United Airlines Achieves Highest Second-Quarter Pre-Tax Income In Company History
"Thanks to the outstanding and sustained efforts of 95,000 United team members, United is now consistently delivering results for our customers as well as investors as we raise the mid-point of our full-year 2019 adjusted diluted EPS3 guidance with a new range of $10.50 to $12.00," said Oscar Munoz, CEO of United Airlines. "By once again delivering strong EPS over the last three months, top-tier results are now the expectation, not the exception for United."
- Reported second-quarter net income of $1.1 billion, diluted earnings per share (EPS) of $4.02, pre-tax earnings of $1.4 billion and pre-tax margin of 11.9 percent, expanding pre-tax margin 4.0 points versus the second quarter of 2018.
- Reported second-quarter adjusted net income of $1.1 billion, adjusted diluted EPS of $4.21, adjusted pre-tax earnings of $1.4 billion and adjusted pre-tax margin of 12.4 percent, expanding adjusted pre-tax margin 2.0 points versus the second quarter of 2018.1
- Total passenger revenue increased 6.1 percent versus the second quarter of 2018.
- Consolidated second-quarter passenger revenue per available seat mile (PRASM) increased 2.5 percent year-over-year.
- Consolidated second-quarter unit cost per available seat mile (CASM) decreased 0.4 percent year-over-year.
- Consolidated second-quarter CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 0.6 percent year-over-year.
- Repurchased $536 million of its common shares in the second quarter of 2019, at an average purchase price of $84.07 per share.
- On July 15, 2019, the company's Board of Directors authorized a new $3 billion share repurchase program.
1 Excludes special charges, the mark-to-market impact of financial instruments and imputed interest on certain finance leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. |
2 Airline history defined as post-2010 merger. |
3Excludes special charges and the mark-to-market impact of financial instruments, the nature of which are not determined at this time, and imputed interest on certain finance leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis. |
For more information on UAL's third-quarter and full-year 2019 guidance, please visit ir.united.com for the company's investor update.
Second-Quarter 2019 Highlights
Customer Experience
- United Polaris lounge at San Francisco International Airport voted best business class lounge in the world by the 2019 World Airline Awards from Skytrax.
- Introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next, while ensuring those who have already boarded the aircraft arrive at their destination on time.
- Began flight operations at LaGuardia Airport's new Terminal B Eastern Concourse and opened newest United Club - conveniently located inside security with more than 10,500 square feet with sweeping views of the tarmac.
- Awarded the "People's Voice" Webby Award in the "Business and Finance" category for reimagined mobile app, which debuted earlier this year.
- Partnered with luxury skincare line Sunday Riley on new United Polaris amenity kits.
- Awarded the Crystal Cabin Award for Inflight Entertainment and Connectivity for new onboard entertainment.
- Received IDG's CIO 100 Award for innovative customer volunteer solicitation program.
Operations
- Served nearly 43 million passengers, the most ever for United in the second quarter.
- Achieved top-tier on-time departures rate performance versus the major U.S. airlines, despite headwinds caused by unusually high weather and ATC delays.
- For the second quarter United had the second-best completion factor and the second fewest cancellations among the major U.S. airlines.
Employees
- Received "Best-of-the-Best" award for commitment to diversity and inclusion by the National LGBT Chamber of Commerce (NGLCC) and the National Business Inclusion Consortium (NBIC), demonstrating the airline's industry-leading results across all diverse segments and its commitment to building a more diverse economy.
- Honored with the "DiversityInc Top 50" designation, lauding the airline's leadership in promoting diversity through talent development, leadership accountability and a top supplier diversity program.
- Expect profit sharing for 2019 to be about 20 percent higher per participating employee year-over-year.
- Hosted more than half of the company's 25,000 flight attendants at 17 separate Backstage 2019 events, which are designed to underscore the important role flight attendants play in delivering great service.
Network
- Started 34 new domestic and international routes, including brand-new summer service between New York/Newark and Prague, and the only nonstop service between the United States and Naples, Italy.
- Resumed popular seasonal service on 28 routes offering customers more access than ever before to connect to 54 countries around the world on United's industry-leading global network.
- Announced the only nonstop service from the United States to Cape Town, South Africa, and announced a second daily nonstop service between San Francisco and Hong Kong.
- Launched ninth daily nonstop flight between the United States and Germany from its hub at Denver International Airport, becoming the only U.S. airline connecting Denver to Frankfurt nonstop.
- Tentatively granted a total of four daily nonstop flights to Tokyo Haneda Airport from United's hubs at Newark Liberty International Airport, Chicago O'Hare International Airport, Washington Dulles International Airport and Los Angeles International Airport.
- Unveiled 2019 college football flying schedule, adding around 10,000 seats between its hubs and popular game destinations and, for the first time, adding several point-to-point flights enabling fans to fly nonstop from one college town to another.
- Entered into a new alliance agreement with New Delhi-based airline Vistara - further expanding the airline's global route network to more than 20 destinations throughout India and expected to begin in the fall.
Fleet
- Unveiled next paint design, which brings a refreshed look to its fleet, serving as a visual representation of the airline's ongoing brand evolution while staying true to the history it has developed over the past 93 years of proudly serving customers around the world.
- Took delivery of two Boeing 787-10 aircraft, two used Airbus A319 aircraft, and seven Embraer E175 aircraft operated by our regional partners.
- Signed agreement to purchase 19 used Boeing 737-700 aircraft with deliveries expected beginning in December.
Community and Environment
- Made history with the departure of the "Flight for the Planet," the most eco-friendly commercial flight of its kind in the history of aviation, becoming the first known airline to demonstrate all of the following key actions on a single commercial flight: utilization of sustainable aviation biofuel, zero cabin waste efforts, carbon offsetting, and operational efficiencies.
- Became the first public company to be inducted into Pride Live's Stonewall Ambassador program in recognition of the airline's commitment to LGBTQ+ equality.
- Reached a milestone of 1 million meals packed for charity partner Rise Against Hunger, a global nonprofit, working to end hunger by providing food and life-changing aid to the world's most vulnerable and creating a global commitment to mobilize critical resources.
- Renewed contract with Boston-based World Energy, agreeing to purchase up to 10 million gallons of cost-competitive, commercial-scale, sustainable aviation biofuel over the next two years.
- Revealed the two winning designs for Her Art Here, a first-of-its-kind contest designed to find and uplift underrepresented women artists by providing a chance to have their work painted on a canvas like no other - a United Airlines aircraft. The painted aircraft will begin flying in the fall.
- Announced new and exciting opportunities to help customers celebrate Pride Month through MileagePlus Exclusives benefiting United charity partner The Trevor Project.
Earnings Call
UAL will hold a conference call to discuss its second-quarter 2019 financial results and its financial and operational outlook for third-quarter and full-year 2019 on Wednesday, July 17, at 9:30 a.m. Central time /10:30 a.m. Eastern time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry, introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 356 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 783 mainline aircraft and the airline's United Express carriers operate 561 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to execute our strategic operating plan, including our growth, revenue-generating and cost-control initiatives; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); risks of doing business globally, including instability and political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; our capacity decisions and the capacity decisions of our competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in our supply of aircraft fuel; our ability to cost-effectively hedge against increases in the price of aircraft fuel, if we decide to do so; the effects of any technology failures or cybersecurity breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving our aircraft or operations, the aircraft or operations of our regional carriers or our code share partners or the aircraft or operations of another airline; our ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in our fleet; disruptions to our regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of our investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; disruptions in the availability of aircraft, parts or support from our suppliers; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; labor costs; an outbreak of a disease that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where we operate; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to comply with the terms of our various financing arrangements; our ability to realize the full value of our intangible assets and long-lived assets;-; and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
-tables attached-
On January 1, 2019, United Airlines Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2016-02, Leases ("Topic 842"). As such, certain previously reported 2018 figures are adjusted in this report on a basis consistent with Topic 842.
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) | |||||||||||||||||||||||
Three Months Ended | % | Six Months Ended June 30, | % | ||||||||||||||||||||
(In millions, except per share data) | 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||||||
Operating revenue: | |||||||||||||||||||||||
Passenger | $ | 10,486 | $ | 9,880 | 6.1 | $ | 19,211 | $ | 18,030 | 6.6 | |||||||||||||
Cargo | 295 | 314 | (6.1) | 581 | 607 | (4.3) | |||||||||||||||||
Other operating revenue | 621 | 583 | 6.5 | 1,199 | 1,172 | 2.3 | |||||||||||||||||
Total operating revenue | 11,402 | 10,777 | 5.8 | 20,991 | 19,809 | 6.0 | |||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Salaries and related costs | 3,057 | 2,878 | 6.2 | 5,930 | 5,604 | 5.8 | |||||||||||||||||
Aircraft fuel | 2,385 | 2,390 | (0.2) | 4,408 | 4,355 | 1.2 | |||||||||||||||||
Regional capacity purchase | 715 | 693 | 3.2 | 1,403 | 1,323 | 6.0 | |||||||||||||||||
Landing fees and other rent | 660 | 625 | 5.6 | 1,248 | 1,204 | 3.7 | |||||||||||||||||
Depreciation and amortization | 560 | 538 | 4.1 | 1,107 | 1,062 | 4.2 | |||||||||||||||||
Aircraft maintenance materials and outside repairs | 421 | 438 | (3.9) | 829 | 878 | (5.6) | |||||||||||||||||
Distribution expenses | 442 | 393 | 12.5 | 802 | 735 | 9.1 | |||||||||||||||||
Aircraft rent | 73 | 119 | (38.7) | 154 | 246 | (37.4) | |||||||||||||||||
Special charges (B) | 71 | 129 | NM | 89 | 169 | NM | |||||||||||||||||
Other operating expenses | 1,546 | 1,429 | 8.2 | 3,054 | 2,826 | 8.1 | |||||||||||||||||
Total operating expense | 9,930 | 9,632 | 3.1 | 19,024 | 18,402 | 3.4 | |||||||||||||||||
Operating income | 1,472 | 1,145 | 28.6 | 1,967 | 1,407 | 39.8 | |||||||||||||||||
Operating margin | 12.9 | % | 10.6 | % | 2.3 | pts. | 9.4 | % | 7.1 | % | 2.3 | pts. | |||||||||||
Adjusted operating margin (Non-GAAP) (A) | 13.5 | % | 11.8 | % | 1.7 | pts. | 9.8 | % | 8.0 | % | 1.8 | pts. | |||||||||||
Nonoperating income (expense): | |||||||||||||||||||||||
Interest expense | (191) | (163) | 17.2 | (379) | (325) | 16.6 | |||||||||||||||||
Interest capitalized | 21 | 12 | 75.0 | 43 | 30 | 43.3 | |||||||||||||||||
Interest income | 38 | 25 | 52.0 | 67 | 42 | 59.5 | |||||||||||||||||
Miscellaneous, net (B) | 14 | (164) | NM | 23 | (117) | NM | |||||||||||||||||
Total nonoperating expense | (118) | (290) | (59.3) | (246) | (370) | (33.5) | |||||||||||||||||
Income before income taxes | 1,354 | 855 | 58.4 | 1,721 | 1,037 | 66.0 | |||||||||||||||||
Pre-tax margin | 11.9 | % | 7.9 | % | 4.0 | pts. | 8.2 | % | 5.2 | % | 3.0 | pts. | |||||||||||
Adjusted pre-tax margin (Non-GAAP) (A) | 12.4 | % | 10.4 | % | 2.0 | pts. | 8.6 | % | 6.5 | % | 2.1 | pts. | |||||||||||
Income tax expense (D) | 302 | 172 | 75.6 | 377 | 209 | 80.4 | |||||||||||||||||
Net income | $ | 1,052 | $ | 683 | 54.0 | $ | 1,344 | $ | 828 | 62.3 | |||||||||||||
Diluted earnings per share | $ | 4.02 | $ | 2.48 | 62.1 | $ | 5.07 | $ | 2.95 | 71.9 | |||||||||||||
Diluted weighted average shares | 261.6 | 275.6 | (5.1) | 264.9 | 280.2 | (5.5) | |||||||||||||||||
NM Not meaningful |
UNITED AIRLINES HOLDINGS, INC. | ||||||||||||
PASSENGER REVENUE INFORMATION AND STATISTICS | ||||||||||||
Passenger revenue information is as follows: | ||||||||||||
2Q 2019 Passenger Revenue (millions) | Passenger Revenue vs. 2Q 2018 | PRASM vs. 2Q 2018 | Yield vs. 2Q 2018 | Available Seat Miles vs. 2Q 2018 | 2Q 2019 | |||||||
Domestic | $ | 6,547 | 5.9% | 1.9% | 1.5% | 4.0% | 41,484 | |||||
Atlantic | 1,927 | 5.6% | 0.6% | (1.5%) | 5.0% | 14,114 | ||||||
Pacific | 1,135 | 2.9% | 2.8% | (1.1%) | 0.1% | 10,753 | ||||||
Latin America | 877 | 13.6% | 9.1% | 6.5% | 4.1% | 6,889 | ||||||
International | 3,939 | 6.5% | 3.2% | 0.4% | 3.1% | 31,756 | ||||||
Consolidated | $ | 10,486 | 6.1% | 2.5% | 1.0% | 3.6% | 73,240 | |||||
Select operating statistics are as follows: | |||||||||||||||||||||||
Three Months Ended June 30, | % Increase/ (Decrease) | Six Months Ended June 30, | % Increase/ (Decrease) | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Passengers (thousands) | 42,592 | 41,058 | 3.7 | 79,046 | 75,553 | 4.6 | |||||||||||||||||
Revenue passenger miles (millions) | 63,001 | 59,945 | 5.1 | 116,098 | 109,794 | 5.7 | |||||||||||||||||
Available seat miles (millions) | 73,240 | 70,702 | 3.6 | 138,885 | 132,679 | 4.7 | |||||||||||||||||
Passenger load factor: | |||||||||||||||||||||||
Consolidated | 86.0 | % | 84.8 | % | 1.2 | pts. | 83.6 | % | 82.8 | % | 0.8 | pts. | |||||||||||
Domestic | 87.5 | % | 87.1 | % | 0.4 | pts. | 85.2 | % | 85.1 | % | 0.1 | pts. | |||||||||||
International | 84.0 | % | 81.7 | % | 2.3 | pts. | 81.5 | % | 79.7 | % | 1.8 | pts. | |||||||||||
Passenger revenue per available seat mile (cents) | 14.32 | 13.97 | 2.5 | 13.83 | 13.59 | 1.8 | |||||||||||||||||
Total revenue per available seat mile (cents) | 15.57 | 15.24 | 2.2 | 15.11 | 14.93 | 1.2 | |||||||||||||||||
Average yield per revenue passenger mile (cents) | 16.64 | 16.48 | 1.0 | 16.55 | 16.42 | 0.8 | |||||||||||||||||
Cargo ton miles (millions) | 831 | 855 | (2.8) | 1,636 | 1,672 | (2.2) | |||||||||||||||||
Aircraft in fleet at end of period | 1,344 | 1,308 | 2.8 | 1,344 | 1,308 | 2.8 | |||||||||||||||||
Average stage length (miles) | 1,469 | 1,460 | 0.6 | 1,459 | 1,452 | 0.5 | |||||||||||||||||
Average full-time equivalent employees | 90,779 | 86,743 | 4.7 | 89,761 | 86,157 | 4.2 | |||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.16 | $ | 2.26 | (4.4) | $ | 2.11 | $ | 2.19 | (3.7) | |||||||||||||
Fuel gallons consumed (millions) | 1,102 | 1,058 | 4.2 | 2,087 | 1,990 | 4.9 | |||||||||||||||||
Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for definitions of these statistics. |
UNITED AIRLINES HOLDINGS, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In millions) | June 30, 2019 | December 31, 2018 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,221 | $ | 1,694 | |||
Short-term investments | 2,223 | 2,256 | |||||
Receivables, less allowance for doubtful accounts | 1,762 | 1,426 | |||||
Aircraft fuel, spare parts and supplies, less obsolescence allowance | 996 | 985 | |||||
Prepaid expenses and other | 708 | 733 | |||||
Total current assets | 8,910 | 7,094 | |||||
Total operating property and equipment, net | 28,918 | 27,399 | |||||
Operating lease right-of-use assets | 4,908 | 5,262 | |||||
Other assets: | |||||||
Goodwill | 4,523 | 4,523 | |||||
Intangibles, less accumulated amortization | 3,129 | 3,159 | |||||
Restricted cash | 105 | 105 | |||||
Notes receivable, net | 518 | 516 | |||||
Investments in affiliates and other, net | 1,139 | 966 | |||||
Total other assets | 9,414 | 9,269 | |||||
Total assets | $ | 52,150 | $ | 49,024 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Advance ticket sales | $ | 6,126 | $ | 4,381 | |||
Accounts payable | 3,033 | 2,363 | |||||
Frequent flyer deferred revenue | 2,435 | 2,286 | |||||
Accrued salaries and benefits | 1,871 | 2,184 | |||||
Current maturities of long-term debt | 1,255 | 1,230 | |||||
Current maturities of finance leases | 117 | 123 | |||||
Current maturities of operating leases | 637 | 719 | |||||
Other | 604 | 553 | |||||
Total current liabilities | 16,078 | 13,839 | |||||
Long-term debt and other long-term liabilities and deferred credits: | |||||||
Long-term debt | 12,938 | 12,215 | |||||
Long-term obligations under finance leases | 202 | 224 | |||||
Long-term obligations under operating leases | 5,034 | 5,276 | |||||
Frequent flyer deferred revenue | 2,763 | 2,719 | |||||
Postretirement benefit liability | 1,277 | 1,295 | |||||
Pension liability | 1,366 | 1,576 | |||||
Deferred income taxes | 1,192 | 828 | |||||
Other | 980 | 1,010 | |||||
Total long-term debt and other long-term liabilities and deferred credits: | 25,752 | 25,143 | |||||
Stockholders' equity | 10,320 | 10,042 | |||||
Total liabilities and stockholders' equity | $ | 52,150 | $ | 49,024 | |||
UNITED AIRLINES HOLDINGS, INC. | |||||||
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) | |||||||
(In millions) | Six Months Ended June 30, | ||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net cash provided by operating activities | $ | 4,625 | $ | 4,152 | |||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (2,467) | (1,671) | |||||
Purchases of short-term and other investments | (1,443) | (1,326) | |||||
Proceeds from sale of short-term and other investments | 1,484 | 1,455 | |||||
Investment in affiliates | (27) | (139) | |||||
Loans made to others | — | (10) | |||||
Other, net | 17 | 38 | |||||
Net cash used in investing activities | (2,436) | (1,653) | |||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of long-term debt | 996 | 1,241 | |||||
Payments of long-term debt | (473) | (1,294) | |||||
Repurchases of common stock | (1,062) | (969) | |||||
Principal payments under finance leases | (63) | (35) | |||||
Capitalized financing costs | (30) | (25) | |||||
Other, net | (30) | (17) | |||||
Net cash used in financing activities | (662) | (1,099) | |||||
Net increase in cash, cash equivalents and restricted cash | 1,527 | 1,400 | |||||
Cash, cash equivalents and restricted cash at beginning of the period | 1,799 | 1,591 | |||||
Cash, cash equivalents and restricted cash at end of the period | $ | 3,326 | $ | 2,991 | |||
Investing and Financing Activities Not Affecting Cash: | |||||||
Property and equipment acquired through the issuance of debt | $ | 220 | $ | 125 | |||
Operating lease conversions to finance lease | 36 | — | |||||
Right-of-use assets acquired through operating leases | 99 | 103 | |||||
Property and equipment acquired through finance leases | 8 | — | |||||
UNITED AIRLINES HOLDINGS, INC. | |||
RETURN ON INVESTED CAPITAL (ROIC)—Non-GAAP | |||
ROIC is a non-GAAP financial measure that UAL believes provides useful supplemental information for management and investors by measuring the effectiveness of the company's operations' use of invested capital to generate profits. | |||
(in millions) | Twelve Months Ended June 30, 2019 | ||
Net Operating Profit After Tax ("NOPAT") | |||
Pre-tax income | $ | 3,332 | |
Adjustments: | |||
Special charges and mark-to-market ("MTM") gains on financial instruments: | |||
Impairment of assets | 312 | ||
Termination of a maintenance service agreement | 64 | ||
Severance and benefit costs | 28 | ||
MTM gains on financial instruments | (136) | ||
(Gains) losses on sale of assets and other special charges | 3 | ||
Pre-tax income excluding special charges and MTM gains on financial instruments (Non-GAAP) | 3,603 | ||
add: Interest expense (net of income tax benefit) (a) | 721 | ||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) | 195 | ||
add: Net interest on pension (net of income tax benefit) (a) | (11) | ||
less: Income taxes paid | (13) | ||
NOPAT (Non-GAAP) | $ | 4,495 | |
Average Invested Capital (five-quarter average) | |||
Total assets | $ | 50,076 | |
less: Non-interest bearing liabilities (b) | (17,495) | ||
Average invested capital (Non-GAAP) | $ | 32,581 | |
ROIC (Non-GAAP) | 13.8 | % | |
(a) | Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges and MTM gains and losses on financial instruments. For the twelve months ended June 30, 2019, the effective cash tax rate was 0.4%. |
(b) | Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities. |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION | |||||||||||||||||
(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on financial instruments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to finance leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense. | |||||||||||||||||
CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. | |||||||||||||||||
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below. | |||||||||||||||||
Three Months Ended June 30, | % Increase/ | Six Months Ended June 30, | % Increase/ | ||||||||||||||
2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | ||||||||||||
CASM (cents) | |||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 13.56 | 13.62 | (0.4) | 13.70 | 13.87 | (1.2) | |||||||||||
Special charges (B) | 0.10 | 0.18 | NM | 0.07 | 0.13 | NM | |||||||||||
Third-party business expenses | 0.05 | 0.04 | 25.0 | 0.05 | 0.05 | — | |||||||||||
Fuel expense | 3.26 | 3.38 | (3.6) | 3.17 | 3.28 | (3.4) | |||||||||||
Profit sharing, including taxes | 0.22 | 0.15 | 46.7 | 0.14 | 0.09 | 55.6 | |||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.93 | 9.87 | 0.6 | 10.27 | 10.32 | (0.5) | |||||||||||
NM Not Meaningful |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | $ Increase/ | % Increase/ | Six Months Ended June 30, | $ Increase/ | % Increase/ | ||||||||||||||||||||||||
(in millions) | 2019 | 2018 | (Decrease) | (Decrease) | 2019 | 2018 | (Decrease) | (Decrease) | |||||||||||||||||||||
Operating expenses (GAAP) | $ | 9,930 | $ | 9,632 | $ | 298 | 3.1 | $ | 19,024 | $ | 18,402 | $ | 622 | 3.4 | |||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
Operating expenses, excluding special charges | 9,859 | 9,503 | 356 | 3.7 | 18,935 | 18,233 | 702 | 3.9 | |||||||||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Third-party business expenses | 41 | 29 | 12 | 41.4 | 71 | 60 | 11 | 18.3 | |||||||||||||||||||||
Fuel expense | 2,385 | 2,390 | (5) | (0.2) | 4,408 | 4,355 | 53 | 1.2 | |||||||||||||||||||||
Profit sharing, including taxes | 161 | 108 | 53 | 49.1 | 194 | 125 | 69 | 55.2 | |||||||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 7,272 | $ | 6,976 | $ | 296 | 4.2 | $ | 14,262 | $ | 13,693 | $ | 569 | 4.2 | |||||||||||||||
Operating income (GAAP) | $ | 1,472 | $ | 1,145 | $ | 327 | 28.6 | $ | 1,967 | $ | 1,407 | $ | 560 | 39.8 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 1,543 | $ | 1,274 | $ | 269 | 21.1 | $ | 2,056 | $ | 1,576 | $ | 480 | 30.5 | |||||||||||||||
Pre-tax income (GAAP) | $ | 1,354 | $ | 855 | $ | 499 | 58.4 | $ | 1,721 | $ | 1,037 | $ | 684 | 66.0 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (34) | 135 | (169) | NM | (51) | 90 | (141) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 25 | — | 25 | NM | 46 | — | 46 | NM | |||||||||||||||||||||
Adjusted pre-tax income (Non-GAAP) | $ | 1,416 | $ | 1,119 | $ | 297 | 26.5 | $ | 1,805 | $ | 1,296 | $ | 509 | 39.3 | |||||||||||||||
Net income (GAAP) | $ | 1,052 | $ | 683 | $ | 369 | 54.0 | $ | 1,344 | $ | 828 | $ | 516 | 62.3 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (34) | 135 | (169) | NM | (51) | 90 | (141) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 25 | — | 25 | NM | 46 | — | 46 | NM | |||||||||||||||||||||
Income tax benefit related to adjustments above | (14) | (59) | 45 | NM | (19) | (58) | 39 | NM | |||||||||||||||||||||
Adjusted net income (Non-GAAP) | $ | 1,100 | $ | 888 | $ | 212 | 23.9 | $ | 1,409 | $ | 1,029 | $ | 380 | 36.9 | |||||||||||||||
Diluted earnings per share (GAAP) | $ | 4.02 | $ | 2.48 | $ | 1.54 | 62.1 | $ | 5.07 | $ | 2.95 | $ | 2.12 | 71.9 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 0.27 | 0.47 | (0.20) | NM | 0.34 | 0.60 | (0.26) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (0.13) | 0.49 | (0.62) | NM | (0.19) | 0.32 | (0.51) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 0.10 | — | 0.10 | NM | 0.17 | — | 0.17 | NM | |||||||||||||||||||||
Income tax benefit related to adjustments | (0.05) | (0.22) | 0.17 | NM | (0.07) | (0.20) | 0.13 | NM | |||||||||||||||||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 4.21 | $ | 3.22 | $ | 0.99 | 30.7 | $ | 5.32 | $ | 3.67 | $ | 1.65 | 45.0 | |||||||||||||||
NM Not Meaningful |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | |||||||||||||||
UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt and finance leases is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. UAL also believes that adjusting net cash provided by operating activities for capital expenditures and adjusted capital expenditures is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives. | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Capital Expenditures (in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capital expenditures (GAAP) | $ | 858 | $ | 727 | $ | 2,467 | $ | 1,671 | |||||||
Property and equipment acquired through the issuance of debt | 128 | 65 | 220 | 125 | |||||||||||
Property and equipment acquired through finance leases | — | — | 8 | — | |||||||||||
Adjusted capital expenditures (Non-GAAP) | $ | 986 | $ | 792 | $ | 2,695 | $ | 1,796 | |||||||
Free Cash Flow (in millions) | |||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 2,710 | $ | 2,443 | $ | 4,625 | $ | 4,152 | |||||||
Less capital expenditures | 858 | 727 | 2,467 | 1,671 | |||||||||||
Free cash flow, net of financings (Non-GAAP) | $ | 1,852 | $ | 1,716 | $ | 2,158 | $ | 2,481 | |||||||
Net cash provided by operating activities (GAAP) | $ | 2,710 | $ | 2,443 | $ | 4,625 | $ | 4,152 | |||||||
Less adjusted capital expenditures (Non-GAAP) | 986 | 792 | 2,695 | 1,796 | |||||||||||
Free cash flow (Non-GAAP) | $ | 1,724 | $ | 1,651 | $ | 1,930 | $ | 2,356 | |||||||
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||
NOTES (UNAUDITED) | |||||||||||||||
(B) Special charges and MTM (gains) losses on financial instruments include the following: | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Operating: | |||||||||||||||
Impairment of assets | $ | 61 | $ | 111 | $ | 69 | $ | 134 | |||||||
Severance and benefit costs | 6 | 11 | 12 | 25 | |||||||||||
(Gains) losses on sale of assets and other special charges | 4 | 7 | 8 | 10 | |||||||||||
Total special charges | 71 | 129 | 89 | 169 | |||||||||||
Nonoperating MTM (gains) losses on financial instruments | (34) | 135 | (51) | 90 | |||||||||||
Total special charges and MTM (gains) losses on financial instruments | 37 | 264 | 38 | 259 | |||||||||||
Income tax benefit | (8) | (59) | (8) | (58) | |||||||||||
Total special charges and MTM (gains) losses on financial instruments, net of income tax | $ | 29 | $ | 205 | $ | 30 | $ | 201 | |||||||
Impairment of assets: During the three months ended June 30, 2019, the company recorded a $47 million impairment for aircraft engines removed from operations, a $6 million charge for the early termination of several regional aircraft finance leases and $8 million in other miscellaneous impairments. During the six months ended June 30, 2019, in addition to the charges described above, the company recorded an $8 million fair value adjustment for aircraft purchased off lease. |
In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. The company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, the company recorded a $105 million special charge to write off the entire value of the intangible asset associated with its Brazil routes. For the three and six months ended June 30, 2018, the company also recorded $6 million and $29 million, respectively, of fair value adjustments related to aircraft purchased off lease and other impairments related to certain fleet types and international slots no longer in use. |
Severance and benefit costs: During the three and six months ended June 30, 2019, the company recorded $6 million and $10 million, respectively, of management severance. During the six months ended June 30, 2019, the company recorded $2 million of severance and benefit costs primarily related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and received a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. |
During the three and six months ended June 30, 2018, the company recorded $6 million and $14 million, respectively, of severance and benefit costs related to the voluntary early-out program for its technicians and related employees, and $5 million and $11 million, respectively, of management severance. |
MTM gains and losses on financial instruments: During the three and six months ended June 30, 2019, the company recorded gains of $38 million and $52 million, respectively, for the change in market value of its investment in Azul Linhas Aéreas Brasileiras S.A. ("Azul"). During the three and six months ended June 30, 2019, the company recorded losses of $4 million and $1 million, respectively, for the change in fair value of certain derivative assets related to equity of Avianca Holdings S.A. For equity investments and derivative assets subject to MTM accounting, the company records gains and losses as part of Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations. |
During the three and six months ended June 30, 2018, the company recorded losses of $135 million and $90 million, respectively, for the change in market value of its investment in Azul. |
(C) Interest expense related to finance leases of Embraer ERJ 145 aircraft |
During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to finance leases up until the purchase date. The company recognized $25 million and $46 million of additional interest expense in the three and six months ended June 30, 2019, respectively, as a result of this change. |
(D) Effective tax rate |
The company's effective tax rate for the three and six months ended June 30, 2019 was 22.3% and 21.9%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was 20.1% and 20.2%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items and the impact of a change in the company's mix of domestic and foreign earnings. |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"Thanks to the outstanding and sustained efforts of 95,000 United team members, United is now consistently delivering results for our customers as well as investors as we raise the mid-point of our full-year 2019 adjusted diluted EPS3 guidance with a new range of $10.50 to $12.00," said Oscar Munoz, CEO of United Airlines. "By once again delivering strong EPS over the last three months, top-tier results are now the expectation, not the exception for United."
- Reported second-quarter net income of $1.1 billion, diluted earnings per share (EPS) of $4.02, pre-tax earnings of $1.4 billion and pre-tax margin of 11.9 percent, expanding pre-tax margin 4.0 points versus the second quarter of 2018.
- Reported second-quarter adjusted net income of $1.1 billion, adjusted diluted EPS of $4.21, adjusted pre-tax earnings of $1.4 billion and adjusted pre-tax margin of 12.4 percent, expanding adjusted pre-tax margin 2.0 points versus the second quarter of 2018.1
- Total passenger revenue increased 6.1 percent versus the second quarter of 2018.
- Consolidated second-quarter passenger revenue per available seat mile (PRASM) increased 2.5 percent year-over-year.
- Consolidated second-quarter unit cost per available seat mile (CASM) decreased 0.4 percent year-over-year.
- Consolidated second-quarter CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 0.6 percent year-over-year.
- Repurchased $536 million of its common shares in the second quarter of 2019, at an average purchase price of $84.07 per share.
- On July 15, 2019, the company's Board of Directors authorized a new $3 billion share repurchase program.
1 Excludes special charges, the mark-to-market impact of financial instruments and imputed interest on certain finance leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. |
2 Airline history defined as post-2010 merger. |
3Excludes special charges and the mark-to-market impact of financial instruments, the nature of which are not determined at this time, and imputed interest on certain finance leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis. |
For more information on UAL's third-quarter and full-year 2019 guidance, please visit ir.united.com for the company's investor update.
Second-Quarter 2019 Highlights
Customer Experience
- United Polaris lounge at San Francisco International Airport voted best business class lounge in the world by the 2019 World Airline Awards from Skytrax.
- Introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next, while ensuring those who have already boarded the aircraft arrive at their destination on time.
- Began flight operations at LaGuardia Airport's new Terminal B Eastern Concourse and opened newest United Club - conveniently located inside security with more than 10,500 square feet with sweeping views of the tarmac.
- Awarded the "People's Voice" Webby Award in the "Business and Finance" category for reimagined mobile app, which debuted earlier this year.
- Partnered with luxury skincare line Sunday Riley on new United Polaris amenity kits.
- Awarded the Crystal Cabin Award for Inflight Entertainment and Connectivity for new onboard entertainment.
- Received IDG's CIO 100 Award for innovative customer volunteer solicitation program.
Operations
- Served nearly 43 million passengers, the most ever for United in the second quarter.
- Achieved top-tier on-time departures rate performance versus the major U.S. airlines, despite headwinds caused by unusually high weather and ATC delays.
- For the second quarter United had the second-best completion factor and the second fewest cancellations among the major U.S. airlines.
Employees
- Received "Best-of-the-Best" award for commitment to diversity and inclusion by the National LGBT Chamber of Commerce (NGLCC) and the National Business Inclusion Consortium (NBIC), demonstrating the airline's industry-leading results across all diverse segments and its commitment to building a more diverse economy.
- Honored with the "DiversityInc Top 50" designation, lauding the airline's leadership in promoting diversity through talent development, leadership accountability and a top supplier diversity program.
- Expect profit sharing for 2019 to be about 20 percent higher per participating employee year-over-year.
- Hosted more than half of the company's 25,000 flight attendants at 17 separate Backstage 2019 events, which are designed to underscore the important role flight attendants play in delivering great service.
Network
- Started 34 new domestic and international routes, including brand-new summer service between New York/Newark and Prague, and the only nonstop service between the United States and Naples, Italy.
- Resumed popular seasonal service on 28 routes offering customers more access than ever before to connect to 54 countries around the world on United's industry-leading global network.
- Announced the only nonstop service from the United States to Cape Town, South Africa, and announced a second daily nonstop service between San Francisco and Hong Kong.
- Launched ninth daily nonstop flight between the United States and Germany from its hub at Denver International Airport, becoming the only U.S. airline connecting Denver to Frankfurt nonstop.
- Tentatively granted a total of four daily nonstop flights to Tokyo Haneda Airport from United's hubs at Newark Liberty International Airport, Chicago O'Hare International Airport, Washington Dulles International Airport and Los Angeles International Airport.
- Unveiled 2019 college football flying schedule, adding around 10,000 seats between its hubs and popular game destinations and, for the first time, adding several point-to-point flights enabling fans to fly nonstop from one college town to another.
- Entered into a new alliance agreement with New Delhi-based airline Vistara - further expanding the airline's global route network to more than 20 destinations throughout India and expected to begin in the fall.
Fleet
- Unveiled next paint design, which brings a refreshed look to its fleet, serving as a visual representation of the airline's ongoing brand evolution while staying true to the history it has developed over the past 93 years of proudly serving customers around the world.
- Took delivery of two Boeing 787-10 aircraft, two used Airbus A319 aircraft, and seven Embraer E175 aircraft operated by our regional partners.
- Signed agreement to purchase 19 used Boeing 737-700 aircraft with deliveries expected beginning in December.
Community and Environment
- Made history with the departure of the "Flight for the Planet," the most eco-friendly commercial flight of its kind in the history of aviation, becoming the first known airline to demonstrate all of the following key actions on a single commercial flight: utilization of sustainable aviation biofuel, zero cabin waste efforts, carbon offsetting, and operational efficiencies.
- Became the first public company to be inducted into Pride Live's Stonewall Ambassador program in recognition of the airline's commitment to LGBTQ+ equality.
- Reached a milestone of 1 million meals packed for charity partner Rise Against Hunger, a global nonprofit, working to end hunger by providing food and life-changing aid to the world's most vulnerable and creating a global commitment to mobilize critical resources.
- Renewed contract with Boston-based World Energy, agreeing to purchase up to 10 million gallons of cost-competitive, commercial-scale, sustainable aviation biofuel over the next two years.
- Revealed the two winning designs for Her Art Here, a first-of-its-kind contest designed to find and uplift underrepresented women artists by providing a chance to have their work painted on a canvas like no other - a United Airlines aircraft. The painted aircraft will begin flying in the fall.
- Announced new and exciting opportunities to help customers celebrate Pride Month through MileagePlus Exclusives benefiting United charity partner The Trevor Project.
Earnings Call
UAL will hold a conference call to discuss its second-quarter 2019 financial results and its financial and operational outlook for third-quarter and full-year 2019 on Wednesday, July 17, at 9:30 a.m. Central time /10:30 a.m. Eastern time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry, introduced ConnectionSaver, a new tool dedicated to improving the experience for customers connecting from one United flight to the next and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 356 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 783 mainline aircraft and the airline's United Express carriers operate 561 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to execute our strategic operating plan, including our growth, revenue-generating and cost-control initiatives; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); risks of doing business globally, including instability and political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; our capacity decisions and the capacity decisions of our competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in our supply of aircraft fuel; our ability to cost-effectively hedge against increases in the price of aircraft fuel, if we decide to do so; the effects of any technology failures or cybersecurity breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving our aircraft or operations, the aircraft or operations of our regional carriers or our code share partners or the aircraft or operations of another airline; our ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in our fleet; disruptions to our regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of our investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; disruptions in the availability of aircraft, parts or support from our suppliers; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; labor costs; an outbreak of a disease that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where we operate; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to comply with the terms of our various financing arrangements; our ability to realize the full value of our intangible assets and long-lived assets;-; and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
-tables attached-
On January 1, 2019, United Airlines Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2016-02, Leases ("Topic 842"). As such, certain previously reported 2018 figures are adjusted in this report on a basis consistent with Topic 842.
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) | |||||||||||||||||||||||
Three Months Ended | % | Six Months Ended June 30, | % | ||||||||||||||||||||
(In millions, except per share data) | 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||||||
Operating revenue: | |||||||||||||||||||||||
Passenger | $ | 10,486 | $ | 9,880 | 6.1 | $ | 19,211 | $ | 18,030 | 6.6 | |||||||||||||
Cargo | 295 | 314 | (6.1) | 581 | 607 | (4.3) | |||||||||||||||||
Other operating revenue | 621 | 583 | 6.5 | 1,199 | 1,172 | 2.3 | |||||||||||||||||
Total operating revenue | 11,402 | 10,777 | 5.8 | 20,991 | 19,809 | 6.0 | |||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Salaries and related costs | 3,057 | 2,878 | 6.2 | 5,930 | 5,604 | 5.8 | |||||||||||||||||
Aircraft fuel | 2,385 | 2,390 | (0.2) | 4,408 | 4,355 | 1.2 | |||||||||||||||||
Regional capacity purchase | 715 | 693 | 3.2 | 1,403 | 1,323 | 6.0 | |||||||||||||||||
Landing fees and other rent | 660 | 625 | 5.6 | 1,248 | 1,204 | 3.7 | |||||||||||||||||
Depreciation and amortization | 560 | 538 | 4.1 | 1,107 | 1,062 | 4.2 | |||||||||||||||||
Aircraft maintenance materials and outside repairs | 421 | 438 | (3.9) | 829 | 878 | (5.6) | |||||||||||||||||
Distribution expenses | 442 | 393 | 12.5 | 802 | 735 | 9.1 | |||||||||||||||||
Aircraft rent | 73 | 119 | (38.7) | 154 | 246 | (37.4) | |||||||||||||||||
Special charges (B) | 71 | 129 | NM | 89 | 169 | NM | |||||||||||||||||
Other operating expenses | 1,546 | 1,429 | 8.2 | 3,054 | 2,826 | 8.1 | |||||||||||||||||
Total operating expense | 9,930 | 9,632 | 3.1 | 19,024 | 18,402 | 3.4 | |||||||||||||||||
Operating income | 1,472 | 1,145 | 28.6 | 1,967 | 1,407 | 39.8 | |||||||||||||||||
Operating margin | 12.9 | % | 10.6 | % | 2.3 | pts. | 9.4 | % | 7.1 | % | 2.3 | pts. | |||||||||||
Adjusted operating margin (Non-GAAP) (A) | 13.5 | % | 11.8 | % | 1.7 | pts. | 9.8 | % | 8.0 | % | 1.8 | pts. | |||||||||||
Nonoperating income (expense): | |||||||||||||||||||||||
Interest expense | (191) | (163) | 17.2 | (379) | (325) | 16.6 | |||||||||||||||||
Interest capitalized | 21 | 12 | 75.0 | 43 | 30 | 43.3 | |||||||||||||||||
Interest income | 38 | 25 | 52.0 | 67 | 42 | 59.5 | |||||||||||||||||
Miscellaneous, net (B) | 14 | (164) | NM | 23 | (117) | NM | |||||||||||||||||
Total nonoperating expense | (118) | (290) | (59.3) | (246) | (370) | (33.5) | |||||||||||||||||
Income before income taxes | 1,354 | 855 | 58.4 | 1,721 | 1,037 | 66.0 | |||||||||||||||||
Pre-tax margin | 11.9 | % | 7.9 | % | 4.0 | pts. | 8.2 | % | 5.2 | % | 3.0 | pts. | |||||||||||
Adjusted pre-tax margin (Non-GAAP) (A) | 12.4 | % | 10.4 | % | 2.0 | pts. | 8.6 | % | 6.5 | % | 2.1 | pts. | |||||||||||
Income tax expense (D) | 302 | 172 | 75.6 | 377 | 209 | 80.4 | |||||||||||||||||
Net income | $ | 1,052 | $ | 683 | 54.0 | $ | 1,344 | $ | 828 | 62.3 | |||||||||||||
Diluted earnings per share | $ | 4.02 | $ | 2.48 | 62.1 | $ | 5.07 | $ | 2.95 | 71.9 | |||||||||||||
Diluted weighted average shares | 261.6 | 275.6 | (5.1) | 264.9 | 280.2 | (5.5) | |||||||||||||||||
NM Not meaningful |
UNITED AIRLINES HOLDINGS, INC. | ||||||||||||
PASSENGER REVENUE INFORMATION AND STATISTICS | ||||||||||||
Passenger revenue information is as follows: | ||||||||||||
2Q 2019 Passenger Revenue (millions) | Passenger Revenue vs. 2Q 2018 | PRASM vs. 2Q 2018 | Yield vs. 2Q 2018 | Available Seat Miles vs. 2Q 2018 | 2Q 2019 | |||||||
Domestic | $ | 6,547 | 5.9% | 1.9% | 1.5% | 4.0% | 41,484 | |||||
Atlantic | 1,927 | 5.6% | 0.6% | (1.5%) | 5.0% | 14,114 | ||||||
Pacific | 1,135 | 2.9% | 2.8% | (1.1%) | 0.1% | 10,753 | ||||||
Latin America | 877 | 13.6% | 9.1% | 6.5% | 4.1% | 6,889 | ||||||
International | 3,939 | 6.5% | 3.2% | 0.4% | 3.1% | 31,756 | ||||||
Consolidated | $ | 10,486 | 6.1% | 2.5% | 1.0% | 3.6% | 73,240 | |||||
Select operating statistics are as follows: | |||||||||||||||||||||||
Three Months Ended June 30, | % Increase/ (Decrease) | Six Months Ended June 30, | % Increase/ (Decrease) | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Passengers (thousands) | 42,592 | 41,058 | 3.7 | 79,046 | 75,553 | 4.6 | |||||||||||||||||
Revenue passenger miles (millions) | 63,001 | 59,945 | 5.1 | 116,098 | 109,794 | 5.7 | |||||||||||||||||
Available seat miles (millions) | 73,240 | 70,702 | 3.6 | 138,885 | 132,679 | 4.7 | |||||||||||||||||
Passenger load factor: | |||||||||||||||||||||||
Consolidated | 86.0 | % | 84.8 | % | 1.2 | pts. | 83.6 | % | 82.8 | % | 0.8 | pts. | |||||||||||
Domestic | 87.5 | % | 87.1 | % | 0.4 | pts. | 85.2 | % | 85.1 | % | 0.1 | pts. | |||||||||||
International | 84.0 | % | 81.7 | % | 2.3 | pts. | 81.5 | % | 79.7 | % | 1.8 | pts. | |||||||||||
Passenger revenue per available seat mile (cents) | 14.32 | 13.97 | 2.5 | 13.83 | 13.59 | 1.8 | |||||||||||||||||
Total revenue per available seat mile (cents) | 15.57 | 15.24 | 2.2 | 15.11 | 14.93 | 1.2 | |||||||||||||||||
Average yield per revenue passenger mile (cents) | 16.64 | 16.48 | 1.0 | 16.55 | 16.42 | 0.8 | |||||||||||||||||
Cargo ton miles (millions) | 831 | 855 | (2.8) | 1,636 | 1,672 | (2.2) | |||||||||||||||||
Aircraft in fleet at end of period | 1,344 | 1,308 | 2.8 | 1,344 | 1,308 | 2.8 | |||||||||||||||||
Average stage length (miles) | 1,469 | 1,460 | 0.6 | 1,459 | 1,452 | 0.5 | |||||||||||||||||
Average full-time equivalent employees | 90,779 | 86,743 | 4.7 | 89,761 | 86,157 | 4.2 | |||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.16 | $ | 2.26 | (4.4) | $ | 2.11 | $ | 2.19 | (3.7) | |||||||||||||
Fuel gallons consumed (millions) | 1,102 | 1,058 | 4.2 | 2,087 | 1,990 | 4.9 | |||||||||||||||||
Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for definitions of these statistics. |
UNITED AIRLINES HOLDINGS, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In millions) | June 30, 2019 | December 31, 2018 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,221 | $ | 1,694 | |||
Short-term investments | 2,223 | 2,256 | |||||
Receivables, less allowance for doubtful accounts | 1,762 | 1,426 | |||||
Aircraft fuel, spare parts and supplies, less obsolescence allowance | 996 | 985 | |||||
Prepaid expenses and other | 708 | 733 | |||||
Total current assets | 8,910 | 7,094 | |||||
Total operating property and equipment, net | 28,918 | 27,399 | |||||
Operating lease right-of-use assets | 4,908 | 5,262 | |||||
Other assets: | |||||||
Goodwill | 4,523 | 4,523 | |||||
Intangibles, less accumulated amortization | 3,129 | 3,159 | |||||
Restricted cash | 105 | 105 | |||||
Notes receivable, net | 518 | 516 | |||||
Investments in affiliates and other, net | 1,139 | 966 | |||||
Total other assets | 9,414 | 9,269 | |||||
Total assets | $ | 52,150 | $ | 49,024 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Advance ticket sales | $ | 6,126 | $ | 4,381 | |||
Accounts payable | 3,033 | 2,363 | |||||
Frequent flyer deferred revenue | 2,435 | 2,286 | |||||
Accrued salaries and benefits | 1,871 | 2,184 | |||||
Current maturities of long-term debt | 1,255 | 1,230 | |||||
Current maturities of finance leases | 117 | 123 | |||||
Current maturities of operating leases | 637 | 719 | |||||
Other | 604 | 553 | |||||
Total current liabilities | 16,078 | 13,839 | |||||
Long-term debt and other long-term liabilities and deferred credits: | |||||||
Long-term debt | 12,938 | 12,215 | |||||
Long-term obligations under finance leases | 202 | 224 | |||||
Long-term obligations under operating leases | 5,034 | 5,276 | |||||
Frequent flyer deferred revenue | 2,763 | 2,719 | |||||
Postretirement benefit liability | 1,277 | 1,295 | |||||
Pension liability | 1,366 | 1,576 | |||||
Deferred income taxes | 1,192 | 828 | |||||
Other | 980 | 1,010 | |||||
Total long-term debt and other long-term liabilities and deferred credits: | 25,752 | 25,143 | |||||
Stockholders' equity | 10,320 | 10,042 | |||||
Total liabilities and stockholders' equity | $ | 52,150 | $ | 49,024 | |||
UNITED AIRLINES HOLDINGS, INC. | |||||||
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) | |||||||
(In millions) | Six Months Ended June 30, | ||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net cash provided by operating activities | $ | 4,625 | $ | 4,152 | |||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (2,467) | (1,671) | |||||
Purchases of short-term and other investments | (1,443) | (1,326) | |||||
Proceeds from sale of short-term and other investments | 1,484 | 1,455 | |||||
Investment in affiliates | (27) | (139) | |||||
Loans made to others | — | (10) | |||||
Other, net | 17 | 38 | |||||
Net cash used in investing activities | (2,436) | (1,653) | |||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of long-term debt | 996 | 1,241 | |||||
Payments of long-term debt | (473) | (1,294) | |||||
Repurchases of common stock | (1,062) | (969) | |||||
Principal payments under finance leases | (63) | (35) | |||||
Capitalized financing costs | (30) | (25) | |||||
Other, net | (30) | (17) | |||||
Net cash used in financing activities | (662) | (1,099) | |||||
Net increase in cash, cash equivalents and restricted cash | 1,527 | 1,400 | |||||
Cash, cash equivalents and restricted cash at beginning of the period | 1,799 | 1,591 | |||||
Cash, cash equivalents and restricted cash at end of the period | $ | 3,326 | $ | 2,991 | |||
Investing and Financing Activities Not Affecting Cash: | |||||||
Property and equipment acquired through the issuance of debt | $ | 220 | $ | 125 | |||
Operating lease conversions to finance lease | 36 | — | |||||
Right-of-use assets acquired through operating leases | 99 | 103 | |||||
Property and equipment acquired through finance leases | 8 | — | |||||
UNITED AIRLINES HOLDINGS, INC. | |||
RETURN ON INVESTED CAPITAL (ROIC)—Non-GAAP | |||
ROIC is a non-GAAP financial measure that UAL believes provides useful supplemental information for management and investors by measuring the effectiveness of the company's operations' use of invested capital to generate profits. | |||
(in millions) | Twelve Months Ended June 30, 2019 | ||
Net Operating Profit After Tax ("NOPAT") | |||
Pre-tax income | $ | 3,332 | |
Adjustments: | |||
Special charges and mark-to-market ("MTM") gains on financial instruments: | |||
Impairment of assets | 312 | ||
Termination of a maintenance service agreement | 64 | ||
Severance and benefit costs | 28 | ||
MTM gains on financial instruments | (136) | ||
(Gains) losses on sale of assets and other special charges | 3 | ||
Pre-tax income excluding special charges and MTM gains on financial instruments (Non-GAAP) | 3,603 | ||
add: Interest expense (net of income tax benefit) (a) | 721 | ||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) | 195 | ||
add: Net interest on pension (net of income tax benefit) (a) | (11) | ||
less: Income taxes paid | (13) | ||
NOPAT (Non-GAAP) | $ | 4,495 | |
Average Invested Capital (five-quarter average) | |||
Total assets | $ | 50,076 | |
less: Non-interest bearing liabilities (b) | (17,495) | ||
Average invested capital (Non-GAAP) | $ | 32,581 | |
ROIC (Non-GAAP) | 13.8 | % | |
(a) | Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges and MTM gains and losses on financial instruments. For the twelve months ended June 30, 2019, the effective cash tax rate was 0.4%. |
(b) | Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities. |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION | |||||||||||||||||
(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on financial instruments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to finance leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense. | |||||||||||||||||
CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. | |||||||||||||||||
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below. | |||||||||||||||||
Three Months Ended June 30, | % Increase/ | Six Months Ended June 30, | % Increase/ | ||||||||||||||
2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | ||||||||||||
CASM (cents) | |||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 13.56 | 13.62 | (0.4) | 13.70 | 13.87 | (1.2) | |||||||||||
Special charges (B) | 0.10 | 0.18 | NM | 0.07 | 0.13 | NM | |||||||||||
Third-party business expenses | 0.05 | 0.04 | 25.0 | 0.05 | 0.05 | — | |||||||||||
Fuel expense | 3.26 | 3.38 | (3.6) | 3.17 | 3.28 | (3.4) | |||||||||||
Profit sharing, including taxes | 0.22 | 0.15 | 46.7 | 0.14 | 0.09 | 55.6 | |||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.93 | 9.87 | 0.6 | 10.27 | 10.32 | (0.5) | |||||||||||
NM Not Meaningful |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | $ Increase/ | % Increase/ | Six Months Ended June 30, | $ Increase/ | % Increase/ | ||||||||||||||||||||||||
(in millions) | 2019 | 2018 | (Decrease) | (Decrease) | 2019 | 2018 | (Decrease) | (Decrease) | |||||||||||||||||||||
Operating expenses (GAAP) | $ | 9,930 | $ | 9,632 | $ | 298 | 3.1 | $ | 19,024 | $ | 18,402 | $ | 622 | 3.4 | |||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
Operating expenses, excluding special charges | 9,859 | 9,503 | 356 | 3.7 | 18,935 | 18,233 | 702 | 3.9 | |||||||||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Third-party business expenses | 41 | 29 | 12 | 41.4 | 71 | 60 | 11 | 18.3 | |||||||||||||||||||||
Fuel expense | 2,385 | 2,390 | (5) | (0.2) | 4,408 | 4,355 | 53 | 1.2 | |||||||||||||||||||||
Profit sharing, including taxes | 161 | 108 | 53 | 49.1 | 194 | 125 | 69 | 55.2 | |||||||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 7,272 | $ | 6,976 | $ | 296 | 4.2 | $ | 14,262 | $ | 13,693 | $ | 569 | 4.2 | |||||||||||||||
Operating income (GAAP) | $ | 1,472 | $ | 1,145 | $ | 327 | 28.6 | $ | 1,967 | $ | 1,407 | $ | 560 | 39.8 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 1,543 | $ | 1,274 | $ | 269 | 21.1 | $ | 2,056 | $ | 1,576 | $ | 480 | 30.5 | |||||||||||||||
Pre-tax income (GAAP) | $ | 1,354 | $ | 855 | $ | 499 | 58.4 | $ | 1,721 | $ | 1,037 | $ | 684 | 66.0 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (34) | 135 | (169) | NM | (51) | 90 | (141) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 25 | — | 25 | NM | 46 | — | 46 | NM | |||||||||||||||||||||
Adjusted pre-tax income (Non-GAAP) | $ | 1,416 | $ | 1,119 | $ | 297 | 26.5 | $ | 1,805 | $ | 1,296 | $ | 509 | 39.3 | |||||||||||||||
Net income (GAAP) | $ | 1,052 | $ | 683 | $ | 369 | 54.0 | $ | 1,344 | $ | 828 | $ | 516 | 62.3 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 71 | 129 | (58) | NM | 89 | 169 | (80) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (34) | 135 | (169) | NM | (51) | 90 | (141) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 25 | — | 25 | NM | 46 | — | 46 | NM | |||||||||||||||||||||
Income tax benefit related to adjustments above | (14) | (59) | 45 | NM | (19) | (58) | 39 | NM | |||||||||||||||||||||
Adjusted net income (Non-GAAP) | $ | 1,100 | $ | 888 | $ | 212 | 23.9 | $ | 1,409 | $ | 1,029 | $ | 380 | 36.9 | |||||||||||||||
Diluted earnings per share (GAAP) | $ | 4.02 | $ | 2.48 | $ | 1.54 | 62.1 | $ | 5.07 | $ | 2.95 | $ | 2.12 | 71.9 | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (B) | 0.27 | 0.47 | (0.20) | NM | 0.34 | 0.60 | (0.26) | NM | |||||||||||||||||||||
MTM (gains) losses on financial instruments (B) | (0.13) | 0.49 | (0.62) | NM | (0.19) | 0.32 | (0.51) | NM | |||||||||||||||||||||
Interest expense on ERJ 145 finance leases (C) | 0.10 | — | 0.10 | NM | 0.17 | — | 0.17 | NM | |||||||||||||||||||||
Income tax benefit related to adjustments | (0.05) | (0.22) | 0.17 | NM | (0.07) | (0.20) | 0.13 | NM | |||||||||||||||||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 4.21 | $ | 3.22 | $ | 0.99 | 30.7 | $ | 5.32 | $ | 3.67 | $ | 1.65 | 45.0 | |||||||||||||||
NM Not Meaningful |
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | |||||||||||||||
UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt and finance leases is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. UAL also believes that adjusting net cash provided by operating activities for capital expenditures and adjusted capital expenditures is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives. | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Capital Expenditures (in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capital expenditures (GAAP) | $ | 858 | $ | 727 | $ | 2,467 | $ | 1,671 | |||||||
Property and equipment acquired through the issuance of debt | 128 | 65 | 220 | 125 | |||||||||||
Property and equipment acquired through finance leases | — | — | 8 | — | |||||||||||
Adjusted capital expenditures (Non-GAAP) | $ | 986 | $ | 792 | $ | 2,695 | $ | 1,796 | |||||||
Free Cash Flow (in millions) | |||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 2,710 | $ | 2,443 | $ | 4,625 | $ | 4,152 | |||||||
Less capital expenditures | 858 | 727 | 2,467 | 1,671 | |||||||||||
Free cash flow, net of financings (Non-GAAP) | $ | 1,852 | $ | 1,716 | $ | 2,158 | $ | 2,481 | |||||||
Net cash provided by operating activities (GAAP) | $ | 2,710 | $ | 2,443 | $ | 4,625 | $ | 4,152 | |||||||
Less adjusted capital expenditures (Non-GAAP) | 986 | 792 | 2,695 | 1,796 | |||||||||||
Free cash flow (Non-GAAP) | $ | 1,724 | $ | 1,651 | $ | 1,930 | $ | 2,356 | |||||||
UNITED AIRLINES HOLDINGS, INC. | |||||||||||||||
NOTES (UNAUDITED) | |||||||||||||||
(B) Special charges and MTM (gains) losses on financial instruments include the following: | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Operating: | |||||||||||||||
Impairment of assets | $ | 61 | $ | 111 | $ | 69 | $ | 134 | |||||||
Severance and benefit costs | 6 | 11 | 12 | 25 | |||||||||||
(Gains) losses on sale of assets and other special charges | 4 | 7 | 8 | 10 | |||||||||||
Total special charges | 71 | 129 | 89 | 169 | |||||||||||
Nonoperating MTM (gains) losses on financial instruments | (34) | 135 | (51) | 90 | |||||||||||
Total special charges and MTM (gains) losses on financial instruments | 37 | 264 | 38 | 259 | |||||||||||
Income tax benefit | (8) | (59) | (8) | (58) | |||||||||||
Total special charges and MTM (gains) losses on financial instruments, net of income tax | $ | 29 | $ | 205 | $ | 30 | $ | 201 | |||||||
Impairment of assets: During the three months ended June 30, 2019, the company recorded a $47 million impairment for aircraft engines removed from operations, a $6 million charge for the early termination of several regional aircraft finance leases and $8 million in other miscellaneous impairments. During the six months ended June 30, 2019, in addition to the charges described above, the company recorded an $8 million fair value adjustment for aircraft purchased off lease. |
In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. The company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, the company recorded a $105 million special charge to write off the entire value of the intangible asset associated with its Brazil routes. For the three and six months ended June 30, 2018, the company also recorded $6 million and $29 million, respectively, of fair value adjustments related to aircraft purchased off lease and other impairments related to certain fleet types and international slots no longer in use. |
Severance and benefit costs: During the three and six months ended June 30, 2019, the company recorded $6 million and $10 million, respectively, of management severance. During the six months ended June 30, 2019, the company recorded $2 million of severance and benefit costs primarily related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and received a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. |
During the three and six months ended June 30, 2018, the company recorded $6 million and $14 million, respectively, of severance and benefit costs related to the voluntary early-out program for its technicians and related employees, and $5 million and $11 million, respectively, of management severance. |
MTM gains and losses on financial instruments: During the three and six months ended June 30, 2019, the company recorded gains of $38 million and $52 million, respectively, for the change in market value of its investment in Azul Linhas Aéreas Brasileiras S.A. ("Azul"). During the three and six months ended June 30, 2019, the company recorded losses of $4 million and $1 million, respectively, for the change in fair value of certain derivative assets related to equity of Avianca Holdings S.A. For equity investments and derivative assets subject to MTM accounting, the company records gains and losses as part of Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations. |
During the three and six months ended June 30, 2018, the company recorded losses of $135 million and $90 million, respectively, for the change in market value of its investment in Azul. |
(C) Interest expense related to finance leases of Embraer ERJ 145 aircraft |
During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to finance leases up until the purchase date. The company recognized $25 million and $46 million of additional interest expense in the three and six months ended June 30, 2019, respectively, as a result of this change. |
(D) Effective tax rate |
The company's effective tax rate for the three and six months ended June 30, 2019 was 22.3% and 21.9%, respectively. The effective tax rate for the three and six months ended June 30, 2018 was 20.1% and 20.2%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items and the impact of a change in the company's mix of domestic and foreign earnings. |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO, April 13, 2021 /PRNewswire/ -- United Airlines continues to lead the industry towards a more sustainable future with the launch of the first-of-its-kind Eco-Skies Alliance SM program. Working with the airline, more than a dozen leading global corporations will collectively contribute towards the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) this year. With its nearly 80% emissions reductions on a lifecycle basis compared to conventional jet fuel, this is enough SAF to eliminate approximately 31,000 metric tons of greenhouse gas emissions, or enough to fly passengers over 220 million miles.
As inaugural participants, the following companies are taking a lead within their respective industries, reducing their aviation-related impact on the environment at the source, and creating demand for more SAF production.
- Autodesk
- Boston Consulting Group
- CEVA Logistics
- Deloitte
- DHL Global Forwarding
- DSV Panalpina
- HP Inc.
- Nike
- Palantir
- Siemens
- Takeda Pharmaceuticals
"While we've partnered with companies for years to help them offset their flight emissions, we applaud those participating in the Eco-Skies Alliance for recognizing the need to go beyond carbon offsets and support SAF-powered flying, which will lead to more affordable supply and ultimately, lower emissions," said United CEO Scott Kirby. "This is just the beginning. Our goal is to add more companies to the Eco-Skies Alliance program, purchase more SAF and work across industries to find other innovative paths towards decarbonization."
United has made the airline industry's single largest investment in SAF and has purchased more SAF than any other airline in the world. World Energy, a long-term partner of United, will supply the SAF to Los Angeles International Airport (LAX), which makes it conveniently accessible to United's operations.
Customers traveling with United can now purchase SAF
In addition to the Eco-Skies Alliance program, United is giving customers the ability to contribute funds for additional SAF purchase or for use on initiatives United believes will help decarbonize aviation – the first of any U.S. airline to do so. Understanding there is a growing interest among customers for real, lasting solutions, this new capability will be available starting immediately via portal on united.com/ecoskiesalliance.
Advocating for sustainable travel, together with United
Strong federal and state policy leadership will be essential to reducing the climate impacts of air travel, so starting immediately United will help individuals connect with elected representatives to advocate for policies that would make air travel more sustainable for the long term. United will be the first airline in the world to connect customers directly with policy makers to voice the support that is needed to advance and accelerate permanent, scalable solutions that hold the potential to decarbonize the air transportation industry – and not just offset emissions.
"We know there is a growing demand from a wide range of our customers including corporations, cargo shippers and individuals who share the same concern we do – that climate change is the most pressing issue of our generation," Kirby said.
United's 100% Green Commitment
At United, we believe the airline industry needs to be bolder when it comes to making decisions that confront the climate crisis. That's why we've committed to become 100% green and reduce our greenhouse gas emissions 100% by 2050 by taking the harder, better path of reducing emissions from flying, rather than relying on traditional carbon offsets.
Here are some of the ways we're making sustainability the new standard in flight:
- In February 2021, we announced an agreement to work with Archer Aviation to accelerate the development and production of their electric aircraft – an urban mobility solution that has the potential to serve as an 'air taxi,' giving United customers another opportunity to reduce their carbon footprint before they even board a United flight.
- In 2020, we became the first airline to announce a commitment to invest in carbon capture and sequestration by committing to a multimillion-dollar investment in 1PointFive, a joint venture between Oxy Low Carbon Ventures and Rusheen Capital that plans to build the first industrial-sized Direct Air Capture plant in the United States. A single plant is expected to capture and permanently sequester one million tons of CO2 each year, the equivalent of the work of 40 million trees, but covering a land area about 3,000 times smaller.
- In 2019, we committed $40 million toward an investment initiative focused on accelerating the development of sustainable aviation fuel (SAF) and other decarbonization technologies. That same year, we operated the Flight for the Planet, which represented the most-eco-friendly commercial flight of its kind in the history of commercial aviation.
- In 2018, we became the first U.S. airline to commit to reducing its greenhouse gas emissions—50% by 2050.
- In 2016, we became the first airline globally to use SAF in regular operations on a continuous basis with SAF from World Energy.
- In 2015, we invested $30 million in Fulcrum BioEnergy, a SAF producer that converts trash to low-carbon jet fuel, the largest investment by any airline in a SAF producer. Through the associated purchase agreement, United has nearly half the global airline industry's publicly announced commitments for SAF.
United's Award-Winning Eco-Skies Program
United's award-winning Eco-Skies® program represents the company's commitment to the environment and the actions taken every day to create a more sustainable future. The Carbon Disclosure Project (CDP) named United as the only airline globally to its 2020 Climate 'A List' for the airline's actions to cut emissions, mitigate climate risks and develop the low-carbon economy, marking the seventh consecutive year that United had the highest CDP score among U.S. airlines.
In 2017, Air Transport World magazine named United its Eco-Airline of the Year for the second time since the airline launched the Eco-Skies program. Additionally, United ranked No. 1 among global carriers inNewsweek's2017 Global 500 Green Rankings, one of the most recognized environmental performance assessments of the world's largest publicly traded companies. For more information on United's commitment to environmental sustainability, visit united.com/sustainability.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL."
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
In addition, for those United Aviate Academy students who may need additional financing, United has partnered with Sallie Mae to offer private student loans to ensure that no highly-qualified, highly-motivated, eligible applicants will be turned away solely because they can't afford to enroll. United Aviate Academy expects to enroll 100 students in 2021.
"Over the next decade, United will train 5,000 pilots who will be guaranteed a job with United, after they complete the requirements of the Aviate program – and our plan is for half of them to be women and people of color," said United CEO Scott Kirby. "We're excited that JPMorgan Chase has agreed to support our work to diversify our pilot ranks and create new opportunities for thousands of women and people of color who want to pursue a career in aviation."
To break down the financial barriers that limited access to the airline pilot career path for generations of women and people of color, United has committed to fund $1.2 million in scholarships. The airline's credit card partner, JPMorgan Chase has also committed $1.2 million to support women and people of color who are accepted to United Aviate Academy.
"We are proud to partner with United to support the Aviate Academy's mission to enable thousands to pursue their dream as a commercial airline pilot," said Ed Olebe, President of Chase Co-Brand Cards. "Investing in this program directly aligns with our efforts to advance racial equity by expanding career development opportunities and making tangible progress in a field where women and people of color are underrepresented."
United will leverage its long-standing relationships with a variety of organizations, including the Organization of Black Aerospace Professionals, Sisters of the Skies, the Latino Pilots Association and the Professional Asian Pilots Association to help identify and steer highly qualified, diverse candidates to the United Aviate Academy. As key partners, these organizations will select the applicants to receive the scholarships and grants funded by United and JPMorgan Chase.
HBCU Affiliate Partnerships
United has also finalized partnerships with three HBCUs, Delaware State University, Elizabeth City State University and Hampton University, to identify top talent and recruit them into the Aviate program. Through the partnership, students will have the opportunity to join Aviate and connect with dedicated ambassadors and coaches who will help guide them on the path to a United flight deck.
Aviate: Love to fly, born to lead
United's innovative Aviate pilot development program provides those who aspire to a career as a United captain with the most direct route to achieving that goal. Aviate is built to accommodate pilots of all experience levels – from those with zero hours to professional pilots already flying for one of our regional partners.
For instance, an aspiring aviator who joins the United Aviate Academy in Phoenix with no prior flying experience can become a licensed pilot within two months. Within a year, they can start earning income after receiving their commercial pilot license. Within five years, they can become a United pilot.
The United Aviate Academy's first class of 20 pilots will begin their studies in the third quarter of 2021, with the class graduating in the first half of 2022. Graduates will then have opportunities to further pursue their careers while working specifically within the Aviate ecosystem at partner universities, professional flight training organizations and United Express carriers.
Aviate also provides support and coaching for pilots to develop into leaders who exemplify the professionalism, level of excellence and commitment to providing safe, caring, dependable and efficient service that United expects from its pilots.
United's Aviate career path program offers pilots competitive benefits, including:
- The most direct path within the industry to a major airline, with an Aviate regional partner minimum requirement of 24 months and 2,000 hours
- More options in program entry points throughout a pilot's career and choice of select United Express carriers
- Increased transparency and clarity along the path from program entry to flying for United
- Improved career development, mentoring and access to United pilots and learning tools.
- Immediate inclusion in the United family, with access to senior leadership, site visits and tours, and certain travel privileges
For more information on Aviate, please visit unitedaviate.com
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
NEW YORK, March 29, 2021 /PRNewswire/ -- United is back at John F. Kennedy Airport (JFK), now operating direct service to the airline's West Coast hubs – Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) from New York City. The airline will use its Boeing 767-300ER aircraft which features 46 business class all-aisle-access seating, and 22 United Premium Plus® seats. The airline operates the most premium seats between the New York City area and Los Angeles and San Francisco combined.
United is currently flying one round-trip flight, five days a week to each West Coast airport, with plans to double the number of flights as demand grows. The carrier is back at JFK following a five-year hiatus and now offers service from all three major airports in the New York City area.
"United's return to JFK reflects not only our strong commitment to the New York City area, but also to increasing service to and from the places our customers want to fly," said Ankit Gupta, Vice President of Domestic Network Planning and Scheduling. "With the addition of JFK, United now offers unmatched service, greater convenience, more choice and a best-in-class product for travelers throughout the New York City region as they return to the skies."
"We're happy to welcome United Airlines back to Kennedy Airport," said Charles Everett, General Manager of John F. Kennedy International Airport. "We remain committed to providing the highest level of safety, accessibility and ease of travel for all of the passengers who use the Port Authority's airport facilities, and United's decision is a great step in that direction."
United's premium cabin features flat-bed seats on all flights similar to the current Newark-Los Angeles and Newark-San Francisco offerings, providing a consistent and comprehensive NYC-West Coast product. This includes the signature cooling gel pillow along with the Saks Fifth Avenue day blanket and pillow. The routes offer seasonal menus crafted by renowned chefs and distinctive amenities. This includes both travelers in United Business and United Premium Plus sections who enjoy a complimentary hot entrée, mixed nuts, salad and dessert, as well as complimentary alcoholic beverages. The Economy Plus® and Economy sections feature the United all-in-one snack bag as well as the airline's buy on board program, which returns on April 12. Eligible customers will have access to the United ClubSM location at either LAX or SFO.
United's operations at JFK's Terminal 7 will provide seamless access for customers. The lobby area offers self-service kiosks, along with eight podiums which are conveniently located steps away from the TSA check point. Just a short walk from security screening, travelers will find the United-operated gates. Customers will also benefit from easy connections to more than a dozen Star Alliance partners at JFK, including access to 15 destinations in 14 countries as of March 2021.
For images and video footage please click here. Tickets are now available for purchase on United.com.
Committed to Ensuring a Safe Journey
United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlusSM program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind. For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO, March 25, 2021 /PRNewswire/ -- As more travelers begin to plan long-awaited getaways with family and friends, United Airlines is kicking off summer vacation season with a robust May schedule that includes the addition of 26 new nonstop routes between Midwest cities such as Cleveland, Cincinnati and Milwaukee and popular vacation destinations such as Hilton Head, S.C.; Pensacola, Fla.; and Portland, Maine. The airline also plans to resume more than 20 domestic routes and will start new service between Orange County, Calif., and Honolulu.
Internationally, in May United will fly more than 100% of its pre-pandemic schedule to Latin America compared to what it operated in 2019, including more flights to Mexico, the Caribbean, Central America and South America. The airline also plans to resume flights between Chicago and Tokyo Haneda, resume passenger flights between New York/Newark and Milan and Rome, and restart service between Chicago and Amsterdam. In total, United plans to operate 52% of its overall schedule compared to May 2019, whereas in May 2020 United operated 14% of its overall schedule compared to May 2019.
"In the past few weeks, we have seen the strongest flight bookings since the start of the pandemic," said Ankit Gupta, vice president of United's domestic network planning and scheduling. "As we rebuild our schedule to meet that demand, adding in seasonal point-to-point flying is just one of the ways we are finding opportunities to add new and exciting service. And as we have done throughout the entire pandemic, we will continue being nimble and strategic with our network to add the right service to the destinations our customers want to visit."
Domestic May Schedule
Starting May 27, United will begin point-to-point service to Charleston, S.C.; Hilton Head, S.C.; Myrtle Beach, S.C.; Pensacola, Fla. and Portland, Maine from seven cities including Cleveland, Cincinnati and Columbus, Ohio; St. Louis, Mo.; Pittsburgh, Pa.; Milwaukee, Wis. and Indianapolis, Ind. United plans to operate these point-to-point routes through Labor Day weekend. Most customers on these flights will experience United's new Bombardier CRJ-550 – the world's first 50-seater aircraft with two cabins. The spacious CRJ-550 is equipped with 10 first class seats, 20 Economy Plus seats, 20 standard economy seats, Wi-Fi, more legroom and enough overhead bin space for every customer to bring a roller bag on board.
For video and photos of the CRJ-550 click here.
United also continues to be a leading airline to Hawaii, offering more than 200 weekly flights, including new service between Orange County and Honolulu. In May, United will begin offering United Premium Plus® service on select Hawaii routes, which includes a bigger, more comfortable seat and a complimentary meal. United Premium Plus will be available for customers traveling to Honolulu and Maui from Chicago and Denver and will be expanded in June to flights between Chicago and Kona, Houston and Honolulu, and New York/Newark and Maui. United allows customers with valid negative COVID-19 tests to pre-clear before departing to Hawaii so they can save time and skip document screening lines upon arrival in the islands.
In addition to the new point-to-point service, United will resume 20 domestic flights to popular destinations and introduce three new domestic routes. This new nonstop service includes flights between Houston and Kalispell, Mont.; Washington, D.C. and Bozeman, Mont.; and between Chicago and Nantucket, Mass. Overall, United plans to operate 58% of its domestic schedule compared to May 2019.
International May Schedule
United will fly 46% of its international schedule compared to its May 2019 schedule. As customers continue to travel to warm beach destinations, United will operate more flights to Mexico, the Caribbean, Central America and South America than the carrier flew in 2019, providing more options to travel to Central America than any other U.S. carrier. Across the Pacific, United will resume flights between Chicago and Tokyo's Haneda airport and increase service from Los Angeles to Sydney and Tokyo Narita. Across the Atlantic, United will resume service between Newark and Milan and Rome as well as between Chicago and Amsterdam, Munich and Tel Aviv.
New Summer Point-to-Point Frequencies
Service from Cleveland to: | ||
Destination | Frequency | |
Charleston, S.C. | 3x weekly | |
Hilton Head, S.C. | 3x weekly | |
Myrtle Beach, S.C. | 3x weekly | |
Pensacola, Fla. | 3x weekly | |
Portland, Maine | 3x weekly | |
Service from Cincinnati to: | ||
Charleston, S.C. | 3x weekly | |
Hilton Head, S.C. | 3x weekly | |
Pensacola, Fla. | 3x weekly | |
Portland, Maine | 3x weekly | |
Service from Columbus to: | ||
Charleston, S.C. | 3x weekly | |
Hilton Head, S.C. | 4x weekly | |
Portland, Maine | 4x weekly | |
Service from Indianapolis to: | ||
Charleston, S.C. | 4x weekly | |
Hilton Head, S.C. | 3x weekly | |
Portland, Maine | 4x weekly | |
Service from Milwaukee to: | ||
Charleston, S.C. | 2x weekly | |
Myrtle Beach, S.C. | 2x weekly | |
Pensacola, Fla. | 2x weekly | |
Portland, Maine | 2x weekly | |
Savannah, Ga. | 2x weekly | |
Service from St. Louis to: | ||
Hilton Head, S.C. | 3x weekly | |
Myrtle Beach, S.C. | 3x weekly | |
Service from Pittsburgh to: | ||
Charleston, S.C. | 3x weekly | |
Hilton Head, S.C. | 3x weekly | |
Pensacola, Fla. | 3x weekly | |
Portland, Maine | 3x weekly | |
Committed to Ensuring a Safe Journey
United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlus program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
Beginning March 11, United will start daily service to Breckenridge (QKB) and on April 1, will start four-times daily service to Fort Collins (FNL). The airline is teaming up with Landline – a premium ground transportation company – to offer connecting service to these popular destinations through Denver International Airport (DEN). Customers can book their travel on united.com starting today, selecting Breckenridge or Fort Collins as their destination.
"United's new service from Denver to Breckenridge and Fort Collins is just one example of how we are identifying opportunities to innovate our route network to get people where they want to go with ease and convenience," said Ankit Gupta, United's vice president of Domestic Network Planning and Scheduling. "Our customers tell us that national parks and ski destinations are important to them and we are proud to partner with Landline to offer a unique, seamless way to help them get there."
"With this new service, customers can start their day anywhere in United's global network and arrive slope side in Breckenridge minutes from the main gondola," said Landline's co-founder & CEO David Sunde. "At the same time, in Fort Collins we are creating global connectivity for the first time in 25 years. These new routes exemplify our mission to redefine the airport by making it mobile and multimodal. We could not be more thrilled to have United's commitment to innovation and passion for customer service backing this new endeavor."
Added Landline co-founder & President Ben Munson, "We have worked closely with the United team to create a stress-free connecting experience in Denver. Customers will love our spacious leather seating, onboard streaming entertainment and free Wi-Fi."
Customers connecting to Breckenridge or Fort Collins at Denver will transfer to the Landline service from an assigned gate in Concourse A, remaining within the secure airside area of the terminal. Checked-in baggage will be transferred directly from the plane to the bus. Customers originating in Breckenridge or Fort Collins will be required to pass through security on transit in DEN.
Click here for b-roll highlighting customer experience
Keeping customer wellbeing at the forefront, United and Landline will be implementing a wide variety of cleaning and safety measures as part of the new service, all of which have been reviewed by the Cleveland Clinic. These measures include:
- Back-to-front boarding;
- Reducing seat capacity on Landline's service to enable social distancing onboard;
- Requiring mandatory use of masks onboard for customers aged two and over;
- Electrostatically spraying ahead of each departure and sanitizing high touch areas;
- Implementing a UV disinfection air filtration system launched by OEM (Prevost) on all vehicles;
- Providing United CleanPlusSM sanitizing wipes to each customer; and
- Requiring customers to complete a 'Ready to Fly' checklist at check-in, acknowledging they don't have symptoms for COVID-19 and agreeing to follow our policies.
In addition, United MileagePlus ® members will be able to accrue Premier qualifying points (PQP) and redeemable miles on services to both destinations.
Denver remains one of United's fastest growing hubs with daily departures around 80% of 2019 levels – the highest among United hubs. United currently serves more than 160 destinations from Denver and operates more than 360 flights per day – the most comprehensive route network of any carrier in Denver – and offers more flights to more Colorado destinations than any other airline.
For more information on the new service, please visit united.com/landline.
United service to Breckenridge | |||||
From | To | Depart | Arrive | Frequency | Effective |
Denver | Breckenridge | 11:15 a.m. 11:15 a.m. 11:15 a.m. | 1:45 p.m. 2:00 p.m. 1:35 p.m. | Mon-Thurs, Fri Sun | March 11 |
Breckenridge | Denver | 2:15 p.m. 2:25 p.m. 1:55 p.m. | 4:45 p.m. 4:45 p.m. 4:45 p.m. | Mon-Thurs, Fri Sun | March 11 |
Schedule subject to change | |||||
United service to Fort Collins | |||||
From | To | Depart | Arrive | Frequency | Effective |
Denver | Fort Collins | 9:45 a.m. 1:25 p.m. 6:00 p.m. 7:25 p.m. | 11:00 a.m. 2:40 p.m. 7:15 p.m. 8:40 p.m. | 4x daily | April 1 |
Fort Collins | Denver | 7:30 a.m. 9:10 a.m. 11:20 a.m. 5:15 p.m. | 8:45 a.m. 10:25 a.m. 12:35 p.m. 6:30 p.m. | 4x daily | April 1 |
Schedule subject to change | |||||
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
About Landline
Landline is building the future of travel by seamlessly connecting air and ground transportation networks, bringing the airport right to your front door. By integrating with Landline's platform, airlines can access new markets and create custom designed check-in experiences for their customers by offering one-click, one-price multimodal itineraries. Follow Landline on Twitter (@ridelandline).
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"Laysha and her credentials are the right addition to our already strong board of directors at a pivotal moment for our company," said United CEO Scott Kirby. "United will benefit from Laysha's insight on a wide range of topics that will be essential to our success as we recover from the impact of COVID-19, including her expertise in the areas of community and stakeholder engagement, corporate responsibility and diversity, equity and inclusion."
"When we began the search for a new board member, we were focused on finding a leader with both strong business acumen and a unique perspective that will help United capitalize on our strengths as we emerge from the COVID-19 crisis," said Oscar Munoz, Executive Chairman of United Airlines. "I'm eager for Laysha to get started because I know she will add value right away as we evaluate the strategic opportunities for United Airlines and its incredibly bright future."
"At a pivotal time for the airline industry, I look forward to joining the UAL board and helping the company fulfill its purpose of connecting people and uniting the world," said Ward.
In addition to her executive role at Target Corporation, Ward serves on the Aspen Institute Latinos and Society Advisory Board, the Stanford Center for Longevity Advisory Council, and is a member of the Executive Leadership Council, the Economic Clubs of New York and Chicago, Alpha Kappa Alpha Sorority, and The Links. Ward also serves on the board of directors of Denny's Corporation, as well as the boards of Greater MSP, the Minnesota Orchestra, and the Northside Achievement Zone.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"We are thrilled to offer travelers a convenient, non-stop option between Boston and London with this addition to our global network," said Patrick Quayle, United's vice president of International Network and Alliances. "We will continue to monitor the demand recovery and travel restrictions as we finalize a start date for this service later in 2021."
Tickets will be available for purchase on united.com and the United app in the coming weeks.
United has provided service to London Heathrow for nearly 30 years and over the course of the pandemic has maintained continuous service between the U.S. and London. Looking ahead, Boston will be United's 19th daily flight between the United States and London Heathrow.
Boston – London Schedule | ||||||
From | To | Depart | Arrive | Frequency | Aircraft | |
Boston | London | 10:00 p.m. | 9:35 a.m.+1 | Daily | 767-300ER | |
London | Boston | 5:00 p.m. | 7:30 p.m. | Daily | 767-300ER | |
Schedule subject to change | ||||||
United's Polaris product is a premium travel experience that prioritizes relaxation and comfort with features that include everything from custom, luxury bedding from Saks Fifth Avenue and restaurant-quality, multi-course inflight dining to premium amenity kits and full flat-bed seats with direct aisle access. Along with its 46 Polaris Business Class seats, the aircraft also features 22 United Premium Plus seats, 43 United Economy Plus seats and 56 United Economy seats.
Committed to Ensuring a Safe Journey
United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlus program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com