United Airlines Holdings, Inc. Q3 FY2024 earnings call

• Scott Kirby noted the market inflection with unprofitable capacity exiting, leading to domestic yield improvement, and highlighted $10B investment in people over 4 years, plus a $1.5B share repurchase program.
• Brett Hart emphasized record passenger numbers, top on-time performance, NPS improvement (up 5 points Y/Y, 24 points vs 2019 YTD), and Linda Jojo's retirement after 10 years of customer innovation.
• Linda Jojo discussed over $14B tech investments to enhance customer experience, including United app, Agent on Demand, and Starlink WiFi, driving NPS and innovation.
• Andrew Nocella detailed revenue trends by region, capacity reallocation, corporate demand growth (95% of 2019 levels in September), and moderate Pacific growth in 2025.
• Mike Leskinen discussed financial results (pretax margin 9.7%, EPS $3.33), CASM ex pressure, fleet deliveries, capital allocation, and share repurchase to return value to shareholders.

United's top line revenue grew 2.5% year-over-year to $14.8 billion on 4.1% more capacity. Domestic PRASM improved as unprofitable capacity exited, with August and September showing slight positive year-over-year. Atlantic RASM grew as capacity rationalized, exiting Q3 at +4%. Asia RASM was challenged due to China and South Pacific headwinds, but Pacific growth to moderate in Q4 and 2025. Premium cabin RASM up 2% in Q3. Basic economy volumes up 21% year-over-year. MileagePlus revenue up 11%, with premium population revenue up 9% driving majority of growth.

• Q4 EPS expected between $2.50 and $3.
• $1.5B share repurchase program starting this quarter, funded by free cash flow.
• Full year adjusted capital expenditures expected less than $6.5B, with downward bias in 2025 due to aircraft delivery delays.
• Target net leverage below 2 times in the next few years, with focus on free cash flow conversion target of 50% in near term.

• Aircraft delivery delays from Boeing and Airbus impacting CapEx plans.
• Competition from other airlines throwing excess capacity during peak periods, affecting yields.
• Uncertainty in Asia Pacific market due to China and South Pacific headwinds, impacting RASM.

Q: How do you plan to capitalize on an evolving industry backdrop in '25?

A: Focus on building products customers want, high yield share, connectivity, and corporate traffic acceleration, particularly in Q1.

Q: Impact of Boeing 777X delays?

A: Creates a better setup for global long haul network despite delays, with the 777X delayed again.

Q: Basic economy volumes growth?

A: Expanding and profitable, changing the industry dynamic, with basic economy now a solid home run for United.

Q: MileagePlus and Kinective Media contribution to margin?

A: Investment phase in 2025, accelerating in 2026+, with substantial impact expected but details to come later.

Q: Domestic recovery in corporate markets?

A: Coastal hubs stronger than interior, corporate traffic growing, with professional services, financial services, and tech growing fastest.