Q1 2025 United Airlines Holdings Inc Earnings Call

[music].

Good morning, and welcome to United Airlines Holdings Earnings Conference call for the first quarter of 2025. My name is Sarah and I will be your conference facilitator today.

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

At that time, if you would like to ask a question press star one on your telephone keypad.

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

Christina Edwards: Thank you Sarah good morning, everyone and welcome to United's first quarter 2025 earnings Conference call yesterday, we issued our earnings release, which is available on our website at IR United Dotcom.

Christina Edwards: 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 based upon information currently available to the company.

Christina Edwards: 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 thank you 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.

Yesterday, we issued our earnings release which is available on our website at ir.united.com . . . . . . . . .

Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations, which 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 10K and thank you, another report filed with the STC by United Airlines Holdings and United Airlines for a more thorough description of these factors. Thank you.

Christina Edwards: 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 joining.

Christina Edwards: Joining us on the call today to discuss our results and outlook are Chief Executive Officer, Scott Kirby President, Brett Hart Executive Vice President and Chief Commercial Officer, Andrew Phillips, and Executive Vice President and Chief Financial Officer, Mike Lessening. In addition, we have other members of the executive team on the line available for the Q&A and now I'd like to turn the call over to Scott.

Unless otherwise noted, we will be discussing our financial metrics on non-GAAP basis on this call. Please refer to the related definitions and reconciliation in our press release. For reconciliation of these non-GAAP measures , the most referable GAAP measures , please refer to the tables at the end of our earnings release.

Christina Edwards: Thanks, Christina and good morning, everyone.

Joining us on the call today to discuss the results of our Chief Executive Officer, Scott Kirby, President, Brett Hart, Executive Vice President, Chief Commercial Officer, Andrew Nocella, and Executive Vice President, Chief Financial Officer, Michael Leskinen.

Christina Edwards: The first quarter of 2025 assure that it's clearly softer macroeconomic environment is driving the volatility in the market and softer demand for travel, but for United specifically two big picture themes have been confirmed first.

Scott Kirby: In addition, we have other members of the Executive Team online available for the Q&A. And now I'd like to turn the call over to Scott.

Christina Edwards: Performance is strong even in this weak environment, because we've won the battle for brand loyal customers and second because we've won those brand loyal customers our earnings and financial metrics are demonstrating resilience that United has never had before.

Scott Kirby: Thanks, Kristina. Good morning, everyone. The first quarter of 2025 was sure of impulse. It's clear that the software macroeconomic environment is driving both volatility in the market and software demand for travel. But for United, specifically two big picture themes have been confirmed. Thank you for your time. Cheers.

Christina Edwards: The strains on the macro economy have impacted demand, but even in that strained environment I'd just had the highest first quarter pre tax margin. It's COVID-19 began and we expect to be one of only two airlines that are profitable in the first quarter and our resilience is further demonstrated by the fact that if the environment remains relatively weaker but stable we can stay within our full year guidance.

Scott Kirby: United Performance is strong even in this week environment because we've won the battle for brand loyal customers. And second, because we've won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United's never had before.

The strains on the macro economy have impacted demand.

Christina Edwards: However, we read the same headlines as you and so we think that there's a reasonable chance that bookings could weaken from here, but even if we're in that recessionary environment, we still expect a seven to $9 per share for the full year 2025.

Scott Kirby: But even in that strain environment, United just had the highest first quarter pretext margins since COVID began and we expect to be one of only two airlines that are profitable in the first quarter.

Scott Kirby: and our resilience is further demonstrated by the fact that if the environment remains relatively weaker but stable.

Christina Edwards: I'd say that theres been a structural permanent irreversible change what I mean is that United has one brand loyal customers and they are sticky lifelong customers. We are now the brand loyal leader by a wide margin in six of our seven hubs entitles one other airline in Los Angeles, and most folks around the country, where the leader or one of the leaders with brands.

Scott Kirby: We can stay within our full year guidance range. However, we read the same headline as you, and so we think that there's a reasonable chance that booking could weaken from here, but even if we're in that recessionary environment, we still expect our $7.9 for share for the full year 2025.

Scott Kirby: When I say that there's been a structural permanent and irreversible change, what I mean is that United has one brand loyal customers and they are sticky lifelong customers.

Speaker Change: Loyal customers, Andrew will share some facts on customers that live in the Bay area, Denver and Chicago in his remarks, but it is those gains that are allowing us to be resilient even in this weaker economic environment to be clear, even though those customers are sticky and we believe those market share gains or permanent we're capitalizing on our momentum and doing more to attract even more brands.

Scott Kirby: We are now the brand loyal leader by a wide margin in six of our seven hubs and tied with one other airline in Los Angeles. They most spoke around the country where the leader or one of the leaders of the brand loyal customers.

Scott Kirby: Andrew will serve some facts on the customers that live in the Bay Area, Denver and Chicago in his remarks. But it is those gains that are allowing us to be resilient, even in this weaker economic environment.

Speaker Change: Our customers are building huge new clubs in Houston, and San Francisco and about to open additional new club in Denver, We're still in the fastest Wi Fi in the world on our planes the Starlink and they'll start flying next month, we're adding new features to the most powerful travel app in the World every couple of weeks and our operation is reliable and resilient as ever this weakening environment doesn't have us.

Scott Kirby: To be clear, even though those customers are sticky and we believe those markets share gains are permanent, we're capitalizing on our momentum and doing more to attract even more brand loyal customers.

Scott Kirby: Building huge new clubs in Houston and San Francisco, about to open an additional new club in Denver. We're installing the fastest Wi-Fi on the world on our planes at Starlink, and they'll start flying next month.

Speaker Change: Considering these investments in fact, we're leaning into them because they are at the center of our biggest competitive advantage winning brand loyal customers and a huge thank you to our employees for their incredible service that makes this one possible.

Scott Kirby: We're adding new features to the most powerful travel app in the world every couple of weeks, and our operation is reliable and resilient as ever. This weakening environment doesn't have us reconsidering this event.

Speaker Change: Periods of economic cycle softening or part of the business cycle. So the question for United is what should we do know that we see economic softness tactically, we're being very diligent about expenses and removing capacity, particularly off peak utilization flying and Andrew Mike will talk about those in a few minutes and strategically our priority is pretty simple and it has.

Scott Kirby: Management. In fact, we're leaning into them because they're at the center of our biggest competitive advantage, winning Brown Law customers.

Scott Kirby: and a huge thank you to our employees for their incredible service that makes this one possible.

Periods of economic softening are part of the business cycle.

Speaker Change: Isn't changed when the brand loyal customers because that gives us the best margins in good times and that Lee can grow even larger gearing lean times.

Scott Kirby: So the question for United is what should we do now that we see economic softness? Tactically, we're being very diligent about expenses and removing capacity, particularly off peak utilization flying, and Andrew and Michael talk about those in a few minutes. [inaudible]

Speaker Change: The reason is that for any given customer live in any given city or not the brand loyal airline youre. The spilt airlines the only way of spill airline gets passengers is through lower prices. When times are good that strategy can work, okay, but when times get tougher the brand little airlines like United has more seats to sell which we do sell at lower prices, but that disproportion.

Scott Kirby: And strategically, our priority is pretty simple and it hasn't changed. When the brand oil customers, because that gives us the best margins and good times, and that leak can grow even larger during lean times.

Scott Kirby: The reason is that for any given customer living in a given city, you're not the brand loyal airline, you're the spelled airline.

Speaker Change: It impacts all of the spill carriers that we compete with some of the reasons.

Speaker Change: Guidance updates from other airlines our.

Scott Kirby: The only way a spill airline gets passengers is their lower prices. And times are good, that's strategy can work okay, but when times get tougher, the brand little airline like United has more seats itself, which we do sell at lower prices, but that disproportionately impacts all the spare carriers that we compete with. [inaudible]

Speaker Change: Stock Stark reminder of this point.

Speaker Change: For some historical perspective, southwest historically was the airline with the highest percentage of brand loyal customers for most of its history southwest is focused on smaller secondary cities, where they had by far the best schedule for customers. They also had a huge customer advantage as the only airline that didn't have change fees or bag fees.

Scott Kirby: some of the guidance updates from other airlines are a stark reminder of this point. [inaudible]

Scott Kirby: For some historical perspective, Southwest historically was the airline with the highest percentage of brand loyal customers. For most of its history, Southwest was focused on smaller, secondary city, where they had by far the best schedule for customers. [inaudible]

That meant that a high percentage of their customers for brand loyal to southwest at its core that's why southwest historically was the highest margin airline in good times and while they always outperformed by an even wider margin when times get tough.

Speaker Change: But as they've moved into big high cost hubs of other airlines both of those advantages are gone and now United and what other airlines are the brand loyal customer leaders, it's always dangerous to say that it's different this time and in fact, we're seeing exactly the opposite is going to be exactly. The same. This time history is just repeating.

Scott Kirby: Works, they also had a huge customer advantage, the only airline that didn't have chase fees or back fees. [inaudible]

Scott Kirby: That meant that a high percentage of their customers were brand loyal to Southwest. At its core, that's why Southwest historically was the highest margin airline in good times, and why they always outperformed by an even wider margin when times got tough.

Scott Kirby: But as they've moved into big high cost hubs of other airlines, both of those advantages are gone. And now United and one other airline are the brand loyal customer leaders. It's always dangerous to say that it's different this time. And in fact, we're saying exactly the opposite. It's going to be exactly the same this time.

Speaker Change: The only thing that changed is that United is now one of the two brands.

Speaker Change: Leading brand loyal airline so to conclude.

Speaker Change: <unk> is the right strategy been well executed by our people and it's producing strong resilient results in good times and even more impressively in tough times is never.

Speaker Change: <unk> never been in a stronger competitive position customers are benefiting our employees are benefiting our shareholders will also benefit and the value that's being created Brett over to you.

Scott Kirby: History is just repeating. The only thing that changed is that United is now one of the two leading brand loyal airlines. But it concludes United next is the right strategy, been well executed by our people, and it's producing strong, resilient results in good times, and even more impressively in tough times.

Brett Hart: Thank you Scott and good morning.

Brett Hart: Despite a challenging macro environment 2025 is off to a solid start.

Brett Hart: We operate in a dynamic and evolving landscape global trade policies, including tariffs are shaping that landscape.

Scott Kirby: Knight has never been in a stronger competitive position. Customers are benefiting, employees are benefiting, and our shareholders will also benefit in the value of being created. Brett, over to you.

Speaker Change: You mentioned broader economic uncertainties remain top of mind.

Thank you Scott, and good morning.

Speaker Change: We are closely monitoring the potential impact on prices, we would pay for aircraft as a reminder, Boeing accounts for the majority of our future total order book and most of our Airbus 321 meals are produced in Alabama.

Brett Hart: We operate in a dynamic and evolving landscape. Global trade policies, including tariffs, are shaping that landscape. And as Scott mentioned, broader economic uncertainties remain top of mind.

Speaker Change: As such we don't currently anticipate a meaningful direct impact from tariffs relating to aircraft purchases.

Brett Hart: We are closely monitoring the potential impact on the prices we put pay for aircraft. As a reminder, following accounts for the majority of our future total order book and most of our Airbus 321 NEOs are produced in Alabama.

Speaker Change: Turning to our performance this quarter, we are seeing the results of our continued investments in operational excellence and we are delivering an exceptional customer experience.

Brett Hart: As such, we don't currently anticipate a meaningful direct impact from Terrace relating to aircraft purchases.

Speaker Change: These achievements are a testament to the commitment and excellence of our employees.

Speaker Change: None of it would be possible without you.

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Speaker Change: <unk>.

Brett Hart: Turning to our performances quarter, we are seeing the results of our continued investments in operational excellence.

Speaker Change: In Q1, not only did we serve more customers than ever in the first quarter for United.

We are delivering an exceptional customer experience.

Speaker Change: We also finished number one in on time departures among our U S large peers, when including customers who were hoped with connection savor.

Brett Hart: Youth achievements are a testament to the commitment and excellence of our employees.

None of it would be possible without you. Thank you.

Speaker Change: We achieved our highest NPS scores and our best on time arrival score since the pandemic.

Brett Hart: In Q1, not only did we serve more customers than ever in a first quarter for United, but we also finished number one in on-time departures among our U.S. large peers when including customers who were helped with Connection Saver.

Speaker Change: As well as the second lowest first quarter <unk> cancellation rate in company history.

Speaker Change: We accomplished all of this with safety at the forefront.

Speaker Change: It is committed to getting every customer to their destination safely and on time.

Brett Hart: We achieved our highest NTS scores and our best on-time arrival score since the pandemic, as well as the second lowest first quarter seat cancellation rate in company history.

Speaker Change: We continue to invest in enhanced pilot training and safety technology, making it easier for our employees to report safety concerns.

Speaker Change: Our United team is engaged across the industry and with government to ensure the safety of our aviation system.

We accomplished all of this with safety at the forefront. [inaudible]

Brett Hart: is committed to getting every customer to their destination safely and on time. [inaudible]

Speaker Change: In the first quarter, we reached two major milestones on the accelerated rollout of Starlink technology across our fleet completing.

Brett Hart: We continue to invest in enhanced pilot training and safety technology making it easier for our employees to report safety concerns.

Speaker Change: Completing our first sterling installation on a United Express aircraft.

Brett Hart: Our United team is engaged across the industry and with government to ensure the safety of our aviation system.

Speaker Change: Securing FAA certification.

Speaker Change: To begin operations on the Embraer 175 fleet.

Brett Hart: In the first quarter, we reached two major milestones on the accelerated rollout of Starlink technology across our fleet.

Speaker Change: We're on track for our first Starlink enabled regional flight later this spring with our entire two cabin regional fleet expected to be retrofitted by year end. We continue to expect the first mainline aircraft with Sterling to take flight.

Brett Hart: Completing our first starling installation on a United Express aircraft and securing FAA certification.

Brett Hart: To begin operations on the Embryer 175 Fleet. We're on track for our first Starlink-enabled regional flight, later this spring, with our entire two cabin regional fleet expected to be retrofitted by year end.

Speaker Change: For the end of 2025.

Speaker Change: We believe Starlink will revolutionize the in flight experience for our customers and United is leading the way for the future of Wi Fi for the airline industry.

Speaker Change: With that I will hand, it over to Andrew to discuss the revenue environment.

Brett Hart: We continue to expect the first mainline aircraft was starling to take flight before the end of 2025.

Andrew: Thanks, Brett.

Andrew: United's topline Q1 revenue increased five 4% to a company record $13 2 billion <unk> for the quarter was up half a percent.

Brett Hart: We believe Starlink will revolutionize the implied experience for our customers.

Brett Hart: is leading the way for the future of Wi-Fi for the airline industry.

Andrew: <unk> been hard at work adjusting how we fly and historically weaker United Q1 period, and our efforts paid off with a material year over year improvement in our margin.

Brett Hart: With that, I will hand it over to Andrew to discuss the revenue environment.

Thanks, Brett.

Andrew: Demand trends did turn down as we exited January resulted in lower revenue production than we had originally forecasted for Q1.

Brett Hart: United's top-line Q1 revenue increased 5.4% to a company record 13.2 billion. Trasin for the quarter was up half a percent.

Andrew: Domestic main cabin RASM were down 5% year over year and represent the bulk of the gap between our Q1 revenue expectations and actual results.

Brett Hart: We've been hard at work adjusting how we fly in the historically weaker United Q1 period in our efforts paid off with a material year-to-year improvement in our margins.

Andrew: As we would expect in times of economic weakness, we saw the weakness magnified on off peak flights. For example, the revenue gap on domestic flights depart prior to seven a M. R. After ATM outside of the Golden hours is usually 30% lower but in Q1 that gap extended to 40% lower that's why we are canceling.

Brett Hart: Man Trends did turn down as we exited January , resulting in lower revenue production than we had originally forecasted for Q1. Domestic main cabin rathms were down 5% year over year and represents the bulk of the gap between our Q1 revenue expectations and actual results.

Brett Hart: As we would expect in time to economic weakness, we saw the weakness magnified on off-deaked flights.

Andrew: Our off peak flying and lower utilization going forward.

Andrew: Weakness is the weakness in the main cabin with somewhat offset by premium performance overall premium cabin unit revenues were up mid single digits in Q1 International Polaris RASM were up 8% and international premium plus RASM grew up over 5% domestic premium seat RASM were flat.

Brett Hart: For example, the revenue gap on domestic flights to pardon prior to 7 a.m. or after 8 p.m. outside of the golden hours is usually 30 percent lower. But in Q1, that gap expanded to 40 percent lower. That's why we are canceling more off-beak flying and lower utilization going forward.

Brett Hart: Weakness is the weakness in the main cabin was somewhat offset by premium performance.

Andrew: Our long term strategy to build premium capacity and customer choice. We're very helpful. Given the main cabin demand trends in Q1.

Brett Hart: Overall, premium cabin unit revenues were up mid-single digits in C1. International Clairis Rathams were up 8% and international premium plus Rathams were up over 5%. Domestic premium seat Rathams were flat. Rathams were up 8% and international premium plus Rathams were flat.

Andrew: Business traffic trends, we saw late in Q4 and early 2025 moderated later in the quarter loan business revenue grew 7% in Q1 year over year versus 15% in Q4.

Brett Hart: Our long-term strategies to build premium capacity and customer choice were very helpful given main cabin demand trends in Q1.

Andrew: Contracted business sales for all future travel are currently up low single digits year over year, which has moderated from the up double digit at the start of the year.

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Brett Hart: Business Traffic Trend, we saw late in Q4 and early 2025 moderated later in the quarter. Blown Business Revenue grew 7% in Q1, year-to-year, versus 15% in Q4.

Andrew: Loyalty revenue remained strong and grew 9% to $1 5 billion in the quarter co brand spend was also strong up 9% co brand spending growth in early April remains consistent with March performance.

Brett Hart: Contracted business sales for all future travel are currently up low single digits year of year, which is moderated from the up double digits at the start of the year.

Andrew: Q2 customer demand is not what we were planning just a few months ago, but we continue to expect our topline revenue growth for Q2 to be positive.

Brett Hart: Loyalty Revenue remained strong and grew 9% to 1.5 billion in the quarter, Cobra and Spending was also strong up 9%, Cobra and Spending growth in early April remained consistent with March performance. [inaudible]

Andrew: We have adjusted our strategies going forward to accommodate more lower yielding passengers unnecessary reaction to the current environment.

Andrew: East the effect.

Brett Hart: Q2 customer demand is not what we were planning just a few months ago, but we continue to expect our top line revenue growth for Q2 to be positive.

Andrew: Of these RM changes is that we will spill less traffic to our competitors, but we will run with lower yields.

Andrew: Since making this arm change about six weeks ago bookings have stabilized and we are currently booked ahead of last year at this same point in time by one point.

We have adjusted RM's strategies going forward to accommodate more

Andrew: We at United have a high number of brand loyal customers and our focus on our seven hubs put us puts us in a position where we are not a spill carrier we determined how much traffic we spill to other carriers based on the amount of capacity offer and the yield we're willing to accept.

Andrew: To give you a few examples in Chicago during Q4 2024, we expanded our passenger share lead of local origin traffic to 'twenty. Two points ahead of our next largest competitor in 2019 that lead with only six points and in 2015, we actually had a negative gap.

Andrew: From Denver, we've increased our gap ahead of our largest competitor in that market to 10 points for Denver based passengers.

Andrew: It also gained two one points of market share in late 2024, and the Bay area.

Andrew: United will operate our narrow body aircraft with 2% less utilization in the coming quarters effectively lowering our domestic capacity by two points.

Andrew: In the last few weeks, we have reduced domestic capacity for the summer and our sell unscheduled by three points with one more point to be removed shortly.

Andrew: Our primary competitors, we operate at the highest percentage of our domestic departures in the golden hours between <unk> and <unk>.

Andrew: We usually have the lowest overall aircraft utilization and lower utilization is usually considered a negative in our industry, but for United It has been one key to our relative success.

Andrew: Fourth quarter domestic schedules are still being developed and we will look to see if more significant changes are needed.

Andrew: The international environment is also strong for United and we believe it looks good for Q2 as of now the makeup of our international traffic skews heavily towards U S point of origin business.

Andrew: Most of our international travel demand is U S base, we are seeing modest declines in non U S origin passenger volumes for the second quarter International passengers originated in Europe are currently booked six 6% lower than last year Canadian origin passenger volumes are slightly worse down 9% year over year.

Andrew: For United U S origin demand has more than compensated for these reductions.

Andrew: As we think about the impact of a potential recession could have on business traffic. It is important to note that relative to pre pandemic. Our revenue makeup is less reliant on this revenue source.

Andrew: Revenue that makes up eight points less of our passenger revenue and contributes four four points less to our load factor.

Andrew: So far we've seen no deterioration in high end consumers' willingness to purchase a purchase a premium experience.

This revenue and that makes up eight points less of our passenger revenue and contributes four four points less to our load factor.

<unk> this to the fact that the economic uncertainty has a larger impact on more budget minded discretionary travelers and those seeking a premium experience Q.

So far we've seen no deterioration in high end consumers' willingness to purchase a purchase a premium experience. We attribute this to the fact that the economic uncertainty has a larger impact on more budget minded discretionary travelers and those seeking a premium experience Q.

Andrew: Q2 book premium PRASM to date have remained solidly positive for international flights and flattish for domestic flights.

Andrew: United has a consistent strategy for the last nine years to win brand loyal customers and that has been happening. This is important for investors, who want confidence that United is margin outperformance really can be structural permanent and irreversible.

Q2 book premium PRASM to date have remained solidly positive for international flights and flattish for domestic flights.

United has a consistent strategy for the last nine years to win brand loyal customers and that has been happening. This is important for investors, who want confidence that United is margin outperformance really can be structural permanent and irreversible.

Speaker Change: With that I want to say, thanks to the entire United team and I'll hand, it off to Mike to talk about our financial results.

Mike Lessening: Thanks, Andrew for the first quarter, we delivered earnings per share of <unk> 91 ahead of expectations and within our guidance.

Scott Kirby: With that I want to say, thanks to the entire United team and I'll hand, it off to Mike to talk about our financial results.

Mike Lessening: Our pre tax margin was three 3% up three six points year over year and our strongest first quarter. We've had in the last five years. We expect these results to lead the industry and further demonstrates the success of our United <unk> plan.

Mike Leskinen: Thanks, Andrew for the first quarter, we delivered earnings per share of <unk> 91 cents ahead of expectations and within our guidance.

Scott Kirby: Our pre tax margin was three 3% up three six points year over year and the strongest first quarter. We've had in the last five years. We expect these results to lead the industry and further demonstrate the success of our United next plan.

Mike Lessening: As Andrew just described at the start of February we saw a steep drop in U S government and government adjacent travel we guide however, with a no excuses philosophy to seeing the pressure on revenue, we doubled down on managing cost to ensure we would deliver within the first quarter EPS guidance range.

Scott Kirby: As Andrew just described at the start of February we saw a steep drop in U S government and government adjacent travel.

Mike Lessening: Those efforts along with favorable timing of a few maintenance events led to our first quarter CASM ex result of up only 0.3% year over year. These.

Scott Kirby: We guide however, with a no excuses philosophy to seeing the pressure on revenue, we double down on managing cost to ensure we would deliver within the first quarter EPS guidance range.

Mike Lessening: These actions combined with lower fuel costs enable us to deliver on our guidance on.

Scott Kirby: Those efforts along with favorable timing of a few maintenance events led to our first quarter CASM ex result of up only 0.3% year over year.

Mike Lessening: I'm proud of the team for their hard work and making sure we delivered on our first quarter financial commitments.

Mike Lessening: Looking to the second quarter, we expect earnings per share to be between $3 25, and $4 25.

Scott Kirby: These actions combined with lower fuel costs enable us to deliver on our guidance.

Mike Lessening: We are acutely focused on booking trends and the potential impact of tariffs and we're closely monitoring the situation.

Scott Kirby: I'm proud of the team for their hard work and making sure we delivered on our first quarter financial commitments.

Scott Kirby: Looking to the second quarter, we expect earnings per share to be between $3 25, and $4 25.

Mike Lessening: And it is a risk but to date, our bookings have stabilized looking out to the third quarter and beyond we've already taken action to pull down our less profitable flying including Red eye flying capacity in U S government traffic heavy routes and trans border flying aided by accelerating the retirement of 21 aircraft.

Scott Kirby: We are acutely focused on booking trends and the potential impact of tariffs and we're closely monitoring the situation.

Scott Kirby: And it is a risk but to date, our bookings have stabilized looking out to the third quarter and beyond we've already taken action to pull down our less profitable flying including Red eye flying capacity in U S government traffic heavy routes and trans border flying aided by accelerating the retirement of 21 aircrafts.

Mike Lessening: We were the first airline to recognize slowing demand from U S government spending and to take appropriate action, we expect our domestic capacity come down four points from our original plan starting in the third quarter.

Scott Kirby: We were the first airline to recognize slowing demand from U S government spending and to take appropriate actions, we expect our domestic capacity come down four points from our original plan starting in the third quarter.

There's a tremendous amount of uncertainty in the economy right now and we've already seen a reduction in demand and corresponding correspondingly revenue, but we've seen stability at that lower demand level in the last six weeks and the silver lining is we also expect a significant reduction in our fuel cost.

Scott Kirby: There's a tremendous amount of uncertainty in the economy right now and we've already seen a reduction in demand and corresponding correspondingly revenue, but we've seen stability at that lower demand level in the last six weeks and the silver lining is we also expect a significant reduction in our fuel costs.

Mike Lessening: If demand remains stable for the balance of the year that combination of revenue decline in fuel cost reduction along with the fact that we built a significant contingency into our initial guide leaves me cautiously optimistic that we can still deliver full year earnings per share within our guidance range of $11 52.

If demand remains stable for the balance of the year that combination of revenue decline in fuel cost reduction along with the fact that we built a significant contingency into our initial guide leaves me cautiously optimistic that we can still deliver full year earnings per share within our guidance range of $11 50.

Mike Lessening: The $13 50.

Mike Lessening: While we have seen stability in demand for the past six weeks. We also recognize that there's a real risk of the U S economy going into a recession.

Mike Lessening: If we enter a recession, we are modeling an additional five point reduction in total revenue for the remainder of the year on average per quarter in that scenario, we would make an additional downward adjustment to the capacity and we have not assumed any further relief from fuel price, even though that might happen.

Scott Kirby: The $13 50.

Scott Kirby: While we have seen stability in the demand for the past six weeks. We also recognize that there's a real risk of the U S economy going into a recession.

Scott Kirby: If we enter a recession, we are modeling an additional five point reduction in total revenue for the remainder of the year on average per per quarter in that scenario, we would make an additional downward adjustments to capacity and we have not assumed any further relief from fuel price, even though that might happen.

Mike Lessening: Even in that World, we expect our full year earnings per share to be between $7 and $9.

Mike Lessening: Well that is not what our expectations were at the start of the year that scenario would be the first time, United would have remained solidly profitable through recession.

Scott Kirby: Even in that World, we expect our full year earnings per share to be between $7 and $9.

Mike Lessening: We believe it would justify significant multiple expansion as we will have proven our financial resiliency are greatly improved competitive position and the durability of a D. Commoditized business powered by brand loyal customers.

Scott Kirby: Well that is not what our expectations were at the start of the year that scenario would be the first time, United would have remained solidly profitable through recession.

Scott Kirby: We believe it would justify significant multiple expansion as we will have proven our financial resiliency are greatly improved competitive position and the durability of a D commoditize business powered by brand loyal customers.

Mike Lessening: Turning to the balance sheet.

We ended the first quarter with $18 3 billion in liquidity, including our Undrawn revolver, we generated over $2 billion of free cash flow and paid down $1 billion of debt.

Speaker Change: Turning to the balance sheet.

Mike Lessening: In fact over the last 12 months, we've generated over $5 billion in free cash flow, representing approximately 130% of our net income.

Speaker Change: We ended the first quarter with $18 3 billion in liquidity, including our Undrawn revolver, we generated over $2 billion of free cash flow and paid down $1 billion of debt.

Mike Lessening: At our current equity valuation that represents an over 20% free cash flow yield.

Scott Kirby: In fact over the last 12 months, we've generated over $5 billion in free cash flow, representing approximately 130% of our net income at.

Mike Lessening: Our net leverage was reduced to 2.0 times from two two times at the end of the at the end of 2024, marking continued progress as we work towards our long term net leverage target of less than two times.

Scott Kirby: At our current equity valuation that represents an over 20% free cash flow yield.

Mike Lessening: Recognizing our progress Fitch upgraded the United the double B with a positive outlook with a change to a positive outlook from Moody's as well.

Scott Kirby: Our net leverage was reduced to 2.0 times from two two times at the end of the at the end of 2024, marking continued progress as we work towards our long term net leverage target of less than two times.

Mike Lessening: On the buyback as of April 10th we've repurchased approximately five 6 million shares in 2025 at an average price of $80.

Scott Kirby: Recognizing our progress Fitch upgraded the United the double B with a positive outlook with the change to a positive outlook from Moody's as well.

Mike Lessening: History has taught us that even industry leaders are prone to steep market over corrections in times like this and we built our buyback strategy around being opportunistic.

Brett Hart: On the buyback as of April 10th we've repurchased approximately five 6 million shares in 2025 at an average price of $80.

Mike Lessening: We believe this is precisely the right time to repurchase our shares at our current depressed valuation with approximately $1 billion left in authorization.

Speaker Change: History has taught us that even industry leaders are prone to steep market over corrections in times like this and we built our buyback strategy around being opportunistic.

Regardless of the economic path ahead, we expect our financial results to be resilient and we believe that the long term earnings power of our company Hasnt changed and frankly it is possible that some of the weaker airlines may be forced to curtail money, losing capacity sooner than they otherwise might have.

Brett Hart: We believe this is precisely the right time to repurchase our shares at our current depressed valuation with approximately $1 billion left in authorization.

Brett Hart: Regardless of the economic path ahead, we expect our financial results to be resilient.

Mike Lessening: Therefore, our view of the intrinsic value of our shares also hasnt changed in fact as I mentioned earlier, we believe our multiple should expand as we proved that our business is stronger and more resilient even in a time of economic stress for.

Brett Hart: We believe that the long term earnings power of our company Hasnt changed and frankly, it's possible that some of the weaker airlines may be forced to curtail money losing.

Mike Lessening: For as long as our share price remains depressed we plan to continue to utilize a meaningful portion of free cash flow to repurchase shares at what we believe are discounted prices.

Mike Lessening: As I've mentioned in the last several quarters free cash flow generation remains a top priority.

Mike Lessening: While demand has softened we continue to expect we would continue to expect to generate full year free cash flow approaching $3 billion in a base case and positive free cash flow even in a downside recession scenario.

Mike Lessening: To close the nice competitive competitive position in the industry is only strengthening we're focused on leaning into our network strengths continuing to win brand loyal customers and delivering on our financial commitments.

Christina Edwards: Now back to Christina to start the Q&A.

Christina Edwards: Thank you Mike we will now take questions from the analyst Q&A. Please limit yourself to one question and if needed one follow up question. Sara. Please describe the procedure to ask a question.

Christina Edwards: Thank you the question and answer session will be conducted electronically if you would like.

Christina Edwards: To ask a question. Please press star one on your telephone keypad.

Christina Edwards: I'd like to withdraw your question simply press Star one again please.

Christina Edwards: Please ensure you are not on speaker phone and that your phone is not on mute.

Speaker Change: Can you talk for a moment, while we assemble our queue.

Speaker Change: Your first question comes from Jamie Baker of Jpmorgan. Your line is open.

Speaker Change: Oh, Hey, good morning, everybody. So first one probably for Scott or Mike.

Speaker Change: Presumably this past January you had an internal forecast for 2026 earnings.

Speaker Change: If we embrace something closer to the recessionary scenario.

Speaker Change: You just laid out.

Speaker Change: What would your internal 2026 forecast be higher lower or the same today.

Speaker Change: Hey, Jamie Thanks for the question I think it's insightful.

Speaker Change: Maybe the most important question we talked about today.

Speaker Change: Thank you we.

Speaker Change: We can end the call after my question.

Speaker Change: Yes.

Speaker Change: We're doing it.

Speaker Change: I'm going to slightly modify your timing from 2026 to say the 12 months once referred to a normalized back to growth economy I happen to think that will be for 2026.

Speaker Change: But sort of it depends on the macro environment, but in the 12 months, where we're back to a normal macro economy. The short answer is yes, our margins would be higher and I would go but I would go back to what we've been telling you. It really for the last five years and it started with one we were going to de commoditize and build into.

Speaker Change: A brand loyal airlines, that's been a part of the United next strategy. That's been a part of the entire strategy coming out of Covid second was cost convergence.

Speaker Change: Who is going to be a fundamental structural change for the industry.

Speaker Change: Third is revenue diversity.

Speaker Change: We see that.

Speaker Change: We've talked about international as a day, but we haven't talked about loyalty loyalty strong across the board that's been another structural change.

Speaker Change: Part of this too is also part of the revenue diversity has been solving finally solving the puzzle on the price sensitive travel and we have done that with basic economy.

Speaker Change: Gage and so all the things that we've talked about for the last five years led to us on the last call talking about comparative advantage and saying that we thought the world was going to the airline is going to evolve to a place where airlines flu.

Speaker Change: Primarily in places, where they had competitive advantages.

Speaker Change: What kind of <unk>.

Speaker Change: Capacity worse that have happened in the past would become a thing of the past.

Speaker Change: All of the trends we've talked about just had separated the gap between the brand loyal airlines and everyone else.

Speaker Change: And so what this stressful environment is going to is going to accelerate what's going to happen anyway.

Speaker Change: Airlines, focusing in markets, where they have competitive advantage and that means that looking forward, there's going to be less unprofitable flying in the industry, which means less total flying.

That was going to happen and that is just going to happen sooner.

Speaker Change: That means that I.

Speaker Change: I am confident that United Airlines is going to have higher margins.

Speaker Change: Then we would have had just taken longer to occur and in fact I will go one step further and say that when we get to the 12 months sort of post this economic period.

Not only are we going to have higher margins.

Speaker Change: Believe they will be solidly double digit margins.

Speaker Change: Okay. Thank you for that and then.

Speaker Change: Mike I know you touched on and sit in your prepared remarks, but.

Speaker Change: Your your premium high margin competitor refuses to buyback stock until they meet their leverage targets you were obviously pretty active last quarter or through April 10th.

Speaker Change: I would love to believe its because you are down 30% 30 analysis, but in all seriousness.

Speaker Change: Question on this topic is is why is it simply a function of.

Speaker Change: Cash flowing around burning a hole in your pocket given the delivery delays I guess, what mark Mark Streeter and I are trying to reconcile is your own goal to de risk the balance sheet and achieve IHG ratings again, some pretty material repurchases through April 10th any additional color.

Speaker Change: Thanks, Jamie I Love the question.

Speaker Change: Look when we think about buyback versus deleveraging, we are trying to optimize our overall cost of capital.

Speaker Change: And therefore, as our stock price declines and the gap between our market price and our view of intrinsic value of the shares is that widens.

Speaker Change: It is more opportunistic to buy back shares.

Speaker Change: And so that's what you have seen and you've seen an acceleration of the buyback as the share price was lower now.

Speaker Change: Are very very disciplined around making sure we have guardrails around that and we need to continue to deleverage I'm very prominent about talking about getting our leverage our net leverage below two times, it's very important to us to continue to March towards investment grade. It is very important to us that the buyback is funded by free cash flow.

Speaker Change: And that we do not we do not.

Speaker Change: Drift into a debt funded buyback so all with all of those constraints.

Speaker Change: We feel confident about the future and excited about frankly, an opportunity to purchase shares at these low prices.

Speaker Change: Scott and Mike. Thank you very much I appreciate it.

Speaker Change: The next question comes from Andrew <unk> with Bank of America. Your line is open.

Andrew: Hi, good morning, everyone.

Speaker Change: Mike You mentioned the cost performance senior prepared remarks really impressive here in <unk>.

Andrew: I would imagine it's hard to do much better than that going forward.

Is that the right way to think about it and can you maybe speak to additional cost levers you have if the revenue environment starts to move towards your recession scenario.

Speaker Change: Thanks, Andrew for the question, we're very proud of our cost performance in the first quarter, but before I talk about the first quarter. Let me talk about our focus on building a cost effective or cost efficient culture here at United.

Speaker Change: We are being intentional about spending in areas that improve the customer experience, but we also know that there are a lot of areas to be more efficient as an airline these opportunities are wide ranging including for example, improving our procurement organization and taking advantage of technology and data and we've always said that running a reliable operation to the best path to a low cost <unk>.

Speaker Change: Operations, most importantly, running a reliable operation is the best way, we can win brand loyal customers.

Scott Kirby: Foreign.

Speaker Change: So we feel great about it I do think we've had some costs that we don't think we've had some maintenance costs. The drifted from <unk> into <unk> and so I would expect <unk> CASM ex to be the best performance of the year, but as we sit here I expect meaningfully better CASM ex for the full year than I would've thought Justin.

And we've always said that running a reliable operation to the best path to a low cost operation. Most importantly, running a reliable operation is the best way, we can win brand loyal customers.

Kristina Edwards: Good morning, and welcome to United Airlines Holdings earnings conference call for Q1 2025. My name is Sarah, and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions at that time. If you would like to ask a question, press star one on your telephone keypad. This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed, or rebroadcast without the company's permission. Your participation implies your consent to our recording of this call. If you do not agree with these terms, simply drop off the line. I will now turn the presentation over to your host for today's call, Christina Edwards, Managing Director of Investor Relations. Please go ahead. Thank you, Sarah. Good morning, everyone, and welcome to United's Q1 2025 earnings conference call.

Operator: Good morning, and welcome to United Airlines Holdings earnings conference call for Q1 2025. My name is Sarah, and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions at that time. If you would like to ask a question, press star one on your telephone keypad. This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed, or rebroadcast without the company's permission. Your participation implies your consent to our recording of this call. If you do not agree with these terms, simply drop off the line. I will now turn the presentation over to your host for today's call, Kristina Edwards, Managing Director of Investor Relations. Please go ahead.

Sarah: Good morning and welcome to United Airlines Holdings earnings conference call for the first quarter of 2025. My name is Sarah and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. At that time, if you would like to ask a question, press star one on your telephone keypad.

So we feel great about it I do think we've had some costs that we don't think we've had some maintenance costs. The drifted from <unk> into <unk> and so I would expect <unk> CASM ex to be the best performance of the year, but as we sit here I expect meaningfully better CASM ex for the full year than I would've thought just in <unk>.

Speaker Change: January so we're going to continue to work hard to find more areas for efficiency.

Speaker Change: But we made a lot of progress in the first quarter.

Speaker: This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed or rebroadcast without the company's permission. Your participation implies your consent to our recording of this call.

Speaker Change: Got it understood and then just my second question.

Speaker Change: Just wanted to get your thoughts on the <unk> on the five points of lower revenue production in a recessionary scenario.

Annual area. So we're going to continue to work hard to find more areas for efficiency, but we made a lot of progress in the first quarter.

Speaker Change: Why is that.

Speaker: If you do not agree with these terms, simply drop off the line.

Speaker Change: Great number to anchor to and I guess what is it.

Speaker Change: Got it understood and then just my second question I just wanted to get your thoughts on the <unk> on the five points of lower revenue production in a recessionary scenario I guess why is that.

Speaker Change: From an industry perspective to get to the summer.

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. Thank you, Sarah.

Speaker Change: The $9 of EPS. Thank you.

Speaker Change: It's a great question and I'll, maybe Andrew you want to jump on at the end.

Kristina Edwards: Thank you, Sarah. Good morning, everyone, and welcome to United's Q1 2025 earnings conference call.

Scott Kirby: Good morning, everyone and welcome to United's first quarter 2025 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 which represent the company's current expectations, which are based upon information currently available. 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 FCC by United Airlines Holdings and United Airlines for a more thorough description of Unless otherwise noted, we will be discussing our financial metrics on a non-gap basis.

Speaker Change: But.

Speaker Change: Bright number to anchor to and I guess, what's embedded from an industry perspective to get to the 70 to $79 in EPS. Thank you.

Speaker Change: But from a high level, what you've seen from what we expected in January.

Kristina Edwards: Yesterday we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the Company's current expectations, which are based upon information currently available to the company. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our Earnings Release, Form 10-K and 10-Q, and other reports filed with the SEC by United Airlines Holdings and United Airlines for a 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 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.

Yesterday we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the Company's current expectations, which are based upon information currently available to the company. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our Earnings Release, Form 10-K and 10-Q, and other reports filed with the SEC by United Airlines Holdings and United Airlines for a 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 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: What we expect in the base case now you've seen them about five point reduction in revenue from what we thought just a few months ago.

Scott Kirby: It's a great question you know maybe Andrew you want to jump on at the end.

Scott Kirby: But from a high level, what you've seen from what we expected in January.

Speaker Change: And then the recession scenario would be an additional five point reduction.

Scott Kirby: To what we expect in the base case now you've seen them about five point reduction in revenue from what we thought just a few months ago.

Speaker Change: Starting whenever we enter into that reception so sometime in the third quarter most likely.

Speaker Change: So if you if you add those together, which would be the appropriately appropriate way to think about it it would be a 10 point reduction from the run rate. We would have expected how long we persist at that low level, you're going to have to make your own assumptions around and listen we're not we don't have a crystal ball on how deeper recession might be.

Mike Leskinen: And then the recession scenario would be an additional five point reduction.

Scott Kirby: Starting whenever we enter into that reception so sometime in the third quarter most likely.

Speaker: Please refer to the related definitions and reconciliations in our press.

Scott Kirby: So if you if you add those together, which would be the appropriately appropriate way to think about it it would be a 10 point reduction from the run rate. We would have expected now how long we persist at that low level, you're going to have to make your own assumptions.

Speaker: 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 � Joining us on the call today to discuss our results and outlook are Chief Executive Officer Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer Andrew Nocella, and Executive Vice President and Chief Financial Officer Michael In addition, we have other members of the executive team on the line available for the Q&A.

Speaker Change: But that's our expectation of what a normal recession might look like.

Kristina Edwards: Joining us on the call today to discuss our results and outlook are our Chief Executive Officer Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer Andrew Nocella, and Executive Vice President and Chief Financial Officer Mike Leskinen. In addition, we have other members of the executive team on the line available for the Q&A. Now I'd like to turn the call over to Scott.

Joining us on the call today to discuss our results and outlook are our Chief Executive Officer Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer Andrew Nocella, and Executive Vice President and Chief Financial Officer Mike Leskinen. In addition, we have other members of the executive team on the line available for the Q&A. Now I'd like to turn the call over to Scott.

Speaker Change: Giving you the tools, if you want to create a different scenario than that but that that would be our expectation of a downside case and we wanted to be transparent with you all around the assumptions.

Scott Kirby: <unk> around and listen we're not we don't have a crystal ball on how deeper recession might be but that's our expectation of what a normal recession might look like.

Yeah.

Scott Kirby: Giving you the tools, if you want to create a different scenario than that but that that would be our expectation of a downside case.

Speaker Change: Great. Thank you very much.

Scott Kirby: And now I'd like to turn the call over to Scott. Thanks, Kristina, and good morning, everyone. The first quarter of 2025 was sure eventful. It's clear that the softer macroeconomic environment is driving both volatility in the market and softer demand for travel. But for United specifically, two big picture themes have been confirmed. First, United's performance is strong, even in this weak environment, because we've won the battle for brand loyal customers. And second, because we've won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United's never had before. The strains on the macroeconomy have impacted demand, but even in that strained environment, United just had the highest first quarter pre-tax margin since COVID began, and we expect to be one of only two airlines that are profitable in the first quarter.

Speaker Change: I want to clarify that the pinpoint reduction it kicks in in April for our recession scenario.

Scott Kirby: Thanks, Christina, and good morning, everyone. The first quarter of 2025 was sure eventful. It's clear softer macroeconomic environment is driving both volatility in the market and softer demand for travel. But for United specifically, two big picture themes have been confirmed. First, United's performance is strong even in this weak environment. Because we've won the battle for brand loyal customers. And second, because we've won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United's never had before. The strains on the macroeconomy have impacted demand. But even in that strained environment, United just had the highest first quarter pre-tax margin since COVID began, and we expect to be one of only two airlines that are profitable in the first quarter.

Scott Kirby: Thanks, Christina, and good morning, everyone. The first quarter of 2025 was sure eventful. It's clear softer macroeconomic environment is driving both volatility in the market and softer demand for travel. But for United specifically, two big picture themes have been confirmed. First, United's performance is strong even in this weak environment. Because we've won the battle for brand loyal customers. And second, because we've won those brand loyal customers, our earnings and financial metrics are demonstrating resilience that United's never had before. The strains on the macroeconomy have impacted demand. But even in that strained environment, United just had the highest first quarter pre-tax margin since COVID began, and we expect to be one of only two airlines that are profitable in the first quarter.

Scott Kirby: We wanted to be transparent with you all around the assumptions.

Speaker Change: The next question comes from Conor Cunningham of Melius Research Your line is open.

Scott Kirby: Yeah.

Great. Thank you very much I wanted to clarify that the the pinpoint reduction it kicks in in April for a recession scenario.

Conor Cunningham: Hi, everyone. Thank you I appreciate the details on the spill traffic comment I wanted to kind of start there.

Scott Kirby: Yeah.

Scott Kirby: The next question comes from Conor Cunningham of Melius Research Your line is open.

Conor Cunningham: Can you.

Conor Cunningham: I just would've this just seems like a time in which you would might look to stamp out all of the spill traffic carriers from your hub markets in general So I just thought that that was the whole entire point of kind of basic economy. In general. So can you just talk about how you can continue to move down the path of eliminating spill spill spilling traffic in general Thank you.

Conor Cunningham: Hi, everyone. Thank you I appreciate the details on the spill Catholic comment I wanted to kind of start there.

Scott Kirby: Can you I.

Speaker Change: I just would've this just seems like a time in which you would might look to stamp out all of the spill traffic carriers from your hub markets in general So I just thought that that was the the whole entire point of kind of basic economy. In general. So can you just talk about how you can continue to move down the path of eliminating spilt spill spilling traffic in general Thank you.

Scott Kirby: And our resilience is further demonstrated by the fact that if the environment remains relatively weaker but stable, we can stay within our full year guidance range. However, we read the same headlines as you, and so we think that there's a reasonable chance that bookings could weaken from here. But even if we're in that recessionary environment, we still expect to earn $7 to $9 per share for the full year 2025. When I say that there's been a structural, permanent, and irreversible change, what I mean is that United has won brand-loyal customers, and they are sticky, lifelong customers.

Scott Kirby: And our resilience is further demonstrated by the fact that if the environment remains relatively weaker but stable, we can stay within our full year guidance range. However, we read the same headlines as you, and so we think that there's a reasonable chance that bookings could weaken from here. But even if we're in that recessionary environment, we still expect to earn $7 to $9 per share for the full year 2025. When I say that there's been a structural, permanent, irreversible change, what I mean is that United has won brand loyal customers and they are sticky lifelong customers. We are now the brand loyal leader by a wide margin in six of our seven hubs and tied with one other airline in Los Angeles. In most spokes around the country, we're the leader or one of the leaders of brand loyal customers.

And our resilience is further demonstrated by the fact that if the environment remains relatively weaker but stable, we can stay within our full year guidance range. However, we read the same headlines as you, and so we think that there's a reasonable chance that bookings could weaken from here. But even if we're in that recessionary environment, we still expect to earn $7 to $9 per share for the full year 2025. When I say that there's been a structural, permanent, irreversible change, what I mean is that United has won brand loyal customers and they are sticky lifelong customers. We are now the brand loyal leader by a wide margin in six of our seven hubs and tied with one other airline in Los Angeles. In most spokes around the country, we're the leader or one of the leaders of brand loyal customers.

Conor Cunningham: So we're just trying to build a great airline for United Airlines customers.

Conor Cunningham: That's all we're doing like truthfully, our plan hasn't changed in five years, we make tactical adjustments like we did this time to pull out utilization flying.

Scott Kirby: So we're just trying to build a great airline for United Airlines customers.

Speaker Change: What else does what they do I think it puts a midst pressure on them when you're not it gets great.

Scott Kirby: That's all we're doing like truthfully, our plan hasn't changed in five years, we'd make tactical adjustments like we did this time to put utilization point, everyone else does what they do I think it puts them at the pressure on them when United gets great.

Speaker Change: That the contrast between United Airlines, and everyone else gets wider and more evident.

Speaker Change: Theres not us consciously trying to stamp out or do anything like that we're trying to create the best airline in history.

Scott Kirby: We are now the brand loyal leader by a wide margin in six of our seven hubs and tied with one other airline in Los Angeles and most spokes around the country. We're the leader or one of the leaders with brand loyalty.

Speaker Change: Airlines customers.

Scott Kirby: That the contrast between United Airlines, and everyone else gets wider and more evident.

Speaker Change: And that creates a big gap to everyone else and it's up to them to do something else and if they don't.

Scott Kirby: Andrew will share some facts on customers that live in the Bay Area, Denver, and Chicago in his remarks. But it is those gains that are allowing us to be resilient even in this weaker economic environment. To be clear, even though those customers are sticky and we believe those market share gains are permanent, we're capitalizing on our momentum and doing more to attract even more brand loyal customers. We're building huge new clubs in Houston and San Francisco, and about to open an additional new club in Denver. We're installing the fastest Wi-Fi in the world on our planes with Starlink, and they'll start flying next month. We're adding new features to the most powerful travel app in the world every couple of weeks, and our operation is reliable and resilient as ever. This weakening environment doesn't have us reconsidering these investments.

Andrew will share some facts on customers that live in the Bay Area, Denver, and Chicago in his remarks. But it is those gains that are allowing us to be resilient even in this weaker economic environment. To be clear, even though those customers are sticky and we believe those market share gains are permanent, we're capitalizing on our momentum and doing more to attract even more brand loyal customers. We're building huge new clubs in Houston and San Francisco, and about to open an additional new club in Denver. We're installing the fastest Wi-Fi in the world on our planes with Starlink, and they'll start flying next month. We're adding new features to the most powerful travel app in the world every couple of weeks, and our operation is reliable and resilient as ever. This weakening environment doesn't have us reconsidering these investments.

Scott Kirby: Not as consciously trying to stamp out or do anything like that we're trying to create the best airline in history.

Scott Kirby: Andrew will share some facts on customers that live in the Bay Area, Denver and Chicago in his remarks. But it is those gains that are allowing us to be resilient, even in this weaker economic environment. To be clear, even though those customers are sticky, and we believe those market share gains are permanent, we're capitalizing on our momentum and doing more to attract even more brand loyal customers. We're building huge new clubs in Houston and San Francisco, and about to open an additional new club in Denver. We're installing the fastest Wi-Fi in the world on our planes with Starlink, and they'll start flying next month.

Well, we'll see but we're just trying to do a great thing for you at airlift customers.

Speaker Change: Okay. That's helpful.

Speaker Change: Airlines customers.

Speaker Change: You're probably not going to like this question, but I've been getting that kind of repeat if.

Scott Kirby: That creates a big gap to everyone else and it's up to them to do something else and if they don't.

Speaker Change: If you.

Scott Kirby: Well, we'll see but we're just trying to do great things for customers.

Speaker Change: If you just look at the first half implied performance on Etfs and then you look at what Youre baking in on the second half to get to the $60 range. It basically implies you are going to be doing better on a year over year perspective, 2024, So I'm just trying to understand.

Scott Kirby: Okay. That's helpful.

Scott Kirby: You're probably not going to like this question, but I've been getting it kind of on repeat.

Scott Kirby: If you could.

Speaker Change: Can you just look at the first half implied performance on Etfs and then you look at what you're baking in on the second half to get to the 11 $50 range. It basically implies you are going to be doing better on a year over year perspective first 2024, so I'm just trying to understand.

Speaker Change: Whats driving that that improvement if we're bouncing along the bottom in the current recession not recession that with the current environment in general So just what additional levers do you have that you feel more comfortable now maybe its premium maybe its loyalty Mike you seemed to sound better on costs, just any thoughts there in general would be helpful. Thank you.

Scott Kirby: We're adding new features to the most powerful travel app in the world every couple of weeks, and our operation is as reliable and resilient as ever. This weakening environment doesn't have us reconsidering these investments. In fact, we're leaning into them, because they're at the center of our biggest competitive advantage, winning brand loyal customers.

Scott Kirby: In fact, we're leaning into them because they're at the center of our biggest competitive advantage. Winning brand loyal customers and a huge thank you to our employees for their incredible service that makes this win possible. Periods of economic softening are part of the business cycle. So the question for United is what should we do now that we see economic softness? Tactically, we're being very diligent about expenses, and removing capacity, particularly off-peak utilization flying, and Andrew and Mike will talk about those in a few minutes. And strategically our priority is pretty simple and it hasn't changed. Win the brand loyal customers because that gives us the best margins in good times and that lead can grow even larger during lean times. The reason is that for any given customer living in any given city, you're not the brand loyal airline, you're the spill airline.

In fact, we're leaning into them because they're at the center of our biggest competitive advantage. Winning brand loyal customers and a huge thank you to our employees for their incredible service that makes this win possible. Periods of economic softening are part of the business cycle. So the question for United is what should we do now that we see economic softness? Tactically, we're being very diligent about expenses, and removing capacity, particularly off-peak utilization flying, and Andrew and Mike will talk about those in a few minutes. And strategically our priority is pretty simple and it hasn't changed. Win the brand loyal customers because that gives us the best margins in good times and that lead can grow even larger during lean times. The reason is that for any given customer living in any given city, you're not the brand loyal airline, you're the spill airline.

Scott Kirby: What's driving that that improvement if we're bouncing along the bottom in the current recession I'm not recession that the current environment in general So just what additional levers do you have that you feel more comfortable now maybe its premium maybe its loyalty Mike you seemed to sound better on costs, just any thoughts there.

Scott Kirby: And a huge thank you to our employees for their incredible service that makes this one possible. Periods of economic softening are part of the business cycle. So the question for United is what should we do now that we see economic softness? Tactically, we're being very diligent about expenses and removing capacity, particularly off-peak utilization flying, and Andrew and Mike will talk about those in a few minutes. And strategically, our priority is pretty simple, and it hasn't changed. Win the brand loyal customers because that gives us the best margins in good times, and that lead can grow even larger during lean times.

Speaker Change: Yes, the first point I'd make is that the full year guidance.

Speaker Change: In the $11 50 to $13 50 scenario.

Speaker Change: Also on current booking trends holding steady.

Scott Kirby: It would be helpful. Thank you.

Speaker Change: It accounts.

Scott Kirby: Yeah. It would be the first point I'd make is that the full year guidance.

Speaker Change: Accounts for the fact that we burned off all the contingency that we put into that full year guide.

Scott Kirby: In the $11 50 to $13 50 scenario counts on current booking trends holding steady.

Speaker Change: It assumes we have continued excellent cost management, but we don't uncover anything new.

Speaker Change: And it assumes that second half fuel is about 20 lower than first half fuel.

Scott Kirby: Got it.

Speaker Change: Accounts for the fact that we burned off all the contingency that we put into that full year guide.

Scott Kirby: The reason is that for any given customer living in any given city, if you're not the brand loyal airline, you're the spill airline. The only way a spill airline gets passengers is through lower prices. When times are good, that strategy can work okay. But when times get tougher, the brand loyal airline like United has more seats to sell, which we do sell at lower prices, but that disproportionately impacts all the spill carriers that we compete with. Some of the guidance updates from other airlines are a stark reminder of this point. For some historical perspective, Southwest historically was the airline with the highest percentage of brand loyal customers.

Speaker Change: And then finally it accounts for some profit maximizing capacity cuts.

Speaker Change: It assumes we have continued excellent cost management, but we don't uncover anything new.

Scott Kirby: The only way a spill airline gets passengers is through lower prices. When times are good, that strategy can work okay. But when times get tougher, the brand loyal airline like United has more seats to sell, which we do sell at lower prices. But that disproportionately impacts all the spill carriers that we compete with. Some of the reasons guidance updates from other airlines are a stark reminder of this point. For some historical perspective, Southwest historically was the airline with the highest percentage of brand loyal customers. For most of its history, Southwest was focused on smaller secondary cities where they had by far the best schedule for customers. They also had a huge customer advantage as the only airline that didn't have change fees or bag fees. That meant that a high percentage of their customers were brand loyal to Southwest at its core.

The only way a spill airline gets passengers is through lower prices. When times are good, that strategy can work okay. But when times get tougher, the brand loyal airline like United has more seats to sell, which we do sell at lower prices. But that disproportionately impacts all the spill carriers that we compete with. Some of the reasons guidance updates from other airlines are a stark reminder of this point. For some historical perspective, Southwest historically was the airline with the highest percentage of brand loyal customers. For most of its history, Southwest was focused on smaller secondary cities where they had by far the best schedule for customers. They also had a huge customer advantage as the only airline that didn't have change fees or bag fees. That meant that a high percentage of their customers were brand loyal to Southwest at its core.

Speaker Change: So that's how we're thinking about getting to the full year guide of $11 50 to $13 50.

Speaker Change: And it assumes that second half fuel is about 20 lower than first half fuel.

Speaker Change: And then we've been very clear about the downside case as well.

Scott Kirby: And then finally it accounts for some profit maximizing capacity cuts.

Speaker Change: I think that answers your question if it doesn't maybe clarify no I'll keep going.

Scott Kirby: So that's how we're thinking about getting to the full year guide of $11 50 to $13 50.

Speaker Change: I appreciate it thank you.

Speaker Change: By the way that that was a totally fair question, we've asked ourselves that question.

Scott Kirby: And we've been very clear about the downside case as well.

Speaker Change: Yes.

Scott Kirby: I think that answers your question if it doesn't maybe clarify no I'll keep going.

Speaker Change: Good one.

Speaker Change: Point of I mean, I think the bigger point is.

Speaker Change: Good I appreciate it thank you.

Speaker Change: We built we typically build a lot of contingency into guide.

Scott Kirby: For most of its history, Southwest has focused on smaller, secondary cities where they had by far the best schedule for customers. They also had a huge customer advantage as the only airline that didn't have change fees or baggage. That meant that a high percentage of their customers were brand loyal to Southwest. At its core, that's why Southwest historically was the highest margin airline in good times, and why they always outperformed by an even wider margin when times got tough. But as they've moved into big, high-cost hubs of other airlines, both of those advantages are gone, and now United and one other airline are the brand loyal customer leaders.

Scott Kirby: By the way that that was a totally fair question, we've asked ourselves that question.

Speaker Change: Our loved it.

Speaker Change: $13 50.

Doesn't really have contingency left our quarterly quarterly guidance still does.

Scott Kirby: Thank you.

Scott Kirby: Good one.

Brett Hart: I mean, I think the bigger point is.

Speaker Change: I'll just make a bigger point on this which is a cultural point.

Brett Hart: We built we typically build a lot of contingency into guide.

Speaker Change: We expected more questions about doing two guys. It's no one's ever done that we haven't really gotten them but.

Brett Hart: Our loved it.

Scott Kirby: That's why Southwest historically was the highest margin airline in good times. And, while they always outperformed by an even wider margin when times got tough, but as they've moved into big, high-cost hubs of other airlines, both of those advantages are gone. And now United and one other airline are the brand loyal customer leaders. It's always dangerous to say that it's different this time. And in fact we're saying exactly the opposite. It's going to be exactly the same this time. History is just repeating. The only thing that changed is that United is now one of the two brand leading brand loyal airlines. So to conclude, United Next is the right strategy. It's been well executed by our people, and it's producing strong, resilient results in good times and even more impressively in tough times. United has never been in a stronger competitive position.

That's why Southwest historically was the highest margin airline in good times. And, while they always outperformed by an even wider margin when times got tough, but as they've moved into big, high-cost hubs of other airlines, both of those advantages are gone. And now United and one other airline are the brand loyal customer leaders. It's always dangerous to say that it's different this time. And in fact we're saying exactly the opposite. It's going to be exactly the same this time. History is just repeating. The only thing that changed is that United is now one of the two brand leading brand loyal airlines. So to conclude, United Next is the right strategy. It's been well executed by our people, and it's producing strong, resilient results in good times and even more impressively in tough times. United has never been in a stronger competitive position.

Brett Hart: $13 50.

Speaker Change: Doesn't really have contingency left our quarterly quarterly guide still does.

Speaker Change: I told our whole team and I will tell our investors as well.

Speaker Change: I'll just make a bigger point on this which is a cultural point.

Speaker Change: Part of that is also when you run it when you run.

Speaker Change: We expected more questions about doing two guys. It's no one's ever done that we haven't really gotten them but.

Speaker Change: The company was a no excuses philosophy, which is what we have.

Brett Hart: I told our whole team and I will tell our investors as well.

Speaker Change: We are going to do everything possible no matter what happens.

Scott Kirby: It's always dangerous to say that it's different this time, and in fact, we're saying exactly the opposite. It's going to be exactly the same. History is just repeating. The only thing that changed is that United is now one of the two leading brand loyal airlines.

Brett Hart: Part of that is also when you run it when you run.

Speaker Change: Our numbers and it is true that the environment has gotten a lot harder.

The company was a no excuses philosophy, which is what we have.

Speaker Change: In achieving our full year, we still have but we didn't think we had a real shot at getting at we wouldn't say it.

Brett Hart: We are going to do everything possible no matter, what happens to get to our numbers and it is true that the environment has gotten a lot harder.

Speaker Change: But we do have a real shot bookings need to stabilize we got to work hard we gotta do everything right to get there now.

Scott Kirby: So to conclude, United Next is the right strategy. It's been well executed by our people and it's producing strong resilient results in good times and even more impressively in tough times. United has never been in a stronger competitive position. Customers are benefiting, our employees are benefiting, and our shareholders will also benefit in the value that's being created.

Speaker Change: But we still have a real shot.

Brett Hart: Achieving our full year, we still have but we didn't think we had a real shot at getting at we wouldn't say it.

Speaker Change: And.

Speaker Change: Most sure way to lose its throwing the towel.

Brett Hart: But we do have a real shot bookings need to stabilize we got to work hard we gotta do everything right to get there now.

Speaker Change: And at United Airlines.

Scott Kirby: Customers are benefiting, our employees are benefiting, and our shareholders will also benefit in the value that's being created. Brett, over to you. Thank you, Scott, and good morning. Despite a challenging macro environment, 2025 is off to a solid start. We operate in a dynamic and evolving landscape. Global trade policies, including tariffs, are shaping that landscape. And as Scott mentioned, broader economic uncertainties remain top of mind. We are closely monitoring the potential impact on the prices we would pay for aircraft. As a reminder, Boeing accounts for the majority of our future total order book and most of our Airbus A321neos are produced in Alabama. As such, we don't currently anticipate a meaningful direct impact from tariffs relating to aircraft purchases. Turning to our performance this quarter, we are seeing the results of our continued investments in operational excellence and we are delivering an exceptional customer experience.

Customers are benefiting, our employees are benefiting, and our shareholders will also benefit in the value that's being created. Brett, over to you.

Speaker Change: Or what the economic environment is we're going to bust, our asses to get there.

Brett Hart: But we still have a real shot.

Brett Hart: Brett, over to you. Thank you, Scott, and good morning. Despite a challenging macro-environment, 2025 is off to a solid start. We operate in a dynamic and evolving landscape.

Speaker Change: And we will not miss it because we didnt try.

Thank you, Scott, and good morning. Despite a challenging macro environment, 2025 is off to a solid start. We operate in a dynamic and evolving landscape. Global trade policies, including tariffs, are shaping that landscape. And as Scott mentioned, broader economic uncertainties remain top of mind. We are closely monitoring the potential impact on the prices we would pay for aircraft. As a reminder, Boeing accounts for the majority of our future total order book and most of our Airbus A321neos are produced in Alabama. As such, we don't currently anticipate a meaningful direct impact from tariffs relating to aircraft purchases. Turning to our performance this quarter, we are seeing the results of our continued investments in operational excellence and we are delivering an exceptional customer experience.

Brett Hart: And.

Brett Hart: We shipped most sure way to lose is throwing the towel.

Speaker Change: The culture and that's the philosophy and our results no matter, what we're gonna be better because we manage that way than if we didn't.

Speaker Change: United Airlines.

Speaker Change: What the economic environment is we're going to bust, our asses to get there.

Speaker Change: Hey, I want to emphasize one point Scott made make sure it's clear to everyone.

Brett Hart: Global Trade Policies, including tariffs, are shaping that landscape, and it's gotten Broad Economic Uncertainties Remain Top of We are closely monitoring the potential impact on the prices we would pay for air As a reminder, Boeing accounts for the majority of our future total order. Most of our Airbus 321neos are produced in. As such, we don't currently anticipate States Department of Homeland Security, U.S. Department of Homeland Security, U.S. Department Turning to our performance this quarter, we are seeing the results of our continued investments in operations. we are delivering. Exceptional Customers. These achievements are a testament to the commitment and excellence of our employees.

Brett Hart: And we will not miss it because we didn't try and.

Speaker Change: The full year guide no longer has a contingency in it we burn that but the second quarter guide with a dollar range. We normally have a 50 cent range, we do have contingency in that figure and so.

Brett Hart: The culture, and that's our philosophy and our results no matter, what they're going to be better because we manage that way that if we didn't.

Speaker Change: Hey, I want to emphasize one point Scott made make sure it's clear to everyone.

Brett Hart: The full year guide no longer has a contingency in it we burned that.

Speaker Change: Look as we as we and as we move towards the end of the second quarter. If we're coming in towards the high end of that I feel better about the 11 50 to $13 15 for coming years.

Brett Hart: But the second quarter guide with a dollar range. We normally have a 50 cent range, we do have contingency in that figure and so look.

Speaker Change: Near the low end of that range I feel like were marching towards a recession scenario.

Speaker Change: Look as we enter as we end this as we move towards the end of the second quarter. If we're coming in towards the high end of that I feel better about the 11 50 to $13 15 for coming years near.

Speaker Change: I appreciate it thank you.

Speaker Change: The next question comes from David Vernon with Bernstein. Your line is open.

Brett Hart: Near the low end of that range I feel like we are.

Scott Kirby: These achievements are a testament to the commitment and excellence of our employees. None of it would be possible without you. Thank you. In Q1, not only did we serve more customers than ever in a first quarter for United, but we also finished number one and on time departures among our US large peers. When including customers who were helped with Connection Saver, we achieved our highest NPS scores and our best on time arrival score since the pandemic, as well as the second lowest first quarter seat cancellation rate in company history. We accomplished all of this with safety at the forefront. United is committed to getting every customer to their destination safely and on time. We continue to invest in enhanced pilot training and safety technology, making it easier for our employees to report safety concerns.

These achievements are a testament to the commitment and excellence of our employees. None of it would be possible without you. Thank you. In Q1, not only did we serve more customers than ever in a first quarter for United, but we also finished number one and on time departures among our US large peers. When including customers who were helped with Connection Saver, we achieved our highest NPS scores and our best on time arrival score since the pandemic, as well as the second lowest first quarter seat cancellation rate in company history. We accomplished all of this with safety at the forefront. United is committed to getting every customer to their destination safely and on time. We continue to invest in enhanced pilot training and safety technology, making it easier for our employees to report safety concerns.

David Vernon: Hey, good morning, and thanks for taking the question so Scott.

Speaker Change: Marching towards a recession scenario.

Brett Hart: I appreciate it thank you.

David Vernon: Is relatively unique sort of time for the industry and that you and your other sort of brand loyalty.

Brett Hart: None of it would be possible without you.

Brett Hart: Thank you. In Q1, not only did we serve more customers than ever in a first quarter for United, We also finished number one in on-time departures among our U.S. large Including customers who were helped with connection safety. We achieved our highest NPS scores and our best on-time arrivals. Since the pandemic. As well as the second lowest first quarter seat cancellation rate in company history. Accomplished all of this with safety at the forefront. is committed to getting every customer to their destination safely and Continue to invest in enhanced pilot training. Safety Technology, making it easier for our employees.

Brett Hart: The next question comes from Dave Vernon with Bernstein. Your line is open.

David Vernon: Airlines are.

David Vernon: We're working with a pretty significant margin advantage relative to some of the lower cost and still airlines are out there. How do you think about balancing the use of that margin advantage. Right are you are you thinking about using that margin.

Speaker Change: Hey, good morning, and thanks for taking the question. So Scott this is relatively unique sort of time for the industry in that.

Speaker Change: You and your other sort of brand oil.

Brett Hart: Airlines are.

Speaker Change: Working with a pretty significant margin advantage relative to some of the lower cost and still airlines are out there. How do you think about balancing the use of that margin advantage. Right are you are you thinking about using that margin to take share right now or are you thinking about trying to protect that margin. When you are trying to build a better United Airlines, how do you think about that.

David Vernon: So to take share right now or are you thinking about trying to protect that margin. When you are trying to build a better United Airlines. How do you think about that tension between having an opportunity to maybe take even more share in a market like Denver versus trying to maintain the margin.

David Vernon: I don't think there is attention.

I'll go back to one point, which I tried to make it at the beginning but.

Speaker Change: That tension between having an opportunity to maybe take even more share in a market like Denver versus trying to maintain the margin.

David Vernon: The brand loyal airline is always one.

David Vernon: The brand loyal airline in the United States has always had the top margins.

Brett Hart: Report. Our united team is engaged across the Government, to ensure the safety of our community.

Speaker Change: I don't think there is a tension.

David Vernon: And the brand loyal airline as always outperformed.

Scott Kirby: Our United team is engaged across the industry and with government to ensure the safety of our aviation system. In the first quarter we reached two major milestones on the accelerated rollout of Starlink technology across our fleet, completing our first Starlink installation on a United Express aircraft and securing FAA certification to begin operations on the Embraer 175 fleet. We're on track for our first Starlink-enabled regional flight later this spring with our entire two-cabin regional fleet expected to be retrofitted by year-end. We continue to expect the first mainline aircraft with Starlink to take flight before the end of 2025. We believe Starlink will revolutionize the in-flight experience for our customers and United is leading the way for the future of Wi-Fi for the airline industry. With that, I will hand it over to Andrew to discuss the revenue environment.

Our United team is engaged across the industry and with government to ensure the safety of our aviation system. In the first quarter we reached two major milestones on the accelerated rollout of Starlink technology across our fleet, completing our first Starlink installation on a United Express aircraft and securing FAA certification to begin operations on the Embraer 175 fleet. We're on track for our first Starlink-enabled regional flight later this spring with our entire two-cabin regional fleet expected to be retrofitted by year-end. We continue to expect the first mainline aircraft with Starlink to take flight before the end of 2025. We believe Starlink will revolutionize the in-flight experience for our customers and United is leading the way for the future of Wi-Fi for the airline industry. With that, I will hand it over to Andrew to discuss the revenue environment.

Brett Hart: And I'll go back to one point, which I tried to make at the beginning but.

David Vernon: Recession policy changes, who the brand loyal airlines are.

Brett Hart: The brand loyal airline is always one of the.

Brett Hart: Thank you.

Brett Hart: In the first quarter, we reached two major miles. Accelerator rollout of Starlink technology across Express Aircraft Securing FAA Certification. in Operations on the Embraer 175. We're on track for our first Starlink-enabled regional flight later today. with our entire two-cabin regional fleet expected to be retrofitted by I continue to expect the first mainline aircraft with Starlink to take flight before. We believe Starlink will revolutionize the in-flight experience for our customers. United is leading the way for the future of Wi-Fi for the airline.

Brett Hart: Brand loyal airline in the United States has always had the top margins.

David Vernon: And it really is back to like our plan hasn't changed really.

And the brand loyal airline is always outperformed again.

David Vernon: In any material way at all over the last five years, we have higher confidence in it we thought we would win brand loyalists here, we thought we would start to outperform the rest of the industry.

Brett Hart: Recession policy changes, who the brand little literal linzer.

Brett Hart: And is it really is back to like our plan hasn't changed really in any material way at all over the last five years, we have higher confidence in it we thought we would win brand loyalist here, we thought we would start to outperform the rest of the industry.

David Vernon: Thought that whenever the inevitable business cycle turned we would outperformed during that cycle and all that is happening. So we feel good about that but.

David Vernon: But we're not doing anything specific.

David Vernon: Had a number of markets people ask questions about specific markets, Andrew Italia, where we've had competitors do big changes up some big change it down some big changes up.

Brett Hart: We thought that whenever the inevitable business cycle turned we would outperform during that cycle and all that's happening. So we feel good about that.

David Vernon: Likely our capacity and our plans haven't changed at all.

Brett Hart: We're not doing anything specific.

David Vernon: In those places we're in the enviable position of we can just play the United game, because we've got the brand loyal customers. We can just keep plan on running our plays and it works well.

Brett Hart: We've had a number of markets people ask questions about specific markets, Andrew Italian where we've had competitors do big changes up some big change it down some big changes up.

Andrew Nocella: With that, I will hand it over to Andrew to discuss the resolution. Thanks, Brett. United's top line Q1 revenue increased 5.4% to a company record $13.2 billion. Trasit for the quarter was up half We've been hard at work adjusting how we fly in the historically weaker United Q1 period, and our efforts paid off with a material year-over-year improvement in our margins. Demand trends did turn down as we exited January, resulting in lower revenue production than we had originally forecasted for Q1. Domestic Main Cabin RASMs were down 5% year-over-year and represent the bulk of the gap between our Q1 revenue expectations and actual results.

Brett Hart: And frankly, our capacity and our plans haven't changed at all.

Brett Hart: And those places we're in the enviable position of we can just play the United game, because we've got the brand loyal customers. We can just keep plan run in our plays and it works.

David Vernon: And we don't really need to I mean, I still pay attention I still read everyone's scripts and pay attention to what they're doing but we don't really need to focus on what they're doing or respond to it because it doesn't have that much impact on us.

Andrew Nocella: Thanks, Brett. United's top-line Q1 revenue increased 5.4% to a company record $13.2 billion. TRASM for the quarter was up 0.5%. We've been hard at work adjusting how we fly in the historically weaker United Q1 period, and our efforts paid off with a material year-over-year improvement in our margin. Demand trends did turn down as we exited January, resulting in lower revenue production than we had originally forecasted for Q1. Domestic main-cabin RASM was down 5% year over year and represents the bulk of the gap between our Q1 revenue expectations and actual results. As we would expect in times of economic weakness, we saw the weakness magnified on off-peak flights.

Andrew Nocella: Thanks, Brett. United's top-line Q1 revenue increased 5.4% to a company record $13.2 billion. TRASM for the quarter was up 0.5%. We've been hard at work adjusting how we fly in the historically weaker United Q1 period, and our efforts paid off with a material year-over-year improvement in our margin. Demand trends did turn down as we exited January, resulting in lower revenue production than we had originally forecasted for Q1. Domestic main-cabin RASM was down 5% year over year and represents the bulk of the gap between our Q1 revenue expectations and actual results. As we would expect in times of economic weakness, we saw the weakness magnified on off-peak flights.

David Vernon: We've created the leading airline for brand loyal customers and that was the winning strategy and we've executed.

Speaker Change: We don't really need to I mean, I still pay attention I still read everyone's scripts and pay attention to what they're doing but we don't really need to focus on what they're doing or respond to it because it doesn't have that much impact on us.

David Vernon: We're just finishing the game.

Speaker Change: And I guess as you think about that that building a brand loyal customer right, obviously segmenting the cabin, adding in things like like like faster speed Wi Fi, adding in clubs right. It does seem like the industry as a whole is moving in that direction. How do you think about maintaining that debt.

Brett Hart: We've.

Brett Hart: Created the leading airline for brand loyal customers and that was the winning strategy and we've executed it.

Brett Hart: We're just finishing the game.

Speaker Change: And I guess as you think about that that building the brand loyal customer right, obviously segmenting the cabin, adding in things like like like faster speed Wi Fi, adding in clubs right. It does seem like the industry as a whole is moving in that direction. How do you think about maintaining that.

Andrew Nocella: As we would expect in times of economic weakness, we saw the weakness magnified on off-peak flights. For example, the revenue gap on domestic flights departing prior to 7 a.m. or after 8 p.m., outside of the golden hours, is usually 30 percent lower. But in Q1, that gap expanded to 40 percent lower. That's why we are canceling more off-peak flying and lower utilization going forward. Weakness is the weakness in the main cabin was somewhat offset by premium performance. Overall, premium cabin unit revenues were up mid-single digits in Q1. International Polaris RASMs were up 8%, and International Premium Plus RASMs were up over 5%.

David Vernon: That brand loyalty leadership.

Speaker Change: Over a multiyear period.

Andrew Nocella: For example, the revenue gap on domestic flights departing prior to 7:00AM or after 8:00PM outside of the Golden Hours is usually 30% lower, but in Q1 that gap expanded to 40% lower. That's why we are canceling more offbeat flying and lower utilization going forward. Weakness in the main cabin was somewhat offset by premium performance. Overall premium cabin unit revenues were up mid single digits in Q1. International Polaris RASMs were up 8% and international Premium Plus RASMs were up over 5%. Domestic premium seat RASMs were flat. Our long-term strategies to build premium capacity and customer choice were very helpful given main cabin demand trends in Q1. Business traffic trends we saw late in Q4 and early 2025 moderated later in the quarter. Loyal business revenue grew 7% in Q1 year over year versus 15% in Q4.

For example, the revenue gap on domestic flights departing prior to 7:00AM or after 8:00PM outside of the Golden Hours is usually 30% lower, but in Q1 that gap expanded to 40% lower. That's why we are canceling more offbeat flying and lower utilization going forward. Weakness in the main cabin was somewhat offset by premium performance. Overall premium cabin unit revenues were up mid single digits in Q1. International Polaris RASMs were up 8% and international Premium Plus RASMs were up over 5%. Domestic premium seat RASMs were flat. Our long-term strategies to build premium capacity and customer choice were very helpful given main cabin demand trends in Q1. Business traffic trends we saw late in Q4 and early 2025 moderated later in the quarter. Loyal business revenue grew 7% in Q1 year over year versus 15% in Q4.

Speaker Change: We're seeing some of the other airlines also kind of investing in some of the same capabilities just come down to execution or is there something further.

Speaker Change: And the outlook that you are looking at in terms of trying to maintain that leadership position with Swiss brand loyal customers.

Brett Hart: Brand loyalty leadership.

Brett Hart: Over a multiyear period.

Brett Hart: We're seeing some of the other airlines also kind of investing in some of the same capabilities just come down to execution or is there something further in the in the in the outlook that youre looking at in terms of trying to maintain that leadership position with brand loyal customers.

Speaker Change: I'll try to take that look I think we are charged with continuously trying to climb higher to innovate more and to go faster that's definitely the culture that we have at United.

Speaker Change: And quite frankly, there's a lot of things in the hopper that we havent announced that are yet to come.

I'll try to take that.

Brett Hart: I think we are charged with continuously trying to climb higher to innovate more and to go faster that's definitely the culture that we have at United.

Speaker Change: But we are again in this enviable position, where the United next plan is working our capacity to come online in a much better rate than anybody else's.

Andrew Nocella: Domestic Premium Seat Rathoms or FLAT. Our long-term strategies to build premium capacity Business traffic trends we saw late in Q4 and early 2025 moderated later in the quarter. Flown business revenue grew 7% in Q1 year-over-year versus 15% in Q4. Contracted business sales for all future travel are currently up low single digits year over year, which is moderated from the up double digits at the start Loyalty revenue remained strong and grew 9% to $1.5 billion in the quarter. Co-brand spending was also strong, up 9%. Co-brand spending growth in early April remained consistent with March performance. The Q2 customer demand is not what we were planning a few months ago, but we continue to expect our top-line revenue growth for Q2 to be positive.

Brett Hart: And quite frankly, there's a lot of things in the hopper that we havent announced that are yet to come.

Speaker Change: And that's a really strong foundation that allows us to continue to invest in the customer and youre going to see more and more of that over the next 18 months, we have a bunch of announcements that are planned.

Brett Hart: But we are again in this enviable position, where the United next plan is working our capacity to come online in a much better rate than anybody else's.

Speaker Change: And that's going to allow us to continue the segmentation revenue choice customer choice path and the only other thing I'll add is the investments. We've made we've made over a really long period of time. It takes years to build these clubs it takes years to refit the aircrafts with the appropriate Lopez.

Brett Hart: And that's a really strong foundation that allows us to continue to invest in the customer and youre going to see more and more of that over the next 18 months, we have a bunch of announcements that are planned.

Andrew Nocella: Contracted business sales for all future travel are currently up low single digits year over year, which has moderated from the up double digits at the start of the year. Loyalty revenue remained strong and grew 9% to $1.5 billion in the quarter. Co-brand spending was also strong, up 9%. Co-brand spending growth in early April remained consistent with March performance. Q2 customer demand is not what we were planning just a few months ago, but we continue to expect our top line revenue growth for Q2 to be positive. We have adjusted RM strategies going forward to accommodate more lower yielding passengers, a necessary reaction to the current environment. The effect of these RM changes is that we will spill less traffic to our competitors, but we will run with lower yields.

Contracted business sales for all future travel are currently up low single digits year over year, which has moderated from the up double digits at the start of the year. Loyalty revenue remained strong and grew 9% to $1.5 billion in the quarter. Co-brand spending was also strong, up 9%. Co-brand spending growth in early April remained consistent with March performance. Q2 customer demand is not what we were planning just a few months ago, but we continue to expect our top line revenue growth for Q2 to be positive. We have adjusted RM strategies going forward to accommodate more lower yielding passengers, a necessary reaction to the current environment. The effect of these RM changes is that we will spill less traffic to our competitors, but we will run with lower yields.

Brett Hart: And that's going to allow us to continue the segmentation.

Brett Hart: Revenue choice customer choice path and the only other thing I'll add is the investments. We've made we've made over a really long period of time like it takes years to build these clubs they take years to reset the aircraft with the appropriate Lopez.

Speaker Change: To invest in Wi Fi technology, and while it's I guess a bit flatter than that others are trying to copy us.

Speaker Change: Our generation behind in my opinion, and we will never catch us and we will continue to run as fast or faster to ensure that doesn't happen.

Brett Hart: To invest in Wi Fi technology, and while it's I guess a bit flatter than that others are trying to copy us.

Andrew Nocella: We have adjusted RM strategies going forward to accommodate more lower yield in passengers, a necessary reaction to the current environment. of these RM changes is that we will spill less traffic to our competitors, but we will run with lower. Since making this RM change about six weeks ago, bookings have stabilized, and we are currently booked ahead of last year at this same point in time by one We at United have a high number of brand loyal customers and our focus on our seven hubs puts us in a position where we are not a spill carrier.

Speaker Change: Alright, Thanks again for the time guys.

Speaker Change: Our generation behind in my opinion.

Speaker Change: The next question comes from Catherine O'brien with Goldman Sachs. Your line is open.

Speaker Change: And we'll never catch us and we will continue to run as fast or faster to ensure that doesn't happen.

Catherine O'brien: Hey, good morning, everyone. Thanks, so much for the time.

Speaker Change: Alright, Thanks again for the time guys.

Andrew Nocella: Since making this RM change about six weeks ago, bookings have stabilized, and we are currently booked ahead of last year at this same point in time by one point. We at United have a high number of brand loyal customers, and our focus on our seven hubs puts us in a position where we are not a spill carrier. We determine how much traffic we spill to other carriers based on the amount of capacity offer and the yield we're willing to accept. To give you a few examples, in Chicago during Q4 2024, we expanded our passenger share lead of local origin traffic to 22 points ahead of our next largest competitor. In 2019 that lead was only six points, and in 2015 we actually had a negative gap from Denver.

Since making this RM change about six weeks ago, bookings have stabilized, and we are currently booked ahead of last year at this same point in time by one point. We at United have a high number of brand loyal customers, and our focus on our seven hubs puts us in a position where we are not a spill carrier. We determine how much traffic we spill to other carriers based on the amount of capacity offer and the yield we're willing to accept. To give you a few examples, in Chicago during Q4 2024, we expanded our passenger share lead of local origin traffic to 22 points ahead of our next largest competitor. In 2019 that lead was only six points, and in 2015 we actually had a negative gap from Denver.

Speaker Change: So you've already given us a lot of detail on your full year guide, but maybe just one more on the different levers if you'll allow it.

Speaker Change: The next question comes from Catherine O'brien with Goldman Sachs. Your line is open.

Speaker Change: Thought it was really helpful to frame the revenue downside in the beef key versus the recessionary case.

Catherine O'brien: Hey, good morning, everyone. Thanks, so much for the time, so you've already given us a lot of detail on your full year guide, but maybe just one more on the different levers if you'll allow it.

Speaker Change: But can you give us any high level thoughts on how much the single act of God buffer lower non fuel costs and lower fuel each helped offset.

Andrew Nocella: We determine how much traffic we spill to other carriers based on the amount of capacity we offer and the yield we're willing to accept. To give you a few examples, in Chicago during Q4 2024, we expanded our passenger share lead of local origin traffic to 22 points ahead of our next largest... In 2019, that lead was only six points, and in 2015, we actually had a negative gap. In Denver, we've increased our gap ahead of our largest competitor in that market to 10 points for Denver-based... United also gained 2.1 points of market share in late 2024 in the Bay Area.

Catherine O'brien: It was really helpful to frame the revenue downside the beef key versus the recessionary case, but can you give us any high level thoughts on how much.

Speaker Change: Lower by five points in your January expectations the base case.

Speaker Change: To keep that original EPS range.

Catherine O'brien: Thank god buffer lower non fuel costs and lower fuel each helped offset.

Speaker Change: I'll give you a directional feedback.

Speaker Change: Feedback on that.

Speaker Change: Fuel has been the biggest tailwind as you would expect it's a big reason why I think fuel hedging doesn't make sense in this industry.

Catherine O'brien: Revenue lower by five points in your January expectation is the base case.

Speaker Change: Are you able to keep that original EPS range.

Speaker Change: As a as revenue declines almost always fuel does as well so that was the largest.

Speaker Change: I'll give you a directional feel.

Andrew Nocella: We've increased our gap ahead of our largest competitor in that market to 10 points for Denver-based passengers. United also gained 2.1 points of market share in late 2024. In the Bay Area, United will operate our narrowbody aircraft with 2% less utilization in the coming quarters, effectively lowering our domestic capacity by two points. In the last few weeks, we have reduced domestic capacity for the summer in our sell-in schedule by three points, with one more point to be removed shortly. Among our primary competitors, we operate the highest percentage of our domestic departures in the Golden Hours between 7:00AM and 8:00PM. We usually have the lowest overall aircraft utilization, and lower utilization is usually considered a negative in our industry, but for United it has been one key to our relative success.

We've increased our gap ahead of our largest competitor in that market to 10 points for Denver-based passengers. United also gained 2.1 points of market share in late 2024. In the Bay Area, United will operate our narrowbody aircraft with 2% less utilization in the coming quarters, effectively lowering our domestic capacity by two points. In the last few weeks, we have reduced domestic capacity for the summer in our sell-in schedule by three points, with one more point to be removed shortly. Among our primary competitors, we operate the highest percentage of our domestic departures in the Golden Hours between 7:00AM and 8:00PM. We usually have the lowest overall aircraft utilization, and lower utilization is usually considered a negative in our industry, but for United it has been one key to our relative success.

Speaker Change: Feedback on that.

Speaker Change: Fuel has been the biggest tailwind as you would expect it's a big reason why I think fuel hedging doesn't make sense in this industry.

Speaker Change: The second.

Speaker Change: Impact second largest impact was the.

Speaker Change: Work, we've done on cost management.

Speaker Change: As a as revenue declines almost always fuel does as well so that was the largest.

Speaker Change: So that was a big driver.

Andrew Nocella: United will operate our narrow-body aircraft with 2% less utilization in the coming quarters, effectively lowering our domestic capacity by 2%. In the last few weeks, we have reduced domestic capacity for the summer in our sell-on schedule by three points, with one more point to be removed shortly. Among our primary competitors, we operate the highest percentage of our domestic departures in the golden hours between 7 a.m. and 8 p.m. We usually have the lowest overall aircraft utilization, and lower utilization is usually considered a negative in our industry, but for United, it has been one key to our relative success.

Speaker Change: We've got plans multiyear plans to hit some of these cost targets, but we definitely pulled some of that forward.

The second.

Speaker Change: Impact second largest impact was the.

Speaker Change: Related to those cost savings the decision to early retire 21 aircraft.

Speaker Change: Work, we've done on cost management.

Speaker Change: So that was a big driver.

Speaker Change: That naturally allows us to bring down maintenance expense.

Speaker Change: We've got plans multiyear plans to hit some of these cost targets, but we definitely pulled some of that forward.

And so.

Speaker Change: That.

Speaker Change: Related to those cost savings the decision to early retire 21 aircraft.

Speaker Change: That'd be the third bucket is the decision around capacity made early enough.

Speaker Change: Allows us to also save save maintenance.

Speaker Change: That naturally allows us to bring down maintenance expense.

Speaker Change: Spence I'd put it in I would put it in that range.

Speaker Change: And so that.

Speaker Change: Yeah.

Speaker Change: That ordering a fuel and then cost management and then the capacity decision.

Speaker Change: That'd be the third bucket is the decision around capacity made early enough allows us to also save save maintenance expense. So I'd put it in I put it in that range or that ordering a fuel and then cost management and then the capacity.

Andrew Nocella: Fourth quarter domestic schedules are still being developed, and we will look to see if more significant changes are needed. The international environment is also strong for United, and we believe it looks good for Q2. As of now, the makeup of our international traffic skews heavily towards US point of origin business. While most of our international travel demand is US based, we are seeing modest declines in non-US origin passenger volumes for the second quarter. International passengers originated in Europe are currently booked 6% lower than last year. Canadian origin passenger volumes are slightly worse, down 9% year over year. For United, US origin demand has more than compensated for these reductions.

Fourth quarter domestic schedules are still being developed, and we will look to see if more significant changes are needed. The international environment is also strong for United, and we believe it looks good for Q2. As of now, the makeup of our international traffic skews heavily towards US point of origin business. While most of our international travel demand is US based, we are seeing modest declines in non-US origin passenger volumes for the second quarter. International passengers originated in Europe are currently booked 6% lower than last year. Canadian origin passenger volumes are slightly worse, down 9% year over year. For United, US origin demand has more than compensated for these reductions.

Andrew Nocella: Fourth quarter domestic schedules are still being developed and we will look to see if more significant changes are needed. The international environment is also strong for United, and we believe it looks good for Q2 as of now. The makeup of our international traffic skews heavily towards U.S. point of origin. While most of our international travel demand is U.S. based, we are seeing modest declines in non-U.S. origin passenger volumes. For the second quarter, international passengers originated in Europe are currently booked 6% lower than last Canadian origin passenger volumes are slightly worse down 9%. For United, U.S.

Mike Lessening: Very helpful. Thanks, Mike.

Speaker Change: Everyone, one for Andrew a little bit of a shorter term question.

Speaker Change: Can you speak to how you see each entity performing in the second quarter should we expect RASM deceleration across each geography or are there some of the international markets holding in better.

Speaker Change: Yeah.

Mike Leskinen: Real helpful. Thanks, Mike.

Speaker Change: Everyone, one for Andrew a little bit of a shorter term question.

Speaker Change: Color would be helpful. Thanks.

Katy: Sure Katy.

Speaker Change: Can you speak to how you see each entity performing in the second quarter should we expect RASM deceleration across each geography are there some of the international market is holding in better any color would be helpful. Thanks.

Speaker Change: I think we had a really very good strong Q1 for international and I think we all have the same in Q2, but the year over year RASM won't be the same but at this point I do expect international RASM to be positive across every single international entity by the way.

Katy: Sure Katy.

Speaker Change: <unk>.

Speaker Change: You know I think we had a really very good strong Q1 for international and I think while at the same in Q2 that the year over year RASM won't be the same but at this point I do expect international RASM to be positive.

Andrew Nocella: origin demand has more than compensated for these reductions. As we think about the impact that potential recessions could have on business traffic, it is important to note that relative to pre-pandemic, our revenue makeup is less reliant on this revenue source. Business Revenue now makes up eight points less of our passenger revenue and contributes 4.4 points less to our load. So far, we've seen no deterioration in high-end consumers' We attribute this to the fact that the economic uncertainty has a larger impact on more budget-minded discretionary travelers than those seeking a premium. Q2 book premium prisms to date have remained solidly positive for international flights and sladish for domestic flights.

Katy: With specific probably being the strongest.

Andrew Nocella: As we think about the impact that potential recessions could have on business traffic, it is important to note that relative to pre-pandemic, our revenue makeup is less reliant on this revenue source. Business revenue now makes up 8 points less of our passenger revenue and contributes 4.4 points less to our load factor. So far we've seen no deterioration in high-end consumers' willingness to purchase a premium experience. We attribute this to the fact that the economic uncertainty has a larger impact on more budget-minded discretionary travelers than those seeking a premium experience. Q2 booked premium PRASMs to date have remained solidly positive for international flights and flattish for domestic flights. United has a consistent strategy for the last nine years to win brand loyal customers, and that has been happening.

As we think about the impact that potential recessions could have on business traffic, it is important to note that relative to pre-pandemic, our revenue makeup is less reliant on this revenue source. Business revenue now makes up 8 points less of our passenger revenue and contributes 4.4 points less to our load factor. So far we've seen no deterioration in high-end consumers' willingness to purchase a premium experience. We attribute this to the fact that the economic uncertainty has a larger impact on more budget-minded discretionary travelers than those seeking a premium experience. Q2 booked premium PRASMs to date have remained solidly positive for international flights and flattish for domestic flights. United has a consistent strategy for the last nine years to win brand loyal customers, and that has been happening.

Katy: Atlantic and Latin trailing that so clearly the bulk of the issue we're seeing today as demand for domestic flights, particularly in the main cabin.

Speaker Change: Every single international entity by the way.

Katy: And that's where the challenge will be in Q2 as it was in Q1 and.

Speaker Change: With specific probably being the strongest.

Speaker Change: Atlantic and Latin trailing that so clearly the bulk of the issue we're seeing today as demand for domestic flights, particularly in the main cabin.

Katy: It's gonna be a clearly negative RASM.

<unk> for for domestic in Q2 based on everything we see right now.

Speaker Change: And that's where the challenge will be in Q2 as it was in Q1 and.

Katy: That's all for the time.

Speaker Change: The next question comes from Tom Fitzgerald of TV Cowen Your line is open.

Speaker Change: It's going to be clearly a negative RASM.

Speaker Change: <unk> for for domestic in Q2 based on everything we see right now.

Tom Fitzgerald: I think from the time and congrats on the results.

Speaker Change: That's all for the time.

Speaker Change: Can you just hear your perspective higher level longer term.

The next question comes from Tom Fitzgerald TD Cowen Your line is open.

Andrew Nocella: United has a consistent strategy for the last nine years to win brand loyal customers and that has been happening.

Speaker Change: On the broader international market, given you're going to flag carrier in your franchise.

Andrew Nocella: This is important for investors who want confidence that United's margined outperformance really can be structural, permanent, and irreversible.

Andrew Nocella: This is important for investors who want confidence that United's margin outperformance really can be structural, permanent, and irreversible. With that I want to say thanks to the entire United team and I'll hand it off to Mike to talk about our financial results.

This is important for investors who want confidence that United's margin outperformance really can be structural, permanent, and irreversible. With that I want to say thanks to the entire United team and I'll hand it off to Mike to talk about our financial results.

Tom Fitzgerald: I think from the time and congrats on the results.

Speaker Change: Some of the growth you have with freedom flying Hong Kong, just given that it seems like there is a heightened risk of more geopolitical tension.

Speaker Change: Can you just hear your perspective higher level longer term.

Michael: With that, I want to say thanks to the entire United team and I'll hand it off to Mike to talk about our financial results. Thanks, Andrew. For the first quarter, we delivered earnings per share of 91 cents ahead of expectations and within our guidance. Our pre-tax margin was 3%, up 3.6 points year over year, and the strongest first quarter we've had in the last five years. We expect these results to lead the industry and further demonstrate the success of our UnitedNext plan. As Andrew just described, at the start of February, we saw a steep drop in U.S.

Speaker Change: On the broader international market, given you're going to flag carrier in your franchise.

Speaker Change: Flip to hear how you're thinking about that.

Speaker Change: Sure I think international for as long as I've been at United has been the stronger entity and we've worked really hard and.

Mike Leskinen: Thanks, Andrew. For the first quarter, we delivered earnings per share of $0.91, ahead of expectations and within our guidance. Our pre-tax margin was 3%, up 3.6 points year over year, and the strongest first quarter we've had in the last five years. We expect these results to lead the industry and further demonstrate the success of our United Next plan. As Andrew just described, at the start of February, we saw a steep drop in US government and government adjacent travel. We guide, however, with a no excuses philosophy. So seeing the pressure on revenue, we doubled down on managing costs to ensure we would deliver within the first quarter EPS guidance range. Those efforts, along with favorable timing of a few maintenance events, led to a first quarter CASM-ex result of up only 0.3% year over year.

Michael Leskinen: Thanks, Andrew. For the first quarter, we delivered earnings per share of $0.91, ahead of expectations and within our guidance. Our pre-tax margin was 3%, up 3.6 points year over year, and the strongest first quarter we've had in the last five years. We expect these results to lead the industry and further demonstrate the success of our United Next plan. As Andrew just described, at the start of February, we saw a steep drop in US government and government adjacent travel. We guide, however, with a no excuses philosophy. So seeing the pressure on revenue, we doubled down on managing costs to ensure we would deliver within the first quarter EPS guidance range. Those efforts, along with favorable timing of a few maintenance events, led to a first quarter CASM-ex result of up only 0.3% year over year.

Speaker Change: Some of the growth you have with your fifth Freedom line of Hong Kong, just given that it seems like there's a heightened risk of more viewing political passion.

Speaker Change: And continue to work hard to make sure that domestic catches up international continues to accelerate.

Speaker Change: I'd love to hear how you're thinking about that.

Speaker Change: Sure I think international for as long as I've been at United has been the stronger entity and we've worked really hard.

Speaker Change: And the more we do.

Speaker Change: The better it all gets like there's this S curve type of effect and.

Speaker Change: And continue to work hard to make sure that domestic catches up but international continues to accelerate.

Speaker Change: And the World is getting smaller things that we did not think were possible five years ago, our possible today and I think the same will be true in five years.

Speaker Change: And the more we do.

Michael: government and government-adjacent travel. We guide, however, with a no excuses philosophy. So seeing the pressure on revenue, we doubled down on managing costs to ensure we would deliver within the first quarter EPS guidance. Those efforts, along with favorable timing of a few maintenance events, led to a first quarter CASMX result of up only 0.3% year-over-year. These actions, combined with lower fuel costs, enable us to deliver on our guidance . I'm proud of the team for their hard work in making sure we delivered on our first quarter financial commitment.

Speaker Change: The better it all gets like there's this U S term curb type of effect and.

Speaker Change: And as you look at that and so we are continuing to look at a broad range of opportunities.

Speaker Change: And the World is getting smaller things that we did not thing where possible five years ago, our possible today and I think the same will be true in five years and as you look at that and so we are continuing to look at a broad range of opportunities outside of United States. We think it is a more lucrative environment as we go through the cycle clearly.

Speaker Change: Outside the United States, We think it is a more lucrative environment as we go through the cycle clearly there'll be.

Speaker Change: Ups and downs just like there are in any marketplace and things will move around and we'll move our aircraft appropriately, but we remain really bullish on the international environment. The results in Q1, where I think outstanding our margins across every single entity, where up mid to high single digits.

Mike Leskinen: These actions combined with lower fuel costs enable us to deliver on our guidance. I'm proud of the team for their hard work in making sure we delivered on our first quarter financial commitments. Looking to the second quarter, we expect earnings per share to be between $3.25 and $4.25. We are acutely focused on booking trends and the potential impact of tariffs, and we are closely monitoring the situation, and it is a risk. But to date our bookings have stabilized. Looking out to the third quarter and beyond, we've already taken action to pull down our less profitable flying, including red-eye flying capacity in US government traffic, heavy routes, and trans-border flying, aided by accelerating the retirement of 21 aircraft. We were the first airline to recognize slowing demand from US government spending and to take appropriate action.

These actions combined with lower fuel costs enable us to deliver on our guidance. I'm proud of the team for their hard work in making sure we delivered on our first quarter financial commitments. Looking to the second quarter, we expect earnings per share to be between $3.25 and $4.25. We are acutely focused on booking trends and the potential impact of tariffs, and we are closely monitoring the situation, and it is a risk. But to date our bookings have stabilized. Looking out to the third quarter and beyond, we've already taken action to pull down our less profitable flying, including red-eye flying capacity in US government traffic, heavy routes, and trans-border flying, aided by accelerating the retirement of 21 aircraft. We were the first airline to recognize slowing demand from US government spending and to take appropriate action.

Speaker Change: There'll be ups.

Speaker Change: And down to just like there are in any marketplace and things will move around and we'll move our aircraft appropriately, but we remain really bullish on the international environment. The results in Q1, where I think outstanding our margins across every single entity, where up mid to high single digits in.

Speaker Change: In Q1.

Michael: Looking to the second quarter, we expect earnings per share to be between $3.25 and $4.25. We are acutely focused on booking trends and the potential impact of tariffs, and we are closely monitoring the situation. And it is a risk. But today, our bookings have stabilized. Looking out to the third quarter and beyond, we've already taken action to pull down our less profitable flying, including red-eye flying, capacity in U.S. government traffic-heavy routes, and trans-border flying, aided by accelerating the retirement of 21-air We were the first airline to recognize slowing demand from U.S. government spending and to take appropriate action.

Speaker Change: Really great performance.

Speaker Change: We'll see where that lands in Q2, but Q2 international outperform again it has for years. We believe it will going forward. We have an order book to support that growth and we will continue to watch it that being said we also have a lot of older 780 Sevens and triple Sevens that we can potentially retire if things do change, but at this point we're leaning.

Speaker Change: In Q1.

Speaker Change: Really great performance.

Speaker Change: See where that lands in Q2, but Q2 international outperform again it has for years. We believe it will going forward. We have an order book to support that growth and we will continue to watch it that being said we also have a lot of older 780 Sevens and triple Sevens that we can potentially retire if things do change, but at this point we're leaning into.

Speaker Change: Into it because it is working.

Speaker Change: I'll add structurally the further you look out on the timeline I think the more.

Speaker Change: There are two structural supply constraints that are going to cause the international to outperform more and more over time number one is aircraft.

Speaker Change: It does it is working.

Speaker Change: And I'll add structurally the further you look out on the timeline I think the more.

Mike Leskinen: We expect our domestic capacity to come down 4 points from our original plan starting in Q3. There's a tremendous amount of uncertainty in the economy right now, and we've already seen a reduction in demand and correspondingly in revenue. But we've seen stability at that lower demand level in the last six weeks. And the silver lining is we also expect a significant reduction in our fuel cost if demand remains stable for the balance of the year. That combination of revenue decline and fuel cost reduction, along with the fact that we built a significant contingency into our initial guide, leaves me cautiously optimistic that we can still deliver full year earnings per share within our guidance range of $11.50 to 13.50.

We expect our domestic capacity to come down 4 points from our original plan starting in Q3. There's a tremendous amount of uncertainty in the economy right now, and we've already seen a reduction in demand and correspondingly in revenue. But we've seen stability at that lower demand level in the last six weeks. And the silver lining is we also expect a significant reduction in our fuel cost if demand remains stable for the balance of the year. That combination of revenue decline and fuel cost reduction, along with the fact that we built a significant contingency into our initial guide, leaves me cautiously optimistic that we can still deliver full year earnings per share within our guidance range of $11.50 to 13.50.

Speaker Change: All the aircraft that got retired and Covid combined with the supply chain challenges not just at the manufacturers, but much deeper in the supply chain, whether it's engines or BSC or kind of across the board.

Michael: We expect our domestic capacity to come down four points from our original plan starting in the third quarter. There's a tremendous amount of uncertainty in the economy right now, and we've already seen a reduction in demand and correspondingly in revenue, but we've seen stability at that lower demand level in the last six months. And the silver lining is we also expect a significant reduction in our fuel If demand remains stable for the balance of the year, that combination of revenue decline and fuel cost reduction, along with the fact that we built a significant contingency into our initial guide, leaves me cautiously optimistic that we can still deliver full-year earnings per share within our guidance range of $11.50 to $13.50.

Speaker Change: There are two structural supply constraints that are going to cause the international to outperform more and more over time number one aircrafts.

Speaker Change: There are going to be supply chain, a big supply chain challenges for wide body internationals.

Speaker Change: All the aircraft that got retired and Covid combined with the supply chain challenges not just at the manufacturers, but much deeper in the supply chain, whether it's engines or be a fee or kind of across the board.

Speaker Change: I think for the rest of my career.

Speaker Change: And then secondly, as airport constraints like Kent.

Speaker Change: I can't tell you how hard it was for us to get slots in Manila to fly to Manila.

Speaker Change: There are going to be supply chain, a big supply chain challenges for wide body international.

Speaker Change: And international markets are far more constrained from a capacity perspective at the airports and so if I had to make a bet.

Speaker Change: I think for the rest of my career.

Speaker Change: And then secondly, as airport constraints like.

Speaker Change: I can't tell you how hard it was for us to get slots in Manila to fly to Manila.

Speaker Change: I've actually make the bet the short term to just because I see the data, but if I had to make a bet on a year from now I'll have less confidence, but I had to think about 510 longer term.

Speaker Change: <unk>.

Speaker Change: And international markets are far more constrained from a capacity perspective at the airports and so if I had to make a bet.

Mike Leskinen: While we've seen stability in demand for the past six weeks, we also recognize that there's a real risk of the US economy going into a recession. If we enter a recession, we are modeling an additional five point reduction in total revenue for the remainder of the year on average per quarter. In that scenario, we would make an additional downward adjustment to capacity, and we have not assumed any further relief in fuel price even though that might happen even in that world. We expect our full year earnings per share to be between $7 and $9. While that is not what our expectations were at the start of the year, that scenario would be the first time United would have remained solidly profitable through a recession.

While we've seen stability in demand for the past six weeks, we also recognize that there's a real risk of the US economy going into a recession. If we enter a recession, we are modeling an additional five point reduction in total revenue for the remainder of the year on average per quarter. In that scenario, we would make an additional downward adjustment to capacity, and we have not assumed any further relief in fuel price even though that might happen even in that world. We expect our full year earnings per share to be between $7 and $9. While that is not what our expectations were at the start of the year, that scenario would be the first time United would have remained solidly profitable through a recession.

Michael: While we've seen stability and demand for the past six weeks, we also recognize that there's a real risk of the U.S. economy going into a recession. If we enter a recession, we are modeling an additional five-point reduction in total revenue for the remainder of the year, on average, per quarter. In that scenario, we would make an additional downward adjustment to capacity, and we have not assumed any further relief in fuel price, even though that might happen. Even in that world, we expect our full year earnings per share to be between $7 and $9. While that is not what our expectations were at the start of the year, that scenario would be the first time United would have remained solidly profitable through a recession.

Speaker Change: I'd put all my chips on international because the supply constraints.

Speaker Change: I would actually make the bet in the short term to just because I see the data, but if I had to make a bet on a year from now I'll have less confidence, but I had to think about 510 longer term, Matt I'd put all my chips on international because the supply constraints.

Speaker Change: Are real and are significant.

Speaker Change: Okay.

Speaker Change: That's really helpful. Thanks, so much and then just.

Speaker Change: As a follow up on Monday.

Speaker Change: Think about the rollout for Starlink on the mainline fleet, what the cadence like that could look like and then how you are contemplating potential share gains as that product comes out in the market.

Speaker Change: Are real and are significant.

Speaker Change: That's really helpful. Thanks, so much and then just.

Speaker Change: Okay.

Speaker Change: We got really positive.

Speaker Change: As a follow up.

Speaker Change: Socratic lever that you guys have next year. Thanks again for the time.

Speaker Change: Thinking about the rollout for Starlink on the mainline fleet, what the cadence like that could look like and then how youre contemplating potential share gains as that product comes out in the market.

Speaker Change: Yeah, we are very excited about star link and what it enables for our customers what it enables for connective and mileage plus as well we shouldn't forget that because these things are all kind of linked together, we've made a lot of different investments whether it be starlink food seed you name it and all those things together are kind of leading us to where we are today.

Speaker Change: That seems like a really positive.

Speaker Change: Socratic lever that you guys have Mike Thanks, again for the time.

Mike Leskinen: We believe it would justify significant multiple expansion as we will have proven our financial resiliency, our greatly improved competitive position, and the durability of a decommoditized business powered by brand loyal customers. Turning to the balance sheet, we ended the first quarter with $18.3 billion in liquidity, including our undrawn revolver. We generated over $2 billion of free cash flow and paid down $1 billion of debt. In fact, over the last 12 months we've generated over $5 billion in free cash flow, representing approximately 130% of our net income. At our current equity valuation, that represents an over 20% free cash flow yield. Our net leverage was reduced to 2.0x from 2.2x at the end of 2024, marking continued progress as we work towards our long-term net leverage target of less than two times.

We believe it would justify significant multiple expansion as we will have proven our financial resiliency, our greatly improved competitive position, and the durability of a decommoditized business powered by brand loyal customers. Turning to the balance sheet, we ended the first quarter with $18.3 billion in liquidity, including our undrawn revolver. We generated over $2 billion of free cash flow and paid down $1 billion of debt. In fact, over the last 12 months we've generated over $5 billion in free cash flow, representing approximately 130% of our net income. At our current equity valuation, that represents an over 20% free cash flow yield. Our net leverage was reduced to 2.0x from 2.2x at the end of 2024, marking continued progress as we work towards our long-term net leverage target of less than two times.

Michael: We believe it would justify significant multiple expansion, as we will have proven our financial resiliency, our greatly improved competitive position, and the durability of a decommoditized business powered by brand-loyal customers.

Speaker Change: Yeah.

Speaker Change: We are very excited about starlink and what it enables for our customers what it enables for connective and mileage plus as well we shouldn't forget that because these things are all kind of linked together, we've made a lot of different investments whether it be starlink food seed.

Speaker Change: <unk>.

Speaker Change: On the brand loyalty side, and I think it's been incredibly effective and so we're super proud of that investment in there I think theres more and more to come on that front.

Michael: Turning to the balance. We ended the first quarter with $18.3 billion in liquidity, including our Androna revolver. We generated over $2 billion of free cash flow and paid down $1 billion of debt. In fact, over the last 12 months, we've generated over $5 billion in free cash flow representing approximately 130% of our net income. At our current equity valuation, that represents an over 20% free cash flow. Our net leverage was reduced to 2.0 times from 2.2 times at the end of the at the end of 2024, marking continued progress as we work towards our long term net leverage target of less than Recognizing Our Progress, Fitch Upgraded United to Double B with a Positive Outlook, with a change to a positive outlook from Moody's as well.

Speaker Change: You name it and all those things together are kind of leading us to where we are today.

Speaker Change: The next question comes from Sheila <unk> with Jefferies. Your line is open.

Speaker Change: On the brand loyalty side, and I think it's been incredibly effective and so we're super proud of that investment in there I think there's more and more to come on that front.

Sheila: Good morning, guys and great quarter.

Sheila: Relative to the environment. So maybe if I could ask about international it's fairly strong, but I think in the prepared remarks that our comments around.

Speaker Change: The next question comes from Sheila <unk> with Jefferies. Your line is open.

Sheila: International non U.

Speaker Change: Down Europe, Thanks, Ken is that online.

Speaker Change: Good morning, guys great quarter.

Speaker Change: Relative to the environment. So maybe if I could ask about international it's fairly strong, but I think in the prepared remarks that our comments around.

Speaker Change: The increase in U S originated international traffic. So maybe if you could talk about that dynamic.

Speaker Change: Is there a share gain opportunity as you expand internationally and.

Speaker Change: International non U.

Mike Leskinen: Recognizing our progress, Fitch upgraded United a double B with a positive outlook. With the change to a positive outlook from Moody's as well on the buyback, as of April 10, we've repurchased approximately 5.6 million shares in 2025 at an average price of $80. History has taught us that even industry leaders are prone to steep market overcorrections in times like this. We built our buyback strategy around being opportunistic. We believe this is precisely the right time to repurchase our shares and at our current depressed valuation, with approximately $1 billion left in authorization, regardless of the economic path ahead, we expect our financial results to be resilient. We believe that the long term earnings power of our company hasn't changed and frankly, it's possible that some of the weaker airlines may be forced to curtail money losing capacity sooner than they otherwise might have.

Recognizing our progress, Fitch upgraded United a double B with a positive outlook. With the change to a positive outlook from Moody's as well on the buyback, as of April 10, we've repurchased approximately 5.6 million shares in 2025 at an average price of $80. History has taught us that even industry leaders are prone to steep market overcorrections in times like this. We built our buyback strategy around being opportunistic. We believe this is precisely the right time to repurchase our shares and at our current depressed valuation, with approximately $1 billion left in authorization, regardless of the economic path ahead, we expect our financial results to be resilient. We believe that the long term earnings power of our company hasn't changed and frankly, it's possible that some of the weaker airlines may be forced to curtail money losing capacity sooner than they otherwise might have.

Speaker Change: Down Europe, Canada down line offset by the increase in U S originated international traffic. So maybe if you could talk about that dynamic.

Speaker Change: Sorry customers and that's my guess and on the Pacific strength.

Touch upon different markets there.

Speaker Change: Sure what we wanted to give that data because I think as most people know there was some erroneous data about trans border traffic and some outrageous number which was completely false.

Michael: On the buyback, as of April 10, we've repurchased approximately 5.6 million shares in 2025 at an average price of $80. History has taught us that even industry leaders are prone to steep market overcorrections in times like this, and we've built our buyback strategy around being opportunistic. We believe this is precisely the right time to repurchase our shares at our current depressed valuation with approximately $1 billion left in authorization. Regardless of the economic path ahead, we expect our financial results to be resilient. We believe that the long-term earnings power of our company hasn't changed. And frankly, it's possible that some of the weaker airlines may be forced to curtail money-losing capacity sooner than they otherwise might.

Speaker Change: And is there a share gain opportunity as you expand internationally and some of our customers and that's my guess and on the Pacific strength, if you could touch upon different markets there.

Speaker Change: That was put out there. So we wanted to put out the numbers yet yes, we are seeing a modest decline in foreign origin business.

Speaker Change: Sure what we wanted to give that data because I think as most people know there was some erroneous data about trans border traffic and some outrageous number which was completely false.

Speaker Change: But you know our our U S origin point of sale is over I think a little over 80% to begin with and so the 20% has seen a modest decline and we're able to easily refill those seats with U S origin point demand. So that's as a result of all that our international looks fine.

Speaker Change: That was put out there. So we wanted to put out the numbers yet yes, we are seeing a modest decline in foreign origin business.

Speaker Change: But you know our our U S origin point of sale is over I think a little over 80% to begin with and so the 20% has seen a modest decline and we're able to easily refill those seats with U S origin point demand. So that's as a result of all that our international looks fine.

Speaker Change: In terms of overseas, particularly the Pacific that that entity is kind of leading the way clearly did in Q1 across the board we see strength just about everywhere in the Pacific, but Japan is really phenomenally strong right now for us and our partner.

Mike Leskinen: Therefore, our view of the intrinsic value of our shares also hasn't changed. In fact, as I mentioned earlier, we believe our multiples should expand as we prove that our business is stronger and more resilient even in a time of economic stress. For as long as our share price remains depressed, we plan to continue to utilize a meaningful portion of free cash flow to repurchase shares at what we believe are discounted prices. As I've mentioned the last several quarters, free cash flow generation remains a top priority. While demand has softened, we continue to expect to generate full year free cash flow approaching $3 billion in a base case and positive free cash flow even in a downside recession scenario. To close, United's competitive position in the industry is only strengthening.

Therefore, our view of the intrinsic value of our shares also hasn't changed. In fact, as I mentioned earlier, we believe our multiples should expand as we prove that our business is stronger and more resilient even in a time of economic stress. For as long as our share price remains depressed, we plan to continue to utilize a meaningful portion of free cash flow to repurchase shares at what we believe are discounted prices. As I've mentioned the last several quarters, free cash flow generation remains a top priority. While demand has softened, we continue to expect to generate full year free cash flow approaching $3 billion in a base case and positive free cash flow even in a downside recession scenario. To close, United's competitive position in the industry is only strengthening.

Michael: Therefore, our view of the intrinsic value of our shares also has... In fact, as I mentioned earlier, we believe our multiple should expand as we prove that our business is stronger and more resilient, even in a time of economic stress. For as long as our share price remains depressed, we plan to continue to utilize a meaningful portion of free cash flow to repurchase shares at what we believe are discounted prices. As I've mentioned in the last several quarters, free cash flow generation remains a top priority. While demand has softened, we continue to expect to generate full-year free cash flow approaching $3 billion in a base case and positive free cash flow even in a downside recession scenario.

Speaker Change: In terms of overseas, particularly the Pacific that that entity is kind of leading the way clearly did in Q1 across the board we see strength just about everywhere in the Pacific, but Japan is really phenomenally strong right now for us and our partner and so I think that is a noteworthy.

Speaker Change: So I think that is a noteworthy.

Speaker Change: The South Pacific is having a very good year and really across the board the Pacific looks really good the Atlantic I think also it looks really good Germany had a very good.

Speaker Change: The South Pacific is having a very good year.

Speaker Change: In Q1, we will see we will see where that is in Q2 and southern Europe.

And really across the board the Pacific looks really good Atlantic I think also it looks really good Germany had a very good quarter.

Speaker Change: Is just increasingly.

Speaker Change: <unk> vacation spot for U S consumers.

Speaker Change: And in fact for U S consumers to go in off peak periods. So overall.

Speaker Change: Quarter in Q1, we will see we'll see where that is in Q2 and southern Europe.

Speaker Change: Look you know I think the international environment would be even stronger if we hadn't had that deterioration in the origin business from overseas or the U S consumer is even stronger.

Speaker Change: Is just increasingly desirable vacation spot for U S consumers.

Kristina Edwards: Close, United's competitive position in the industry is only strengthened We're focused on leaning into our network strengths, continuing to win brand loyal customers and delivering on our financial Now back to Kristina to start the Q&A. Thank you, Mike.

Speaker Change: And in fact for us consumers to go in off peak periods. So overall.

Speaker Change: Stronger economic outlook, but the international entity. It looks I think really good is a strong source of profit for United.

Mike Leskinen: We're focused on leaning into our network strengths, continuing to win brand loyal customers, and delivering on our financial commitments. Now back to Christina to start the Q and A.

Michael Leskinen: We're focused on leaning into our network strengths, continuing to win brand loyal customers, and delivering on our financial commitments. Now back to Kristina to start the Q and A.

Speaker Change: Look you know I think the international environment would be even stronger if we hadn't had that deterioration in the origin business from overseas or the U S consumer is even stronger than us.

Speaker Change: And we're very bullish about the short term and long term outlook.

Kristina Edwards: Thank you, Mike. We will now take questions from the analyst community. Please limit yourself to one question and, if needed, one follow-up question. Sarah, please describe the procedure to ask a 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. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Please hold for a moment while we assemble our queue. Your first question comes from Jamie Baker of J.P. Morgan. Your line is open.

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

Speaker: We will now take questions from the analyst community. Please limit yourself to one question and if needed, one follow-up.

Speaker Change: And maybe one for Mike.

Speaker Change: Stronger economic outlook, but the international entity. It looks I think really good is a strong source of profits for United.

Speaker Change: On the seven to $9 scenario in a recession, how do we think about your operating margins and free cash flow in that scenario.

Sarah: Sarah, please describe the procedure to us. Thank you.

Operator: 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. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Please hold for a moment while we assemble our queue. Your first question comes from Jamie Baker of J.P. Morgan. Your line is open.

Speaker Change: And we're very bullish about the short term and long term outlook.

Speaker: The question and answer session will be conducted electronically.

Speaker Change: Yeah.

Speaker Change: Seven to $9.

Speaker: If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon.

Speaker Change: And maybe one for Mike.

Speaker Change: Operating margin is just math.

Mike Leskinen: On the seven to $9 scenario in a recession, how do we think about your operating margins and free cash flow in that scenario.

Speaker Change: We can help you with that offline around free cash that ends up being we would expect that to be near breakeven, but still positive free cash in the seven to nine range. We would have some theres some movement in capex, but probably not this calendar year.

Speaker Change: Uh huh.

Speaker Change: $709. The operating margin is just math.

Speaker: Please hold for a moment while we assemble our assembly.

Speaker Change: We can help you with that offline around free cash that ends up being we would expect that to be near breakeven, but still positive free cash in the seven to nine range. We would have some theres some movement in capex, but probably not this calendar year.

Jamie Baker: Your first question comes from Jamie Baker of JPMorgan. Your line is open. Oh, hey, good morning, everybody. So first one probably for Scott or, or Mike, presumably this past January, you had an internal forecast for 2026 earnings. If we embrace something closer to the recessionary scenario that you just laid out, would your internal 2026 forecast be higher, lower, or the same today? Hey, Jamie. Thanks for that question. I think it's an insightful and maybe the most important question we talked about today. Oh, thank you. We can end the call after my question. There you go.

Speaker Change: Okay. Thank you.

Speaker Change: Yes.

Tom Fitzgerald: The next question comes from Tom <unk> with UBS. Your line is open.

Mike Leskinen: Oh, hey, good morning everybody. So first one probably for Scott or Mike. Presumably this past January you had an internal forecast for 2026 earnings. If we embrace something closer to the recessionary scenario that you just laid out, what would your internal 2026 forecast be? Higher, lower, or the same today?

Jamie Baker: Oh, hey, good morning everybody. So first one probably for Scott or Mike. Presumably this past January you had an internal forecast for 2026 earnings. If we embrace something closer to the recessionary scenario that you just laid out, what would your internal 2026 forecast be? Higher, lower, or the same today?

Speaker Change: Yes.

Speaker Change: Yes, good morning.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks for the chance to ask question here I wanted to ask you a little bit about some of the cost assumptions and maybe how the pace of union agreements tends to work.

Speaker Change: The next question comes from Tom <unk> with UBS. Your line is open.

Speaker Change: Okay.

Speaker Change: Yes, good morning.

Speaker Change: During an economic downturn.

Speaker Change: Thanks for the chance to ask question here I wanted to ask you a little bit about some of the cost assumptions and maybe how the pace of union agreements tends to work during.

Speaker Change: Thinking of the flight attendants in particular, but.

Speaker Change: Do you think progress tends to be slower if you're in a recession or things or a lot weaker or do you kind of think the same assumptions in terms of your cost profile.

Scott Kirby: Hey Jamie, thanks for that question. I think it's insightful and maybe the most important question we talk about today.

Scott Kirby: Hey Jamie, thanks for that question. I think it's insightful and maybe the most important question we talk about today.

Speaker Change: During an economic downturn.

Speaker Change: I'm thinking of the flight attendants in particular.

Speaker Change: Timing of when you might get a union agreement.

Andrew Nocella: Thank you.

Jamie Baker: Thank you.

Speaker Change: Do you think progress tends to be slower if you're in a recession or things or a lot weaker or do you kind of think the same assumptions in terms of your cost profile on timing of when you might get a union agreement.

Mike Leskinen: We can end the call after my question.

We can end the call after my question.

Scott Kirby: There you go. Go eat more donuts. I'm going to slightly modify your timing from 2026 to say the 12 months once we're sorted to a normalized back to growth economy. I happen to think that'll be for 2026, but sort of depends on the macro environment. But in the 12 months where we're back to a normal macroeconomy, the short answer is yes, our margins would be higher. I would go, but I would go back to what we've been telling you really for the last five years. It started with one, we were going to decommoditize and build United into a brand loyal airline. That's been a part of the United Next strategy. It's been a part of the entire strategy coming out of COVID. Second was cost convergence was going to be a fundamental structural change for the industry. Third is revenue diversity.

Scott Kirby: There you go. Go eat more donuts. I'm going to slightly modify your timing from 2026 to say the 12 months once we're sorted to a normalized back to growth economy. I happen to think that'll be for 2026, but sort of depends on the macro environment. But in the 12 months where we're back to a normal macroeconomy, the short answer is yes, our margins would be higher. I would go, but I would go back to what we've been telling you really for the last five years. It started with one, we were going to decommoditize and build United into a brand loyal airline. That's been a part of the United Next strategy. It's been a part of the entire strategy coming out of COVID. Second was cost convergence was going to be a fundamental structural change for the industry. Third is revenue diversity.

Speaker Change: Our people are doing a great job.

Scott Kirby: I'm going to slightly modify your timing from 2026 to say the 12 months once we're sorted to a normalized back to growth economy. I happen to think that'll be for 2026, but it sort of depends on the macro environment. But in the 12 months where we're back to a normal macro economy, the short answer is yes, our margins would be higher. But I would go back to what we've been telling you really for the last five years. And it started with, one, we were going to decommoditize and build United into a brand loyal airline. That's been a part of the United next strategy that's been a part of the entire strategy coming out of COVID.

Speaker Change: You can see it in our resilient result, when I say, we have one brand loyal customers, we talked about the hard product the biggest thing we do.

Speaker Change: It's our people care and take care of customers, there's nothing as powerful as walking onto an airplane to fly to the galley who are smiling who are happy who are positive who you can tell are happy and positive there's nothing as impactful as Katherine come out of the cockpit and talking to the customers standing there.

Speaker Change: Our people are doing a great job.

Speaker Change: You can see it in our resilient result, when I say, one brand loyal customer we talked about the hard product the biggest thing we do.

Speaker Change: Our people care and take care of customers, there's nothing as powerful as walking onto an airplane to fly it as in the galley who are smiling who are happy who are positive who you can tell are happy and positive there's nothing as impactful as Katherine come out of the cockpit and talking to the customers extending their and Theyre doing a great job.

Speaker Change: They're doing a great job and we are winning even in a recession.

Speaker Change: So theyre going to get good industry, leading contracts.

Speaker Change: They deserve it in this recessionary environment, even if it happens it isn't going to change that.

Scott Kirby: Second was cost convergence was going to be a fundamental structural change for the industry. Third is revenue diversity. We see that we talked about international today, but we haven't talked about loyalty yet, but loyalty strong, like across the board, that's been another structural change. Part of this too has also part of the revenue diversity has been solving, finally solving the puzzle on the price sensitive travel. And we have done that with basic economy. And so all the things that we've talked about for the last five years led to us on the last call, talking about comparative advantage and saying that we thought the world was going to, the airline world was going to evolve to a place where airlines flew primarily in places where they had competitive advantages and the kind of...

Speaker Change: We are winning even in a recession.

Speaker Change: And we're getting close.

Speaker Change: By attendance so fingers crossed that we're that we're near the goal line.

Speaker Change: So theyre going to get good industry, leading contract.

Speaker Change: They deserve it in this recessionary environment, even if it happens it isn't going to change that.

Speaker Change: Yeah.

Scott Kirby: You know, we see that, you know, we talked about international today, but we haven't talked about loyalty yet, but loyalty strong like across the board. That's been another structural change. Part of this too has also part of the revenue diversity has been solving finally solving the puzzle on the price sensitive travel. And we have done that with Basic Economy engage. And so all the things that we've talked about for the last five years we led to us on the last call talking about comparative advantage and saying that we thought the world was going to, the airline world was going to evolve to a place where airlines flew primarily in places where they had competitive advantages.

You know, we see that, you know, we talked about international today, but we haven't talked about loyalty yet, but loyalty strong like across the board. That's been another structural change. Part of this too has also part of the revenue diversity has been solving finally solving the puzzle on the price sensitive travel. And we have done that with Basic Economy engage. And so all the things that we've talked about for the last five years we led to us on the last call talking about comparative advantage and saying that we thought the world was going to, the airline world was going to evolve to a place where airlines flew primarily in places where they had competitive advantages.

Speaker Change: Okay, so that doesn't affect your view on timing.

Speaker Change: And.

Speaker Change: Well I guess the second question.

Speaker Change: And we're getting close.

Speaker Change: By attendance so fingers crossed that were that were near the goal line.

Speaker Change: No I think you've said well we don't assume this cycle is different or we don't we don't assume things are different but clearly united position.

Speaker Change: Yeah.

Speaker Change: Okay, so that doesn't affect your view on timing.

Speaker Change: Is different you identified that really clearly with the commentary on the market share in hub.

Speaker Change: Well I guess the second question.

Speaker Change: So I think you said well we don't have seen this cycle is different or we don't we don't assume things are different but clearly United tradition.

Speaker Change: Do you think that maybe the consumer is different as well maybe more of the spend is with high end consumers that would maybe support resilient international or how do you think about that I guess I'm just trying to think of in a recession wouldn't naturally international flying come down I mean, you haven't seen that yet.

Speaker Change: Is different you identified that really clearly with the commentary on the market share in the hub.

Speaker Change: Do you think that maybe the consumer is different as well maybe more of the spend is with high end consumers that would maybe support resilience on international.

Scott Kirby: And you know, the kind of capacity wars that have happened in the past would become a thing of the past because all of the trends we talked about just had separated the gap between the brand loyal airlines and everyone else. And so what this stressful environment is going to do is it is going to accelerate what was going to happen anyway of airlines focusing in markets where they have comparative advantage. And that means that looking forward there's going to be less unprofitable flying in the industry, which means less total flying than was going to happen. And that is just going to happen sooner. That means that I am confident that United Airlines is going to have higher margins than we would have had this taken longer to occur.

And you know, the kind of capacity wars that have happened in the past would become a thing of the past because all of the trends we talked about just had separated the gap between the brand loyal airlines and everyone else. And so what this stressful environment is going to do is it is going to accelerate what was going to happen anyway of airlines focusing in markets where they have comparative advantage. And that means that looking forward there's going to be less unprofitable flying in the industry, which means less total flying than was going to happen. And that is just going to happen sooner. That means that I am confident that United Airlines is going to have higher margins than we would have had this taken longer to occur.

Speaker Change: See if you have any other comments to offer on that is just like consumer make different international was more resilient. This time around even if you go into recession. Thank you P. I.

Speaker Change: Or how do you think about that I guess I'm, just trying to think of in a recession wouldn't.

Speaker: Persons", Dr. Doug Campbell, and Unknown Attendee. Do not use the gender characters in this webinar. I am confident that United Airlines is going to have higher margins than we would have had this taken longer to occur.

Speaker Change: Absolutely International flying come down I mean, you haven't seen that yet you just wanted to see if you have any other comments to offer on that is just like consumer make different international is more resilient.

Speaker Change: International is definitely been more resilient, but I do think there are different types of consumers in each of those consumer tax appeals at a different level of pressure.

Speaker Change: This time around even if you go into recession. Thank you P I.

Speaker Change: And the situation that the country faces right now and clearly the discretionary consumer facing more pressure and that that customer with probably less likely to take that vacation a room or Tokyo to begin with so the high end consumer which I think you know from a look at well over the few years yet the market is down.

Speaker Change: International is definitely been more resilient, but I do think there are different types of consumers in each of those consumer types fuels a different level of pressure.

Speaker Change: The situation that the country faces right now and clearly the discretionary consumer.

Speaker Change: There's more pressure and that that customer with probably less likely to take that vacation a room or tokyo to begin with so.

Speaker Change: In recent months, but the high end consumer the more wealthy consumer the one that takes the global vacations, but one that wants to sit in a premium.

Speaker: And in fact, I will go one step further and say that when we get to the 12 months sort of post this economic period, not only are we going to have higher margins, I believe they will be solidly double-digit. Okay, thank you for that.

Scott Kirby: In fact I will go one step further and say that when we get to the 12 months sort of post this economic period, not only are we going to have higher margins, I believe they will be solidly double digit margins. Okay, thank you for that.

In fact I will go one step further and say that when we get to the 12 months sort of post this economic period, not only are we going to have higher margins, I believe they will be solidly double digit margins.

Speaker Change: So the high end consumer, which I think you know from a look at well over the few years, yet the markets down in recent months, but the high end consumer the more wealthy consumer the one that takes the global vacations, but one that wants to sit in a premium.

Speaker Change: Pete.

Speaker Change: Seems to be less impacted so far.

Speaker Change: And I think that's really good for our business and its consistent with our brand and win these customers to begin with.

Jamie Baker: Okay, thank you for that.

Jamie Baker: And then, you know, Mike, I know you touched on this in your prepared remarks, but you know your premium high margin competitor refuses to buy back you know stock until they meet their leverage targets you were obviously pretty active last quarter or you know through April 10. You know I'd love to believe it's because you like our down 30 and 30 analysis but in all seriousness you know our question on this topic is is why is it simply a function of you know cash flying around burning a hole in your pocket giving the delivery delays I guess I guess what Mark you know Mark Streeter and I are trying to reconcile is your own goal to de-risk the balance sheet and achieve IG ratings against some pretty material repurchases through April 10.

Mike Leskinen: You know, Mike, I know you touched on this in your prepared remarks, but you know, your, your premium high margin competitor refuses to buy back, you know, stock until they meet their leverage targets. You were obviously pretty active last quarter or you know, through April 10th. You know, I'd love to believe it's because you like our down 30 and 30 analysis. But in all seriousness, you know, our question on this topic is, is why is it simply a function of, you know, cash flowing around burning a hole in your pocket given the delivery delays? I guess what Mark, you know, Mark Streeter and I are trying to reconcile as your own goal to de-risk the balance sheet and achieve IG ratings against some pretty material repurchases through April 10th. Any additional color? Thanks Jamie. I love the question.

You know, Mike, I know you touched on this in your prepared remarks, but you know, your, your premium high margin competitor refuses to buy back, you know, stock until they meet their leverage targets. You were obviously pretty active last quarter or you know, through April 10th. You know, I'd love to believe it's because you like our down 30 and 30 analysis. But in all seriousness, you know, our question on this topic is, is why is it simply a function of, you know, cash flowing around burning a hole in your pocket given the delivery delays? I guess what Mark, you know, Mark Streeter and I are trying to reconcile as your own goal to de-risk the balance sheet and achieve IG ratings against some pretty material repurchases through April 10th. Any additional color?

Speaker Change: Hey, Tom This is Mike I want to add to that.

Pete.

Speaker Change: It seems to be less impacted so far.

Speaker Change: There's also been a real mix shift.

Speaker Change: And I think that's really good for our business and its consistent with our brand in one of these customers to begin with.

Speaker Change: I did I think probably the industry level with a real mix shift.

Speaker Change: In our premium cabins, we have less corporate and we have that we have more premium leisure.

Speaker Change: Hey, Tom This is Mike I want to add to that I think there's also been a real mix shift at United I think probably the industry level with a real mix shift.

Speaker Change: And I believe that piece of our business is showing some great resilience as well so a lot of secular trends are accruing to our benefit.

Speaker Change: In our premium cabins, we have less corporate and we have that we have more premium leisure.

Speaker Change: Okay.

Speaker Change: Great.

Speaker Change: And I believe that piece of our business is showing some great resilience as well so a lot of secular trends are accruing to our benefit.

Speaker Change: Thanks for the insight.

Speaker Change: The next question comes from Duane <unk> with Evercore ISI. Your line is open.

Speaker Change: Okay.

Speaker Change: Great.

Duane: Hey, Thanks, Good morning, I have a book club question for you.

Speaker Change: Thanks for the insight.

Speaker Change: The next question comes from Duane <unk> with Evercore ISI. Your line is open.

Michael: Any additional color? Thanks, Jamie. I love the question. Look, when we think about buyback versus deleveraging, we are trying to optimize our overall cost to capital. And therefore, as our stock price declines, and the gap between our market price and our view of intrinsic value of the shares, as that widens, it is more opportunistic to buy back shares. And so that's what you have seen, you've seen an acceleration of buyback as the share price was lower. Now, we are very, very disciplined around making sure we have guardrails around that. And we need to continue to deleverage.

Speaker Change: You really piqued our interest with our recent book recommendation capital returns.

Michael Leskinen: Thanks Jamie. I love the question.

Mike Leskinen: Look, when we think about buyback versus deleveraging, we are trying to optimize our overall cost of capital, and therefore, as our stock price declines and the gap between our market price and our view of intrinsic value of the shares, as that widens, it is more opportunistic to buy back shares. And so that's what you have seen. You've seen an acceleration in the buyback as the share price was lower. Now we are very, very disciplined around making sure we have guardrails around that, and we need to continue to deleverage. I'm very prominent about talking about getting our leverage, our net leverage below two times. It's very important to us to continue to march towards investment grade. It is very important to us that the buyback is funded by free cash flow and that we do not drift into a debt funded buyback.

Look, when we think about buyback versus deleveraging, we are trying to optimize our overall cost of capital, and therefore, as our stock price declines and the gap between our market price and our view of intrinsic value of the shares, as that widens, it is more opportunistic to buy back shares. And so that's what you have seen. You've seen an acceleration in the buyback as the share price was lower. Now we are very, very disciplined around making sure we have guardrails around that, and we need to continue to deleverage. I'm very prominent about talking about getting our leverage, our net leverage below two times. It's very important to us to continue to march towards investment grade. It is very important to us that the buyback is funded by free cash flow and that we do not drift into a debt funded buyback.

Speaker Change: The book covers a lot of ground and we won't do it justice here, but it focuses on supply analysis and the authors advocate for buying equities and sectors when industry returns are low.

Speaker Change: Hey, Thanks, Good morning I have.

Speaker Change: A book club question for you.

Speaker Change: You really piqued our interest with our recent book recommendation capital returns.

Speaker Change: The book covers a lot of ground and we won't do it justice here, but it focuses on supply analysis and the authors advocate for buying equities and sectors when industry returns are low.

Speaker Change: And capacity is exiting.

Speaker Change: It also makes the point that lower asset growth firms lower capex firms tend to outperform higher asset growth firms over the long run. So so with that long winded intro Scott what are the highlights from your perspective, and maybe for Mike and Andrew How would this book influence.

Scott Kirby: And capacity is exiting it also makes the point that lower asset growth firms lower capex firms tend to outperform higher asset growth firms over the long run. So so with that long winded intro Scott what were the highlights from your perspective and maybe from.

Michael: I'm very prominent about talking about getting our leverage, our net leverage below two times. It's very important to us to continue to march towards investment grade. It is very important to us that the buyback is funded by free cash flow.

Speaker Change: Youre thinking about growth and capital allocation.

Speaker Change: Well I'm glad that you read my book recommendations I have another one.

Speaker Change: They're really yet actually I forget the title by Brian Great anyone's interested in physics.

Scott Kirby: Mike and Andrew how would this book influence your thinking about growth and capital allocation.

Speaker: And that we do not, we do not Leonhardt, Sean Hill, Rick Hoschel, haroldsimpson, Ina Van Den Heuvelen, Patricia saja, Sebastian Attair, Scott and Mike, thank you very much. Appreciate it.

Speaker Change: <unk>.

Look forward to it.

Speaker Change: Well I'm glad that you read my book recommendation I have another one.

Mike Leskinen: So, with all of those constraints, we feel confident about the future and excited about, frankly, an opportunity to purchase shares at these low prices. Scott and Mike, thank you very much.

Speaker Change: On understanding.

So, with all of those constraints, we feel confident about the future and excited about, frankly, an opportunity to purchase shares at these low prices.

Speaker Change: The search for a unified theory.

Speaker Change: And it's really good but capital returns is good also.

Speaker Change: They're really yet actually I forget the title with by Brian Great anyone's interested in physics.

Speaker Change: Spectacular.

Speaker Change: And there's a lot of good lessons in there of how to think to.

Jamie Baker: Scott and Mike, thank you very much.

Speaker Change: Look forward to it on understanding.

Scott Kirby: Appreciate it.

Appreciate it.

Speaker Change: The search for a unified theory.

Speaker Change: Think about it one for me is you know.

Kristina Edwards: The next question comes from Andrew Didora with Bank of America. Your line is open.

Kristina Edwards: The next question comes from Andrew Didora with Bank of America. Your line is open.

Andrew Didora: The next question comes from Andrew Didora with Bank of America, your line is open. Hi, good morning, everyone. Mike, you know, you mentioned the cost performance in your prepared remarks, you know, really impressive here in one cue. You know, I would imagine it's hard to do much better than that going forward. Is that the right way to think about it?

Speaker Change: And it's really good but capital returns is good also.

Speaker Change: Which probably appeals to the way I think but it has to be willing to think against the consensus.

Speaker Change: And there's a lot of good lessons in there of how to think.

Scott Kirby: Hi, good morning everyone. Mike, you mentioned the cost performance in your prepared remarks. Really impressive here in Q1. I would imagine it's hard to do much better than that going forward. Is that the right way to think about it? Can you maybe speak to additional cost levers you have if the revenue environment starts to move towards your recession scenario?

Andrew Didora: Hi, good morning everyone. Mike, you mentioned the cost performance in your prepared remarks. Really impressive here in Q1. I would imagine it's hard to do much better than that going forward. Is that the right way to think about it? Can you maybe speak to additional cost levers you have if the revenue environment starts to move towards your recession scenario?

Speaker Change: When everyone else is buying airplanes is probably the wrong time to buy airplanes.

Speaker Change: So think about it.

Speaker Change: One for me is you know.

Speaker Change: We did we did do it at the right time.

Speaker Change: Which probably appeals to the way I think but has to be willing to think against the consensus.

Speaker Change: And Covid when everyone else thought the world was coming to an end and air travel would never fun.

Speaker Change: When everyone else is buying airplanes is probably the wrong time to buy airplanes.

Speaker Change: Recover.

Michael: And can you maybe speak to additional cost levers you have, if the revenue environment starts to move towards your recession scenario? Thanks, Andrew, for the question. We're very proud of our cost performance in the first quarter.

Speaker Change: You just heard and I think I think about supply like way more than I think about the demand environment. The demand environment to go up demand, whether it's going to go down overtime demand is going to grow a little faster than GDP for air travel and Theres going to be short term variations like there are right now.

Speaker Change: We did do it at the right time.

Speaker Change: And Covid when everyone else thought the world was coming to an end and air travel would never.

Mike Leskinen: Thanks Andrew for the question. We're very proud of our cost performance in the first quarter. But before I talk about the first quarter, let me talk about our focus on building a cost efficient culture here at United. We are being intentional about spending in areas that improve the customer experience. But we also know that there are a lot of areas to be more efficient as an airline. These opportunities are wide ranging, including, for example, improving our procurement organization and taking advantage of technology and data. And we've always said that running a reliable operation, the best path to a low cost operation, most importantly, running a reliable operation is the best way we can win brand loyal customers. So we feel great about it.

Scott Kirby: Thanks Andrew for the question. We're very proud of our cost performance in the first quarter. But before I talk about the first quarter, let me talk about our focus on building a cost efficient culture here at United. We are being intentional about spending in areas that improve the customer experience. But we also know that there are a lot of areas to be more efficient as an airline. These opportunities are wide ranging, including, for example, improving our procurement organization and taking advantage of technology and data. And we've always said that running a reliable operation, the best path to a low cost operation, most importantly, running a reliable operation is the best way we can win brand loyal customers. So we feel great about it.

Speaker Change: Recover.

Speaker Change: You just heard and I think I think about supply like way more than I think about the demand environment. The demand environment seem to go up demand and I am just going to go down overtime demand is going to grow a little faster than GDP for air travel and theres going to be toward term variations like there are right now.

Michael: But before I talk about the first quarter, let me talk about our focus on building a cost efficient culture here at United. We are being intentional about spending in areas that improve the customer experience. But we also know that there are a lot of areas to be more efficient as an airline. These opportunities are wide ranging, including, for example, improving our procurement organization, and taking advantage of technology and data. And we've always said that running a reliable operation is the best path to a low cost operation. Most importantly, running a reliable operation is the best way to we can win brand loyal customers.

Speaker Change: Stress about those I follow what's happening with supply I think this is going to lead to better supply.

Speaker Change: Changes.

Speaker Change: And also even my answer on the International question why I feel so buildup that international not just not because it's booked well right now I would like something could change in the short term.

Speaker Change: Stress about those that follow what's happening with supply I think this is going to lead to better supply.

Speaker Change: But because I look out a few years and the supply environment is going to be constrained internationally and that is the place you want to go.

Speaker Change: Changes.

Speaker Change: And also even my answer on the international question.

Speaker Change: So buildup that international not just not because it's booked well right now I would like something could change in the short term.

Speaker Change: I've been way more frustrated that Boeing didn't get us all of our 787 that they didn't get us all of our 737.

Speaker Change: Because I look out a few years and the supply environment is going to be constrained internationally and that is the place you want to go.

Michael: So we feel great about it. I do think we've had some costs that we don't think we've had some maintenance costs that drifted from 1Q into 2Q. And so I'd expect 1Q-CASM-X to be the best performance of the year. But as we sit here, I expect meaningfully better CASM-X for the full year than I would have thought just in January. So we're going to continue to work hard to find more areas for efficiency.

Speaker Change: Because we were the only ones in the world that wanted to make that bet.

Mike Leskinen: I do think we've had some costs that we don't think we have had some maintenance costs that drifted from Q1 into Q2. So I'd expect Q1 CASM-ex to be the best performance of the year. But as we sit here, I expect meaningfully better CASM-ex for the full year than I would have thought just in January. So we're going to continue to work hard to find more areas for efficiency, but we made a lot of progress.

I do think we've had some costs that we don't think we have had some maintenance costs that drifted from Q1 into Q2. So I'd expect Q1 CASM-ex to be the best performance of the year. But as we sit here, I expect meaningfully better CASM-ex for the full year than I would have thought just in January. So we're going to continue to work hard to find more areas for efficiency, but we made a lot of progress.

Speaker Change: Made that bet.

Speaker Change: It's paying off but it could have paid off even bigger.

Speaker Change: <unk> been way more frustrated that Boeing didn't get us over 787 that they didn't get us all of our 730 Sevens.

Speaker Change: But you know.

Speaker Change: It's a great book, everyone should read it.

Speaker Change: Because we were the only ones in the world that wanted to make that bet.

Speaker Change: It's the first time, given a homework assignment to the team, but the financing network team I got them all copies, it's hard to get by the way not in print.

Speaker Change: Did that bet.

Speaker Change: And it's paying off but it could have paid off even bigger.

Speaker Change: But.

Speaker Change: But Aaron garner more copies.

Speaker Change: Anyway, it's a great book, everyone should read it.

Speaker: But we made a lot of progress Got it understood.

Speaker Change: And some of the lessons either Mike.

Speaker Change: It's the first time, giving a homework assignment for the team, but the finance the network team I got them all copies, it's hard to get by the way not in print.

Scott Kirby: In Q1. Got it. Understood. And then just my second question, just wanted to get your thoughts on the five points of lower revenue production in a recessionary scenario. I guess why is that the right number to anchor to? And I guess what's embedded from an industry perspective to get to the $7 to 9 in EPS. Thank you.

Andrew Didora: In Q1. Got it. Understood. And then just my second question, just wanted to get your thoughts on the five points of lower revenue production in a recessionary scenario. I guess why is that the right number to anchor to? And I guess what's embedded from an industry perspective to get to the $7 to 9 in EPS. Thank you.

Duane: Duane I'll make two points.

Duane: But I thought the book emphasize number one.

Michael: And then just my second question, just wanted to get your thoughts on the four on the five points of lower revenue production in a recessionary scenario. I guess, why is that the right number to anchor to? And I guess what's what's embedded from an industry perspective to get to the seven to seven to $9 an EPS? Thank you. It's a great question. And I'll maybe Andrew want to jump on at the end. But, but from a high level, what you've seen from what we expected in January, to what we expect in the base case now, you've seen an about five point reduction in revenue from what we thought just a few months ago.

Speaker Change: Capex, we'd be thoughtful and disciplined around that.

Speaker Change: But Aaron garner more copies.

Speaker Change: Okay.

Speaker Change: Mike.

Speaker Change: The investments we make in aircrafts, they're 30 year investments to make sure that our expected return through cycle return on invested capital above our cost of capital.

Speaker Change: Oh boy I'll make two points.

Speaker Change: But I thought the book emphasize number one.

Speaker Change: Capex, we'd be thoughtful and disciplined around that.

Speaker Change: Given the constraints to supply that we've been harping on we feel very strongly about that we've got some older aircraft in fact that if we could get our additional deliveries the return profile of replacing some of those older aircraft is quite strong nicely exceeding our cost of capital, but deploy the book as we need to maintain discipline.

Speaker Change: The investments we make in aircrafts, they're 30 year investments to make sure that our expected return through cycle return on invested capital above our cost of capital.

Mike Leskinen: It's a great question. Maybe Andrew will want to jump on at the end. From a high level, what you've seen, from what we expected in January to what we expect in the base case now, you've seen about a 5-point reduction in revenue from what we thought just a few months ago. The recession scenario would be an additional five-point reduction starting whenever we enter into that recession, so sometime in Q3 most likely. If you, if you add those together, which would be the appropriate way to think about it, it would be a 10-point reduction from the run rate we would have expected. Now, how long we persist at that low level, you're going to have to make your own assumptions around.

Scott Kirby: It's a great question. Maybe Andrew will want to jump on at the end. From a high level, what you've seen, from what we expected in January to what we expect in the base case now, you've seen about a 5-point reduction in revenue from what we thought just a few months ago. The recession scenario would be an additional five-point reduction starting whenever we enter into that recession, so sometime in Q3 most likely. If you, if you add those together, which would be the appropriate way to think about it, it would be a 10-point reduction from the run rate we would have expected. Now, how long we persist at that low level, you're going to have to make your own assumptions around.

Speaker Change: Given the constraints to supply that we've been harping on we feel very strongly about that we've got some older aircraft in fact that if we could get.

We need to be willing to think differently and turn right when the market turns left in and vice versa.

Speaker Change: Additional deliveries the return profile of replacing some of those older aircraft is quite strong nicely exceeding our cost of capital, but deploy the book as we need to maintain discipline and we need to be willing to think differently and you know turn rate when the market turns left in and vice versa. The second point that.

Michael: And then the recession scenario would be an additional five point reduction, starting whenever we enter into that recession. So sometime in the third appropriate way to think about it, it would be a 10 point reduction from the run rate we would have expected. Now how long we persist at that low level, you're going to have to make your own assumptions around. And listen, we're not we don't have a ball on how deeper recession might be. But that's our expectation of what a normal recession might look like. We've given you the tools if you want to create a different scenario than that.

Speaker Change: Second point the book emphasize that I'm I've been passionate about since I left the buy side is that buyback should be opportunistic.

Speaker Change: If at some point, we don't feel like it should be opportunistic we can pivot to a dividend, but buybacks. When the shares are on sale because of the market is panicked, we should be willing to step in.

Speaker Change: The book emphasize that.

Speaker Change: I have been passionate about since I left the buy side is that buybacks should be opportunistic.

Speaker Change: Within the constraints of managing our balance sheet to drive towards investment grade, we should be willing to step in in a more heavy handed way and when the shares closed in on intrinsic value. We should just turn it off completely and allow our balance sheet to improve more rapidly those would be the two points.

Speaker Change: If at some point, we don't feel like it should be opportunistic we can pivot to a dividend.

Mike Leskinen: Listen, we're not, we don't have a crystal ball on how deep a recession might be. That's our expectation of what a normal recession might look like. We've given you the tools if you want to create a different scenario than that. That, that would be our expectation of a downside case and we wanted to be transparent with you all around the assumptions.

Listen, we're not, we don't have a crystal ball on how deep a recession might be. That's our expectation of what a normal recession might look like. We've given you the tools if you want to create a different scenario than that. That, that would be our expectation of a downside case and we wanted to be transparent with you all around the assumptions.

Speaker Change: But buybacks when the shares are on sale because the market is panicked, we should be willing to step in.

Within the constraints of managing our balance sheet to drive towards investment grade, we should be willing to step in in a more heavy handed way and when the shares close in on intrinsic value. We should just turn it off completely and allow our balance sheet to improve more rapidly those would be the two points.

Speaker: But that would be our expectation of a downside case. And we wanted to be transparent with you all around Great. Thank you very much.

Speaker Change: Oh, only add a relative point that I thought was most interesting about because of the supply side forecast and in this case I you know I'll just reiterate what Scott said that the international airports around the globe and the big airports in the United States are really not building runways and we're not building gate.

Scott Kirby: Great, thank you very much.

Andrew Didora: Great, thank you very much.

Mike Leskinen: Hey, I want to clarify that the 10 point reduction, it kicks in in April for our recession scenario.

Scott Kirby: Hey, I want to clarify that the 10 point reduction, it kicks in in April for our recession scenario.

Speaker: Hey, I want to clarify that the pinpoint reduction it kicks in in April for our recess.

Speaker Change: Hi.

Speaker Change: We add a relative point that I thought was most interesting about because of the supply side forecast and in this case I you know I'll just reiterate what Scott said that the international airports around the globe and the big airports in the United States, We're really not building runways and we're not building gate.

Speaker Change: But as GDP grows we're building demand and so I remain very bullish in the big cities that we have our ups in here in this country in the big cities, who fly to around the globe, where it's become increasingly difficult if not impossible to be able to extend schedules.

Kristina Edwards: The next question comes from Connor Cunningham of Melius Research. Your line is open.

Operator: The next question comes from Connor Cunningham of Melius Research. Your line is open.

Conor Cunningham: The next question comes from Conor Cunningham of Melius Research. Your line is open. Hi, everyone. Thank you. Appreciate the details on the spill traffic comment. I want to just kind of start there.

Mike Leskinen: Hi everyone.

Conor Cunningham: Hi everyone.

Scott Kirby: Thank you.

Thank you. Appreciate the details on the spill traffic comment.

Mike Leskinen: Appreciate the details on the spill traffic comment.

Speaker Change: But as GDP grows we're building demand and so I remain very bullish in the big cities that we have our ups in here in this country and the big cities, who fly to around the globe, where it's become increasingly difficult if not impossible to be able to extend schedules.

Scott Kirby: I wanted to kind of start there.

I wanted to kind of start there.

Scott Kirby: You know, can you I just would have this just seems like a time in which you would like look to stamp out all the spill traffic carriers from your hub markets in general. So I just thought that that was the whole entire point of kind of basic economy in general. So can you just talk about how you can continue to move down the path of eliminating spill traffic in general? Thank you. So we're just trying to build a great airline for United Airlines. That's all we're doing. Truthfully, our plan hasn't changed in five years. We make tactical adjustments like we did this time to pull out utilization flying.

Speaker Change: I appreciate the thoughts thank you.

Mike Leskinen: You know, can you? I just would have. This just seems like a time in.

You know, can you? I just would have. This just seems like a time in.

Speaker Change: The next question comes from Mike Lindenberg with Deutsche Bank. Your line is open.

Scott Kirby: Which you would look to stamp out all the spill traffic carriers from your hub markets in general. So I just thought that that was the whole entire point of kind of basic economy in general. So can you just talk about how?

Which you would look to stamp out all the spill traffic carriers from your hub markets in general. So I just thought that that was the whole entire point of kind of basic economy in general. So can you just talk about how?

Mike Lindenberg: Hey, My question is going to be a little bit more low brow.

I appreciate the thoughts thank you.

Speaker Change: Got you.

Speaker Change: Basic economy here I think last quarter, you gave us a number maybe it was about 15% of volume when we look at the <unk>.

Speaker Change: The next question comes from Mike Lindenberg with Deutsche Bank. Your line is open.

Andrew Nocella: You can, you know, continue to move down the path of eliminating spill.

You can, you know, continue to move down the path of eliminating spill.

Scott Kirby: Spill traffic in general. Thank you. So we're just trying to build a great airline for United Airlines customers. That's all we're doing. And like truthfully our plan hasn't changed in five years. We make tactical adjustments like we did this time to pull out utilization flying. Everyone else does what they do. I think it puts immense pressure on them when United gets great, that the contrast between United Airlines and everyone else gets wider and more evident. But it's not us consciously trying to stamp out or do anything like that. We're trying to create the best airline in history for United Airlines customers, and that creates a big gap to everyone else, and it's up to them to do something else. And if they don't, well, we'll see. But we're just trying to do a great thing for United Airlines customers. Okay, that's helpful.

Spill traffic in general. Thank you.

Mike Lindenberg: Hey, My question is going to be a little bit more low brow.

Michael Leskinen: So we're just trying to build a great airline for United Airlines customers. That's all we're doing. And like truthfully our plan hasn't changed in five years. We make tactical adjustments like we did this time to pull out utilization flying. Everyone else does what they do. I think it puts immense pressure on them when United gets great, that the contrast between United Airlines and everyone else gets wider and more evident. But it's not us consciously trying to stamp out or do anything like that. We're trying to create the best airline in history for United Airlines customers, and that creates a big gap to everyone else, and it's up to them to do something else. And if they don't, well, we'll see. But we're just trying to do a great thing for United Airlines customers.

Speaker Change: The year over year increase in basic economy revenue relative to your total revenue, it's almost outpacing a two to one.

Speaker Change: Touch.

Speaker Change: Basic economy here I think last quarter, you gave us a number maybe it was about 15% of volume when we look at it.

Speaker Change: Where is that percentage today and is that just largely a function of the up gauging of next or are you starting to see.

Speaker Change: The year over year increase in basic economy revenue relative to your total revenue, it's almost outpacing at 201.

Scott Kirby: Everyone else does what they do. I think it puts immense pressure on them. When United gets great, that the contrast between United Airlines and everyone else gets wider and more evident. But it's not us consciously trying to stamp out or do anything like that. We're trying to create the best airline in history for United Airlines customers. That creates a big gap to everyone else. It's up to them to do something else. If they don't, Well, we'll see, but we're just trying to do a great thing for United Airlines.

Speaker Change: Maybe more intense.

Speaker Change: Competing at the lower part of the fare structure and that's driving a higher volume.

Speaker Change: Where is that percentage today and is that just largely a function of the up gauging of next or are you starting to see.

Speaker Change: Oh look I expect in Q2, youre going to CSP more competitive at the lower end of the fare structure, creating higher volume it was less true in Q1.

Speaker Change: Maybe more intense.

Speaker Change: Competing at the lower part of the fare structure and that's driving a higher volume.

Speaker Change: The decline in demand happened so quickly.

Speaker Change: Well look I expect in Q2, youre going to CSP more competitive at the lower end of the fare structure, creating higher volume it was less true in Q1 the.

Speaker Change: Mid February and March and so we didn't have an opportunity to really react quick enough to fill up the seats in our domestic load factor so, but I think three three points in Q2, you're going to see us, we'll probably still run a small load factor deficit year over year domestically, but it's probably in the order of one point and it will be because we've opened up the inventory.

Conor Cunningham: Okay, that's helpful.

Speaker: Okay, that's helpful. And you're probably not gonna like this question, but I've been getting it kind of on repeat. If you just look at the first half implied performance on EPS, and then you look at what you're baking in on the second half to get to the $11, $50 range, it basically implies that you're going to be doing better on a year over year perspective versus 2024. So I'm just trying to understand what's driving that improvement if we're bouncing along the in the current recession, not recession, the current environment in general. So just what additional levers do you have that you feel more comfortable now?

Speaker Change: The decline in demand happen so quickly.

Scott Kirby: You're probably not going to like.

You're probably not going to like.

Andrew Nocella: This question, but I've been getting it.

This question, but I've been getting it.

Speaker Change: February and March and so we didn't have an opportunity to really react quick enough to fill up the seats in our domestic load factor, so, but I think three three points. So in Q2, youre going to see us, we'll probably still run a small load factor deficit year over year domestically, but it's probably in the order of one point and it will be because we've opened up the inventory system to take.

Scott Kirby: Kind of on repeat.

Kind of on repeat.

Mike Leskinen: If you just look at the first.

If you just look at the first.

Scott Kirby: Half implied performance on EPS, and then you look at what you're baking in on the second half to get to.

Half implied performance on EPS, and then you look at what you're baking in on the second half to get to.

Speaker Change: It seemed to take more basic more lower yielding customers.

Andrew Nocella: The $11-$50 range which basically implies.

The $11-$50 range which basically implies.

Speaker Change: And we will simply still less to the spill airlines as a result.

Mike Leskinen: That you're going to be doing better.

That you're going to be doing better.

Scott Kirby: On a year over year perspective versus 2024.

On a year over year perspective versus 2024.

Speaker Change: When we do that.

Mike Leskinen: I'm just trying to understand what's driving that improvement.

Speaker Change: I think youll see it expand in Q2, and it'll go up and down based on market conditions, but we'll decide how much low end traffic, we want us to fill in when we wanted to fill it.

I'm just trying to understand what's driving that improvement.

Speaker Change: More basic more lower yielding customers.

Scott Kirby: If we're bouncing along the bottom in the current recession. Not recession, the current environment in general. So, just what additional levers do you have that you feel more comfortable now? Maybe it's premium, maybe it's loyalty. Mike, you seem to sound better on cost. Just any thoughts there in general would be helpful. Thank you.

If we're bouncing along the bottom in the current recession. Not recession, the current environment in general. So, just what additional levers do you have that you feel more comfortable now?

Speaker Change: And we will simply still less to the spill airlines as a result.

Speaker Change: Great Andrew since I have you.

Speaker Change: We do that.

Speaker Change: You'll see it expand in Q2, and it'll go up and down based on market conditions, but we'll decide how much low end traffic we wanted to fill in when do we want to spill it right.

Speaker Change: Realized deadline may seven.

Andrew Nocella: Maybe it's premium, maybe it's loyalty, might get you to sound better on cost. Just any thoughts there in general would be helpful. Thank you. Yeah, look, the first point I'd make is that the full year guidance in the 1150 to 1350 scenario counts on current booking trends holding steady. It Accounts for the fact that we've burned up all the contingency that we put into that full-year guide. It assumes we have continued excellent cost management, but we don't uncover anything new. And it assumes that second half fuel is about 20 cents lower than first half. And then finally, it accounts for some profit-maximizing capacity.

Maybe it's premium, maybe it's loyalty. Mike, you seem to sound better on cost. Just any thoughts there in general would be helpful. Thank you.

Speaker Change: Most international of any of the carriers, so passport among your customer shouldn't be an issue.

Speaker Change: What sort of impact do we have I mean, I don't think it impacts your cash since you sold the ticket, but are you going to get a bunch of cancellations, where all of a sudden there is some revenue recognition because people show up and they don't have any thoughts on that.

Mike Leskinen: Yeah. Look, the first point I'd make is that the full year guidance in the 1150-1350 scenario counts on current booking trends holding steady. It accounts for the fact that we've burned up all the contingency that we put into that full year guide. It assumes we have continued excellent cost management, but we don't uncover anything new. It assumes that second half fuel is about $0.20 lower than first half fuel. Then finally, it accounts for some profit maximizing capacity cuts. So that's how we're thinking about getting to the full year guide of 1150-1350. We've been very clear about the downside case as well. I think that answers your question. If it doesn't, maybe clarify and I'll keep going.

Michael Leskinen: Yeah. Look, the first point I'd make is that the full year guidance in the 1150-1350 scenario counts on current booking trends holding steady. It accounts for the fact that we've burned up all the contingency that we put into that full year guide. It assumes we have continued excellent cost management, but we don't uncover anything new. It assumes that second half fuel is about $0.20 lower than first half fuel. Then finally, it accounts for some profit maximizing capacity cuts. So that's how we're thinking about getting to the full year guide of 1150-1350. We've been very clear about the downside case as well. I think that answers your question. If it doesn't, maybe clarify and I'll keep going.

Speaker Change: Great Andrew since I have you just this realized deadline may seven.

Speaker Change: International or any of the carriers. So passport among your customers shouldn't be an issue, but what sort of impact do we have I mean, I don't think it impacts your cash since you sold the ticket, but are you going to get a bunch of cancellations, where all of a sudden there is some revenue recognition because people show up and they don't have any thoughts on that.

Speaker Change: Hello, guys I think there is a lot going on there.

Speaker Change: I hope that gets extended once again and I hope the same thing when it happens again.

But we're working through this with the government and I think well have more to say on it but hopefully everybody is prepared and you've got the real idea of their passport or their passport card, there's multiple ways to get through TSA security obviously.

Speaker Change: Hello, guys I think there's a lot going on there and.

Speaker Change: I kind of hope that date gets extended once again and I hope the same thing when it happens again.

Speaker Change: But we're working through this with the government and I think well have more to say on it but hopefully everybody is prepared and you've got the real idea of their passport or their passport card, there's multiple ways to get through TSA security, obviously, but this is something we are aware of and we continue to talk to the government about it.

Speaker Change: But this is something we are aware of and we continue to talk to the government about it.

Michael: And so that's how we're thinking about getting to the full year guide of 1150 to 1350. And then we've been very clear about the downside case as well. I think that answers your question. If it doesn't, maybe clarify and I'll... Now, you're good. I appreciate it. Thank you. And by the way, that was a totally fair question. We've asked ourselves that question. Yeah, but the point is, I mean, I think the bigger point is we typically build a lot of contingency into guides. And our 1150 to 1350 doesn't really have contingency left. Our quarterly guide still does.

Speaker Change: Thank you.

Speaker Change: The next question comes from Brandon, So Glenn SKU with Barclays. Your line is open.

Brandon: Hi, good morning, and thanks for taking my questions. So can you guys dig into how youre defining brand loyal customers. Because I think this is a pretty important concept and Scott I think in your prepared remarks or maybe it was Andrew you talked about like share of local customers is that a way we could start to measure it from the outside looking in.

Speaker Change: Thank you.

Andrew Nocella: No, you're good. I appreciate it.

Conor Cunningham: No, you're good. I appreciate it.

Scott Kirby: Thank you. And by the way, that was a totally fair question. We've asked ourselves that question. Yeah, but the point is, I mean, I think the bigger point is we build. We typically build a lot of contingency into guides. Our $11.50-13.50 doesn't really have contingency left. Our quarterly guide still does. I'll just make a bigger point on this, which is a cultural point. We expected more questions about doing two Qs, since no one's ever done that. We haven't really gotten them. But I told our whole team, and I'll tell our investors as well. Part of that is also when you run the company with a no excuses philosophy, which is what we have, we are going to do everything possible, no matter what happens, to get to our numbers.

Scott Kirby: Thank you. And by the way, that was a totally fair question. We've asked ourselves that question. Yeah, but the point is, I mean, I think the bigger point is we build. We typically build a lot of contingency into guides. Our $11.50-13.50 doesn't really have contingency left. Our quarterly guide still does. I'll just make a bigger point on this, which is a cultural point. We expected more questions about doing two Qs, since no one's ever done that. We haven't really gotten them. But I told our whole team, and I'll tell our investors as well. Part of that is also when you run the company with a no excuses philosophy, which is what we have, we are going to do everything possible, no matter what happens, to get to our numbers.

Speaker Change: The next question comes from Brandon <unk> with Barclays. Your line is open.

Brandon: Hi, good morning, and thanks for taking my questions. So can you guys dig into how youre defining brand loyal customers because I think this is a pretty important concept.

Brandon: Absolutely its all of the above.

Speaker Change: And Scott I think in your prepared remarks, or maybe it was Andrew you talked about like share of local customers is that a way we could start to measure it from the outside looking in.

Brandon: So there's a number of ways to do it but.

Brandon: Our total market share and you look at every single one of our hub cities our market share is up in every single city, we fly to.

Michael: And I'll just make a bigger point on this, which is a cultural point. We expected more questions about doing two guides. No one's ever done that. We haven't really gotten them. But I told our whole team and I'll tell our investors as well. Part of that is also when you run the company with a no excuses philosophy, which is what we have, we are going to do everything possible no matter what happens to get our numbers. And it is true that the environment has gotten a lot harder and achieving our full year. We still have, you know, we didn't think we had a real shot at getting it.

Speaker Change: Absolutely its all of the above.

Brandon: If you look at the origin market share, which is something I highly recommend that you do and I gave some numbers today for Chicago for example, where our origin share is better than our total share in other words the loyalty of local customers here in Chicago has shifted to United We've got those customers a co brand credit card as well to make sure. They are incredibly sticky and they stay with you.

Speaker Change: So there's a number of ways to do it but.

Speaker Change: Our total market share and you look at every single one of our hub cities our market share is up in every single city, we fly to.

Speaker Change: If you look at the origin market share, which is something I highly recommend that you do and I gave some numbers today for Chicago for example, where our origin share is better than our total share in other words the loyalty of local customers here in Chicago has shifted to United We've got those customers a co brand credit card as well to make sure they're incredibly sticky and they stay with you.

Brandon: United indefinitely.

Brandon: That was our plan all along we think it's working and we will do the same.

Scott Kirby: And it is true that the environment has gotten a lot harder, and achieving our full year, we still have, you know, we didn't think we had a real shot at getting it. We wouldn't say it, but we do have a real shot. Bookings need to stabilize. We got to work hard. We got to do everything right to get there now. But we still have a real shot. And, you know, the most sure way to lose is throw in the towel. And at United Airlines, we, no matter what the economic environment is, we are going to bust our asses to get there. And we will not miss it because we didn't try. And that's the culture and that's the philosophy. And our results, no matter what, are going to be better because we manage that way than if we didn't.

And it is true that the environment has gotten a lot harder, and achieving our full year, we still have, you know, we didn't think we had a real shot at getting it. We wouldn't say it, but we do have a real shot. Bookings need to stabilize. We got to work hard. We got to do everything right to get there now. But we still have a real shot. And, you know, the most sure way to lose is throw in the towel. And at United Airlines, we, no matter what the economic environment is, we are going to bust our asses to get there. And we will not miss it because we didn't try. And that's the culture and that's the philosophy. And our results, no matter what, are going to be better because we manage that way than if we didn't.

Brandon: The other measurement we look at is.

Brandon: Share amongst the big global travel agencies are those tend to be higher yielding customers traveling often for business and our share in that category continues to go up.

Speaker Change: Indefinitely.

Speaker Change: That was our plan all along we think it's working and we will do the same.

Scott Kirby: We wouldn't say it. But we do have a real shot. Bookings need to stabilize. We got to work hard. We got to do everything right to get there now. But we still have a real shot. And, you know, we the most sure way to lose is throw in the towel. And at United Airlines, we no matter what the economic environment is, we are going to bust our asses to get there and we will not miss it because we didn't try. And that's the culture and that's the philosophy. And our results, no matter what, are going to be better because we manage that way than if we didn't.

Speaker Change: Other measurement, we look at is share amongst the big global travel agencies are those tend to be higher yielding customers traveling often for business and our share in that category continues to go up.

Brandon: And there's probably a bunch of other ways you can do it but it shows up in our regular revenue premium to the industry and it shows up in our market share. It shows up all over the place, but most importantly, it shows up into our margin in the relative gap, we have to our customers or to our competitors and I think you'll see that our margin gap probably increased two others in.

Speaker Change: And there's probably a bunch of other ways you can do it but it shows up in our regular revenue premium to the industry and it shows up in our market share. It shows up all over the place, but most importantly, it shows up into our margin in the relative gap, we have to our customers or to our competitors and I think youll see that our margin gap probably increased two others.

Brandon: Q1 did not decrease.

Speaker Change: Well I appreciate that Andrew and I guess can you put that in the context of how prudent it is right now growing domestic capacity in the high single digit level, because I think that's what you're <unk> in summer schedules are showing right now and especially just given that we saw such a drastic change in unit revenues, we thought <unk> would be positive and ended up down I think three.

Michael: I want to emphasize one point Scott made. Make sure it's clear to everyone. The full year guide no longer has a contingency in it. We burned that. But the second quarter guide with the dollar range, we normally have a 50 cent We do have contingency in that figure. And so look, as we move towards the end of the second quarter, if we're coming in towards the high end of that, I feel better about the $1,150 to $1,350. And if we're coming near the low end of that range, I feel like we're marching towards a recession.

Mike Leskinen: I want to emphasize one point Scott made. Make sure it's clear to everyone the full year guide no longer has a contingency in it. We burned that. But the second quarter guide with the dollar range, we normally have a $0.50 range. We do have contingency in that figure. And so look, as we move towards the end of the second quarter, if we're coming in towards the high end of that, I feel better about the $11.50 to $13.50. And if we're coming near the low end of that range, I feel like we're marching towards a recession scenario.

Michael Leskinen: I want to emphasize one point Scott made. Make sure it's clear to everyone the full year guide no longer has a contingency in it. We burned that. But the second quarter guide with the dollar range, we normally have a $0.50 range. We do have contingency in that figure. And so look, as we move towards the end of the second quarter, if we're coming in towards the high end of that, I feel better about the $11.50 to $13.50. And if we're coming near the low end of that range, I feel like we're marching towards a recession scenario.

Speaker Change: In Q1 did not decrease.

Speaker Change: Well I appreciate that Andrew and I guess can you put that in the context of how prudent it is right now growing domestic capacity in the high single digit level, because I think that's what you're <unk> in summer schedule is showing right now and especially just given that we saw such a drastic change in unit revenues, we thought <unk> would be positive and ended up down I think.

Brandon: 4% domestically so.

Brandon: Is it the right opportunity to be taking a lot of share right now or I guess, maybe if I rephrase. The question is the focus really just on incremental gaining that share today and worry about the margins later or is there more of a focus on margins and again is it prudent to be growing that much domestically.

Speaker Change: Three or 4% domestically so.

Speaker Change: Is it the right opportunity to be taking a lot of share right now or I guess, maybe if I rephrase. The question is the focus really just on incremental gaining that share today and worry about the margins later or is there more of a focus on margins and again is it prudent to be growing that much domestically.

Brandon: Well I think it's false to think that we don't focus on both we are always focused on our margin, but I think we've shown over eight years now that we have a proven track record on our capacity decisions and all of those decisions have been undeniably good for United.

Scott Kirby: Appreciate it. Thank you.

Conor Cunningham: Appreciate it. Thank you.

Speaker: Thank you.

Kristina Edwards: The next question comes from Dave Vernon with Bernstein. Your line is open.

Operator: The next question comes from Dave Vernon with Bernstein. Your line is open.

Dave Vernon: Next question comes from Dave Vernon with Bernstein. Your line is open. Hey, good morning. And thanks for taking the question. So Scott, you know, this is a relatively unique sort of time for the industry in that, that, you know, you and your other sort of brand loyal airline are working with a pretty significant margin advantage, relative to some of the lower cost and spill airlines that are out there. How do you think about balancing the use of that margin advantage? Right? Are you are you thinking about using that margin to take share right now? Or are you thinking about trying to protect that margin when you're trying to build a better United Airlines?

Speaker Change: It's forced to think that we don't focus on both we are always focused on our margin, but I think we've shown over eight years now that we have a proven track record on our capacity decisions and all of those decisions have been undeniably good for United.

Scott Kirby: Hey, good morning and thanks for taking the question.

David Vernon: Hey, good morning and thanks for taking the question.

Brandon: We look back at our absolute and relative performance with Q1 and believe that our choice of growing which we did focus on peak time of day client proved right and created our margins that you saw we were the first to announce the change to our fleet a few weeks back at the JP Morgan Conference and we've unloaded a bunch of capacity as a result of that so we were gonna fly higher than the number.

Mike Leskinen: So Scott, you know, this is a.

So Scott, you know, this is a.

Scott Kirby: Relatively unique sort of time for the industry in that, you know, you and.

Relatively unique sort of time for the industry in that, you know, you and.

Mike Leskinen: Your other sort of brand loyal airline.

Your other sort of brand loyal airline.

Scott Kirby: Are working with a pretty significant margin advantage relative to some of the lower cost and spill airlines that are out there. How do you think about balancing the use of that margin advantage? Are you thinking about using that margin to take share right now or are you thinking about trying to protect that margin when you're trying to build a better United Airlines? How do you think about that tension?

Are working with a pretty significant margin advantage relative to some of the lower cost and spill airlines that are out there. How do you think about balancing the use of that margin advantage? Are you thinking about using that margin to take share right now or are you thinking about trying to protect that margin when you're trying to build a better United Airlines? How do you think about that tension?

Speaker Change: We look back at our absolute and relative performance with Q1 and believe that our choice of growing which we did focus on peak time of day client proved right and created you know our margins that you saw we were the first to announce the change to our fleet a few weeks back at the JP Morgan Conference and we've unloaded a bunch of capacity as a result of that so we were going to fly higher than the number.

Brandon: That we're gonna blocks.

Brandon: We believe the capacity plan, we have now for the spring and summer is the best plan for United and we also understand that things change and as usual state we'll stay on top of this thing and we remain open to making changes.

Scott Kirby: How do you think about that? That tension between having an opportunity to maybe take even more share in a market like Denver versus trying to maintain the margin?

Andrew Nocella: Between having an opportunity to maybe take.

Between having an opportunity to maybe take.

Speaker Change: We're gonna block, we believe the capacity plan, we have now for the spring and summer is the best plan for United and we also understand that things change and as usual state we'll stay on top of these things and we remain open to making changes in September and beyond but at this point. We think we have the right plan. We're not flying you know, we're not going to fly unproductive.

Scott Kirby: Even more share in a market like Denver versus trying to maintain the margin? I don't think there is a tension, and in fact I'll go back to one point which I tried to make at the beginning. But the brand loyal airline has always won. The brand loyal airline in the United States has always had the top margins, and the brand loyal airline has always outperformed in recession. All that's changed is who the brand loyal airlines are. And you know, it really is back to like our plan hasn't changed really in any material way at all over the last five years. We have higher confidence in it. We thought we would win brand loyal share. We thought we would start to outperform the rest of the industry. We thought that whenever the inevitable business cycle turned, we would outperform during that cycle, and all that's happening.

Even more share in a market like Denver versus trying to maintain the margin?

Brandon: In September and beyond but at this point, we think we have the right plan. We're not flying you know, we're not going to fly unproductive capacity.

Scott Kirby: I don't think there is a tension, and in fact I'll go back to one point which I tried to make at the beginning. But the brand loyal airline has always won. The brand loyal airline in the United States has always had the top margins, and the brand loyal airline has always outperformed in recession. All that's changed is who the brand loyal airlines are. And you know, it really is back to like our plan hasn't changed really in any material way at all over the last five years. We have higher confidence in it. We thought we would win brand loyal share. We thought we would start to outperform the rest of the industry. We thought that whenever the inevitable business cycle turned, we would outperform during that cycle, and all that's happening.

Scott Kirby: I don't think there is a tension. And in fact, I'll go back to one point, which I tried to make at the beginning, but the brand loyal airline has always won. The brand loyal airline in the United States has always had the top and the Brent and Loyola Airlines has always outperformed in All this changes who the Brant Loyal are. And, you know, it's really it's back to like, our plan hasn't changed really, in any material way at all. Over the last five years, we have higher confidence in it, we thought we would win brand loyal share, we thought we would start to outperform the rest of the industry.

Brandon: But we are also going to balance market share and financial returns we've given you the.

Brandon: The EPS guidance, we continue to guide.

Brandon: And I think we're really focused as Scott said on no excuse culture on delivering on our guidance.

Speaker Change: But we are also going to balance market share and financial returns we've given you the.

Brandon: Thank you Andrew.

Speaker Change: The EPS guidance, we've given you to guide.

Speaker Change: The next question comes from Ravi Shanker with Morgan Stanley. Your line is open.

Speaker Change: And I think we're really focused as Scott said on our notes, whose culture on delivering on our guide.

Brandon: Great. Thanks, Good morning, guys.

Speaker Change: Thank you Andrew.

Speaker Change: So just a follow up on the multiple scenarios here, but from a loyalty and co brand standpoint.

Speaker Change: Yeah.

Speaker Change: The next question comes from Ravi Shanker with Morgan Stanley. Your line is open.

Speaker Change: Do you think that evolves, if we do get probably the first broadband consumer recession, we've had since 2008, obviously, the whole industry and loyalty and Cobranded changed a lot since does it stay as resilient.

Scott Kirby: We thought that whenever the inevitable business cycle turned, we would outperform during that cycle, and all that's happening, so we feel good about it. We're not doing anything specific, you know, we've had a number of markets, people ask questions about specific markets, Andrew can tell you, where we've had competitors do big changes up, some big changes down, some big changes up, and frankly, our capacity and our plans haven't changed at all in those places. We're in the enviable position of we can just play the United game because we've got the brand loyal customers. We can just keep playing, running our plays, and it works.

Ravi Shanker: Great. Thanks, Good morning, guys.

Ravi Shanker: Just a follow up on the multiple scenarios here, but from a loyalty and co brand standpoint.

Scott Kirby: So we feel good about that, but we're not doing anything specific. You know, we've had a number of markets. People ask questions about specific markets. And Atlanta, where we've had competitors do big changes up, some big changes down, some big changes up. And frankly our capacity and our plans haven't changed at all in those places. We're in the enviable position of we can just play the United game because we've got the brand loyal customers, we can just keep playing, running our plays and it works. We don't really need to. I mean, I still pay attention, I still read everyone's scripts and pay attention to what they're doing, but we don't really need to focus on what they're doing or respond to it because it doesn't have that much impact on us.

So we feel good about that, but we're not doing anything specific. You know, we've had a number of markets. People ask questions about specific markets. And Atlanta, where we've had competitors do big changes up, some big changes down, some big changes up. And frankly our capacity and our plans haven't changed at all in those places. We're in the enviable position of we can just play the United game because we've got the brand loyal customers, we can just keep playing, running our plays and it works. We don't really need to. I mean, I still pay attention, I still read everyone's scripts and pay attention to what they're doing, but we don't really need to focus on what they're doing or respond to it because it doesn't have that much impact on us.

Ravi Shanker: How do you think that evolves, if we do get probably the first broad based consumer recession. We've had since 2008, obviously, the whole industry and loyalty and Cobranded changed a lot since does it stay as resilient as.

Speaker Change: As it was doing the pandemic or do you think it's oh.

Speaker Change: Greater risk.

Ravi Shanker: Hey, Ravi I Love I Love that question.

Speaker Change: The loyalty business and the stream of revenue and profits from that business was.

Ravi Shanker: As it was doing the pandemic or do you think it's oh.

Speaker Change: Was Brazil was resilient through the Covid pandemic everything we've seen the data shows great resilience right now.

Ravi Shanker: At greater risk.

Ravi Shanker: Hey, Ravi I Love I Love that question loyalty business and the stream of revenue and profits from that business.

Scott Kirby: We don't really need to, I mean, I still pay attention, I still read everyone's scripts and pay attention. But we don't really need to focus on what they're doing or respond.

Speaker Change: If anything we expect to see secular growth continue through even in the economic weak spot. So.

Speaker Change: Was Brazil was resilient through the Covid pandemic everything we've seen the data shows great resilience right now.

As we sensitize the modeling scenarios upsides and downsides, that's a piece that is kind of a rock at all scenarios.

Scott Kirby: I didn't have that much. We've created the leading airline for Brandon Loyal. That was the winning strategy and we've executed it. Now we're just finishing the game.

Speaker Change: If anything we expect to see secular growth continue through even in the economic weak spot. So as we sensitize the modeling scenarios upsides and downsides. That's a piece that is kind of a rock.

Scott Kirby: We've created the leading airline for Brand Loyal Customers, and that was the winning strategy, and we've executed it, and now we're just finishing the game. And I guess as you think about that, building the Brand Loyal Customer, obviously segmenting the cabin, adding in things like faster speed, Wi-Fi, adding in clubs, it does seem like the industry as a whole is moving in that direction. How do you think about maintaining that?

We've created the leading airline for Brand Loyal Customers, and that was the winning strategy, and we've executed it, and now we're just finishing the game.

Speaker Change: Just to add that you know and we said this word a lot today the brand loyal customers makes a difference here. So as we build the premier members of the program as we increase the penetration rate.

David Vernon: And I guess as you think about that, building the Brand Loyal Customer, obviously segmenting the cabin, adding in things like faster speed, Wi-Fi, adding in clubs, it does seem like the industry as a whole is moving in that direction. How do you think about maintaining that?

Andrew Nocella: And I guess as you as you think about that, that that that building the brand loyal customer, right, obviously, you know, segmenting the cabin, adding in things like like, like faster speed, Wi Fi, adding in clubs, right? It does seem like the industry as a whole is moving in that direction. How do you think about maintaining that that that that brand loyalty leadership over a multi year period, if we're seeing, you know, some of the other airlines also kind of investing in some of the same capabilities just come down to execution? Or is there something further in the in the in the outlook that you're looking at in terms of trying to maintain that leadership position with with brand loyal customer?

Speaker Change: All scenarios.

Speaker Change: Those holding credit cards. This cycle just builds on itself like a flywheel and we're really really focused on this business and making sure. It does that and as a result, I think it's getting stronger and will be more resilient in a downturn than it was even in the pandemic.

Speaker Change: I'll just add that.

Speaker Change: We said this word a lot today the brand loyal customers makes a difference here. So as we build the premier members of the program as we increase the penetration rate.

Speaker Change: Those holding credit cards.

Andrew Nocella: Brand loyalty leadership over a multi-year.

Brand loyalty leadership over a multi-year.

Speaker Change: This cycle just builds on itself like a flywheel and we're really really focused on this business and making sure. It does that and as a result, I think it's getting stronger and will be more resilient in a downturn than it was even in the pandemic.

Scott Kirby: If we're seeing some of the other airlines also kind of investing in some of the same capabilities just come down to execution, or is there something further in the outlook that you're looking at in terms of trying to maintain that leadership position with Brand Loyal Customers?

If we're seeing some of the other airlines also kind of investing in some of the same capabilities just come down to execution, or is there something further in the outlook that you're looking at in terms of trying to maintain that leadership position with Brand Loyal Customers?

Speaker Change: Understood that's very helpful and maybe a quick follow up for you Mike.

Speaker Change: Just wanted to confirm that your fuel price assumptions between your two full year guide scenarios are not different and if so do you think there's potential for more field price tailwind in the recession scenario.

Speaker Change: Understood that's very helpful and maybe a quick follow up for you Mike.

Andrew Nocella: I'll try to take that.

Andrew Nocella: I'll try to take that.

Andrew Nocella: I'll try to take that. Look, I think, you know, we're charged with continuously trying to climb higher, to innovate more and to go faster. That's definitely the culture that we have at United. And, you know, quite frankly, there's a lot of things in the hopper that we haven't announced that are yet to come. But we are, again, in this enviable position where the United Next plan is working, our capacities come online at a much better rate than anybody else's. And that's a really strong foundation that allows us to continue to invest in the customer. And you're going to see more and more of that over the next 18 months, we have a bunch of announcements that are planned.

Speaker Change: Just wanted to confirm that your fuel price assumptions between your two full year guide scenarios are not different and if so do you think there's potential for more field price tailwind in the recession scenario.

Scott Kirby: Look.

Look.

Andrew Nocella: I think we are charged with continuously trying to climb higher, to innovate more, and to go faster. That's definitely the culture that we have at United. And you know, quite frankly, there's a lot of things in the hopper that we haven't announced that are yet to come. But we are again in this enviable position where the United Next plan is working. Our capacities come online at a much better rate than anybody else's and that's a really strong foundation that allows us to continue to invest in in the customer. And you're going to see more and more of that over the next 18 months. We have a bunch of announcements that are planned and that's going to allow us to continue the segmentation, revenue choice, customer choice path.

I think we are charged with continuously trying to climb higher, to innovate more, and to go faster. That's definitely the culture that we have at United. And you know, quite frankly, there's a lot of things in the hopper that we haven't announced that are yet to come. But we are again in this enviable position where the United Next plan is working. Our capacities come online at a much better rate than anybody else's and that's a really strong foundation that allows us to continue to invest in in the customer. And you're going to see more and more of that over the next 18 months. We have a bunch of announcements that are planned and that's going to allow us to continue the segmentation, revenue choice, customer choice path.

Mike: Yeah, Ravi I think it's a good point and if revenue falls off as much as we anticipate in the downside scenario and the recession scenario. There's a solid case to be made that we would see further decline in fuel that is an assumption you can make and so we're being very clear and transparent.

Ravi Shanker: Ravi I think it's a good point and.

Ravi Shanker: If revenue falls off as much as we anticipate in the downside scenario in the us or the recession scenario. There's a solid case to be made that we would see further decline in fuel that is an assumption you can make and so we're being very clear and transparent on the assumptions, we made and that is that we don't get into additional.

Speaker Change: And the assumptions, we made and that is that we don't get into additional offset from fuel.

Speaker Change: Understood. Thank you.

Speaker Change: We will now switch to the media portion of the call.

Speaker Change: Your question. Please press star one on your telephone keypad.

Ravi Shanker: <unk> offset from fuel.

Andrew Nocella: And that's going to allow us to continue the segmentation, revenue choice, customer choice path. The only other thing I'll add is the investments we've made, we've made over a really long period of time, like it takes years to build these clubs, it takes years to refit the aircraft with the appropriate lopos to invest in the Wi-Fi technology. And while it's, I guess, a bit flattering that others are trying to copy us, they are generations behind, in my opinion, and will never catch us. And we will continue to run as fast or faster to ensure that...

Speaker Change: Understood. Thank you.

Speaker Change: I would like to withdraw your question simply press Star. One again. Please ensure you may not on speaker phone and that your phone is not on mute when called upon.

Speaker Change: We will now switch to the media portion of the call.

Andrew Nocella: The only other thing I'll add is the investments we've made, we've made over a really long period of time. Like it takes years to build these clubs, it takes years to refit the aircraft with the appropriate Polaris to invest in the Wi-Fi technology. And while it's, I guess, a bit flattering that others are trying to copy us, they are generations behind in my opinion and will never catch us. And we will continue to run as fast or faster to ensure that doesn't happen.

The only other thing I'll add is the investments we've made, we've made over a really long period of time. Like it takes years to build these clubs, it takes years to refit the aircraft with the appropriate Polaris to invest in the Wi-Fi technology. And while it's, I guess, a bit flattering that others are trying to copy us, they are generations behind in my opinion and will never catch us. And we will continue to run as fast or faster to ensure that doesn't happen.

Speaker Change: Your question. Please press star one on your telephone keypad.

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

Speaker Change: If you would like to withdraw your question simply press Star. One again. Please ensure you are not on speaker phone and that your phone is not on mute when called upon.

Your first question comes from at Mary Schlangen Stein with Bloomberg News Your line is open.

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

Speaker Change: Thank you Hey, Scott I wanted to ask you with China, saying that they're going to help Boeing deliveries and we've got a an aircraft engine and parts supplier that says they'll be scrapping shipment.

Speaker Change: Your first question comes from Mary <unk> Langan Stein with Bloomberg News your line is open.

Mary: Thank you Hey, Scott I wanted to ask you with China, saying that they're going to help Boeing deliveries and we've got a an aircraft engine parts supplier that says they'll be scrapping shipments that are subject to tariff.

Speaker Change: Subject to tariffs.

Mike Leskinen: All right, thanks again for the time, guys.

David Vernon: All right, thanks again for the time, guys.

Speaker: All right.

Catherine O'brien: Thanks again for the time, guys. The next question comes from Catherine O'Brien with Goldman Sachs. Your line is open. Hey, good morning, everyone. Thanks so much for the time. So you've already given us a lot of detail on your full year guide, but maybe just one more on the different levers, if you'll allow it. You know, I thought it was really helpful to frame the revenue downside in the base case versus the recessionary case. But can you give us any high level thoughts on how much, you know, the single act of God buffer, lower non fuel costs and lower fuel each helped offset, you know, revenue lower by five points in your January expectations, the base case, such that you're able to keep that original EPS range?

Speaker Change: Building that on top of the current supply chain issues.

Speaker Change: Is there kind of a crisis developing in the overall aerospace industry and if so what are your main concerns there.

Kristina Edwards: The next question comes from Katherine O'Brien with Goldman Sachs. Your line is open. Hey, good morning everyone, thanks so much for the time. So you've already given us a lot of detail on your full-year guide, but maybe just one more on the different levers if you'll allow it. I thought it was really helpful to frame the revenue downside in the base case versus the recessionary case. But can you give us any high-level thoughts on how much the single act of God buffer, lower non-fuel costs, and lower fuel each helped offset, you know, revenue lower by 5 points in your January expectations? The base case such that you're able to keep that original EPS range.

Operator: The next question comes from Catherine O'Brien with Goldman Sachs. Your line is open.

Catherine O’Brien: Hey, good morning everyone, thanks so much for the time. So you've already given us a lot of detail on your full-year guide, but maybe just one more on the different levers if you'll allow it. I thought it was really helpful to frame the revenue downside in the base case versus the recessionary case. But can you give us any high-level thoughts on how much the single act of God buffer, lower non-fuel costs, and lower fuel each helped offset, you know, revenue lower by 5 points in your January expectations? The base case such that you're able to keep that original EPS range.

Mary: Building that on top of the current supply chain issues.

Speaker Change: I think it's way too early to be panicking and declaring a crisis.

Mary: Is there kind of a crisis developing in the overall aerospace industry and if so what are your main concerns there.

Speaker Change: Aerospace is.

Speaker Change: Is probably the number one example of this.

Mary: I think it's way too early to be panicking and declaring a crisis.

Speaker Change: A successful high tech manufacturer manufacturing export powerhouse industry in the United States.

Mary: Aerospace.

Mary: Is probably the number one example.

Speaker Change: And we're still in the early.

Speaker Change: The opening game.

Mary: A successful high tech manufacturer manufacturing export powerhouse industry in the United States.

Speaker Change: Of how all this tariff is going to settle out.

Speaker Change: And I suspect by the time, we get to the end game.

Mike Leskinen: I'll give you a directional feedback on that.

Michael Leskinen: I'll give you a directional feedback on that.

Michael: I'll give you directional feedback on Fuel has been the biggest tailwind, as you would expect.

Mary: And we're still in the early.

Speaker Change: Aerospace is going to be recognized as a clear winner.

Scott Kirby: Katie.

Catie.

Mike Leskinen: Fuel has been the biggest tailwind as you would expect. It's a big reason why I think fuel hedging doesn't make sense in this industry. As revenue declines, almost always fuel does as well. So that was the largest, the second impact. Second largest impact was the work we've done on cost management. So that was a big driver. We've got plans, multi-year plans to hit some of these cost targets, but we definitely pulled some of that forward related to those cost savings. The decision to early retire 21 aircraft, that naturally allows us to bring down maintenance expenses. And so that'd be the third bucket is the decision around capacity made early enough allows us to also save maintenance expense. So I put it in that range or in that ordering: fuel, and then cost management, and then the capacity decision.

Fuel has been the biggest tailwind as you would expect. It's a big reason why I think fuel hedging doesn't make sense in this industry. As revenue declines, almost always fuel does as well. So that was the largest, the second impact. Second largest impact was the work we've done on cost management. So that was a big driver. We've got plans, multi-year plans to hit some of these cost targets, but we definitely pulled some of that forward related to those cost savings. The decision to early retire 21 aircraft, that naturally allows us to bring down maintenance expenses. And so that'd be the third bucket is the decision around capacity made early enough allows us to also save maintenance expense. So I put it in that range or in that ordering: fuel, and then cost management, and then the capacity decision.

Mary: The opening game.

Speaker Change: <unk> proposition for the United States.

Mary: Of how all of this tariff is going to settle out.

Speaker: Executive, University of Maryland, Theodore R. Barnes, and Michael R. reason why I think fuel hedging doesn't make sense in this industry. As revenue declines, almost always fuel does as well. So that was the largest. The second largest impact was the work we've done on cost management. So that was a big driver. We've got plans, multiyear plans to hit some of these cost targets, but we definitely pulled some of that forward. Related to those cost savings, the decision to early retire 21 aircraft, that naturally allows us to bring down meet Attorneys at Law . with restors , the other Allows us to also save, save me.

Speaker Change: Things are going to work out to.

Mary: And I suspect by the time, we get to the end game.

Speaker Change: Our recommendation Aero, obviously take a breath.

Mary: Aerospace is going to be recognized as a clear winning proposition for the United States.

Speaker Change: Let's wait a little while before you start making panicky mode.

Speaker Change: Okay, and you said at the start of the call that most of your deliveries are coming from Boeing but if you face the prospect of having to take an Airbus planes, playing them pay the tariffs on it what do you do that.

Mary: Things are going to work out to my recommendation area, obviously take a breath.

Mary: Let's wait a little while before you start making panicky mode.

Mary: Okay, and you said at the start of the call that most of your deliveries are coming from Boeing but if you face the prospect of having taken the Airbus planes, playing them pay the tariffs on it what do you do that well.

Brett Hart: Well, we're in a we're in a different position than others were mostly Airbus or Boeing aircrafts as Brett said.

Speaker Change: Boeing second largest customer behind only the U S government.

Speaker Change: Well, we're in a we're in a different position than others were mostly Airbus or Boeing aircrafts, as Brett said, where Boeing second largest customer behind only the U S government.

Speaker Change: Most of our Airbus deliveries are coming from Alabama.

Speaker Change: It was a pretty minor issue for us and in fact I look at it as an opportunity we had the senior leadership of Airbus isn't here with us yesterday.

Speaker Change: Most of our Airbus deliveries are coming from Alabama, So there's a pretty minor issue for us and in fact I look at it as an opportunity we had the senior leadership of Airbus isn't here with us yesterday.

Michael: So I put it in note in that range, or that ordering, fuel, and then cost management, and then the capacity.

Speaker Change: As an opportunity to actually strengthen the partnership there.

Speaker Change: To their credit.

Speaker Change: Airbus is having to import some parts they built.

Speaker Change: Some of the parts come from elsewhere, and so far they have been.

Kristina Edwards: Really helpful. Thanks, Mike. Maybe one for Andrew. A little bit of a shorter term question. Can you speak to how you see each entity performing in Q2? Should we expect RASM deceleration across each geography, or are there some of the international markets holding in better? Any color would be helpful, thanks.

Catherine O’Brien: Really helpful. Thanks, Mike. Maybe one for Andrew. A little bit of a shorter term question. Can you speak to how you see each entity performing in Q2? Should we expect RASM deceleration across each geography, or are there some of the international markets holding in better? Any color would be helpful, thanks.

Speaker: Very helpful. Thanks, Mike.

Andrew Nocella: Maybe one for Andrew, a little bit of a shorter term question. Can you speak to how you see each entity performing in the second quarter? You know, should we expect rasm deceleration across each geography or are there some of the international markets holding it better? Any color would be helpful. Thanks. for KD. You know, I think we had a really very good, strong Q1 for international, and I think we'll have the same in Q2, but the year-over-year rhasm won't be the same. But at this point, I do expect international rhasms to be positive across every single international entity, by the way, with the Pacific probably being the strongest Atlantic and Latin trail in that.

Speaker Change: As an opportunity to actually strengthen the partnership there.

Speaker Change: They have had to pay the tariffs on those airplanes.

Speaker Change: To their credit.

Speaker Change: And they've been a good partner.

Speaker Change: Bus is having to import some parts they build airplane in Alabama, the sum of the parts come from elsewhere. So far they have been.

Speaker Change: Just dealing with that right now.

Speaker Change: We all think let's go back to let's take a breath.

Speaker Change: They have had to pay the tariffs on those airplanes.

Speaker Change: A work these things out, but we view this as an opportunity to kind of work with Airbus.

Speaker Change: And they've been a good partner.

Scott Kirby: Sure.

Andrew Nocella: Sure.

Andrew Nocella: Katie. You know, I think we had a really very good strong Q1 for international, and I think we'll have the same in Q2, but the year-over-year RASM won't be the same. But at this point I do expect international RASMs to be positive across every single international entity, by the way, with the Pacific probably being the strongest, Atlantic and Latin trailing in that. So clearly the bulk of the issue we're seeing today is demand for domestic flights, particularly in the main cabin. And that's where the challenge will be in Q2 as it was in Q1. And you know it's going to be clearly a negative RASM environment for domestic in Q2 based on everything with you.

Catie. You know, I think we had a really very good strong Q1 for international, and I think we'll have the same in Q2, but the year-over-year RASM won't be the same. But at this point I do expect international RASMs to be positive across every single international entity, by the way, with the Pacific probably being the strongest, Atlantic and Latin trailing in that. So clearly the bulk of the issue we're seeing today is demand for domestic flights, particularly in the main cabin. And that's where the challenge will be in Q2 as it was in Q1. And you know it's going to be clearly a negative RASM environment for domestic in Q2 based on everything with you.

Speaker Change: Dealing with that right now I.

Speaker Change: Again, we have much less exposure, so it's easier for us to work with them.

Speaker Change: I think we all think let's go back to let's take a breath.

Speaker Change: We're not going to we don't need to make any definitive statements about what we will or won't do at this moment in time, we're going to see a few more cards before we start doing that.

Speaker Change: We'll work these things out, but we view this as an opportunity to kind of work with Airbus.

Speaker Change: Again, we have much less exposure, so it's easier for us to work with them.

Speaker Change: Great. Thank you very much.

Speaker Change: We don't need to make any definitive statements about what we will or won't do at this moment in time, we're going to see a few more cards before we start doing that.

Speaker Change: The next question comes from John Glass of Crain's Chicago business. Your line is open.

Andrew Nocella: So clearly, the bulk of the issue we're seeing today is demand for domestic flights, particularly in the main cabin. And that's where the challenge will be in Q2, as it was in Q1. And, you know, it's going to be clearly a negative rhasm. environment for for isphere, Inc.

Speaker Change: Sure.

Speaker Change: Alright, Thank you very much.

John Glass: Good morning.

Speaker Change: Yeah.

John Glass: You guys mentioned that you got.

Speaker Change: The next question comes from John <unk>.

Speaker Change: As mentioned in the press release this morning about adding additional gates at O'hare can you talk a little bit about how that fits into both the overall strategy for United as well as what it means for the expansion underway at O'hare.

Speaker Change: Crain's Chicago business. Your line is open.

Speaker Change: Okay.

Speaker Change: Good morning.

Speaker Change: You guys mentioned it.

Speaker Change: You guys mentioned in the press release this morning about adding additional gates at O'hare.

Kristina Edwards: Right now, just a lot for the time. The next question comes from Tom Fitzgerald of TD Cowen. Your line is open. Hi.

Catherine O’Brien: Right now, just a lot for the time.

Operator: The next question comes from Tom Fitzgerald of TD Cowen. Your line is open.

Speaker Change: Sure, It's Andrew I'll give it a try you're you're correct, we're going to gain six capes. Later this year, we're very excited to do that our current facilities are very full and we know people want to fly and we know what they want to find peak periods into these six capes school allow us to continue to execute on the United next growths.

Speaker Change: You talk a little bit about how that fits into both the overall strategy for United as well as what it means for the expansion underway at O'hare.

Tom Fitzgerald: The next question comes from Tom Fitzgerald of TD Cowen. Your line is open. Thanks for the time and congrats on the results. I'd love to just hear your perspective, higher level and longer term, on the broader international market, given you're the flag carrier in your franchise, and some of the growth you have with your Freedom Flying out of Hong Kong, just given that it seems like there's a heightened risk of more geopolitical tensions. And I'd love to hear how you're thinking about that. Sure, you know, I think international, you know, for as long as I've been at United has been, you know, the stronger entity, and we've worked really hard, and continue to work hard to make sure that domestic catches up, but international continues to accelerate.

Thomas Fitzgerald: Hi.

Andrew Nocella: Thanks for the time, and congrats on the results.

Thanks for the time, and congrats on the results.

Andrew Nocella: Sure, It's Andrew I'll give it a try your youre correct, where we're gonna gained six capes later this year, we're very excited to do that our current facilities are very full and we know people want to fly and we know what they want to find peak periods into the six gatesville allow us to continue to execute on the United next growth plan.

Mike Leskinen: I'd love to just hear your perspective.

I'd love to just hear your perspective.

Andrew Nocella: Higher level and longer term on the broader international market, given you're the flag.

Higher level and longer term on the broader international market, given you're the flag.

Speaker Change: Plan.

Scott Kirby: Carrier and your franchise, and some of the growth you have with your freedom.

Carrier and your franchise, and some of the growth you have with your freedom.

Speaker Change: We're really proud we won the gates through this process, we've been very consistent in our strategy here in Chicago.

Andrew Nocella: Line out of Hong Kong. Just given that, it seems like there's.

Line out of Hong Kong. Just given that, it seems like there's.

Scott Kirby: A heightened risk of more geopolitical tensions.

A heightened risk of more geopolitical tensions.

Speaker Change: And as a result of that we've got the six gates and we're going to continue to grow we think the economics of the hub look really darn good right now and we're excited about what the future holds in Chicago for United.

Andrew Nocella: We were really proud we want the gates through this process, we've been very consistent in our strategy here in Chicago and as a result of that.

Andrew Nocella: I'd love to hear how you're thinking about that.

I'd love to hear how you're thinking about that.

Kristina Edwards: Sure.

Andrew Nocella: Sure.

Andrew Nocella: I think International, for as long as I've been at United, has been the stronger entity, and we've worked really hard and continue to work hard to make sure that domestic catches up. But International continues to accelerate, and the more we do, the better it all gets. Like there's this S curve type effect, and the world is getting smaller. Things that we did not think were possible five years ago are possible today. And I think the same will be true in five years. And as you look at that, and so we are continuing to look at a broad range of opportunities outside the United States. We think it is a more lucrative environment as we go through this cycle. Clearly there will be ups and downs just like there are in any marketplace. And things will move around, and we'll move our aircraft appropriately.

I think International, for as long as I've been at United, has been the stronger entity, and we've worked really hard and continue to work hard to make sure that domestic catches up. But International continues to accelerate, and the more we do, the better it all gets. Like there's this S curve type effect, and the world is getting smaller. Things that we did not think were possible five years ago are possible today. And I think the same will be true in five years. And as you look at that, and so we are continuing to look at a broad range of opportunities outside the United States. We think it is a more lucrative environment as we go through this cycle. Clearly there will be ups and downs just like there are in any marketplace. And things will move around, and we'll move our aircraft appropriately.

Speaker Change: You got the six capes and we're going to continue to grow we think the economics of the hub look really darn good right now and we're excited about what the future holds in Chicago for United.

Speaker Change: Recession have any impact on that on the growth.

Speaker Change: It could.

Speaker Change: But at this point.

Scott Kirby: And the more we do, the better it all gets, like there's this, you know, S curve type effect. And the world is getting smaller, things that we did not think were possible five years ago are possible today. And I think the same will be true in five years. And as you look at that, and so we are continuing to look at a broad range of opportunities. Outside the United States, we think it is a more lucrative environment. As we go through the cycle, clearly there'll be, you know, ups and downs, just like there are in any marketplace, and things will move around, and we'll move our aircraft appropriately.

Speaker Change: We were offered in a record scheduled Atlanta Chicago. This summer we plan to do that we're not changing our plan.

Speaker Change: Recession have any impact on that on the growth.

Uh huh.

Speaker Change: And our plan is really very consistent with what we advised a six months ago before we started the year.

Speaker Change: Could potentially but at this point.

Speaker Change: We were offered in our records schedule out of Chicago. This summer we plan to do that we're not changing our plan.

Speaker Change: But you know this.

Speaker Change: Period shall pass and we will get back to doing what we need to do in Chicago, and we remain really confident.

Speaker Change: And our plan is really very consistent with what we advised on six months ago before we started the year.

Speaker Change: Okay.

Speaker Change: But you know this.

Speaker Change: Thanks.

Speaker Change: Period shall pass and we will get back to doing what we need to do in Chicago, and we remain really confident.

Speaker Change: Yeah.

Speaker Change: This concludes the question and answer session I will now turn the call back over to Cristina Edwards for closing remarks.

Speaker Change: Okay.

Andrew Nocella: But we remain really bullish on the international environment. The results in Q1 were, I think, outstanding. Our margins across every single entity were up mid to high single digits in Q1. Really great performance. We'll see where that lands in Q2. But Q2, the international outperform again. It has for years. We believe it will going forward. We have an order book to support that growth, and we'll continue to watch it. That being said, we also have a lot of older 767s and 777s that we can potentially retire if things do change. But at this point we're leaning into it because it is working.

But we remain really bullish on the international environment. The results in Q1 were, I think, outstanding. Our margins across every single entity were up mid to high single digits in Q1. Really great performance. We'll see where that lands in Q2. But Q2, the international outperform again. It has for years. We believe it will going forward. We have an order book to support that growth, and we'll continue to watch it. That being said, we also have a lot of older 767s and 777s that we can potentially retire if things do change. But at this point we're leaning into it because it is working.

Scott Kirby: But we remain really bullish on the international environment. The results in Q1 were, I think, outstanding. Our margins across every single entity were up mid to high single digits in Q1. Really great performance. You know, we'll see where that lands in Q2, but Q2, the international outperform again. It has for years. We believe it will going forward. We have, you know, an order book to support that growth, and we'll continue to watch it.

Speaker Change: Thanks for joining the call today, please contact investor or media relations. If you have any further questions and we look forward to talking to you next quarter happy spring.

Speaker Change: Thanks.

Speaker Change: Yeah.

Speaker Change: This concludes the question and answer session I will now turn the call back over to Cristina Edward.

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

Scott Kirby: That being said, we also have a lot of older 767s and 777s that we can, you know, potentially retire if things do change. But at this point, we're leaning into it because it is working. And I'll add structurally, the further you look out on the timeline, I think the more there are two structural supply constraints that are going to cause the international to outperform more and more. Number one is aircraft. All the aircraft that got retired in COVID combined with the supply chain challenges, not just at the manufacturers, but much deeper in the supply chain, whether it's engines or BFE or kind of across the board.

Scott Kirby: I'll add, structurally, the further you look out on the timeline, I think the more there are two structural supply constraints that are going to cause the International to outperform more and more over time. Number one is aircraft. All the aircraft that got retired in COVID combined with the supply chain challenges, not just at the manufacturers, but much deeper in the supply chain. Whether it's engines or BFE or kind of across the board, there are going to be supply chain, big supply chain challenges for widebody International, I think for the rest of my career. And then secondly is airport constraints. Like, you know, I can't tell you how hard it was for us to get slots in Manila to fly to Manila. And international markets are far more constrained from a capacity perspective at the airports.

Scott Kirby: I'll add, structurally, the further you look out on the timeline, I think the more there are two structural supply constraints that are going to cause the International to outperform more and more over time. Number one is aircraft. All the aircraft that got retired in COVID combined with the supply chain challenges, not just at the manufacturers, but much deeper in the supply chain. Whether it's engines or BFE or kind of across the board, there are going to be supply chain, big supply chain challenges for widebody International, I think for the rest of my career. And then secondly is airport constraints. Like, you know, I can't tell you how hard it was for us to get slots in Manila to fly to Manila. And international markets are far more constrained from a capacity perspective at the airports.

Scott Kirby: There are going to be supply chain, big supply chain challenges for wide body internationals, I think for the rest of my career. And then secondly, is airport constraints, like Can't tell you how hard it was for us to get slots in Manila, to fly to Manila. And international markets are far more constrained from a capacity perspective at the airport. And so if I had to make a bet, like I'm not, I'd actually make the bet the short term too, just because I see the data. But if I had to make a bet on a year from now, I'd have less confidence.

Scott Kirby: So if I had to make a bet, look, I'm not. I'd actually make the bet the short term too, just because I see the data. But if I had to make a bet on a year from now, I'd have less confidence. But I had to make a bet five, 10, longer term, man, I'd put all my chips on international because the supply constraints are real and are significant. That's really helpful. Thanks so much.

So if I had to make a bet, look, I'm not. I'd actually make the bet the short term too, just because I see the data. But if I had to make a bet on a year from now, I'd have less confidence. But I had to make a bet five, 10, longer term, man, I'd put all my chips on international because the supply constraints are real and are significant.

Speaker: But if I had to make a bet 5-10 longer term, man, I'd put all my chips on international because the supply constraint are real and are.

Thomas Fitzgerald: That's really helpful. Thanks so much.

Speaker: That's really helpful. Thanks so much.

Andrew Nocella: And then, just as a follow-up, I'd love to think about the rollout for Starlink on the mainline fleet, what the cadence like that could look like, and then how you're contemplating potential share.

And then, just as a follow-up, I'd love to think about the rollout for Starlink on the mainline fleet, what the cadence like that could look like, and then how you're contemplating potential share.

Speaker: And then as a follow up, I'd love to think about the rollout for Starlink on the mainline fleet, what the cadence like that could look like, and then how you're contemplating potential share gains as that product comes out in the market. I think that that seems like a really positive idiosyncratic lever that you guys have next year. Thanks again for the time. Yeah, I, we are very excited about Starlink and what it enables for our customers, what it enables for Connective and MileagePlus as well, we shouldn't forget that. Because these things are all kind of linked together.

Scott Kirby: Gains as that product comes out in the market. I think that seems like a really positive, idiosyncratic lever that you guys have next year.

Gains as that product comes out in the market. I think that seems like a really positive, idiosyncratic lever that you guys have next year.

Andrew Nocella: Thanks again for the time. Yeah, we are very excited about Starlink and what it enables for our customers, what it enables for connectivity and MileagePlus as well. We shouldn't forget that because these things are all kind of linked together. You know, we've made a lot of different investments, whether it be Starlink, food seeds, and you name it, and all those things together are kind of leading us to where we are today on the brand loyalty side. And I think it's been incredibly effective. And so we're super proud of that investment, and I think there's more to come on that front.

Thanks again for the time.

Andrew Nocella: Yeah, we are very excited about Starlink and what it enables for our customers, what it enables for connectivity and MileagePlus as well. We shouldn't forget that because these things are all kind of linked together. You know, we've made a lot of different investments, whether it be Starlink, food seeds, and you name it, and all those things together are kind of leading us to where we are today on the brand loyalty side. And I think it's been incredibly effective. And so we're super proud of that investment, and I think there's more to come on that front.

Speaker: You know, we've made a lot of different investments, whether it be Starlink, food, seed. you name it. And all those things together are kind of leading us to where we are today on the brand loyalty side.

Kristina Edwards: The next question comes from Sheila Kahyaoglu with Jefferies. Your line is open. Good morning, guys, and great quarter just relative to the environment. So maybe I could ask about international. It's clearly strong, but I think in the prepared remarks there were comments around international non-US origin volumes down, Europe down 6%, Canada down 9%, offset by the increase in US originated international traffic. So maybe if you could talk about that dynamic and is there a share gain opportunity as you expand internationally and convert customers in those markets, and on the Pacific strength, if you could touch upon different markets there?

Operator: The next question comes from Sheila Kahyaoglu with Jefferies. Your line is open.

Sheila Kahyaoglu: Next question comes from Sheila Kahyaoglu with Jeffreys. Your line is open. Good morning, guys, and great quarter, just relative to the environment. So maybe I could ask about international, it's clearly strong, but I think in the prepared remarks, there were comments around international non US origin volumes down, Europe down six, Canada down nine, offset by the increase in US originated international traffic.

Sheila Kahyaoglu: Good morning, guys, and great quarter just relative to the environment. So maybe I could ask about international. It's clearly strong, but I think in the prepared remarks there were comments around international non-US origin volumes down, Europe down 6%, Canada down 9%, offset by the increase in US originated international traffic. So maybe if you could talk about that dynamic and is there a share gain opportunity as you expand internationally and convert customers in those markets, and on the Pacific strength, if you could touch upon different markets there?

Andrew Nocella: So maybe if you could talk about that dynamic, and, and is our share gain opportunity as you expand internationally and convert customers in those markets, and on the Pacific strength, if you could touch upon different markets there. Speaker 1 Sure. Well, we wanted to give that data because I think, as most people know, there was some erroneous data about transborder traffic and some outrageous number, which was completely false. That was... Speaker. So we wanted to put out the numbers that, yeah, we are seeing a modest decline in foreign origin. But, you know, our, our U.S.

Scott Kirby: Sure.

Andrew Nocella: Sure.

Andrew Nocella: Well, we wanted to give that data because I think, as most people know, there was some erroneous data about transborder traffic and some outrageous number, which was completely false, that was put out there. So we wanted to put out the numbers that yeah, we are seeing a modest decline in foreign origin business. But you know, our US origin point of sale is I think a little over 80% to begin with. And so the 20% is seeing a modest decline and we're able to easily refill those seats with US origin point demand. So as a result of all that, our international looks fine. In terms of, you know, overseas, particularly the Pacific, that that entity is kind of leading the way, clearly did in Q1. Across the board we see strength just about everywhere in the Pacific.

Well, we wanted to give that data because I think, as most people know, there was some erroneous data about transborder traffic and some outrageous number, which was completely false, that was put out there. So we wanted to put out the numbers that yeah, we are seeing a modest decline in foreign origin business. But you know, our US origin point of sale is I think a little over 80% to begin with. And so the 20% is seeing a modest decline and we're able to easily refill those seats with US origin point demand. So as a result of all that, our international looks fine. In terms of, you know, overseas, particularly the Pacific, that that entity is kind of leading the way, clearly did in Q1. Across the board we see strength just about everywhere in the Pacific.

Andrew Nocella: origin point of sale is over, I think, a little over 80 And so the 20% is seeing a modest decline, and we're able to easily refill those seats with U.S. origin point demand. So as a result of all that, our international looks fine. In terms of, you know, overseas, specifically the Pacific, that entity is kind of leading the way, clearly did in Q1. Across the board, we see strength just about everywhere in the Pacific, but Japan is really phenomenally strong right now for us and our partner, ANA, so I think that is noteworthy. The South Pacific is having a very good year, and really across the board.

Andrew Nocella: But Japan is really phenomenally strong right now for us and our partner ANA. So I think that is noteworthy. The South Pacific is having a very good year. And really across the board, the Pacific looks really good. The Atlantic I think also looks really good. Germany had a very good quarter in Q1. We'll see where that is in Q2. And Southern Europe is just, you know, increasingly a desirable vacation spot for US consumers, and in fact for US consumers to go in off-peak period. So overall, look, you know, I think the international environment would be even stronger if we hadn't had that deterioration in the origin business from overseas or the US consumer was even stronger and a stronger economic outlook. But the international entity looks, I think really good, is a strong source of profits for United.

But Japan is really phenomenally strong right now for us and our partner ANA. So I think that is noteworthy. The South Pacific is having a very good year. And really across the board, the Pacific looks really good. The Atlantic I think also looks really good. Germany had a very good quarter in Q1. We'll see where that is in Q2. And Southern Europe is just, you know, increasingly a desirable vacation spot for US consumers, and in fact for US consumers to go in off-peak period. So overall, look, you know, I think the international environment would be even stronger if we hadn't had that deterioration in the origin business from overseas or the US consumer was even stronger and a stronger economic outlook. But the international entity looks, I think really good, is a strong source of profits for United.

Andrew Nocella: Atlantic, I think also looks really good. Germany had a very good Quarter in Q1. We'll see, we'll see where that is in Q2. And Southern Europe is just, you know, increasingly a desirable vacation spot for US consumers. In fact, for U.S. consumers to go on off-peak periods. So overall. Look, you know, I think the international environment would be even stronger if we hadn't had that deterioration in the origin business from overseas, or the US consumer is even stronger.

Speaker: </p><p begin="00.4.3.10.4.4.26.290."</p does the USGS red 여기 계정을 바꾸십니까 twitter.com.uk% boassee Good is a strong source of profits for United. We're very bullish about the short-term and long-term.

Andrew Nocella: We're very bullish about the short-term and long-term outlook.

We're very bullish about the short-term and long-term outlook.

Michael: And maybe one for Mike. On the $7 to $9 scenario in a recession, how do we think about your operating margins and free cash flow in that scenario? to Nine dollars. I mean, the operating margin is just math. We can help you with that offline around free cash that ends up being, we would expect that to be near break-even, but still positive free cash in the seven to nine range. We would have some, there's some movement in CapEx, but probably not this calendar.

Kristina Edwards: Maybe one for Mike. On the $7 to $9 scenario in a recession, how do we think about your operating margins and free cash flow in that scenario?

Sheila Kahyaoglu: Maybe one for Mike. On the $7 to $9 scenario in a recession, how do we think about your operating margins and free cash flow in that scenario?

Mike Leskinen: At $7 to $9? I mean, the operating margin is just math. We can help you with that offline around free cash that ends up being. We would expect that to be near break-even but still positive free cash in the 7 to 9 range. We would have some. There's some movement in CapEx, but probably not this calendar year.

Michael Leskinen: At $7 to $9? I mean, the operating margin is just math. We can help you with that offline around free cash that ends up being. We would expect that to be near break-even but still positive free cash in the 7 to 9 range. We would have some. There's some movement in CapEx, but probably not this calendar year.

Tom Wadewitz: Okay, thank you. The next question comes from Tom Wadewitz with UBS. Your line is open. Yeah, good morning. Thanks for the for the chance to ask a question here. I wanted to ask you a little bit about some of the cost assumptions and maybe how the pace of union agreements tends to work during an economic downturn. You know, I'm thinking of the flight attendants in particular, but do you think, you know, progress tends to be slower, if you're in a recession or things are a lot weaker? Or do you kind of think, you know, the same assumptions in terms of your cost profile on timing of when you might get a union agreement?

Kristina Edwards: Okay, thank you. The next question comes from Tom Wadewitz with UBS. Your line is open.

Sheila Kahyaoglu: Okay, thank you.

Operator: The next question comes from Tom Wadewitz with UBS. Your line is open.

Andrew Nocella: Yeah, good morning. Thanks for the, for the chance to ask question here. I wanted to ask you a little bit about some of the cost assumptions and maybe how the pace of union agreements tends to work during an economic downturn. You know, I'm thinking of the flight attendants in particular, but do you think, you know, progress tends to be slower if you're in a recession or things are a lot weaker? Or do you kind of think, you know, the same assumptions in terms of your cost profile, on timing of when you might get a union agreement?

Thomas Wadewitz: Yeah, good morning. Thanks for the, for the chance to ask question here. I wanted to ask you a little bit about some of the cost assumptions and maybe how the pace of union agreements tends to work during an economic downturn. You know, I'm thinking of the flight attendants in particular, but do you think, you know, progress tends to be slower if you're in a recession or things are a lot weaker? Or do you kind of think, you know, the same assumptions in terms of your cost profile, on timing of when you might get a union agreement?

Scott Kirby: You know, our people are doing a great job. You can see it in our resilient results. When I say we want brand loyal customers, we talk about the hard product. The biggest thing we do is how our people care and take care of customers. There's nothing as powerful as walking onto an airplane. There's two flight attendants in the galley who are smiling, who are happy, who are positive, who you can tell are happy and positive. There's nothing as impactful as, you know, a captain coming out of the cockpit and talking to the customers and standing there.

Scott Kirby: You know, our people are doing a great job. You can see it in our resilient results. When I say we want brand loyal customers, we talk about the hard product. The biggest thing we do is how our people care and take care of customers. There's nothing as powerful as walking onto an airplane. There's two flight attendants in the galley who are smiling, who are happy, who are positive, who you can tell are happy and positive. There's nothing as impactful as a captain coming out of the cockpit and talking to the customers and standing there, and they're doing a great job and we're winning even in a recession. So they're going to get good industry leading contracts and they deserve it. This recessionary environment, even if it happens, isn't going to change that. We're getting close, particularly on the flight attendants.

Scott Kirby: You know, our people are doing a great job. You can see it in our resilient results. When I say we want brand loyal customers, we talk about the hard product. The biggest thing we do is how our people care and take care of customers. There's nothing as powerful as walking onto an airplane. There's two flight attendants in the galley who are smiling, who are happy, who are positive, who you can tell are happy and positive. There's nothing as impactful as a captain coming out of the cockpit and talking to the customers and standing there, and they're doing a great job and we're winning even in a recession. So they're going to get good industry leading contracts and they deserve it. This recessionary environment, even if it happens, isn't going to change that. We're getting close, particularly on the flight attendants.

Scott Kirby: And they're doing a great job. And we're winning even in a recession. So they're going to get good industry leading contracts, and they deserve it. And this recessionary environment, even if it happens, isn't going to change that. And, and we're getting close, particularly on the flight attendants.

Scott Kirby: So fingers crossed that we're that we're near the goal. Okay, so that doesn't affect your view on timing. What is for the second question? So, you know, I think you said, well, we don't assume the cycle is different. Or, you know, we don't we don't assume things are different, but clearly United's position is different. You identify that really clearly with the commentary on the market share and hub. Do you think that maybe the consumer is different as well, maybe more of the spend is with high end consumers that would maybe support resilience on international? Or how do you think about that?

Scott Kirby: So fingers crossed that we're near the goal line.

So fingers crossed that we're near the goal line.

Andrew Nocella: Okay, so that doesn't affect your view on timing, I guess, for the second question. So you know, I think you said, well, we don't assume the cycle is different or you know, we don't assume things are different, but clearly United's position is different. You identified that really clearly with the commentary on the market share in the hub. Do you think that maybe the consumer is different as well? Maybe more of the spend is with high-end consumers. That would maybe support resilience on international or how do you think about that? I guess I'm just trying to think, in a recession, wouldn't naturally international flying come down? I mean you haven't seen that yet. I just want to see if you have any other comments to offer on that. Is just like consumer mix different.

Brett Hart: Okay, so that doesn't affect your view on timing, I guess, for the second question. So you know, I think you said, well, we don't assume the cycle is different or you know, we don't assume things are different, but clearly United's position is different. You identified that really clearly with the commentary on the market share in the hub. Do you think that maybe the consumer is different as well? Maybe more of the spend is with high-end consumers. That would maybe support resilience on international or how do you think about that? I guess I'm just trying to think, in a recession, wouldn't naturally international flying come down? I mean you haven't seen that yet. I just want to see if you have any other comments to offer on that. Is just like consumer mix different.

Scott Kirby: I guess I'm just trying to think of in a recession, wouldn't naturally international flying come down? I mean, you haven't seen that yet. I just want to see if you have any other comments to offer on that. It's just like, consumer makes different internationals more resilient this time around, even if you go on a recession.

Andrew Nocella: International is more resilient this time around, even if you go into recession. Thank you. Yeah, international has definitely been more resilient. But I do think, you know, there are different types of consumers, and each of those consumer types feels a different level of pressure in the situation that the country faces right now. And clearly the discretionary consumer faces more pressure, and that customer was probably less likely to take that vacation to Rome or Tokyo to begin with. So the high end consumer, which I think you know from looking at wealth over the few years, yeah, the market's down in recent months, but the high end consumer, the more wealthy consumer, the one that takes the global vacations, the one that wants to sit in a premium seat, seems to be less impacted so far.

International is more resilient this time around, even if you go into recession. Thank you.

Scott Kirby: Thank you. Yeah, I think international has definitely been more resilient. But I do think, there are different types of consumers and each of those consumer types feels a different level of pressure in the situation that the country faces right now. And clearly the discretionary consumer faces more pressure. And that customer was probably less likely to take that vacation to Rome or Tokyo to begin with. So the high end consumer, which I think, from a look at wealth over the few years, yeah, the market's down in recent months. But the high end consumer, the more wealthy consumer, the one that takes the global vacations, the one that wants to sit in a premium seat.

Andrew Nocella: Yeah, international has definitely been more resilient. But I do think, you know, there are different types of consumers, and each of those consumer types feels a different level of pressure in the situation that the country faces right now. And clearly the discretionary consumer faces more pressure, and that customer was probably less likely to take that vacation to Rome or Tokyo to begin with. So the high end consumer, which I think you know from looking at wealth over the few years, yeah, the market's down in recent months, but the high end consumer, the more wealthy consumer, the one that takes the global vacations, the one that wants to sit in a premium seat, seems to be less impacted so far.

Scott Kirby: Seems to be less impacted so far. I think that's really good for our. with our brand and one of these.

Andrew Nocella: I think that's really good for our business, and it's consistent with our brand and winning these customers to begin with.

I think that's really good for our business, and it's consistent with our brand and winning these customers to begin with.

Mike Leskinen: Hey Tom, this is Mike. I want to add to that. I think there's also been a real mix shift at United. I think probably at the industry level with a real mix shift in our premium cabins, we have less corporate and we have more premium leisure. And I believe that piece of our business is showing some great resilience as well. So a lot of secular trends are accruing to our benefit.

Michael Leskinen: Hey Tom, this is Mike. I want to add to that. I think there's also been a real mix shift at United. I think probably at the industry level with a real mix shift in our premium cabins, we have less corporate and we have more premium leisure. And I believe that piece of our business is showing some great resilience as well. So a lot of secular trends are accruing to our benefit.

Andrew Nocella: Hey, Thomas, Mike, I want to add to that. I think there's also been a real mixed shift at United, I think probably the industry level with a real mixed shift. In our premium cabins, we have less corporate and we have more premium leisure. And I believe that piece of our business is showing some great resilience as well. So a lot of secular trends are accruing to our Great.

Andrew Nocella: Great, thanks for the insight.

Thomas Wadewitz: Great, thanks for the insight.

Duane Pfennigwerth: Thanks for the insight. Next question comes from Duane Pfennigwerth with Evercore ISI. Your line is open. Hey, thanks. Good morning. I have a book club question for you. You really piqued our interest with a recent book recommendation, Capital Returns. The book covers a lot of ground and we won't do it justice here, but it focuses on supply analysis and the authors advocate for buying equities in sectors when industry returns are low and capacity is exiting. It also makes the point that lower asset growth firms, lower capex firms tend to outperform higher asset growth firms over the long run.

Kristina Edwards: The next question comes from Duane Pfennigwerth with Evercore ISI. Your line is open.

Operator: The next question comes from Duane Pfennigwerth with Evercore ISI. Your line is open.

Scott Kirby: Hey, thanks.

Duane Pfennigwerth: Hey, thanks.

Andrew Nocella: Good morning.

Good morning.

Scott Kirby: I have a book club question for you. You really piqued our interest with a recent book recommendation, Capital Returns. The book covers a lot of ground, and we won't do it justice here, but it focuses on supply analysis, and the authors advocate for buying equities in sectors when industry returns are low and capacity is exiting. It also makes the point that lower asset growth firms, lower capex firms, tend to outperform higher asset growth firms over the long run. So with that long-winded intro, Scott, what were the highlights from your perspective, and maybe for Mike and Andrew, how would this book influence your thinking about growth and capital allocation? Well, I'm glad that you read my book recommendations. I have another one that I'm not through reading yet. I actually forget the title. It's by Brian Greene. Anyone's interested in in physics. It's spectacular.

I have a book club question for you. You really piqued our interest with a recent book recommendation, Capital Returns. The book covers a lot of ground, and we won't do it justice here, but it focuses on supply analysis, and the authors advocate for buying equities in sectors when industry returns are low and capacity is exiting. It also makes the point that lower asset growth firms, lower capex firms, tend to outperform higher asset growth firms over the long run. So with that long-winded intro, Scott, what were the highlights from your perspective, and maybe for Mike and Andrew, how would this book influence your thinking about growth and capital allocation?

Scott Kirby: So with that long winded intro, Scott, what were the highlights from your perspective and maybe for Mike and Andrew, how would this book influence your thinking about growth and capital allocation? Well, I'm glad that you read my book recommendations. I have another one. I'm not through reading yet. I actually forget the title. It's by Brian Green. Anyone's interested in physics. It's spectacular. Look forward to it. On understanding the search for a unified theory. And it's really good. But capital returns is good also. And, you know, there's a lot of good lessons in there of how to think, to think about it.

Scott Kirby: Well, I'm glad that you read my book recommendations. I have another one that I'm not through reading yet. I actually forget the title. It's by Brian Greene. Anyone's interested in in physics. It's spectacular.

Scott Kirby: Look forward to it. On Understanding the Search for a Unified Theory, and it's really good. But Capital Returns is good also. And you know, I think there's a lot of good lessons in there of how to think, to think about it. One for me is, you know, which probably appeals to the way I think, but is to be willing to think against the consensus, you know, when everyone else is buying airplanes is probably the wrong time to buy airplanes. We did do it at the right time, you know, in COVID, when everyone else thought the world was coming to an end and air travel would never recover. You just heard, and I think I think about supply like way more than I think about the demand environment. Demand environment is going to go up. Demand environment's going to go down over time.

Duane Pfennigwerth: Look forward to it.

Scott Kirby: On Understanding the Search for a Unified Theory, and it's really good. But Capital Returns is good also. And you know, I think there's a lot of good lessons in there of how to think, to think about it. One for me is, you know, which probably appeals to the way I think, but is to be willing to think against the consensus, you know, when everyone else is buying airplanes is probably the wrong time to buy airplanes. We did do it at the right time, you know, in COVID, when everyone else thought the world was coming to an end and air travel would never recover. You just heard, and I think I think about supply like way more than I think about the demand environment. Demand environment is going to go up. Demand environment's going to go down over time.

Scott Kirby: One for me is, you know, which probably appeals to the way I think, but is to be willing to think against the consensus. You know, when everyone else is buying airplanes, it's probably the wrong time to buy airplanes. We did, we did do it at the right time. You know, in COVID, when everyone else thought the world was coming to an end and air travel would never recover. You just heard, and I think, I think about supply, like way more than I think about the demand environment. Demand environment is going to go up, demand environment is going to go down.

Scott Kirby: Over time, demand is going to grow a little faster than GDP for air travel. And there's going to be short term variations like there are right now. I don't stress about those. I follow what's happening with supply. I think this is going to lead to better supply changes. And also, even my answer on the international part of it is going to lead to better supply. I've been way more frustrated that Boeing didn't get us all of our 787s than that they didn't get us all of our 737s, because we were the only ones in the world that wanted to make that bet.

Scott Kirby: Demand is going to grow a little faster than GDP for air travel, and there's going to be short-term variations like there are right now. I don't stress about those. I follow what's happening with supply. I think this is going to lead to better supply changes. Also, even my answer on the international question, I feel so bullish about international not because it's booked well right now, like something could change in the short term, but because I look out a few years and the supply environment is going to be constrained internationally and that is the place you want to go.

Demand is going to grow a little faster than GDP for air travel, and there's going to be short-term variations like there are right now. I don't stress about those. I follow what's happening with supply. I think this is going to lead to better supply changes. Also, even my answer on the international question, I feel so bullish about international not because it's booked well right now, like something could change in the short term, but because I look out a few years and the supply environment is going to be constrained internationally and that is the place you want to go.

Scott Kirby: I've been way more frustrated that Boeing didn't get us all of our 787s than that they didn't get us all of our 737s because we were the only ones in the world that wanted to make that bet, and we made that bet, and it's paying off. But it could have paid off even bigger. But you know. Anyway, it's a great book. Everyone should read it. It's the first time I've given a homework assignment to the team, but the finance and network team, I got them all copied. It's hard to get, by the way, because it's not in print, but Aaron got them all copied and some of the lessons I learned.

I've been way more frustrated that Boeing didn't get us all of our 787s than that they didn't get us all of our 737s because we were the only ones in the world that wanted to make that bet, and we made that bet, and it's paying off. But it could have paid off even bigger. But you know. Anyway, it's a great book. Everyone should read it. It's the first time I've given a homework assignment to the team, but the finance and network team, I got them all copied. It's hard to get, by the way, because it's not in print, but Aaron got them all copied and some of the lessons I learned.

Michael: And we made that bet. And it's paying off, but it could have paid off even bigger.

Michael: But you know, anyway, it's a great book, everyone should read it. It's the first time I've given a homework assignment to the team, but the finance and network team, I got them all copies. It's hard to get, by the way, because it's not in print. But Aaron got them all. States. That's some of the lessons I learned.

Mike Leskinen: Mike, Duane, I'll make two points that I thought the book emphasized. Number one, CapEx we need to be thoughtful and disciplined around the investments we make in aircraft. They're 30-year investments to make sure that our expected return through-cycle return on invested capital is above our cost of capital. Given the constraints to supply that we've been harping on, we feel very strongly about that we've got some older aircraft, in fact, that if we could get additional deliveries, the return profile of replacing some of those older aircraft is quite strong, nicely exceeding our cost of capital. But the point of the book is we need to maintain discipline and we need to be willing to think differently and turn right when the market turns left and vice versa.

Mike,

Michael: Mike. I'll make two points that I thought the book emphasized. Number one, CapEx. We need to be thoughtful and disciplined around the investments we make in aircraft. They're 30-year investments. to make sure that our expected return through cycle, return on invested capital is above our cost of capital. Given the constraints to supply that we've been harping on, we feel very strongly about that. We've got some older aircraft. In fact, that if we could get additional deliveries, the return profile of replacing some of those older aircraft is quite strong, nicely exceeding our cost of capital. But the point of the book is we need to maintain discipline, and we need to be willing to think The second point that the book emphasized that I've been passionate about since I left the buy side is that buybacks should be opportunistic.

Michael Leskinen: Duane, I'll make two points that I thought the book emphasized. Number one, CapEx we need to be thoughtful and disciplined around the investments we make in aircraft. They're 30-year investments to make sure that our expected return through-cycle return on invested capital is above our cost of capital. Given the constraints to supply that we've been harping on, we feel very strongly about that we've got some older aircraft, in fact, that if we could get additional deliveries, the return profile of replacing some of those older aircraft is quite strong, nicely exceeding our cost of capital. But the point of the book is we need to maintain discipline and we need to be willing to think differently and turn right when the market turns left and vice versa.

Mike Leskinen: The second point that the book emphasized that I've been passionate about since I left the buy side is that buybacks should be opportunistic. If at some point we don't feel like it should be opportunistic, we can pivot to a dividend. But buybacks, when the shares are on sale because the market is panicked, we should be willing to step in within the constraints of managing our balance sheet to drive towards investment grade. We should be willing to step in in a more heavy handed way. When the shares close in on intrinsic value we should just turn it off completely and allow our balance sheet to improve more rapidly. Those would be the two points.

The second point that the book emphasized that I've been passionate about since I left the buy side is that buybacks should be opportunistic. If at some point we don't feel like it should be opportunistic, we can pivot to a dividend. But buybacks, when the shares are on sale because the market is panicked, we should be willing to step in within the constraints of managing our balance sheet to drive towards investment grade. We should be willing to step in in a more heavy handed way. When the shares close in on intrinsic value we should just turn it off completely and allow our balance sheet to improve more rapidly. Those would be the two points.

Michael: If at some point we don't feel like it should be opportunistic, we can pivot to a dividend. But buybacks, when the shares are on sale because the market is panicked, we should be willing to step in. Within the constraints of managing our balance sheet to drive towards investment grade, we should be willing to step in in a more heavy-handed way. When the shares close in on intrinsic value, we should just turn it off completely and allow our balance sheet to improve more rapidly.

Speaker: I'll only add the relative point that I thought. Founders of the Book, and this is the supply side. Reader, Scott Sedbeck, The International Airports Around the Globe. States. We have big airports here in the United States. We're really not building runways, and we're not building gates. but as GDP grows. Party Speaker Senator, Unknown Male Speaker of the Board Inc., Unknown Associate of the Capital Exchange, Congress. Traveler Infrastructure, and so on and Appreciate the thoughts.

Andrew Nocella: I'll only add the relative point that I thought was most interesting. The book was in supply side forecast, and in this case I'll just reiterate what Scott said, that the international airports around the globe and the big airports here in the United States are really not building runways and we're not building gates. But as GDP grows we're building demand. And so I can remain very bullish in the big cities that we have our hubs in here in this country and the big cities we fly to around the globe where it's becoming increasingly difficult, if not impossible, to be able to expand schedule.

Andrew Nocella: I'll only add the relative point that I thought was most interesting. The book was in supply side forecast, and in this case I'll just reiterate what Scott said, that the international airports around the globe and the big airports here in the United States are really not building runways and we're not building gates. But as GDP grows we're building demand. And so I can remain very bullish in the big cities that we have our hubs in here in this country and the big cities we fly to around the globe where it's becoming increasingly difficult, if not impossible, to be able to expand schedule.

Mike Leskinen: Appreciate the thoughts.

Duane Pfennigwerth: Appreciate the thoughts.

Mike Linenberg: Thank you. Next question comes from Mike Linenberg with Deutsche Bank. Your line is open. Oh, hey, my question is going to be a little bit more lowbrow. Just touch basic economy here. I think last quarter, you gave us a number, maybe it was about 15% of volume. When we look at, you know, the year over year increase in basic economy revenue relative to your total revenue, it's almost outpacing a two to one. Where is that percentage today? And is that just largely a function of the upgaging and next? Or are you starting to see you know, maybe more intensely competitive, you know, competing at the lower part of the fare structure, and that's driving a higher volume?

Andrew Nocella: Thank you.

Thank you.

Kristina Edwards: The next question comes from Michael Linenberg with Deutsche Bank. Your line is open. Oh, hey, my.

Operator: The next question comes from Michael Linenberg with Deutsche Bank. Your line is open.

Michael Linenberg: Oh, hey, my.

Andrew Nocella: Question is going to be a little bit more low brow. Just touch basic economy here. I think last quarter you gave us a number, maybe it was about 15% of volume. When we look at, you know, the year over year increase in basic economy revenue relative to your total revenue, it's almost outpacing a 2 to 1. Where is that percentage today, and is that just largely a function of the up gauging and next, or are you starting to see, you know, maybe more intensely competitive, you know, competing at the lower part of the fare structure and.

Question is going to be a little bit more low brow. Just touch basic economy here. I think last quarter you gave us a number, maybe it was about 15% of volume. When we look at, you know, the year over year increase in basic economy revenue relative to your total revenue, it's almost outpacing a 2 to 1. Where is that percentage today, and is that just largely a function of the up gauging and next, or are you starting to see, you know, maybe more intensely competitive, you know, competing at the lower part of the fare structure and.

Scott Kirby: That's driving a higher volume.

That's driving a higher volume.

Andrew Nocella: Unknown Speaker. Look, I expect in Q2, you're going to see us be more competitive at the lower end of the fare structure, creating higher volume. It was less true in Q1, because the decline in demand happened so quickly at the, you know, mid-February and March. And so we didn't have an opportunity to really react quick enough to fill up the seats, and our domestic load factor fell by, I think, 3.3 points. So in Q2, you're going to see us, we'll probably still run a small deficit year-over-year domestically, but it's probably in the order of one point.

Andrew Nocella: Look, I expect in Q2 you're going to see us be more competitive at the lower end of the fare structure, creating higher volume. It was less true in Q1. The decline in demand happened so quickly at the, you know, mid February and March, and so we didn't have an opportunity to really react quick enough to fill up the seats. Our domestic load factor fell by, I think, 3.3 points. In Q2 you're going to see us, we'll probably still run a small load factor deficit year over year domestically, but it's probably in the order of one point, and it will be because we've opened up the inventory system to take more basic, more low yielding customers, and we will simply spill less to the spill airlines as a result when we do that.

Andrew Nocella: Look, I expect in Q2 you're going to see us be more competitive at the lower end of the fare structure, creating higher volume. It was less true in Q1. The decline in demand happened so quickly at the, you know, mid February and March, and so we didn't have an opportunity to really react quick enough to fill up the seats. Our domestic load factor fell by, I think, 3.3 points. In Q2 you're going to see us, we'll probably still run a small load factor deficit year over year domestically, but it's probably in the order of one point, and it will be because we've opened up the inventory system to take more basic, more low yielding customers, and we will simply spill less to the spill airlines as a result when we do that.

Andrew Nocella: And it'll be because we've opened up the inventory system to take more basic, more lower-yielding customers, and we will simply spill less to the spill airlines as a result when we do that.

Andrew Nocella: But I think you'll see it expand in Q2. And it'll go up and down based on market conditions, but we'll decide how much low-end traffic we want to spill and when we want to Great.

Andrew Nocella: But I think you'll see it expand in Q2 and it'll go up and down based on market conditions. But we'll decide how much low end traffic we want to spill and when we want to spill it.

But I think you'll see it expand in Q2 and it'll go up and down based on market conditions. But we'll decide how much low end traffic we want to spill and when we want to spill it.

Scott Kirby: Great.

Michael Linenberg: Great.

Andrew Nocella: Andrew, since I have you just this Real ID deadline, 7 May 2025, I mean you're the most international of any of the carriers, so passports among your customers shouldn't be an issue. But what sort of impact do we have? I mean I don't think it impacts your cash since you sold a ticket, but are you going to get a bunch of cancellations where all of a sudden there's some revenue recognition because people show up and they don't have ID? Any thoughts on that? Look, I think there's a lot going on there and I kind of hope that date gets extended once again and I'll hope the same thing when it happens again. But we're working through this with the government and I think we'll have more to say on it.

Andrew Nocella: And Andrew, since I have you, just this real ID deadline, May 7. I mean, you're the most international of any of the carriers. So passports among your customers shouldn't be an issue. But what sort of impact do we have? I mean, I don't think it impacts your cash since you sold the ticket. But are you going to get a bunch of cancellations where all of a sudden there's some revenue recognition, because people show up and they don't have ID? Any thoughts on that? But this is something we are aware of, and we continue to talk to the government.

Andrew, since I have you just this Real ID deadline, 7 May 2025, I mean you're the most international of any of the carriers, so passports among your customers shouldn't be an issue. But what sort of impact do we have? I mean I don't think it impacts your cash since you sold a ticket, but are you going to get a bunch of cancellations where all of a sudden there's some revenue recognition because people show up and they don't have ID? Any thoughts on that?

Andrew Nocella: Look, I think there's a lot going on there and I kind of hope that date gets extended once again and I'll hope the same thing when it happens again. But we're working through this with the government and I think we'll have more to say on it.

Andrew Nocella: But hopefully everybody's prepared and they got their Real ID or their passport or their passport card. There's multiple ways to get through TSA security obviously, but this is something we are aware of and we continue to talk to the government about it. Great, thank you.

But hopefully everybody's prepared and they got their Real ID or their passport or their passport card. There's multiple ways to get through TSA security obviously, but this is something we are aware of and we continue to talk to the government about it.

Michael Linenberg: Great, thank you.

Brandon Oglenski: Great, thank you. The next question comes from Brandon Oglenski with Barclays, your line is open. Hi, good morning, and thanks for taking my questions. So can you guys dig into how you're defining brand loyal customers? Because I think this is a pretty important concept. And Scott, I think in your prepared remarks, or maybe it was Andrew, you talked about like share of local customers. Is that a way we could start to measure it from the outside looking in? Absolutely, it's all of the above. So there's a number of ways to do it. But our total market share, and you look at every single one of our hub cities, our market share is up in every single city we fly to.

Kristina Edwards: The next question comes from Brandon Oglenski with Barclays. Your line is open.

Operator: The next question comes from Brandon Oglenski with Barclays. Your line is open.

Andrew Nocella: Hi, good morning, and thanks for taking my questions. So can you guys dig into how?

Brandon Oglenski: Hi, good morning, and thanks for taking my questions. So can you guys dig into how?

Scott Kirby: You're defining brand loyal customers? Because I think this is a pretty important concept.

You're defining brand loyal customers? Because I think this is a pretty important concept.

Andrew Nocella: Scott, I think in your prepared remarks, or maybe it was Andrew, you.

Scott, I think in your prepared remarks, or maybe it was Andrew, you.

Scott Kirby: Talked about like share of local customers.

Talked about like share of local customers.

Andrew Nocella: Is that a way we could start to measure it from the outside looking in? Absolutely. It's all of the above. So there's a number of ways to do it, but our total market share, and you look at every single one of our hub cities, our market share is up in every single city we fly to. If you look at the origin market share, which is something I highly recommend that you do, and I gave some numbers today for Chicago, for example, where our origin share is better than our total share. In other words, the loyalty of local customers here in Chicago has shifted to United. We've got those customers, a co-branded credit card as well to make sure they're incredibly sticky and they stay with United indefinitely. That was our plan all along. We think it's working, and we'll do the same.

Is that a way we could start to measure it from the outside looking in?

Andrew Nocella: Absolutely. It's all of the above. So there's a number of ways to do it, but our total market share, and you look at every single one of our hub cities, our market share is up in every single city we fly to. If you look at the origin market share, which is something I highly recommend that you do, and I gave some numbers today for Chicago, for example, where our origin share is better than our total share. In other words, the loyalty of local customers here in Chicago has shifted to United. We've got those customers, a co-branded credit card as well to make sure they're incredibly sticky and they stay with United indefinitely. That was our plan all along. We think it's working, and we'll do the same.

Andrew Nocella: If you look at the origin market share, which is something I highly recommend that you do, and I gave some numbers today for Chicago, for example, where our origin share is better than our total share. In other words, the loyalty of local customers here in Chicago has shifted to United. We've got those customers a co-brand credit card as well to make sure they're incredibly sticky. And they stay with United indefinitely. That was our plan all along. We think it's working and we'll do the same. The other measurement we look at is, you know, share amongst the big global travel events.

Andrew Nocella: The other measurement we look at is share among the big global travel agencies. Those tend to be higher yielding customers traveling often for business. Our share in that category continues to go up. There's probably a bunch of other ways you can do it, but it shows up in our regular revenue premium to the industry, and it shows up in our market share. It shows up all over the place, but most importantly, it shows up in our margin and the relative gap we have to our customers or to our competitors. I think you'll see that our margin gap probably increased to others in Q1, did not decrease. Well, I appreciate that, Andrew, and I.

The other measurement we look at is share among the big global travel agencies. Those tend to be higher yielding customers traveling often for business. Our share in that category continues to go up. There's probably a bunch of other ways you can do it, but it shows up in our regular revenue premium to the industry, and it shows up in our market share. It shows up all over the place, but most importantly, it shows up in our margin and the relative gap we have to our customers or to our competitors. I think you'll see that our margin gap probably increased to others in Q1, did not decrease.

Andrew Nocella: Those tend to be higher yielding customers traveling often for business, and our share in that category continues to go up. And you know, there's probably a bunch of other ways you can do it, but it shows up in our regular revenue premium to the industry, and it shows up in our market share, it shows up all over the place. But most importantly, it shows up into our margin and the relative gap we have to our customers or to our competitors. And I think you'll see that our margin gap probably increased to others.

Brandon Oglenski: Well, I appreciate that, Andrew, and I.

Andrew Nocella: Well, I appreciate that, Andrew. And I guess, can you put that in the context of how prudent it is right now growing domestic capacity in the high single digit level? Because I think that's what your 2Q and summer schedules are showing right now. And especially just given that we saw such a drastic change in unit revenues, you know, we thought 1Q would be positive and ended up down, I think, three or 4% domestically. So is it the right opportunity to be taking a lot of share right now? Or I guess maybe if I rephrase the question, is the focus really just on incremental gaining that share today, and worry about the margins later?

Scott Kirby: Guess, can you put that in the context of how prudent it is, right?

Guess, can you put that in the context of how prudent it is, right?

Andrew Nocella: Now, growing domestic capacity in the high single digit level?

Now, growing domestic capacity in the high single digit level?

Scott Kirby: Because I think that's what Q2.

Because I think that's what Q2.

Andrew Nocella: Q2 summer schedules are showing right now.

Q2 summer schedules are showing right now.

Scott Kirby: Especially just given that we saw.

Especially just given that we saw.

Andrew Nocella: Such a drastic change in unit revenues. You know, we thought Q1 would be positive and ended up down, I think, 3% or 4% domestically.

Such a drastic change in unit revenues. You know, we thought Q1 would be positive and ended up down, I think, 3% or 4% domestically.

Scott Kirby: So is it the right opportunity to?

So is it the right opportunity to?

Andrew Nocella: Be taking a lot of share right now?

Be taking a lot of share right now?

Mike Leskinen: Or, I guess, maybe if I rephrase.

Or, I guess, maybe if I rephrase.

Scott Kirby: The question is, is the focus really just on incremental gaining that share today and?

The question is, is the focus really just on incremental gaining that share today and?

Andrew Nocella: Worry about the margins later or is.

Worry about the margins later or is.

Andrew Nocella: Or is there more of a focus on margins? And again, is it prudent to be growing that much domestically? Well, I think it's false to think that we don't focus on both, we are always focused on a margin. But I think we've shown over eight years now that we have a proven track record on our capacity to All of those decisions have been undeniably good for United. You know, we look back at our absolute and relative performance this Q1 and believe that our choices are growing, which we did focus on peak time of day fly and proved right and created, you know, our margins that you saw.

Scott Kirby: there more of a focus on margins?

there more of a focus on margins?

Andrew Nocella: And again, is it prudent to be?

And again, is it prudent to be?

Scott Kirby: Growing that much domestically?

Growing that much domestically?

Andrew Nocella: Well, I think it's false to think that we don't focus on both. We are always focused on our margin. But I think we've shown over eight years now that we have a proven track record on our capacity decisions, and all of those decisions have been undeniably good for United. You know, we look back at our absolute and relative performance this Q1 and believe that our choice of growing, which we did, focused on peak time of day flying, proved right and created, you know, our margins that you saw. We were the first to announce a change to our fleet a few weeks back at the J.P. Morgan conference, and we've unloaded a bunch of capacity as a result of that. So we were going to fly higher than the number that we're going to fly.

Andrew Nocella: Well, I think it's false to think that we don't focus on both. We are always focused on our margin. But I think we've shown over eight years now that we have a proven track record on our capacity decisions, and all of those decisions have been undeniably good for United. You know, we look back at our absolute and relative performance this Q1 and believe that our choice of growing, which we did, focused on peak time of day flying, proved right and created, you know, our margins that you saw. We were the first to announce a change to our fleet a few weeks back at the J.P. Morgan conference, and we've unloaded a bunch of capacity as a result of that. So we were going to fly higher than the number that we're going to fly.

Andrew Nocella: We were the first to announce a change to our fleet a few weeks back at the JPMorgan We've unloaded a bunch of capacity as a result of that. So we were going to fly higher than the number that we're going to fly. We believe the capacity plan we have now for the spring and summer is the best plan for United. And, you know, we also understand that things change. And as usual, we'll stay on top of those things. And we remain open to making changes in September and beyond. But at this point, we think we have the right plan.

Andrew Nocella: We believe the capacity plan we have now for the spring and summer is the best plan for United. You know, we also understand that things change and as usual we'll stay on top of those things and we remain open to making changes in September and beyond. At this point we think we.

We believe the capacity plan we have now for the spring and summer is the best plan for United. You know, we also understand that things change and as usual we'll stay on top of those things and we remain open to making changes in September and beyond. At this point we think we.

Scott Kirby: Have the right plan.

Have the right plan.

Andrew Nocella: Plan. We're not flying, you know, we're not going to fly unproductive capacity. But we are also going to balance market share and financial returns. We've given you the EPS guidance, we've given you two guides, and I think we're really focused, as Scott said, on a no excuse culture on delivering on our guide.

Plan. We're not flying, you know, we're not going to fly unproductive capacity. But we are also going to balance market share and financial returns. We've given you the EPS guidance, we've given you two guides, and I think we're really focused, as Scott said, on a no excuse culture on delivering on our guide.

Andrew Nocella: We're not flying, you know, we're not going to fly unproductive capacity. But we are also going to balance market share and financial returns. We've given you, you know, the EPS guidance, we've given you two guides. And I think we're really focused, as Scott said, on a no excuse culture on delivering on our guide.

Scott Kirby: Thank you, Andrew.

Brandon Oglenski: Thank you, Andrew.

Ravi Shanker: Thank you, Andrew. The next question comes from Ravi Shanker with Morgan Stanley. Your line is open. Great. Thanks, guys. So just to follow up on the multiple scenarios here, but from a loyalty and co-brand standpoint, how do you think that evolves if we do get, you know, probably the first broad-based consumer recession we've had since 2008? Obviously, the whole industry and loyalty and co-brand have changed a lot since. Does it stay as resilient as it was during the pandemic, or do you think it has greater risk? Hey, Ravi, I love I love that question. The loyalty business and the stream of revenue and profits from that business was resilient, was resilient through the COVID pandemic.

Kristina Edwards: The next question comes from Ravi Shanker with Morgan Stanley. Your line is open.

Operator: The next question comes from Ravi Shanker with Morgan Stanley. Your line is open.

Andrew Nocella: Great, thanks. Morning guys. So just to follow up on the multiple scenarios here, but from a loyalty and co-brand standpoint, how do you think that evolves if we do get probably the first broad-based consumer recession we've had since 2008? Obviously the whole industry and loyalty and co-brand have changed a lot since. Does it stay as resilient as it was during the pandemic or do you think it has greater risk?

Ravi Shanker: Great, thanks. Morning guys. So just to follow up on the multiple scenarios here, but from a loyalty and co-brand standpoint, how do you think that evolves if we do get probably the first broad-based consumer recession we've had since 2008? Obviously the whole industry and loyalty and co-brand have changed a lot since. Does it stay as resilient as it was during the pandemic or do you think it has greater risk?

Mike Leskinen: Hey Ravi, I love that question. The loyalty business and the stream of revenue and profits from that business was resilient through the COVID pandemic. Everything we see in the data shows great resilience right now. If anything, we expect to see secular growth continue through even an economic weak spot. So as we sensitize the model and scenarios, upsides and downsides, that's a piece that is kind of a rock in all scenarios.

Michael Leskinen: Hey Ravi, I love that question. The loyalty business and the stream of revenue and profits from that business was resilient through the COVID pandemic. Everything we see in the data shows great resilience right now. If anything, we expect to see secular growth continue through even an economic weak spot. So as we sensitize the model and scenarios, upsides and downsides, that's a piece that is kind of a rock in all scenarios.

Ravi Shanker: Everything we see in the data shows great resilience right now. If anything, we expect to see secular growth continue through even an economic weak spot. So as we sensitize the model and scenarios, upsides and downsides, that's a piece that is kind of a rock in all scenarios. I'll just add that, you know, we said this word a lot today, the brand loyal customer. Wargs.

Andrew Nocella: I'll just add that, you know, we've said this word a lot today. The brand loyal customers makes a difference here. So as we build the premier members of the program as we increase the penetration rate of those holding credit cards. This cycle just builds on itself like a flywheel. And we're really, really focused on this business and making sure it does that. And as a result, I think it's getting stronger and will be more resilient in the downturn than it was even in the pandemic. Understood. That's really helpful, and maybe a quick follow-up for you, Mike. Just wanted to confirm that your fuel price assumptions between your two full-year guide scenarios are not different. And if so, do you think there's potential for more fuel price tailwind in the recession scenario?

Andrew Nocella: I'll just add that, you know, we've said this word a lot today. The brand loyal customers makes a difference here. So as we build the premier members of the program as we increase the penetration rate of those holding credit cards. This cycle just builds on itself like a flywheel. And we're really, really focused on this business and making sure it does that. And as a result, I think it's getting stronger and will be more resilient in the downturn than it was even in the pandemic.

Michael: Thank you again. This cycle just builds on itself like a flywheel. And we're really, really focused on this business and making sure it does that. And as a result, I think it's getting stronger and will be more resilient in the downturn than it was.

Ravi Shanker: Understood. That's really helpful, and maybe a quick follow-up for you, Mike. Just wanted to confirm that your fuel price assumptions between your two full-year guide scenarios are not different. And if so, do you think there's potential for more fuel price tailwind in the recession scenario?

Michael: Understood. That's really helpful. And maybe a quick follow up for you, Mike. Just wanted to confirm that your fuel price assumptions between your two full year guide scenarios are not different. And if so, kind of do you think there's potential for more fuel price tailwind in the recession scenario? Yeah, Ravi, I think it's a good point. And if revenue falls off as much as we anticipate in the downside scenario in the recession scenario, there's a solid case to be made that we would see further decline in fuel. That is an assumption you can make. And so we're being very clear and transparent on the assumptions we made.

Mike Leskinen: Yeah, Robbie, I think it's a good point. And if revenue falls off as much as we anticipate in the downside scenario, in the recession scenario, there's a solid case to be made that we would see further decline in fuel. That is an assumption you can make. And so we're being very clear and transparent on the assumptions we made, and that is that we don't get an additional decrease offset from fuel.

Michael Leskinen: Yeah, Robbie, I think it's a good point. And if revenue falls off as much as we anticipate in the downside scenario, in the recession scenario, there's a solid case to be made that we would see further decline in fuel. That is an assumption you can make. And so we're being very clear and transparent on the assumptions we made, and that is that we don't get an additional decrease offset from fuel.

Michael: And that is that we don't get an additional offset from Understood.

Scott Kirby: Understood.

Ravi Shanker: Understood.

Speaker: Thank you. We will now switch to the media portion of the call. To ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Members of the Board of Governors, and that your phone is not on mute when called upon. Hold for a moment while we assemble our Your first question comes from Mary Schlangenstein with Bloomberg News. Your line is open. Thank you. Hey, Scott, I wanted to ask you, with China saying that they're going to halt Boeing deliveries, and we've got an aircraft engine and parts supplier that says they'll be scrapping shipments that are subject to tariffs, Building that on top of the current supply chain issues, is there kind of a crisis developing in the overall aerospace industry?

Andrew Nocella: Thank you.

Thank you.

Kristina Edwards: We will now switch to the media portion of the call. To ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Please hold for a moment while we assemble our queue. Your first question comes from Mary Schlangenstein with Bloomberg News. Your line is open. Thank you. Hey, Scott, I wanted to ask you, with China saying that they're going to halt Boeing deliveries and we've got an aircraft engine and parts supplier that says they'll be scrapping shipments that are subject to tariffs. Building that on top of the current supply chain issues, is there kind of a crisis developing in the overall aerospace industry, and if so, what are your main concerns there?

Operator: We will now switch to the media portion of the call. To ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure you are not on speakerphone and that your phone is not on mute when called upon. Please hold for a moment while we assemble our queue. Your first question comes from Mary Schlangenstein with Bloomberg News. Your line is open.

Mary Schlangenstein: Thank you. Hey, Scott, I wanted to ask you, with China saying that they're going to halt Boeing deliveries and we've got an aircraft engine and parts supplier that says they'll be scrapping shipments that are subject to tariffs. Building that on top of the current supply chain issues, is there kind of a crisis developing in the overall aerospace industry, and if so, what are your main concerns there?

Mary Schlangenstein: And if so, what are your main concerns there? I think it's way too early to be panicking and declaring a crisis. You know, aerospace is probably the number one example of a successful high-tech manufacturing export powerhouse industry in the United States. And we're still in the early, you know, the opening game of how all this tariff is going to settle out. And I suspect by the time we get to the end game, you know, aerospace is going to be recognized as a clear winning proposition for the United States. And, you know, things are going to work out.

Scott Kirby: I think it's way too early to be panicking and declaring a crisis. You know, aerospace is probably the number one example of a successful high tech manufacturer, manufacturing, export powerhouse industry in the United States. And we're still in the early, you know, the opening game of how all this tariff is going to settle out. And I suspect by the time we get to the end game, you know, aerospace is going to be recognized as a clear winning proposition for the United States. And, you know, things are going to work out. So my recommendation to everyone would be just take a breath and let's wait a little while before you start making panicky moves.

Scott Kirby: I think it's way too early to be panicking and declaring a crisis. You know, aerospace is probably the number one example of a successful high tech manufacturer, manufacturing, export powerhouse industry in the United States. And we're still in the early, you know, the opening game of how all this tariff is going to settle out. And I suspect by the time we get to the end game, you know, aerospace is going to be recognized as a clear winning proposition for the United States. And, you know, things are going to work out. So my recommendation to everyone would be just take a breath and let's wait a little while before you start making panicky moves.

Scott Kirby: So my recommendation to everyone would just be take a breath and let's wait a little while before you start making panicky.

Kristina Edwards: Okay. And you said at the start of the call that most of your deliveries are coming from Boeing. But if you face the prospect of having to take an Airbus plane and pay the tariffs on it, will you do that?

Mary Schlangenstein: Okay. And you said at the start of the call that most of your deliveries are coming from Boeing. But if you face the prospect of having to take an Airbus plane and pay the tariffs on it, will you do that?

Scott Kirby: Okay. And you said at the start of the call that most of your deliveries are coming from Boeing, but if you face the prospect of having to take an Airbus plane and pay the tariffs on it, will you do that? Well, we're in a different position than others. We're mostly Airbus or Boeing aircraft. As Brett said, we're Boeing's second largest customer behind only the U.S. government. Most of our Airbus deliveries are coming from Alabama. So this is a pretty minor issue for us. And in fact, I look at it as an opportunity. We had the senior leadership of Airbus in here with us yesterday as an opportunity to actually strengthen the partnership there.

Scott Kirby: Well, we're in a different position than others. We're mostly Airbus, Boeing aircraft. As Brett said, we're Boeing's second largest customer behind only the US Government. Most of our Airbus deliveries are coming from Alabama. So this is a pretty minor issue for us. And in fact, I look at it as an opportunity we had. The senior leadership of Airbus was in here with us yesterday as an opportunity to actually strengthen the partnership there. You know, to their credit, Airbus is having to import some parts. They built the airplane in Alabama, but some of the parts come from elsewhere. So far they have been, you know, they have had to pay the tariffs on those airplanes and they've been a good partner, you know, in just dealing with that right now.

Scott Kirby: Well, we're in a different position than others. We're mostly Airbus, Boeing aircraft. As Brett said, we're Boeing's second largest customer behind only the US Government. Most of our Airbus deliveries are coming from Alabama. So this is a pretty minor issue for us. And in fact, I look at it as an opportunity we had. The senior leadership of Airbus was in here with us yesterday as an opportunity to actually strengthen the partnership there. You know, to their credit, Airbus is having to import some parts. They built the airplane in Alabama, but some of the parts come from elsewhere. So far they have been, you know, they have had to pay the tariffs on those airplanes and they've been a good partner, you know, in just dealing with that right now.

Scott Kirby: And, you know, to their credit, Airbus is having to import some parts. They built the airplane in Alabama. Some of the parts come from elsewhere. So far, they have been, you know, they have had to pay the tariffs on those airplanes. And they've been a good partner, you know, and just dealing with that right now. I think we all think let's go back to let's take a breath and we'll work these things out. But we view this as an opportunity to kind of work with Airbus. Again, we have much less exposure, so it's easier for us to work with them.

Scott Kirby: I think we all think, let's go back to, let's take a breath and we'll work these things out. But we view this as an opportunity to kind of work with Airbus again. We have much less exposure, so it's easier for us to work with them. We're not going to. We don't need to make any definitive statements about what we will or won't do at this moment. We're going to see a few more cards before we start doing that.

Scott Kirby: I think we all think, let's go back to, let's take a breath and we'll work these things out. But we view this as an opportunity to kind of work with Airbus again. We have much less exposure, so it's easier for us to work with them. We're not going to. We don't need to make any definitive statements about what we will or won't do at this moment. We're going to see a few more cards before we start doing that.

Scott Kirby: We're not going to we don't need to make any definitive statements about what we will or won't do at this moment in time. We're going to see a few more cards before we start doing that.

Kristina Edwards: Great. Thank you very much. The next question comes from John Pletz of Crain's Chicago Business. Your line is open.

Mary Schlangenstein: Great. Thank you very much.

Andrew Nocella: Great. Thank you very much. The next question comes from John Pletz of Crain's Chicago Business. Your line is open. Morning. Recorded. Judge mentioned it. You guys mentioned in the press release this morning about adding additional gates at O'Hare. Can you talk a little bit about how that fits into both the overall strategy for United as well as what it means for the expansion underway at O'Hare? Executive, UnitedNext. So, Andrew, I'll give it a try. You're correct. We're going to gain six gates later this year. We're very excited to do that. Our current facilities are very full, and we know people want to fly, and we know they want to fly in peak periods.

Operator: The next question comes from John Pletz of Crain's Chicago Business. Your line is open.

Andrew Nocella: Morning.

John Pletz: Morning.

Scott Kirby: You guys mentioned it. You guys mentioned in the press release this morning about adding additional gates at O'Hare.

You guys mentioned it. You guys mentioned in the press release this morning about adding additional gates at O'Hare.

Andrew Nocella: Hare.

Hare.

Scott Kirby: Can you talk a little bit about how that fits into both the overall strategy for United as well as what?

Can you talk a little bit about how that fits into both the overall strategy for United as well as what?

Andrew Nocella: It means for the expansion underway at O'Hare?

It means for the expansion underway at O'Hare?

Scott Kirby: Hare?

Hare?

Andrew Nocella: Sure, Andrew. I'll give it a try. You're correct. We're going to gain six gates later this year. We're very excited to do that. Our current facilities are very full, and we know people want to fly. We know they want to fly in peak periods. And so these six gates will allow us to continue to execute on the UnitedNext growth plan. We're really proud we won the gates through this process. We've been very consistent in our strategy here in Chicago. And as a result of that, we got the six gates, and we're going to continue to grow. We think the economics of the hub look really darn good right now, and we're excited about what the future holds in Chicago for United States.

Andrew Nocella: Sure, Andrew. I'll give it a try. You're correct. We're going to gain six gates later this year. We're very excited to do that. Our current facilities are very full, and we know people want to fly. We know they want to fly in peak periods. And so these six gates will allow us to continue to execute on the UnitedNext growth plan. We're really proud we won the gates through this process. We've been very consistent in our strategy here in Chicago. And as a result of that, we got the six gates, and we're going to continue to grow. We think the economics of the hub look really darn good right now, and we're excited about what the future holds in Chicago for United States.

Andrew Nocella: And so, these six gates will allow us to continue to execute on the UnitedNext growth plan. You know, we were really proud we won the gates through this process. We've been very pleased. In our strategy here in Chicago. And as a result of that, we got the six gates and we're going to continue to grow. We think the economics of the hub look really darn good right now. And we're excited about what the future holds in Chicago. Recession have any impact on that, on the growth?

Scott Kirby: Recession have any impact on that?

John Pletz: Recession have any impact on that?

Andrew Nocella: The growth, you know, it could potentially. But at this point, you know, we're operating a record schedule out of Chicago this summer. We plan to do that. We're not changing our plan, and our plan is really very consistent with what we devised six months ago before we started the year. But, you know, this period shall pass, and we'll get back to doing what we need to do in Chicago, and we remain really confident.

The growth,

Andrew Nocella: You know, it could potentially. But at this point, you know, we're operating a record schedule out of Chicago this summer. We plan to do that. We're not changing our plan, and our plan is really very consistent with what we devised six months ago before we started the year. But, you know, this period shall pass, and we'll get back to doing what we need to do in Chicago, and we remain really confident.

Andrew Nocella: You know, it could potentially, but at this point, you know, we're operating a record schedule out of Chicago this summer. We had planned to do that. We're not.

Speaker: Scholars Program.

Scott Kirby: Okay, thanks.

John Pletz: Okay, thanks.

Kristina Edwards: This concludes the question and answer session. I will now turn the call back over to Christina Edwards for closing remarks. Thanks for joining the call today. Please contact investor or media relations if you have any further questions. We look forward to talking to you next quarter. Happy Spring. Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect.

Operator: This concludes the question and answer session. I will now turn the call back over to Christina Edwards for closing remarks.

Kristina Edwards: This concludes the question and answer session. I will now turn the call back over to Kristina Edwards for closing remarks. Thanks for joining the call today. Please contact Investor or Media Relations if you have any further questions, and we look forward to talking to you next quarter.

Kristina Edwards: Thanks for joining the call today. Please contact investor or media relations if you have any further questions. We look forward to talking to you next quarter. Happy Spring.

Speaker: Happy Thank you, ladies and gentlemen. This concludes today's conference. You may now

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