Q4 2025 United Airlines Holdings Inc Earnings Call

January 21, 2026

Will be that'll be your conference facilitator today.

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I will now turn the presentation over to your host. For today's call, Christina Edwards, managing director of investor relations. Please go ahead.

Speaker #1: Good morning. And welcome to United Airlines Holdings, Earnings Conference Call for the fourth quarter and full year 2025. My name is Colby, and I'll be your conference facilitator today.

Operator: Good morning, and welcome to United Airlines Holdings' earnings conference call for the fourth quarter and full year 2025. My name is Colby, and I'll be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. All lines have been placed on mute to prevent any background noise, and if you'd like to ask a question at that time, please press star, then the number one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question at any time, please press star one again. Thank you. 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.

Operator: Good morning, and welcome to United Airlines Holdings' Earnings Conference Call For The Fourth Quarter And Full Year 2025. My name is Colby, and I'll be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. All lines have been placed on mute to prevent any background noise, and if you'd like to ask a question at that time, please press star, then the number one on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question at any time, please press star one again. Thank you. 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.

Q4 2025 United Airlines Holdings Inc Earnings Call

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UAL

United Airlines

Earnings

Q4 2025 United Airlines Holdings Inc Earnings Call

UAL

Wednesday, January 21st, 2026 at 3:30 PM

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Kristina Edwards: Thank you, Colby. Good morning, everyone, and welcome to United's fourth quarter and full year 2025 earnings conference call. Yesterday, we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations and 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, and historical operational metrics will exclude pandemic years as 2020 to 2022.

Kristina Edwards: Thank you, Colby. Good morning, everyone, and welcome to United's Fourth Quarter And Full Year 2025 Earnings Conference Call. Yesterday, we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations and 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, and historical operational metrics will exclude pandemic years as 2020 to 2022.

Operator: Before turning to 2026, I want to wish all the best to a friend and an industry icon, Glen Hauenstein. My first real introduction to what has become modern, successful airlines like Delta and United was at Continental in 1994 with Glen and Andrew Nocella as they were dismantling Continental Lite and building the Newark and Houston hubs that we at United are now proud to call our own. I remember Glen once coming into the conference room where I sat and yelled at me for being too loud, something, by the way, that my wife, Kathleen, wholeheartedly agrees with Glen on. At an airline, I think the most important and impactful job is building a great commercial strategy, and a large modern airline simply cannot succeed without a commercial superstar. Glen and Andrew are simply in a separate league from all the other commercial minds around the globe.

Before turning to 2026, I want to wish all the best to a friend and an industry icon, Glen Hauenstein. My first real introduction to what has become modern, successful airlines like Delta and United was at Continental in 1994 with Glen and Andrew Nocella as they were dismantling Continental Lite and building the Newark and Houston hubs that we at United are now proud to call our own. I remember Glen once coming into the conference room where I sat and yelled at me for being too loud, something, by the way, that my wife, Kathleen, wholeheartedly agrees with Glen on. At an airline, I think the most important and impactful job is building a great commercial strategy, and a large modern airline simply cannot succeed without a commercial superstar. Glen and Andrew are simply in a separate league from all the other commercial minds around the globe.

Brett Hart: Thank you, Scott, and good morning. While 2025 presented a challenging macro backdrop for the industry, we remain laser-focused on the customer experience and on building brand loyalty. Continued investments in the travel experience, communication, and reliability helped us navigate disruption and deliver for our customers. Our strong Net Promoter Scores for the year highlight the care and consistency built into the United travel experience. Despite the operational headwinds of the year, we finished 2025 with an almost three-point increase in our overall Net Promoter Score. During the month of November, amid an unprecedented government shutdown and real-time flight reductions, we had the best NPS month in the company's history. This is a testament to our customer focus, decisive actions, customer-friendly policies, and commitment to transparent communication, especially during disruptions. Toby will share in more detail the specific actions we took to produce these customer-friendly results.

Brett Hart: We also continue to innovate, and in Q4, we introduced new features and more personalized updates in our award-winning United app, including enhanced mobile bag tracking, virtual gate real-time boarding updates, and more detailed arrival information. These enhancements are designed to improve transparency, save customers' time, and provide clearer, real-time communication at key moments of the journey. With more than 85% of customers using the United app on the day of travel, another one of our competitive advantages, and we are confident that these investments are meaningfully enhancing the United experience, earning customer trust at every touchpoint and winning brand-loyal customers. On labor, we are currently in active negotiations with four of our labor unions. We look forward to reaching industry-leading contracts with these groups and will share more when able.

We also continue to innovate, and in Q4, we introduced new features and more personalized updates in our award-winning United app, including enhanced mobile bag tracking, virtual gate real-time boarding updates, and more detailed arrival information. These enhancements are designed to improve transparency, save customers' time, and provide clearer, real-time communication at key moments of the journey. With more than 85% of customers using the United app on the day of travel, another one of our competitive advantages, and we are confident that these investments are meaningfully enhancing the United experience, earning customer trust at every touchpoint and winning brand-loyal customers. On labor, we are currently in active negotiations with four of our labor unions. We look forward to reaching industry-leading contracts with these groups and will share more when able.

Toby Enqvist: We flew a record 189 million passengers and ranked number one in Star D0 for the second year in a row. For the year, United ranked number two in on-time departures and number two in cancellations. Our United Express operation delivered 134 days of perfect completion. This is a remarkable performance in the face of the outside challenges that we faced at Newark and staffing challenges at the ATC. Beginning in the early November, the FAA directed airlines to temporarily reduce departures at 40 major airports due to staffing and system constraints from the prolonged US government shutdown. We worked closely with FAA leadership to swiftly implement the reductions, and we want to thank them for their partnership. At United, we were intentional with how we made these cuts. From the start, our priority was protecting the integrity of our network.

We flew a record 189 million passengers and ranked number one in Star D0 for the second year in a row. For the year, United ranked number two in on-time departures and number two in cancellations. Our United Express operation delivered 134 days of perfect completion. This is a remarkable performance in the face of the outside challenges that we faced at Newark and staffing challenges at the ATC. Beginning in the early November, the FAA directed airlines to temporarily reduce departures at 40 major airports due to staffing and system constraints from the prolonged US government shutdown. We worked closely with FAA leadership to swiftly implement the reductions, and we want to thank them for their partnership. At United, we were intentional with how we made these cuts. From the start, our priority was protecting the integrity of our network.

Toby Enqvist: We made a clear decision not to cut long-haul international and hub-to-hub flying. Those flights are the backbone of our network and aided in retaining connectivity and flexibility for our customers. We focused on the reductions where we could minimize customer impact, with a majority of cuts concentrated on regional flying and non-hub domestic routes with smaller narrow-body aircraft. In many cases, that meant trimming frequency on routes where there were multiple daily options rather than eliminating connectivity altogether. Where we could, we consolidated flying in fewer departures with larger aircraft to move the same number of customers more efficiently and reducing further disruption. Even with these changes, total cancellations were only approximately 4% of departures during peak periods and had a minimal impact on our capacity in the quarter. Operationally, I'm very proud of how our team managed the rolling schedule changes.

We made a clear decision not to cut long-haul international and hub-to-hub flying. Those flights are the backbone of our network and aided in retaining connectivity and flexibility for our customers. We focused on the reductions where we could minimize customer impact, with a majority of cuts concentrated on regional flying and non-hub domestic routes with smaller narrow-body aircraft. In many cases, that meant trimming frequency on routes where there were multiple daily options rather than eliminating connectivity altogether. Where we could, we consolidated flying in fewer departures with larger aircraft to move the same number of customers more efficiently and reducing further disruption. Even with these changes, total cancellations were only approximately 4% of departures during peak periods and had a minimal impact on our capacity in the quarter. Operationally, I'm very proud of how our team managed the rolling schedule changes.

Toby Enqvist: We're no strangers to managing through irregular operation, and that has contributed to the speed and flexibility in which we respond to these situations. We published cancellations several days in advance to give peace of mind to our customers and directly communicated any changes through our app and website, and focused on reaccommodating customers wherever possible as quickly as able. Notably, nearly 60% of our customers whose flights were canceled were rebooked within four hours of the original departure time. Any customers traveling during this period could request a refund, even if their flight ultimately operated, and that included non-refundable and Basic Economy tickets. It was the right thing to do. Thank you to each United employee who helped us successfully navigate these real-time schedule changes. We closed out the year on a high note.

We're no strangers to managing through irregular operation, and that has contributed to the speed and flexibility in which we respond to these situations. We published cancellations several days in advance to give peace of mind to our customers and directly communicated any changes through our app and website, and focused on re-accommodating customers wherever possible as quickly as able. Notably, nearly 60% of our customers whose flights were canceled were rebooked within four hours of the original departure time. Any customers traveling during this period could request a refund, even if their flight ultimately operated, and that included non-refundable and Basic Economy tickets. It was the right thing to do. Thank you to each United employee who helped us successfully navigate these real-time schedule changes. We closed out the year on a high note.

Toby Enqvist: United delivered the best operation in the industry over the holidays, ranking number one in on-time departures and on-time arrivals. We canceled less than 1% of our flights during the holidays, and following the Caribbean airspace closure in the early 2026, we added 10% more seats over a three-day period to help customers return home, an outstanding way to close out the busy holiday season. 2025 is a year we should all be proud of, especially given the multiple headwinds United and the industry face. Running a strong operation sets the foundation for delivering on our financial commitments and helps attract the brand-loyal customers that we speak so much about. Thank you again to our incredible team here at United, and I look forward to building on our momentum in 2026 together. Now to you, Andrew, to speak about the revenue environment.

United delivered the best operation in the industry over the holidays, ranking number one in on-time departures and on-time arrivals. We canceled less than 1% of our flights during the holidays, and following the Caribbean airspace closure in the early 2026, we added 10% more seats over a three-day period to help customers return home, an outstanding way to close out the busy holiday season. 2025 is a year we should all be proud of, especially given the multiple headwinds United and the industry face. Running a strong operation sets the foundation for delivering on our financial commitments and helps attract the brand-loyal customers that we speak so much about. Thank you again to our incredible team here at United, and I look forward to building on our momentum in 2026 together. Now to you, Andrew, to speak about the revenue environment.

Andrew Nocella: Thanks, Toby. United's top-line revenues increased 4.8% to $15.4 billion in the quarter on a 6.5% increase in capacity year-over-year. TRASM for the quarter was down 1.6%. Q4 was United's highest revenue quarter ever. Premium cabins outperformed Main Cabin once again in the quarter. Premium cabin revenue were up 12% year-over-year on a 7% more capacity. PRASM for premium cabins outperformed the Main Cabin by almost 10 points in Q4. Main Cabin revenues were up 1% on a 6% more capacity for the quarter. For the year, premium revenues increased approximately 11%, while standard and Basic Economy revenues were down approximately 5%. We did see a nice bounce back in our international flying in Q4 after a challenge in Q3. The Pacific and the Atlantic performed well, with PRASM turning positive in both regions. Latin America, on the other hand, had yet another challenging quarter.

Andrew Nocella: We also expect the domestic capacity environment to be quite favorable for the first half of 2026, with a small but meaningful amount of perennial unprofitable capacity by others leaving the market. However, in Q1, premium revenues continue to lead the way, while standard main cabin seats continue to show some weakness. This main cabin weakness is due to unprofitable capacity offered by other large spill-demand US carriers as ULCC capacity becomes less relevant. We also have a tailwind in Newark later this spring when operations run well. We expect Newark to give United a unique RASM tailwind versus the industry considering the events last spring. But the number of flights, now limited to what the runways can accommodate, our customers can and are booking in confidence. We did make aggressive Latin capacity adjustments for Q1 to correct underperformance we saw in Q3 and Q4.

We also expect the domestic capacity environment to be quite favorable for the first half of 2026, with a small but meaningful amount of perennial unprofitable capacity by others leaving the market. However, in Q1, premium revenues continue to lead the way, while standard main cabin seats continue to show some weakness. This main cabin weakness is due to unprofitable capacity offered by other large spill-demand US carriers as ULCC capacity becomes less relevant. We also have a tailwind in Newark later this spring when operations run well. We expect Newark to give United a unique RASM tailwind versus the industry considering the events last spring. But the number of flights, now limited to what the runways can accommodate, our customers can and are booking in confidence. We did make aggressive Latin capacity adjustments for Q1 to correct underperformance we saw in Q3 and Q4.

Andrew Nocella: However, recent geopolitical events are having a measurable negative impact on bookings in the Caribbean. Yet, we still have a chance at positive Latin RASM depending on when concern dissipates. All United hubs were once again profitable in Q4 and for all of 2025. A fully profitable hub framework allows United to invest incremental capacity on a solid foundation. We think we're only one of two large US carriers that can say all their hubs were profitable in 2025, and these same two carriers are expected to represent the bulk of industry profits in the year. We also believe that of the three airline hubs located in Chicago, only United's hub was profitable in 2025, and we expect it will be profitable again once again in 2026. Today, I also wanted to talk about our commercial focus points for 2026 to drive higher RASMs and margins.

However, recent geopolitical events are having a measurable negative impact on bookings in the Caribbean. Yet, we still have a chance at positive Latin RASM depending on when concern dissipates. All United hubs were once again profitable in Q4 and for all of 2025. A fully profitable hub framework allows United to invest incremental capacity on a solid foundation. We think we're only one of two large US carriers that can say all their hubs were profitable in 2025, and these same two carriers are expected to represent the bulk of industry profits in the year. We also believe that of the three airline hubs located in Chicago, only United's hub was profitable in 2025, and we expect it will be profitable again once again in 2026. Today, I also wanted to talk about our commercial focus points for 2026 to drive higher RASMs and margins.

Andrew Nocella: Our first focus will be new seasonal capacity shaping of our long-haul schedule. Peak demand for international travel has spread from the second, and third quarters to other parts of the year. As a result of this shift, we expect the fastest growing quarter for United's international capacity to be Q1 in 2026, with minimal growth in Q3. Flattening capacity across the quarters would have not been correct in 2019, but it is today. A second focus will be enhanced merchandising of our growing product lineup. We plan to increase segmentation and customer choices with our changes, which we'll announce in early 2026. This effort includes the largest redesign of United.com in a decade. Our third focus will be enhanced connectivity. We will soon approach the connectivity goals we set in 2021 with the United Next Plan by 2027.

Our first focus will be new seasonal capacity shaping of our long-haul schedule. Peak demand for international travel has spread from the second, and third quarters to other parts of the year. As a result of this shift, we expect the fastest growing quarter for United's international capacity to be Q1 in 2026, with minimal growth in Q3. Flattening capacity across the quarters would have not been correct in 2019, but it is today. A second focus will be enhanced merchandising of our growing product lineup. We plan to increase segmentation and customer choices with our changes, which we'll announce in early 2026. This effort includes the largest redesign of United.com in a decade. Our third focus will be enhanced connectivity. We will soon approach the connectivity goals we set in 2021 with the United Next Plan by 2027.

Andrew Nocella: As a result, 2025 represents United's high watermark on domestic capacity growth as we draw this very successful part of the United Next Plan to an end. Our fourth focus will be MileagePlus, enhancing the growth potential in the coming years via drawing a larger distinction between true loyalty programs and reward programs offered by others. We have a legacy contract that continues with our banking partners regarding core economics, but we still have plenty of ideas to boost growth and revenue in the meantime. And premiumization is our fifth focus in 2026. We've had this premium focus for almost eight years now, and while our lead is now being followed by a range of other US carriers, it's United's seven business-centric hubs that dictate this plan and why we expect to be more successful at it.

Andrew Nocella: Last spring, we announced our new elevated interior for our wide-body jets, including the new United Polaris Studio seat, Polaris seats with doors, along with countless other upgrades to the soft product. Four elevated 787s are now being prepared for delivery in the coming weeks, and we expect 16 more for the remainder of 2026. These aircraft, along with other new deliveries, will result in our premium capacity growth accounting for more than half our growth in 2026. We look forward to another innovative set of products and aircraft announcements in 2026. United is defining what premium means for all customers, no matter where they sit or what they pay. Our United Signature Interior Mods and Starlink installs are now moving at that pace and will be completed in 2027, creating a consistent premium product we hope for when we announce United Next in 2021.

Last spring, we announced our new elevated interior for our wide-body jets, including the new United Polaris Studio seat, Polaris seats with doors, along with countless other upgrades to the soft product. Four elevated 787s are now being prepared for delivery in the coming weeks, and we expect 16 more for the remainder of 2026. These aircraft, along with other new deliveries, will result in our premium capacity growth accounting for more than half our growth in 2026. We look forward to another innovative set of products and aircraft announcements in 2026. United is defining what premium means for all customers, no matter where they sit or what they pay. Our United Signature Interior Mods and Starlink installs are now moving at that pace and will be completed in 2027, creating a consistent premium product we hope for when we announce United Next in 2021.

Michael Leskinen: Thanks, Andrew. We closed out 2025 on a high note and delivered fourth-quarter earnings per share of $3.10 within our guidance range of $3.00 to $3.50. And that's despite a $250 million impact to our pre-tax earnings from the government shutdown. 2025 was a challenging year for the airline industry. Between macro volatility and idiosyncratic challenges at Newark, each quarter of 2025 experienced a material event that pressured earnings and further widened the performance gap between industry leaders and laggards. Our full-year 2025 EPS came in at $10.62, which was slightly up versus 2024, and despite a $0.85 headwind from our challenges at Newark. I expect we will be the only US airline to grow EPS last year. This is an incredible proof point of United's ability to execute through times of elevated uncertainty when most of the industry cannot.

Michael Leskinen: An airline with a business anchored by brand-loyal customers isn't only more profitable; it's also more resilient. Our plan is working, and I'd like to thank the entire United team for their hard work in the face of all of these challenges. I'd particularly like to thank our frontline flight attendants, pilots, and customer service representatives. Through an extraordinarily difficult time during the government shutdown, you served our customers, leading to the highest net promoter scores in United's history. Over the last year, we've invested $1 billion in the customer, and as a result, customers are taking note. From larger clubs to free Starlink Wi-Fi, the United product offering, as well as further segmentation, continues to attract more and more brand-loyal customers, driving strong top-line performance and more durable earnings.

An airline with a business anchored by brand-loyal customers isn't only more profitable; it's also more resilient. Our plan is working, and I'd like to thank the entire United team for their hard work in the face of all of these challenges. I'd particularly like to thank our frontline flight attendants, pilots, and customer service representatives. Through an extraordinarily difficult time during the government shutdown, you served our customers, leading to the highest net promoter scores in United's history. Over the last year, we've invested $1 billion in the customer, and as a result, customers are taking note. From larger clubs to free Starlink Wi-Fi, the United product offering, as well as further segmentation, continues to attract more and more brand-loyal customers, driving strong top-line performance and more durable earnings.

Michael Leskinen: The investment in the customer has been enabled by our industry-leading efforts to drive cost efficiencies across the core business. In the fourth quarter, our CASM-ex year-over-year was up only 0.4%, bringing our full-year 2025 CASM-ex up to 0.4% as well. We expect this performance to be industry-leading and will continue to drive efficiencies across the business in 2026. Now turning to the outlook. Looking to the first quarter, we expect earnings per share to be between $1.00 and $1.50, an approximately 37% earnings improvement versus the first quarter of last year at the midpoint, and margin expansion year-over-year. Building off a strong quarter for the full year 2026, we expect earnings per share to be between $12.00 and $14.00. At the midpoint, this represents over 20% growth and implies continued margin expansion as we march towards double-digit margins.

The investment in the customer has been enabled by our industry-leading efforts to drive cost efficiencies across the core business. In the fourth quarter, our CASM-ex year-over-year was up only 0.4%, bringing our full-year 2025 CASM-ex up to 0.4% as well. We expect this performance to be industry-leading and will continue to drive efficiencies across the business in 2026. Now turning to the outlook. Looking to the first quarter, we expect earnings per share to be between $1.00 and $1.50, an approximately 37% earnings improvement versus the first quarter of last year at the midpoint, and margin expansion year-over-year. Building off a strong quarter for the full year 2026, we expect earnings per share to be between $12.00 and $14.00. At the midpoint, this represents over 20% growth and implies continued margin expansion as we march towards double-digit margins.

Michael Leskinen: Turning to the fleet, this year, we expect to take delivery of over 100 aircraft, 100 narrow-body aircraft, and approximately 20 wide-body aircraft. Accordingly, we expect our capital expenditures for the year to be less than $8 billion, consistent with the $7 to 9 billion multi-year CapEx guidance we provided back in 2024. On the balance sheet, becoming investment-grade rated is a major priority of mine, and in 2025, we made meaningful progress towards investment-grade metrics. We paid off $1.9 billion of our high-cost COVID-era debt and brought our total cost of debt down to 4.7%. Our net leverage at the end of the year was 2.2x. As a result of our deleveraging efforts, combined with our earnings power and industry bifurcation, we've received five upgrades to our credit ratings across Moody's, S&P, and Fitch over the last 13 months.

Turning to the fleet, this year, we expect to take delivery of over 100 aircraft, 100 narrow-body aircraft, and approximately 20 wide-body aircraft. Accordingly, we expect our capital expenditures for the year to be less than $8 billion, consistent with the $7 to 9 billion multi-year CapEx guidance we provided back in 2024. On the balance sheet, becoming investment-grade rated is a major priority of mine, and in 2025, we made meaningful progress towards investment-grade metrics. We paid off $1.9 billion of our high-cost COVID-era debt and brought our total cost of debt down to 4.7%. Our net leverage at the end of the year was 2.2x. As a result of our deleveraging efforts, combined with our earnings power and industry bifurcation, we've received five upgrades to our credit ratings across Moody's, S&P, and Fitch over the last 13 months.

Michael Leskinen: United is now just one notch below investment-grade at all three agencies, our highest ratings in over 25 years. In 2026, we plan to deliver further and target net leverage below 2x with the intention of achieving investment-grade metrics by year-end. We're hopeful to achieve investment-grade ratings shortly thereafter and are committed to managing our balance sheet to achieve that goal. Free cash flow generation remains a key priority. In 2025, we generated $2.7 billion in free cash flow, and in 2026, we expect to deliver a similar level of free cash flow given higher aircraft deliveries. In the medium term, we expect free cash conversion to remain around 50%, and as we exit the decade, we continue to expect free cash conversion to expand to around 75%. On the buyback, we have $782 million left in authorization from our board of directors.

United is now just one notch below investment-grade at all three agencies, our highest ratings in over 25 years. In 2026, we plan to deliver further and target net leverage below 2x with the intention of achieving investment-grade metrics by year-end. We're hopeful to achieve investment-grade ratings shortly thereafter and are committed to managing our balance sheet to achieve that goal. Free cash flow generation remains a key priority. In 2025, we generated $2.7 billion in free cash flow, and in 2026, we expect to deliver a similar level of free cash flow given higher aircraft deliveries. In the medium term, we expect free cash conversion to remain around 50%, and as we exit the decade, we continue to expect free cash conversion to expand to around 75%. On the buyback, we have $782 million left in authorization from our board of directors.

Andrew Nocella: Thanks, Connor. I think I agree with your conclusion. 2026 has gotten off to a really, I think, very strong start, but in particular, business volumes have gotten off and are just really compelling. And the way I look at it is if you think back to early 2025, we saw actually strong business volumes at first, but those numbers quickly trailed off to be up just very low single digits in February and March. This year, for the same early January week, business revenue is up high single digits and nearly 20% year-over-year. So if current business volumes simply continue, you'll see year-over-year growth for the last two weeks of January for business up 12%, 13%, 14%. The further you push this math into February and March, the stronger it potentially gets. So I think I agree with your conclusion.

Well, look, uh, you know, I think it's inevitable. Um, uh, you know, premium cabinets are look really on their fourth year in a row, uh, but I do think it's inevitable that the coach cabin, the main cabin, improves and it's, it's a really simple equation. It's it's the unprofitable, uh, capacity offered by others in the marketplace, uh, that continues to fly, you know, more than you, otherwise expect to fly. So we'll, we'll see how that all shakes out. I, I can't predict the time in, um, but I do think eventually, uh, businesses stop doing unprofitable things. Uh, we'll have to see when that happens. But I, I remain bullish that, uh, we are going to see, uh, the performance of the main cabin flip at some point in the future. And when it does uh, that will be enormous uh fuel to our our margin growth and be great for for the industry itself. So time will tell. Um but I remain optimistic that you are on the course for that at some point in the future.

Sure. I'll, I'll I'll take the question. Uh, you know, I think it's a really good and relevant question. Obviously. Uh at first we're in constant contact with Chase on the issue obviously Chase is our largest co-brand partner. Uh, and we talked to them all the time on this on this issue. And what I'd say is, well much remains uncertain, of course, United portfolio would be impacted, but in our view it would be impacted a lot less than just about everybody else. You know, Mileage Plus kobrand holders, tend to skew towards higher FICA band. Ranges often revolve at a lower rate and have low loss rates. These factors make us different than most non-airline co-brand programs, and maybe even a lot different from a lot of other airlines over in programs. You know, we're going to let the banks sort this out, interest rates and revolve rates are more their thing. Our focus is on providing amazing benefits via this program. Uh, that our consumers love. So uh, a lot more to come on this subject, um, but we feel like we're on top of it and, uh, we will be ready for whatever happens in the future.

Andrew Nocella: Sure. I'll take the question. I think it's a really good and relevant question, obviously. And first, we're in constant contact with Chase on the issue. Obviously, Chase is our largest co-brand partner, and we talk to them all the time on this issue. And what I'd say is, while much remains uncertain, of course, United's portfolio would be impacted, but in our view, it would be impacted a lot less than just about everybody else. MileagePlus co-brand holders tend to skew towards higher FICA band ranges, often revolve at a lower rate, and have low loss rates. These factors make us different than most non-airline co-brand programs and maybe even a lot different from a lot of other airline co-brand programs. We're going to let the banks sort this out. Interest rates and revolve rates are more their thing.

Michael Leskinen: Thanks, Sheila. I'm very proud of our cost performance in 2025. I think it'll prove to be industry-leading, as I said in my prepared remarks. Look, the cost efficiency in 2025, in the fourth quarter, the operation, the strong operation formed the foundation. So a lot of credit goes to Toby and his team for driving that strong operation. Strong operation is a cost-efficient operation. But in addition to that, we are driving a real cultural efficiency here at United Airlines. I'll give a few examples, and we can talk more about it as time goes on, but a few examples are as we continue to invest in an industry-leading app; it drives a lot of automation for quicker check-in. It's customer-pleasing. It takes some variable costs out of our system. We've also overhauled our global procurement organization.

And then finally, um, we are using, uh, sophisticated technology to help model, uh, to model the demand for our Tech Ops organization and that's leading the more productive technicians, uh, fewer grounded aircraft, uh, and a more productive Fleet overall. So there's a few examples. Um, I'll tell you that there's more to come. Uh, this is a culture at United, uh, to drive an efficient operation. We reinvest a lot of that in the customer, um, and it's helping to drive higher higher structural profitability for United. So, thanks for the question and and I, at least want to add on mostly to compliment team. Um, I think this is from an investor perspective 1 of the differentiating points of United, uh, versus all the other airlines in the world. Um, uh, we are the best in the air, best airlines in the world at the real core cost efficiency. So that we've talked about a little in the past and credit to Mike credit and Jonathan Ireland, who's sitting in this room, Toby, inquis our chief operating officer uh, and Jason b, b bmbb who runs

Scott Kirby: And I at least want to add on, mostly to complement the team. I think this is, from an investor perspective, one of the differentiating points of United versus all the other airlines in the world. We are the best airline in the world at the real core cost efficiency, something we've talked about a little in the past. And credit to Mike, credit to Jonathan Ireland, who's sitting in this room, Toby Enqvist, our chief operating officer, and Jason Birnbaum, who runs technology for us. Culturally, we are great, but we've also made technology investments that I know do not exist at any other airline. And that's the foundation, the culture, and the technology that drives core efficiency. We keep doing more. And Mike told you a bunch of the tactical things that have happened recently, but then we keep finding more.

it would culturally, um, uh, are great, but we've also made technology Investments that I know do not exist at any other Airline, um, and that's the foundation that the culture and the technology that drives core, uh, efficiency. And, you know, we keep doing more and Mike told you a bunch of the Tactical things that have happened recently, but then we keep finding more, you know, 1 of my favorite stories was, you know, we've finished the budget last year and finished the budget and Toby came forward and said, you know, I think we got chances to drive another 250 million out of the operation, um, in core efficiency. Nothing. That impacts the customer. It helps the airline actually run better, um, and saves money. And there's no other Chief Operating Officer in the world that is doing that. They're all begging for more money in their budgets. Um, like this is real, uh, at United. Um, you know, I

Yeah, clearly in Q4 the larger hit was uh domestic. I wouldn't say International is zero uh from the government shutdown, but it was mostly uh, uh domestic. As you know, as we look into, uh, 2026, we do have this, uh, Caribbean situation, which is impacting the numbers there. So I I'm gonna be careful when I say about the Caribbean. We still think it could be positive. Um, but, you know, it can be closed but we are looking for sequential Improvement everywhere. Clearly, the Atlantic is leading the way, um, uh, which is great, to see or growing a lot across the Atlantic. A lot of it is Israel. Uh, but we're still growing a lot across the Atlantic, and we think we've got the capacity equation really dialed in, uh, in in that region. Uh, so we're really proud of that specific. I think looks, uh, pretty, darn good. South Pacific is not as good as the North Pacific, uh, and domestically, um, you know, it's, it's going to be another Improvement. And, uh, what I'd say, is premium, cabins are leading the way, uh, not only domestically, but across the entire network.

Andrew Nocella: Yeah. Clearly, in Q4, the larger hit was domestic. I wouldn't say international is zero from the government shutdown, but it was mostly domestic. As we look into 2026, we do have this Caribbean situation, which is impacting the numbers there. So I'm going to be careful what I say about the Caribbean. We still think it could be positive, but it's going to be close. But we are looking for sequential improvement everywhere. Clearly, the Atlantic is leading the way, which is great to see. We're growing a lot across the Atlantic. A lot of it is Israel, but we're still growing a lot across the Atlantic, and we think we've got the capacity equation really dialed in in that region. So we're really proud of that. The Pacific, I think, looks pretty darn good. South Pacific is not as good as the North Pacific.

Scott Kirby: Oh, yeah. No, I appreciated the comment. So Andrew, sorry, I'm just getting over cold here. Andrew, in your prepared remarks and also to Connor a few minutes ago, you mentioned that some degree of unprofitable domestic flying out there is increasingly a function of hub-and-spoke peers as opposed to the usual domestic discounter suspects. Now, in the case of discounters, I think it was very reasonable to assume that a lot of that would go away just given the staggering system-wide losses. But the difference with certain hub-and-spoke competitors that you reference, their returns are subsidized by loyalty and premium. So put differently, discounters had no choice but to back off. As Scott likes to say, it's just math. But hub-and-spoke peers do have a choice. I'm curious if you agree with that.

Jamie Baker: Oh, yeah. No, I appreciated the comment. So Andrew, sorry, I'm just getting over cold here. Andrew, in your prepared remarks and also to Connor a few minutes ago, you mentioned that some degree of unprofitable domestic flying out there is increasingly a function of hub-and-spoke peers as opposed to the usual domestic discounter suspects. Now, in the case of discounters, I think it was very reasonable to assume that a lot of that would go away just given the staggering system-wide losses. But the difference with certain hub-and-spoke competitors that you reference, their returns are subsidized by loyalty and premium. So put differently, discounters had no choice but to back off. As Scott likes to say, it's just math. But hub-and-spoke peers do have a choice. I'm curious if you agree with that.

Yeah, I think it's a really good question. Um, I I think economic gravity is uh, the same for all and money, loosen businesses need to figure that out and do something different. Um, and in this case, you know, I do think money losing routes or hubs should should ultimately be close. I, you know, I have some experience in this. I worked on closing a number of hubs uh in my career at different airlines, not not at United obviously. Um and these these decisions are complicated and big but ultimately uh it was making rational capacity decisions and recognizing what makes money and what loses money. Uh, kind of has led at least United uh to where we are today and there's only 1 other Airline. I think that can say that all of their hubs make money and so I still have a lot of confidence. I just don't know when but I have a lot of confidence that money losing flights will eventually exit.

Holding puts constant. Yeah, yeah. That that's a very broad question. And look, I would say, um, that, uh, there's nobody better in the world that Patrick than looking at these opportunities. And, um, what we have found, which I think is contrary to normal, is that the fruit uh, that we're picking up the tree after all these years continues to be excellent. In other words, um, we're able to find a different opportunities because the world is getting smaller. The aircraft technology, obviously, with the 787 has changed, um, but most importantly United is different today than it was a decade ago. And our differences, um, in the traction of brand loyal customers is Scott often says, uh, our product. Everything we do has enabled us, uh, to add these new routes that couldn't have been done years ago and add them at higher margins than the bulk of what the airline has done. So it's it's a remarkable Journey. Um, and I think on the international front, we're frankly just getting started, New York, San Francisco, Washington.

Andrew Nocella: Yeah. That's a very broad question. And look, I would say that there's nobody better in the world at partnering than looking at these opportunities. And what we have found, which I think is contrary to normal, is that the fruit that we're picking off the tree after all these years continues to be excellent. In other words, we're able to find different opportunities because the world is getting smaller. The aircraft technology, obviously, with the 787 has changed. But most importantly, United is different today than it was a decade ago. And our differences in the attraction of brand loyal customers, as Scott often says, our product, everything we do has enabled us to add these new routes that couldn't have been done years ago and add them at higher margins than the bulk of what the airline has done. So it's a remarkable journey.

We announced the growth. Uh, that would come from the connectivity. The growth was always the outcome of the connectivity. Uh, we weren't growing for growth sake. Uh, I think that's really important. And I remember at the time we we did distinguish that not all growth is equal, uh, which was really controversial, uh, back in 2021 because I think many thought it was and I think we proved it was not. So as we've gone through the whole cycle of United, next, we are approaching our connectivity goals. We'll hit them in 2027, uh, probably a year late given some of the delivery delays we experienced from being but, um, uh, close on time in the grand scheme of things. Um, and as we do that, you know, our hubs have reached this critical level, um, around 650 flights per day. In our Mid Continent, hubs with a lot of connectivity, big Banks, uh, and large airplanes. It's exactly what we were contemplating. So as we go forward past 2027, um, you know, we're going to be a lot more focused on gauge and and grow in our operation. That way versus more.

Andrew Nocella: And as we do that, our hubs have reached this critical level, around 650 flights per day in our mid-continent hubs with a lot of connectivity, big banks, and large airplanes. It's exactly what we were contemplating. So as we go forward past 2027, we're going to be a lot more focused on gauge and growing our operation that way versus more flights. We do think there's a point when hubs grow past 900 flights per day, for example, that the marginal economics become really challenging. You compete against yourself, and you drive a lot of operational complexity no matter how many runways you have available to fly from. So we really like our plan. It's based on moderate frequency levels and large aircraft. And I don't want to give too much of a preview for what comes next, but that was a good hint as to where we're going.

And as we do that, our hubs have reached this critical level, around 650 flights per day in our mid-continent hubs with a lot of connectivity, big banks, and large airplanes. It's exactly what we were contemplating. So as we go forward past 2027, we're going to be a lot more focused on gauge and growing our operation that way versus more flights. We do think there's a point when hubs grow past 900 flights per day, for example, that the marginal economics become really challenging. You compete against yourself, and you drive a lot of operational complexity no matter how many runways you have available to fly from. So we really like our plan. It's based on moderate frequency levels and large aircraft. And I don't want to give too much of a preview for what comes next, but that was a good hint as to where we're going.

Hey, good morning and thanks for taking the question, and congrats to the team on, uh, what was a pretty good year and a tough environment. But Scott and I don't mean to kiss up too much here. But I think a lot of folks in this call really appreciate your industry commentary. And a lot of your uh projections have been correct the last few years. Can we talk about just broader industry growth? Because if we look at Revenue to GDP or even Revenue growth last year was effectively flat versus GDP that was up you know, 3 or 4% nominal or real. Um do you think this signals that we're just like in a shrinking industry now or has Zoom taken over or has this really been, you know, too much low cost capacity in the industry just can't get pricing. What's what's your prognosis with you? Uh, it's a supply chain problem, it's not a demand challenge, it's a supply problem. Um, and it's a supply problem. I'm not going to call it low-cost capacity. It's a supply problem with spill carriers um,

Ego usually beats economic gravity in the short term. Um, but economic gravity always wins in the end. Um, and you know, I I feel pretty optimistic, um, that even in this environment, I'm also really good. Even in this environment, how well you United is doing the brand loyal strategy, I thought was going to be successful. I've been on this path with Andrew for really for 20 years. We switched Airlines but we've been on this path for 20 years. I thought it would be successful. It is more successful than I thought, like, it is remarkable. How much resilience we have in bad times or to competitive activities? Um, and um, and so that's good. Um, but you know, you, you know, I look at some of the flying at competitors and it's going to push north of negative 20% margins this year and you can do that now for a little bit of time. Um, but when the down I I I actually I to be honest with you, I think that Supply really comes out when the next downturn hits. The next downturn is going to make it um, extremely

Brett Hart: Oh, yeah. Hey, good morning, everyone. Hey, just touching back on kind of what Jamie brought up. I think the prevailing view is that domestic will be the best-performing geography in 2026, maybe domestic rhythm, maybe profitability. But when I think about the fact that one of your competitors in Chicago is adding a lot of flights, and I've seen reports that they're already losing, I don't know, $700 or $800 million under their current schedule, is that going to be a drag on your domestic to the point that maybe it's transatlantic, maybe it's another geography that comes out on top, or do you have maybe a diversified enough domestic network? I mean, you have a massive domestic network that will be more than overshadowed by strength in some of your other markets like Newark, for example, which is probably going to run very well in 2026.

Michael Linenberg: Oh, yeah. Hey, good morning, everyone. Hey, just touching back on kind of what Jamie brought up. I think the prevailing view is that domestic will be the best-performing geography in 2026, maybe domestic rhythm, maybe profitability. But when I think about the fact that one of your competitors in Chicago is adding a lot of flights, and I've seen reports that they're already losing, I don't know, $700 or $800 million under their current schedule, is that going to be a drag on your domestic to the point that maybe it's transatlantic, maybe it's another geography that comes out on top, or do you have maybe a diversified enough domestic network? I mean, you have a massive domestic network that will be more than overshadowed by strength in some of your other markets like Newark, for example, which is probably going to run very well in 2026.

Scott Kirby: In Chicago, to be specific, in 2016, American actually had higher local market share with Chicago-based customers and higher share with business customers. In 2025, even after all the growth from our competitor, United now has a 22-point lead with Chicago-based customers in Chicago, and a 38-point lead with the brand loyal business customers. Being a brand loyal airline just really inoculates us mostly from that competitive activity. In fact, in 2025, even with all that growth, the Chicago RASM outperformed the rest of the system by 1%, and we made a $500 million profit. By the way, I think we probably would have made $600 million, so it probably cost us about $100 million. But our competitor lost $500 million, even though they didn't start that really until May, so bigger on a full-year basis.

inoculates us mostly from that competitive activity. And in fact, in 2025, even with all that growth uh the Chicago rasim outperformed the rest of the system by 1%. Um and we made a 500 million profit by the way. I think we probably would have made 600 million so it probably cost us about a hundred billion dollars, but our competitor lost, 500 million. Um, even though they did start, that really, until May so bigger on a full year basis, um, as we get our 2026, uh, there's another wave of growth coming from that competitor. Um, mostly, that's going to wind up exactly the same as it did. Last year, was 1 difference in 2025 American had a gate. That means, you know, we watched it, we could have responded, we chose not to they're going to win 3 Gates back at our expense. When the announced comes out later this year, um, we knew that was going to happen. We figured we'd, just let it settle into a new normal and that would all be fine. Um, but in 2026

We're drawing a Line in the Sand. We are not going to allow them to win a single gate at our expense in 2026. We're not trying to win Gates, we're going to add as many flights as are required. Uh, to make sure that we, uh, keep our gate count the same and Chicago. Uh, look, we're just going to stay focused. We've had the right strategy, uh, in, in at the whole network for a decade. We're going to keep doing it. It's a winning strategy, it's working. Uh, we're going to keep doing that, um, in Chicago for what it's worth. Um, I think that we will likely grow our earnings. It certainly will make at least the same 500 million, uh I believe. Um, and likely will still be able to grow our earnings in Chicago for the same reasons. It worked last year. Um, America and we're pretty good at estimating, this, it's likely to push to about a billion dollars in losses, um, in Chicago. Um, but we're going to just stay focused on the strategy that's worked for the last decade. Our team is doing a great job, taking care of customers. Um,

I'll take that. Look, we're, we're looking forward to it. I'm sure some of us will send a few games. Um, I think the interesting thing we see is it creates, uh, with would be normally counter, surgical, traffic flows. So it creates inbound, uh, into the US demand, uh, in June, uh, which is normally an outbound time period. So, uh, quite frankly, yeah, I think that we do expect some upside from that, given the broader macro Trends. I'm not going to judge exactly how much that is, but we do think uh, you know, this particular sporting event will be a positive for United. There are other large sporting events that are not uh, because they drive just Leisure traffic, uh, and business traffic evaporates in those situations. This is not 1 of the situations. So we do expect some, uh, level of upside, but I, I want to caution you. It's, it's still given the size of the United, uh, it it, I'm not sure it's all that meaningful, but it is possible.

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Q4 2025 United Airlines Holdings Inc Earnings Call

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