier results.
Brett Hart: We served a record nearly 174 million customers last year and finished the year first in on time departures at all seven of our hubs.
Brett Hart: We had the busiest December in our history.
Brett Hart: Hang on average 511000 people a day and when so many of our customers were counting on us to get them home safely for the holidays. We closed out the month of December ranked number one in on time departures I want to thank the incredible professionals that United who worked through the holidays and through tough weather to deliver for our customers.
Brett Hart: Thanks tuned in to enhance processes for recovering crews during irregular operation events, we achieved an 82% reduction in crew related cancellations compared to prior years.
Brett Hart: Additionally, we continued refining our aircraft turn process focusing on key components, such as aircraft cleaner time and boarding efficiency driving improved turnaround speed and overall operational performance in 2024, we had the company's best post pandemic turn execution.
Brett Hart: Juicing cancellations and improving efficiency, both meaningfully cut costs.
Brett Hart: And results in a much better experience for our customers.
Brett Hart: Despite that progress staffing at the FAA remains a challenge for the airline industry and most importantly, the traveling public.
Brett Hart: In 2024, even unclear boost sky days, 66% of United's delays were driven by a T C challenges and technology and staffing we remain engaged with leaders in Washington, and in both parties to get the FAA the resources they need and we will look for opportunities to work with the new Congress and new admin.
Speaker Change: Australia to achieve that goal.
Speaker Change: Over the last several years, our culture of innovation is fueled countless advancements in technology and empower our employees and improve customers experience.
Speaker Change: And just in the last several months our team has developed new capabilities for our award winning App like integrating Apple are tagged data to help us reunite customers with their bags and allowing customers to select seat preferences. So they can get moved to the CPA prefer automatically.
Speaker Change: As soon as it becomes available.
Speaker Change: Translating our entire app in the Spanish drove usage, even higher and now nearly 90% of customers engage with our digital channels on the same day travel.
Speaker Change: In 2020 for these and other app enhancements enabled half of our customers who experienced the cancellation to utilize a self service automated method to get back on their way, a 28% increase year over year.
Speaker Change: Our industry, leading App has led to a happier customers who have more control over their travels and employees, who have more time to help customers, who most need it.
Speaker Change: At United We're proud of this culture of innovation, because it's central to our effort to differentiate our good leads away brand and give our customers even more reasons to choose United.
Speaker Change: With that I'll hand, it over to Andrew to review, our strong revenue performance in 2024 and discuss our expectations for revenue environment in 2025.
Andrew Phillips: Thanks, Brett.
The fourth quarter revenue environment materially improved as the capacity a backdrop for the industry became more constructive.
United to Q4, <unk> increased one 6% year over year on a six 2% increase in capacity. The Sunday. After Thanksgiving was our best revenue day in history shatter in the form of record by 25%.
Andrew Phillips: United is domestic capacity increased seven 8% in Q4 with RASM down one 9% we project domestic RASM will turned solidly positive in Q1, the domestic pricing environment is improving as underperforming airlines remove unprofitable capacity at an increasing rate and business traffic growth accelerate.
Andrew Phillips: Industry fare sales are less prevalent with lower discount rates as airlines are prioritizing profitability.
Andrew Phillips: All United's hubs were profitable in Q4 and for the last 12 months with only a seven point pre tax margin difference between the best and the worst performing hub the narrowest spread we've recorded in a quarter since 2016.
Andrew Phillips: Health is very strong with room for margin expansion as we continue our United next plan after years of waiting. We're also finally, starting to gain a critical mass of larger narrow body aircraft, which allows us to execute on our plans to increase gauge.
Andrew Phillips: The United International capacity was clearly the star of the quarter in terms of RASM growth relative to Q3 as a result international margins continue to outpace domestic margins in 2024.
Andrew Phillips: It is planned during the pandemic was to double down on international flying and it's proven to be the right mood.
Andrew Phillips: Q4 Pacific capacity moderated in China headwinds slowed versus Q3 resulted in PRASM flipping from down 15, 7% up four 1%.
Andrew Phillips: PRASM was up high single digits for the last two thirds of the quarter versus last year.
Andrew Phillips: United is profitably digested at 31% increase in Pacific capacity in 2024, and we have now fully reinstated our pre pandemic capacity levels across the region, but margins that are now above the system averages in the past the Pacific margins routinely lagged.
Andrew Phillips: Plan to moderate our Pacific growth as we head into the first half of 2025 labor capacity added in 2020 for mature.
Andrew Phillips: During 2025, we are excited to launch a new initiative to operate 730 sevens on a small number of Narita deep flight to destinations in Asia that do not support non stop service to the U S. We anticipate this unique initiative made possible by our Guam base will extend our lead as the largest transport carrier build an unmatched.
Andrew Phillips: <unk> network scope, we're going to redeploy underperforming assets and efficiently grow load factors shoot from Japan to the U S where local origin demand still has not fully recovered from the pandemic.
Andrew Phillips: 2024 was also a great year for United Atlantic Network from Q4 was no exception with PRASM up seven 1% on flat capacity, we entered 2020 for polishing capacity growth for the year in the Atlantic After a rapid growth in the region post pandemic.
Andrew Phillips: Plan for 2024 worked extremely well all months in Q4, our PRASM positive year over year with December RASM up double digits.
Andrew Phillips: United has the largest U S carrier flying over the Atlantic by S. M and in 2025, we plan to have load and minimal capacity growth in Q1 to support continued RASM strength.
Andrew Phillips: From what we see today, we expect the first quarter to be our best Atlantic Financial result in the Companys first quarter histories.
Andrew Phillips: Latin America trail the other regions throughout 2024, however, it's important to note that United continued to operate profitably in the region. Despite these challenges.
Andrew Phillips: PRASM was up slightly in Q4 and the outlook for early 2025 his positive.
Andrew Phillips: Overall, the momentum for international flying in the fourth quarter was exceptionally strong we believe the pandemic and Derek era global long haul reset along with a sluggish delivery rate of new wide body jets sets up the industry really well for years to come international wine.
Andrew Phillips: Cargo will also had a very strong showing in 2020 core cargo revenues for the year were up nearly 17% and up almost 30% in Q4 versus last year. It was a very good quarter and year for cargos.
Andrew Phillips: The business traffic recovery was a nice tailwind in Q4 results and Q4 and our outlook for Q1, clearly shows this trends and higher yield corporate traffic volumes.
Andrew Phillips: <unk> flown business revenue grew 16% in Q4 year over year, we expect that trend to continue in Q1, which is a tailwind for our business focused network contracted business sales in the quarter for all future travel were up 14% year over year.
Andrew Phillips: Premium passenger revenues increased 10% year over year and premium cabin unit revenues were positive both trends that persisted throughout the year, we see no change in consumer behavior seeking out increased premium experiences, but we also remain committed to our most basic product in Q4 basic economy passengers increased 21%.
Andrew Phillips: Year over year, and now represent 15% of domestic passengers up two points versus 2023.
Andrew Phillips: Royalty revenues grew at a healthy pace of 12% in 2020 for co brand spend was up 9% with 1 million new card acquisitions.
Andrew Phillips: Turning to the product we reached a milestone of deployment of our signature interior with nearly 50% of the fleet work complete as of year end 2024 with installation work moving quickly now we expect to be at 70% by the end of 2025 across the entire United Network, We expect to have 150000 seatback screens.
Andrew Phillips: Full of rich content available to all of our passengers with the with a better ability to personalize everyone's experienced by the end of 2025.
Andrew Phillips: As you can see from our first quarter outlook, we continued to make progress on improving the financial performance of that quarter changes to our capacity deployment across hubs days, a week and time of day had been very effective return to more corporate traffic and the desirability of the southern European vacation in the winter is also a tailwind.
Andrew Phillips: As we announced a few weeks ago. We're tracking ahead of our schedule on Starlink installation, which we think will be a material advantage versus slower or pay Wi Fi services offered by other U S carriers.
Andrew Phillips: United Sterling plan is yet one more action to elevate our product group.
Andrew Phillips: <unk> brand customers use more and more often we will share more on product innovation merchandising and capacity optimization in the coming year furthering our lead we will also talk about how we believe starlink will unlock a host of new digital benefits for our customers and shareholders.
Andrew Phillips: We believe that creating more choice more segmentation and enhancing our products is the winning formula.
Andrew Phillips: Merchandise and sell in and managing the complexity of these multiple experiences is our proven expertise.
Speaker Change: With that I want to say, thanks to the entire United team for an amazing 2024, and I'll hand, it off to Mike to talk about our financial results.
Mike: Thanks, Andrew we delivered record fourth quarter earnings with earnings per share of $3 26.
Mike: Ahead of expectations in the fourth quarter pre tax margin of nine 7% up three five points year over year. These.
Mike: These strong fourth quarter results brought our full year earnings per share to $10 61.
Above the midpoint of our initial guidance range of nine to $11.
Speaker Change: Much of this success is due to the strong revenue performance that Andrew just discussed, but the foundation of our success is a strong operation.
Mike: I'm incredibly grateful for the tremendous efforts of our operations team this quarter.
Mike: Our hubs are in some of the most congested airspace in the world and still we delivered industry, leading operational performance during the quarter.
Mike: Importantly, an operation that runs on time and with few cancellations is also a more cost efficient operation.
Mike: Finally, I'd like to celebrate our stock performance over the last 12 months in 2024, we were the fourth best performing stock in the S&P 500, I've long believed in the potential for our stock three rate given the structural improvements in our business. It's nice that the market is beginning to recognize the shareholder value we've delivered.
Mike: For the first quarter of 2025, we expect earnings per share of <unk> 75 to $1 25.
Mike: And approximately $400 million improvement from the first quarter of last year at the midpoint, implying an approximately 3.5 point improvement in pretax margin.
Mike: Our commercial team has done a great job of continuing to shape the network to match demand and what has historically been our seasonally weakest quarter.
Mike: Further building off our first quarter momentum, we expect full year 2025 earnings per share to be between $11 50 and.
Mike: And $13.50.
At the midpoint this represents 18% growth in earnings per share versus 2024 weeks.
Mike: We expect a similar pace of earnings growth is sustainable as we march toward low double digit pre tax margin.
Mike: We the de Commoditize, we've de commoditize their travel our operation is strong in the United <unk> continues to deliver both higher and more sustainable profits.
Mike: Airlines with less competitive offerings are cutting money, losing routes and frequencies. The industry setup has never been better and we believe United is uniquely positioned to succeed.
Mike: On costs CASM ex was up 5% on six 2% capacity growth versus the fourth quarter of last year.
Mike: As we look ahead to 2025, we are focused on driving efficiency improvements throughout the business. While also improving the experience for our customers and enabling our employees to be more effective at their jobs for.
Mike: For the year, we continue to expect two to three points of CASM ex pressure from a labor agreement is not yet signed.
Mike: Shifting gears to the fleet.
Mike: In the fourth quarter, we took delivery of five Boeing Max aircraft 14, Airbus <unk> hundred 21, Neo aircraft and three Boeing 780 Sevens and.
Mike: In 2025, we are planning to take delivery of 71 narrow body aircraft and 10 wide body aircraft.
Mike: Recall, we had been planning for approximately 100 narrow body aircraft deliveries in 2025, but due to the OEM production delays, we are planning for less which leads to our expected full year capex spend to be below $7 billion. That's below the low end of our 79 billion multi year guidance.
Mike: Turning to the balance sheet.
Mike: We ended the year with $17 4 billion in liquidity, including our Undrawn revolver, we generated $3 $4 billion of free cash flow in.
In 2024, we paid down $7 $4 billion of debt $3 6 billion of which we voluntarily prepaid weed.
Mike: We've now prepaid or refinanced our remaining high cost over their debt.
Mike: Our total cost of debt down to four 6%.
Mike: Our net leverage was two four times at year end and improvement as we make progress to our long term net leverage target of less than two times.
Mike: On the buyback in the quarter, we repurchased $81 million worth of shares leaving over $1 4 billion left in the authorization.
Mike: We remain firm believers that United stock is undervalued as we continue to grow earnings and margins year after year with further room for multiple expansion.
Mike: Finally, I want to reiterate the consistent and growing free cash flow generation remains a top priority.
Mike: And in 2025, we are targeting free cash flow around the $3 4 billion, we delivered in 2024.
Mike: The future of United Airlines has never looked brighter and I'm excited to continue to build upon our competitive advantages in 2025 and beyond.
Christina Edwards: Now back to Christina to start the Q&A.
Christina Edwards: Thank you Mike we will now take questions from the analysts community. Please limit yourself to one question and if needed one follow up question Regina. Please describe the procedure to ask a question.
Speaker Change: Thank you the question and answer session will be conducted electronically. If you would like to ask a question. Please press star followed by the number one on your telephone keypad. Please hold for a moment, while we assemble our queue.
Speaker Change: Our first question comes from the line of David Vernon with Bernstein. Please go ahead.
David Vernon: Hey, good morning, guys. Thanks for taking the question. So Mike maybe you could you talk a little bit about how much of the trend improvement youre seeing in <unk> and how that extends kind of into the full year guide I mean, I'm trying to get a sense for whether the range that you're putting out there for us for the year contemplates things continuing to get better from where we are today or kind of just a reflection of.
Speaker Change: Of where we are today.
David Vernon: Hey, Thanks, David I Love the question.
David Vernon: We've had a long standing policy of setting guidance with a no excuses philosophy and that has served US well we delivered over three points of margin expansion in Q4 and.
And I expect to deliver three to four points of margin expansion again in Q1.
David Vernon: We will continue to build a single act of God into our longer term guidance. So that we deliver even an imperfect conditions, that's kind of a hallmark of our guidance strategy.
It's pretty easy however for us to sit here and think there is opportunity in the back half of the year and then we can do even better than our full year guidance.
David Vernon: Yeah.
David Vernon: Alright, Thanks for that and then just to be clear about the guidance range as well that includes.
David Vernon: The incorporation of some potential flat until the deal in the course of the year correct, yes, It does and it always does.
David Vernon: Alright, thanks, very much for the time guys.
Speaker Change: Our next question comes from the line of Sheila <unk> with Jefferies. Please go ahead.
Speaker Change: Good morning, Congrats team on great results. So Mike maybe this one's for you since you entered your scrap let the stock is undervalued that bought back only 81 nine in Q4 so.
Speaker Change: Free cash flow in 2020, Fortunately for Barry on the guidance for 20% earnings growth and Capex is up less than expected that would suggest.
Speaker Change: Cash flow north of two $5 billion to $3 billion and 25, how are you thinking about.
Speaker Change: Deployment priority target your leverage target with a voluntary prepayments as well if that's necessary.
Share repurchases.
Speaker Change: Thanks, Sheila and let me remind everyone that over the last four years. We've also invested $32 billion in our business and our people, which has been central to our success.
Speaker Change: This strong performance in our evaluation it was a steep steep increase just as soon as we announced the share buyback authorization late last year.
Speaker Change: And so this first quarter out of the gate regarding the buyback.
Speaker Change: We started conservatively it seemed like a reasonable approach.
Speaker Change: Right now we have to balance rebound a rebalance our improvement in our balance sheet and repurchasing shares and so I think that was the right approach.
Speaker Change: Pleased to see the stocks the stock moving so strongly we were number four out of the S&P 500 last year I mentioned that in my script and you'll continue to see an opportunistic repurchase of shares as we move forward through 2025, I'll remind you that we've got $1 billion for an authorization.
Speaker Change: Expect continued multiple expansion and we're going to be really really deliberate about that I'll also add that the deleveraging that we this journey that we're on we expect to reach a below two times net leverage during this calendar year.
Speaker Change: Great. Thank you.
Speaker Change: Our next question comes from the line of Conor Cunningham with Melius Research. Please go ahead.
Conor Cunningham: Hi, everyone. Thank you.
Conor Cunningham: On basic economy can you can you talk a little bit about in the script you talked about how the industry is discounting a lot less and there's obviously a big move in premium.
Conor Cunningham: From the low cost guys can you just talk about how youre going to deploy basic economy is there.
Conor Cunningham: And evolution and how that changes it just seems like.
Conor Cunningham: There's going to be the barbell approach that you had this last couple of years before the industry really structurally changed maybe that evolves and how you deploy that would be at the basic economy side of the equation overall. Thank you.
Speaker Change: Thanks, Connor, Andrew I would say as we look out into the next 12 months, we don't intend to change that we're incredibly happy with the effectiveness of basic economy, particularly as we grow our gauge as a competitive tool. It's done exactly what we wanted it to do and it does seem to be even more of it we do actually the better off we are.
Speaker Change: Honestly there are points, we are clearly balance in multiple product types in our.
Speaker Change: A quiver here and many of the premium but also basic and we truly believe that a broad spectrum of choice for consumers and being able to offer the lowest possible fare to flying United where you get a signature interior seatback entertainment free Wi Fi.
He is the winning recipe and we're not going to change that recipe as we go through 2025.
Speaker Change: Okay.
Speaker Change: And then maybe maybe big picture.
Speaker Change: Relative margin performance, obviously speaks to your willingness to adapt to the environment overall.
Speaker Change: But the United next the day, we talked a ton about up gauging and obviously theres been a lot of delivery delays and so on so I'm just trying to understand on your conviction level around the up gauging strategy do you have a lot of that baked into 2025.
Speaker Change: It just seems like there's still multiple margin points that you have from these from these uniquely United opportunities that you have going forward just any thoughts there. Thank you.
Speaker Change: Yeah look I think gauge is it's not a secret weapon, but gauge is I think really important to us.
Speaker Change: For 2025 gauge is not moving a lot of.
Speaker Change: The delivery delays have been extensive and our ability to put RJ is back to full utilization.
Speaker Change: Move to be the right decision for 2025, what I can say is as you look out through the end of the decade I believe we have the highest gauged possibilities, which is going to be great for the business great for our unit cost and great for our customers because these new aircrafts that incredibly high NPS scores as we bring them online. So we think there.
Speaker Change: There is an incredible amount of runway related to gauge. We obviously operate in hubs that are gigantic from local population base, but they're also announced a gigantic from a connectivity basis, allowing us to use these larger gauge aircraft. We're behind on this I think this summer we had 12 <unk> hundred 20 ones. The T 200 people on next summer we have I think in the mid <unk>.
Speaker Change: And that's probably still a 150 aircraft behind our nearest competitor and as we said over and over again the large gauge narrow body aircraft are the highest margin aircraft flying in the country.
Speaker Change: And that is going to be a meaningful tailwind to united's.
Speaker Change: Margin acceleration as we head into 2026 and 2027 through 2025 is a bit of a pause year AR, but we look forward to getting back on the gauge.
Speaker Change: Bandwagon in 2026 and beyond Hey, Brandon This is Mike I just wanted to come.
Speaker Change: I want to add a an extra point there as we as we look into 'twenty six 'twenty seven as Andrew said, the gauge really starts to accelerate and so it becomes an idiosyncratic CASM.
Speaker Change: CASM ex benefit for United in 'twenty, six and it really starts to kick in in 2007. So.
Speaker Change: Youre not seeing the benefit of that in any of our guidance for this calendar year, but you will see it in coming years.
Speaker Change: Great. Thank you.
Speaker Change: Our next question comes from the line of Brandon <unk> with Barclays. Please go ahead.
Brandon: Hey, congratulations team on what was a great year, and obviously a good outlook here and Mike maybe just following up on that I presume with that comment about gauge looking out years ahead, that's including some expectation that Max 10 is in the mix.
Brandon: We are becoming more hopeful that the Max 10 will be a important gauge.
Gage for United We like the Max nine the Max nine it was a great aircraft, but we are with with Boeing starting to make some real progress in improving their business, where we're becoming more bullish on the Max 10, that's correct.
Brandon: I'll just add whether it's the Max nine or 10, our gauge is going to increase a lot to the 10 would be great, but you know I'm counting on the nine and the <unk> hundred 21 to do what I described a few minutes ago. If we have the 10 available to us that only helps it even further.
Speaker Change: Well, Andrew maybe for my follow up on those lines. Your domestic capacity growth is a little bit elevated here what are the priorities in the network because you look in 2025 domestically, especially with those constraints on gauge and it looks like the solidly positive PRASM comment on domestic is pretty bullish for <unk>. So can you elaborate on those.
Brandon: Sure.
Brandon: We've been working really hard, particularly for for off peak months and quarters like Q1 to readjust, how we deploy our capacity whether it would be by day of week or hub and I think it's been incredibly effective and you see that in the guidance along with the fact the business traffic is coming back. So we're pretty optimistic that this is.
Moving in the right direction, and we can really close margin gaps by making the off peak periods better as we think about 2025.
Brandon: <unk> said this in the past and I'll say it again, we're really focused on building connectivity in our bank structures, particularly in Chicago, Houston, and Denver, where our hubs.
Our fantastic, but they lack the same level of connectivity that we see at some of our larger OE competitor hubs and so we're going to be able to close that gap materially in 2025, which I think is going to be really good for our relative RASM results. As we go forward. So that'll be our focus in 2025 at this.
Brandon: Yeah.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Ravi Shanker with Morgan Stanley. Please go ahead.
Ravi Shanker: Great. Thanks, Good morning, everyone. Just a question on Starlink, obviously, you guys mentioned that a couple of out of your prepared remarks.
Ravi Shanker: Any thoughts on kind of rolling that out how much of a differentiator or do you think that will be what the initial performance has been like and maybe how we can monetize that.
Ravi Shanker: Sure.
Speaker Change: Excellent question and I have to say this is one of the things we are absolutely most excited about at United We did a ton of research on on this product in all the alternative products and feel 100% convinced that this is going to be a game changer fast and free Wi Fi available to our customers, including the ability.
Speaker Change: Two game have gains on the on your on your personal device is gonna be amazing, but look I think the big question here is with connected.
Speaker Change: And our ability to grow mileage, plus and youre going to see us I think unleash a lot of really unique things on this front and in particular.
Speaker Change: I think we see an opportunity maybe where others don't.
And I think that comes from a number of factors that are probably unique to United One is we have an advanced screens on the vast majority of our fleet.
Speaker Change: We need advanced screens to be able to personalized service and deliver content and the way that we're going to be doing go into the future, which we can obviously make the service for our customers better travel with less friction, but also monetize the media sales second with Sterling connectivity.
Speaker Change: Which we'll have which I don't think any of our major competitors will have it allows us to do that in a way that really older older Wi Fi services could not do and then you combine that with the size of mileage plus a legacy program size and I think our innovative spirit here at United is a very good recipe.
Speaker Change: I think we need to prove out this as we go forward.
Speaker Change: But we're very excited to do this were very excited that as United being unique on this front.
Speaker Change: And we hope to show you in the coming quarters and years, what it can be made possible with these investments.
Speaker Change: That's really helpful. Thank you maybe for a follow up obviously lots of momentum and the story stocks doing great everything's going to set up pretty well.
Speaker Change: Can it possibly be greater.
Speaker Change: You guys hinted last year or potential creative options within the loyalty program. Obviously, it's been a long time since you gave us the United next and then the largest change with the world.
Speaker Change: Any thoughts on hosting that Investor day, and potentially at some point this year.
Speaker Change: How do you think about giving us updates on some of those big picture items.
Speaker Change: Hey, Ravi Thanks for the question.
Speaker Change: And we still we continue to see tremendous value in the loyalty program, but we're gonna start to disclose data on that when it makes sense for the business.
Speaker Change: We're still discussing the timing of an investor day.
Speaker Change: We've been really effective getting our message to all of you. During these earnings calls and investor conferences.
Speaker Change: Unlike other airlines.
Speaker Change: Our investor calls are much closer to many investor days, we'll give you a long term guidance, we're giving you a lot more free cash flow.
Speaker Change: Commentary as well, we manage earnings calls like we manage our business with a focus on the long term and today's call is a good example of that so stay tuned and Investor day is an important tool.
Speaker Change: But no no update on precise timing today.
Speaker Change: Understood.
Speaker Change: Our next question comes from the line of Jamie Baker with Jpmorgan. Please go ahead.
Speaker Change: Morning, everybody. So Andrew you know in the past.
Speaker Change: I think it was last summer you talked about that lifecycle for discounted airlines, obviously since that time, we've seen a bankruptcy domestic capacity is tight and we're seeing discounters experiment with new logos.
Speaker Change: Do your original comments still stand or has there been enough evolution in that particular business model that maybe.
Speaker Change: Maybe the outlook from United's perspective.
As a little bit brighter than what you articulated last year any thoughts on that.
Speaker Change: Well look I think it's largely still fans.
Speaker Change: I think as Scott said earlier, we each have our.
Speaker Change: Expertise is what we're great at and what were less grade at maybe a United We think we've created a lot of things, but there's a few things we don't do and we don't intend to do.
Speaker Change: But we manage the complexity of many product types from basic to premium and I think do very well in the premium space and it's because of generations of investment that.
Speaker Change: It came before me.
Speaker Change: And the management team here in the room today, and you just can't snap your fingers and make those generational investments overnight.
Speaker Change: So I'm a bit surprised by the amount of change that the effectiveness of that change remains to be seen.
Speaker Change: The effectiveness of what we've been putting into place for years now has been proven we're going to do more of it in 2025. So I think that lifecycle I went through still holds.
Speaker Change: And I don't expect that we're going to see airlines compete at the level of.
Speaker Change: United in terms of this broad range of products and experiences anytime soon.
Speaker Change: Thank you for that and then quickly for Scott. It was several years ago I think it was at a conference that I asked you. If you could clear up one analyst or investor Misperception, what would it be and I don't remember your exact words, but basically you said that.
Speaker Change: Front the idea that all capacity is created equal and all capacity is equally bad.
Speaker Change: Mike spent a lot of time in front of clients.
Speaker Change: I have my opinions on this but where do you think you are in terms of addressing that.
Speaker Change: So the topic and then would.
Speaker Change: Your answer would be the same if I had simply ask the question in a second time.
Speaker Change: Well I don't know if I answered it would've been the same.
Speaker Change: But it's a it's a good answer regardless and.
Speaker Change: I think that is all capacity is definitely not created equal.
Speaker Change: And if you look.
Speaker Change: Even if you looked at if you just look at total industry capacity in the fourth quarter or the first quarter.
Speaker Change: You'd probably reach a different conclusion than if you disaggregated by you know who is doing to grow the differences than airlines like United and Delta has to say.
Speaker Change: We tend to add service route frequency because that's good for customers, we don't chase load factor, we've been running lower load factors.
Speaker Change: We maintain pricing integrity.
Speaker Change: Because we don't chase load factor and are willing to run lower loads if that's appropriate.
Speaker Change: You know just has a much less negative impact on industry RASM growth from some carriers.
Speaker Change: <unk> only load factor and.
So I think not all growth is anywhere close to created equal.
Speaker Change: And the impact you are seeing that in the results today.
Speaker Change: Results in the fourth quarter and the first quarter prove that that thesis was correct.
Speaker Change: I think that it's going to continue for.
Speaker Change: For years to come which could be a longer discussion, but it's going to continue for years to come.
Scott Kirby: Thanks, Scott I appreciate it.
Speaker Change: Our next question comes from the line of Andrew <unk> with Bank of America. Please go ahead.
Andrew Phillips: Hey, good morning, everyone.
Andrew Phillips: Maybe coming back to Tom loyalty, a little bit Scott Andrew.
Andrew Phillips: Revenues up double digits for Q.
Andrew Phillips: And you continue to invest a few billion dollars each year into your products, whether that be starlink connect foundries et cetera.
Speaker Change: Most airlines spend in total for you. So maybe Ken can you help frame the growth opportunity over the next few years as these investments come online and maybe speak to how you think these changes.
Speaker Change: Changes the value proposition for a traveler and drive them into the loyalty into the loyalty program over time any thoughts there would be appreciated. Thanks.
Speaker Change: Yeah.
Speaker Change: Well look I, you know I talked about it in a few minutes ago, but we are you know the whole myeloid plus connective foundation is incredibly strong.
Speaker Change: And I couldn't be more bullish on the opportunity. It does it does require some investment and some technology and we're well on our way, but look we did I think 12% growth last year in loyalty revenue.
Speaker Change: And that was pretty amazing I think hopefully will show that we lead the industry with that number.
Speaker Change: And our goal for this year is more than that in percentage terms and so we believe this is an accelerating momentum at this point, we need to prove it as we head into 2025 and beyond but connected media in particular like our media sales, we intend to double the next year and double them again, the following year and so.
Speaker Change: A lot of opportunities a lot of work we have a brand new team on board to help us execute on that and as we do all that and personalized service more and more I just think we make mileage plus even that much more attractive to our customer base.
Speaker Change: We have a flywheel effect with more credit cards.
Speaker Change: That are issued I think we did about $1 million last year, we'll do more this year. So it's just going exceedingly well and I think there's a lot more to come and we look forward to you at the appropriate time disclose in more and more but it's an interesting story I gave you many of the unique things that I think are in our quiver related to this.
Speaker Change: And we intend to fully exploit that to the best of our ability, we will deliver and I think a more personalized experience for our customers, which we think will reduce friction and air travel a lot, particularly when you onboard the aircraft. So theres a lot more to say on how are we going to use these screens and how we're going to deliver great service to our customers and we're going to do that in due course.
Speaker Change: Great. Thank you.
Speaker Change: I'm going to pile on that real quickly.
Speaker Change: The quality of the earnings from mileage plus the not only are they growing rapidly, but the stability of those earnings at high margin high margin business as we as we grow that business I do think it's important that you all think about.
Speaker Change: That differentiate its stability and its something were going to work hard to highlight in our disclosures as time goes on.
Speaker Change: Thanks for the question.
Speaker Change: Thanks. Our next question comes from the line of Duane <unk> with Evercore ISI. Please go ahead.
Speaker Change: Hey, Thanks, just on seasonality of margins.
Speaker Change: Maybe you can remind us about some of the network changes you've made over the years historically.
Speaker Change: We didn't really think of the first quarter as a breakout quarter for relative margins for United.
Speaker Change: So what changes have you made is it geographies is it how you're flying.
Speaker Change: Whats changed versus maybe pre COVID-19.
Speaker Change: Well look I would say, it's a lot of things and I'll definitely how we fly is pretty meaningful to that but I look first of all I think you have a brand that is rising across the board as we invest in multiple products and multiple experiences and we're just an airline people are choosing more and more often so that's just.
Speaker Change: Foundational.
Speaker Change: And I think we're really proud of that now in the nuts and bolts, yes. The schedule has changed a lot.
Speaker Change: We're very very careful in particular, how we work with utilization you know just adding flights for the sake of ASM, Yeah, we prove that last year and first quarter was not a great idea from an industry perspective, and we didn't do it and we're not doing it this year in fact, our utilization rate for this year is actually probably.
Speaker Change: And then last year at the current rate. So we're being very careful in how we deploy capacity and I think we're the best in the business at it but that goes not only within the quarter, but by day of week, it's by hub.
Speaker Change: And as by aircraft type and all of those changes, including more Sunshine capacity I think had been really important and then the last thing you know Q1 was always a strength point for corporate traffic that didn't exist during the pandemic or right. After the pandemic and what we see today is corporate traffic coming back very strongly in Q1, which I think will be unique.
Speaker Change: Really beneficial to the business centric airlines, which obviously United is one of them. So that's really important and then the last thing that I think is may be underappreciated is the fact that Europe is becoming more of a year round destination and so Europe always did not so great as the play way to say it particularly.
Speaker Change: <unk> from January 15th through mid March and now we're seeing a totally different result, where people are willing to go on to southern Europe European vacation.
Speaker Change: And so that that's just great and that really helps D season lies Europe at the same time that our connectivity with our Lufthansa hubs deals back to normal at the same time that business traffic builds back to London, Heathrow and you put all those factors together a lot of them you know created by United through scheduled changes some of them created by industry dynamics.
Speaker Change: And we are D seasonal highs in Q1 and make it look a lot better that was our goal a number of years ago.
Speaker Change: Proud to say, we've come a long way, we have a long way to go still but we've come a long way.
Andrew Phillips: That's really helpful. Andrew. Thank you and then just on the path to double digit margins and which implies a bit of improvement.
Speaker Change: Relative to pre Covid.
Speaker Change: You touched on your prepared remarks is this really about structurally higher margins in international and maybe holding serve on domestic or do you see it more.
Speaker Change: More balanced and not necessarily a 2025 answer but but over the next few years. Thanks for taking the questions.
Speaker Change: Well I'll start off as I said in my opening international margins are higher but we think they have stated have room to expand particularly by making the off peak periods better. So we remain excited about that but there is an opportunity on international and there's also a bigger opportunity on domestic as our mid continent hubs in.
Speaker Change: <unk> reached that critical mass of connectivity engage that we're seeking we're still a bit off from where we want to be engaged as we said this year is a bit of a gaze gauge pause year, but starting in 2026 and beyond we're going to really focus on gauge, which is incredibly efficient it's going to unlock the connectivity in our hubs even further and so.
Speaker Change: I'm actually more optimistic that margin growth in the domestic system given all the structural changes, we're putting in place and what's happening around us by our competitors has an incredible amount of upside and we can start to close the gap with international but I have to say international strength is just unbelievably strong right now.
Speaker Change: And I will close the gap will close some of the gap I don't think we'll close all of the gap from the way I look at it at this point to international is going to continue to lead the way I think for the coming years and as we said at the beginning there's just a significant supply constraint when it comes to widebody aircraft in widebody engines.
Speaker Change: That we think confidently last through the end of the decade at this point.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Scott Group with Wolfe Research. Please go ahead.
Speaker Change: Hey, Thanks, good morning.
Speaker Change: Scott and one of the earlier questions you said that you think that.
Speaker Change: Current industry backdrop has years to go I guess, what gives you the confidence and the duration.
Speaker Change: Part of this story I guess, what's the risk in your mind that as domestic pricing turns positive and others start.
Speaker Change: Maybe making a little bit more money that they start chasing it and adding capacity again.
Speaker Change: Well the short answer is it's just math.
Speaker Change: And this has been driven by economic.
Speaker Change: I said in my prepared remarks, I gave some stats on.
Speaker Change: The expense of flying at Big airports in New York like.
That doesn't mean things won't get a little more positive than people will try to put some more capacity back one or two quarters, but it.
Speaker Change: Don't see how it's possible.
Speaker Change: To be a low cost carrier and fly profitably.
Speaker Change: New York airports, or Chicago, or Los Angeles, or San Francisco or the business model just doesn't work because the governments in those entities have priced low cost carriers out of the market.
Speaker Change: And it's just math like every airline that has low margins.
Speaker Change: Don't look like Delta and United is unprofitable capacity and the only way to solve that is to not fly it that doesn't mean they'll do it overnight there will be some ups and downs along the way there'll be ego involved in that but ultimately it is math and it is going to come out because it cannot be profitable.
Speaker Change: Okay, and then maybe just make a numbers question.
Speaker Change: <unk> clearly has RASM outperforming CASM does the guidance contemplate that you have a positive spread all year or is there something unique about the <unk> strengths and I know I know you talked about two to three points from labor or anything else on the cost side do you want to add some color on that thank you.
Speaker Change: Thanks, Scott, let me try to be clear about it for the full year, we expect RASM to exceed CASM. We expect continued margin expansion I expect continued margin expansion into 26 as well regarding costs I think about costs in three buckets, I think about industry wide inflationary pressures whether that be labor whether.
Speaker Change: That'd be airport costs.
Speaker Change: Whether that'd be food costs.
Speaker Change: Fuel costs those costs are going to be pass through to the consumer 100% its frustrating to those inflationary costs had been persistent.
Speaker Change: Need to make sure that we do at least as well as the industry regarding those that number one bucket of costs, but those are those costs should not interfere with our long term profitability.
Speaker Change: The second bucket I'll break into two categories.
Speaker Change: And that is what can we do as an airline to drive efficiency into the operation gauge at United is the largest measure of efficiency that will really kick in and I said as I've said earlier in 'twenty six 'twenty seven.
But we're doing lots more with our App, we've got the best digital technology team in the business to drive efficiency, we're doing great job with tech ops and the operation driving efficiency and we feel we'll do better than average in that category.
Speaker Change: There is a to be though and that is driving efficiency by flying more in a red eyes situations flying more during the off peak and some of our competitors are doing that.
Speaker Change: We feel that that is and I think our results prove that flying in that way to drive utilization. It does it does drive down CASM, but it is a it does not maximize profits. So you you will not see United Airlines are driving efficiency in that way.
Speaker Change: And then the third bucket is one that United has been on a mission for for several years and that is investing in the product and service to differentiate the de commoditize the business.
Speaker Change: And it is clearer than it has ever been that that the commoditization of the product is driving is driving higher margins and I think more stability to this business. So you'll see continued investment by United.
Speaker Change: That will drive CASM.
Speaker Change: But we think it will also expand margins.
Speaker Change: Thank you guys.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Tom Fitzgerald with TD Cowen. Please go ahead.
Tom Fitzgerald: Thanks, so much for the time and congrats on the great results. There was a line in the press release that caught my eye on utilizing Gen AI to expedite customer search and I'm wondering if you could update us on other areas, you're already point NII and the business, we're thinking about it and how youre thinking about the impact whether on the revenue side or in the operation.
Tom Fitzgerald: You know, we do have the leading digital team in the business you can see in the App you can see in all kinds of places.
Tom Fitzgerald: And we have been I think done a yeoman's effort, but really using <unk>.
Tom Fitzgerald: And all kinds of ways that are maybe not or maybe not be as sexy as some of the big high profile announcements, but a whole lot more impactful for the airline and the operation you talked about some of them one of the things that I'm. Most proud of is how much better we are than any airline in history has ever been and communicating with customers.
Tom Fitzgerald: When there are delays choice and explain to you in terms that they understand.
Tom Fitzgerald: And we're getting better and better that I think we're the first inning of that.
We're the only ones on the field no one else is even trying to do it.
Tom Fitzgerald: But but <unk> has been an important.
Tom Fitzgerald: Unlock and there are all kinds of other you know to me one of the interesting applications. You know we have these old.
Tom Fitzgerald: Labor contracts that go back decades, and they've got all these provisions that have built up over decades, and we have people that have 25 30 years of experience trying to interpret what the labor contracts mean, when either flatten or someone can call them with some unusual situations in some of the provisions are hard to know and.
Tom Fitzgerald: Always hard to figure out literally a team of people that try to interpret and get those right and it didn't always know.
<unk> I can read the contract and give you a really good answer.
Tom Fitzgerald: What the output is that's just a small example, but you know.
Tom Fitzgerald: Really what that means to me is our team.
Tom Fitzgerald: It's down in the entire organization.
Tom Fitzgerald: This isn't like some one cool sexy project that we talked about on an earnings call or some other.
Tom Fitzgerald: Forum, but really throughout the organization embedded in the organization.
Tom Fitzgerald: Part of what's driving us to be without question, the leading technology innovator of many airlines around the world.
Speaker Change: Thanks, So much that's it that's really helpful color and then just as a follow up Andrew you talked about adding sunshine capacity being part of the success in improving <unk> and I'm, just curious how you're thinking about Florida and in the broader domestic network and if there's if opportunities present themselves to maybe get larger.
Speaker Change: And in that region, whether it is a focus city or possibly a new hub just love to hear your thoughts there. Thanks again for the time.
We.
Speaker Change: Question, but we have a seven great hubs and.
Speaker Change: You know for for all my years here, we've been focused on making those hubs as great as it can be and I don't think we're anywhere close.
Speaker Change: Key to that and you can look at our relative market shares in our hubs relative to other hub competitors around the country and you can see our shares are so low and I think.
Speaker Change: As our brand rises people on flash more in our gauge is going to increase so we continue to be very focused on our hubs. That's not to say that it will always be that way, but for now and for the foreseeable future our opportunities in our hubs. There's a lot of growth and that's how we're going to grow earnings and grow our margins as Mike talked about earlier.
Speaker Change: But we will continue to build on what is a very successful Florida franchise.
Speaker Change: I think it has done incredibly well and we're tilting a higher percent of our capacity into it but at least in the short term. There is no plans for a hub and the southeastern Florida.
Speaker Change: Our next question will come from the line of Catherine O'brien with Goldman Sachs. Please go ahead.
Speaker Change: Good morning, everyone. Thanks for the time, Mike One for you you know while respecting you don't give a CASM guide you've already given us your high level thoughts on the different buckets of cost we should be thinking about over the next couple of years.
Speaker Change: Just was hoping to get some more color on the puts and takes for 25 mm.
Speaker Change: If you don't have a ratified flight attendant contract for instance, how does that impact the timing of that two to three points of labor headwind you've spoken to anybody else.
Speaker Change: Potentially lumpy, we should be aware of quarter to quarter.
Speaker Change: Hi, Katy Thanks for the question and let me let.
Speaker Change: We tried to expand around the edges.
Speaker Change: You talked about two to three points of labor headwind.
Speaker Change: That we expect in 2025.
Speaker Change: That into dissipates.
Speaker Change: Labor deal with our flight attendants, the timing of which we arent going to discuss today, but would you expect that if that timing where to push to the right. There would be less of a headwind if it pushes to the left pushes earlier than we would have a little bit more of a headwind.
Speaker Change: I would say we have a half a point to a point of pressure from investments that are driving even more revenue into the business and so I feel really good about that as well.
Speaker Change: It does seem like the inflationary pressures overall at the industry level have started to have peaked and have started to abate, but as we sit here I think that they they persist longer than we might have thought six or 12 months ago. So hopefully that helps.
Yes, it does thanks, and Andrew maybe one for you as well you talked about managing the complexity of more products more choices being an area of expertise for the team can you help us think through where the opportunities are leading to this more going forward.
Speaker Change: Just adding more cabins is adding more varied soft products to your existing cabin something else that you know we haven't even thought of yet.
Speaker Change: There would be super helpful. Thanks.
Speaker Change: Yeah.
Speaker Change: Oh, well, that's a really good question and I'm not going to answer it today, [laughter] I'm going to say that other than saying that.
Speaker Change: My opening script.
Speaker Change: I think product choices, one the day and it's kind of ironic because if you go back a few years ago. There are people, saying, the opposite which I never ever understood. The product choices one of the day, we think we have some innovative ideas to expand on all of that including the merchandising the product choices as we go forward and when.
Speaker Change: Im convinced Mike to do an Investor day, hopefully, we will talk about that more I think that was a joke, obviously, but the point of all that is not we're not going to give it away today, but we are working on a bunch of innovative things that I think are going to be very exciting for our customers.
Speaker Change: So theres a lot more to come there's a lot more investment occurring.
Speaker Change: We wish we could announce it today and bring it to the marketplace even sooner.
Speaker Change: But these things take time and you know I said earlier I think United has a multi generational lead.
And we've been working over the last few years to make sure that lead expands and.
Speaker Change: And accelerates as we head into the latter part of this decade, so there's quite a bit more to announce but just not today.
Speaker Change: Great. So I look forward to thanks for the time.
Speaker Change: Yeah.
Speaker Change: We will now switch to the media portion of the call to ask a question press Star followed by the number one on your telephone keypad. Please hold for a moment, while we assemble our queue.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Our first question will come from the line of Mary Shang I'll stay with Bloomberg News. Please go ahead.
Speaker Change: Hi, Thanks, good morning.
Speaker Change: Trump administration has ordered the <unk> policies and review the job performance of individuals and critical safety positions. I'm wondering if you are concerned that that may cause some churn of employees an increase of problems that already exists with ADC in the staffing issue.
Speaker Change: And then secondly, I wanted to ask if United is considering resuming its own policy.
Speaker Change: So I'll answer for United look D O T answer for themselves.
Speaker Change: Or.
Speaker Change: But I feel good about that.
Speaker Change: D O T and the administration and the impact that they will have on the air traffic controls. So I think there's a ton of upside there, but at United We have always have today and will continue to hire based on merit, but we're in the fortunate position that we're a very high quality employer.
Speaker Change: And we make efforts to cast a wide net for people coming into United In fact last year, we had over 600000 applications for fewer than 10000 positions and because of that we can be incredibly selective about who we pick well we do hire them merit, we can hire the absolute best.
Speaker Change: <unk> are the best.
Speaker Change: And have a nationally diverse workforce so that we can do both.
Speaker Change: And the proof is in the result.
Speaker Change: We are performing better coming out of the Covid for the last few years than any other airline in the world and our workforce of having a diverse but also very best people.
Speaker Change: Is a huge part of the reason why we are the best airline in the world.
Speaker Change: And why do you say that there's a ton of upside with the new administration.
I N D O T.
Speaker Change: Well last.
Last year.
Speaker Change: Even though the clear blue Sky days, 68% of our delays were because of air traffic control restriction on the aerospace.
Speaker Change: That impacted millions of customers and it is just basic blocking and tackling you know when I talked to the president he knows a lot about airplanes. He knows a lot about the airspace.
Speaker Change: He is focused.
Speaker Change: Even at his level of fixing it.
Secretary Duffy: Secretary Duffy I spoke to this weekend also focused on fixing it.
Speaker Change: And I think that they will do the basic blocking and tackling.
Speaker Change: I get the FAA the right resources, the right technology to run effectively and there is like everything else combined is not as big for airline customers as running the FAA effectively and efficiently that is bigger than everything else combined.
Speaker Change: And I think we're.
Speaker Change: Gonna be off to the races on that.
Speaker Change: Our next question will come from the line of Rod Gesturing with Reuters. Please go ahead.
Speaker Change: Hi, Thanks for taking my question.
Scott: But people out with some Scott bump.
Scott: Some people are calling it the new <unk> USA.
Scott: Uh huh.
Scott: Basket discipline as well as improved.
Speaker Change: Improved pricing do you subscribe to this view on the second.
Scott: Do you see any of that sort of thing.
Scott: We do do using continued macro uncertainty.
Scott: Yes.
Scott: Demand perspective, because of heightened interest.
Scott: But also from supply perspective.
Scott: Got it.
Scott: So I think this is the golden age for airline customers.
Scott: You know the particularly at airlines like United The amount, we've invested in the product and the service a loyalty program.
Scott: The amount of customers, who are brand loyal to United Today, I think he is bigger than it's ever been in history. The wide array of products for premium all the way down to basic economy.
Scott: I think it's the golden age of customers.
Scott: <unk> customers like that and because customers choose United Airlines. It makes it really good for United Airlines as well that is a symbiotic relationship.
Scott: On the question about supply chain.
Scott: Early into the Trump administration, so, we'll see what happens with tariffs and such.
But you know just like my comments about what's going to happen at the FAA I have a lot of confidence in this administration that where they're focused on doing things that unlock American innovation and entrepreneurial isn't and that create that remove regulatory burdens and expand.
Scott: On the economy, and so I think my base case is that the net net of that is going to be a strong robust economy and strong robust demand for United Airlines.
Scott: Okay.
Scott: And I will now turn the call back over to Cristina Edwards for closing remarks.
Scott: Thanks for joining the call today, please contact Investor and media relations. If you have any further questions and we look forward to talking to you next quarter. They werent.
Scott: Thank you ladies and gentlemen, this concludes today's conference and you may now disconnect.
Scott: Yeah.
Scott:
Scott: Yeah.
Scott:
Scott: Yeah.
Scott: Yeah.
Scott: Yeah.