United Airlines Reports Fourth-Quarter and Full-Year 2017 Performance
"I am incredibly proud of how our employees delivered in 2017, achieving our best-ever operational performance. Reliability is an important pillar in our continued focus on further improving the customer experience," said Oscar Munoz, chief executive officer of United Airlines. "Looking ahead, we are committed to improving profitability over the long-term by building on the strong foundation we have laid over the past two years. Everyone at United is excited to enter 2018 with a clear set of priorities and a renewed sense of purpose around unlocking the full potential of United Airlines."
Fourth-Quarter and Full-Year Revenue
For the fourth quarter of 2017, revenue was $9.4 billion, an increase of 4.3 percent year-over-year. Fourth-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was up 0.2 percent compared to the fourth quarter of 2016. Cargo revenue was $304 million in the fourth quarter of 2017, an increase of 21.6 percent year-over-year primarily due to higher international freight volume and yields. For the full year of 2017, total revenue was $37.7 billion, an increase of 3.2 percent year-over-year.
"Everything we do at United is underpinned by a commitment to deliver top tier operational reliability," said Scott Kirby, president of United Airlines. "Thanks to the drive and dedication of our employees, we have significantly raised the bar in this area, delivering a record-setting operational performance in 2017. Looking ahead, our focus will be on continuing to improve customer service and expanding United's network to offer customers more choice."
Fourth-Quarter and Full-Year Costs
Total operating expense was $8.7 billion in the fourth quarter, up 8.2 percent year-over-year. Consolidated unit cost per available seat mile (CASM) increased 4.0 percent compared to the fourth quarter of 2016 due largely to higher fuel and labor expense. Fourth-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 1.5 percent year-over-year, driven mainly by higher labor expense. For the full year, consolidated CASM increased 2.8 percent compared to full-year 2016 due largely to higher fuel and labor expense. Excluding special charges, third-party business expenses, fuel and profit sharing, consolidated CASM increased 3.1 percent compared to the prior year primarily due to expenses resulting from labor agreements ratified in 2016.
"We are encouraged by our financial results in the fourth quarter which capped a year of strong earnings. Additionally, throughout the year we made significant investments in the business while continuing to return cash to our shareholders through $1.8 billion of share repurchases," said Andrew Levy, executive vice president and chief financial officer of United Airlines. "In 2018, we will continue to focus on cost control, invest strategically into the business and utilize our new $3 billion share repurchase authorization to return cash to our shareholders."
Capital Allocation
UAL generated $728 million in operating cash flow during the fourth quarter of 2017 and ended the quarter with $5.8 billion in unrestricted liquidity, including $2.0 billion of undrawn commitments under its revolving credit facility. UAL generated $3.4 billion in operating cash flow for the full year. The company continued to invest in its business through capital expenditures of $1.1 billion in the fourth quarter and a total of $4.0 billion for the full year. Adjusted capital expenditures, measured as capital expenditures including assets acquired through the issuance of debt and capital leases, airport construction financing, and excluding fully reimbursable projects, were $1.0 billion during the fourth quarter and $4.7 billion for the full year in 2017. The company contributed $419 million to its pension plans and made debt and capital lease principal payments of $1.0 billion during 2017.
For the 12 months ended Dec. 31, 2017, the company's pre-tax income was $3.0 billion and return on invested capital (ROIC) was 13.8 percent. In the fourth quarter, UAL purchased $553 million of its common shares at an average price of $59.61 per share. During 2017, UAL purchased $1.8 billion of its common shares at an average price of $66.30 per share. The company completed its July 2016 $2 billion share repurchase program and announced authorization for a new $3 billion share repurchase program, which represents approximately 14 percent of the company's market capitalization based on the closing stock price on Jan. 22, 2018.
UAL management will host an Investor Event at 4:30pm ET today to discuss fourth-quarter and full-year 2017 earnings, outline 2018 priorities, provide an update on United's network strategy and deliver a financial update. During this presentation, UAL will provide full-year 2018 guidance including earnings per share and establish long-term earnings targets. Please visit ir.united.com to access the first-quarter 2018 investor update, the webcast of the event and the company's presentation made available during the webcast, the entirety of which will be available on the website at the conclusion of the event.
Fourth-Quarter and Full-Year Highlights
Operations and Employees
- Achieved a record-setting year for operational reliability, including best on-time departure performance, fewest cancellations, and best baggage handling performance.
- The fourth quarter saw a record-breaking performance during the busy holiday travel season.
- In December, United was first place among competitors in mainline on-time departures, completion factor, and on-time arrivals.
- In November, United set company performance records during the busy Thanksgiving travel week, landing its best-ever Thanksgiving completion factor and twice breaking on-time performance records in the midst of the busiest travel days of the year.
- Employees earned incentive payments of approximately $30 million for achieving operations performance goals in the fourth quarter, marking a full year of earned bonuses totaling approximately $87 million.
- The company earned its seventh consecutive perfect 100 percent score on the Human Rights Campaign's Corporate Equality Index and a spot on the organization's list of "Best Places to Work for LGBT Equality."
- Recognized as a Top 100 Best Places to Work in the U.S. by the Glassdoor Employees' Choice Awards.
- Announced the appointment of Regional Presidents for California and New York/New Jersey, demonstrating our commitment to these communities and our hubs.
- In response to the catastrophic weather events Harvey, Irma and Maria, United and its employees came together to keep the operation moving and take part in relief efforts, delivering more than 1.7 million pounds of relief supplies to impacted areas, and together with customers and employees, raised and contributed more than $9 million to community assistance.
Network and Fleet
- Last year, announced 44 new domestic routes from the company's seven U.S. mainland hubs, and increased service on 11 routes to the Hawaiian Islands from Denver, Chicago, Los Angeles and San Francisco – offering more nonstop service to Hawaiian destinations than any other carrier.
- Announced 13 new international routes in 2017 including its newest route San Francisco to Papeete, Tahiti starting seasonally in October 2018.
- By increasing its nonstop service from six hub cities to nine ski destinations, United offers customers the most service to the most ski destinations across the U.S.
- During 2017, took delivery of 19 new Boeing aircraft, including twelve 777-300ER, three 787-9, four 737-800 and eight used Airbus aircraft including two A320 and six A319.
- Announced an agreement with Boeing to convert 100 current 737 MAX orders into 737 MAX 10 aircraft starting in late 2020.
- Announced an agreement with Airbus to modify its A350 order resulting in a conversion of the model type from the A350-1000 to the A350-900, an increase in the order size from 35 to 45 aircraft and a deferral of the first delivery to late 2022.
- Retired the company's iconic Boeing 747 fleet with a final farewell flight between San Francisco and Honolulu.
Customer Experience
- Took several actions to improve the overall customer experience – including providing more tools to employees to assist customers and increasing compensation for denied boarding.
- Rolled out system-wide new Customer Solutions Desk with a dedicated team to develop creative solutions to assist customers in reaching their final destinations when their travel plans don't go as expected.
- Decreased involuntary denied boardings by 92% since April, and in December only had 13 involuntary denied boardings.
- Upgraded the Houston and Newark terminal experience with the opening of OTG experience, opened new security lanes with automated security bins at Chicago and Newark, and opened the brand new upgraded Los Angeles United Club along with new Global Services lobbies in Houston, Newark and Los Angeles.
- Improved the customer experience at Houston George Bush Intercontinental Airport by offering customers shorter, more convenient connection times and better access to more destinations through "rebanking" of the hub. UAL will "rebank" Chicago O'Hare beginning in February of 2018.
- Unveiled new enhancements to United's award-winning mobile app including bag tracking feature, ability to change and cancel flights in the app, add MileagePlus and United Club cards to the Apple Wallet, and allow customers to access boarding passes for 19 other carriers.
- Became the first airline to give customers access to flight information and other amenities skills for Amazon Alexa, Google Assistant and Fitbit Ionic smartwatch.
- Continued to improve the mobile tools used by employees, including the first release of the "in the moment" care app, and new functionality in flight attendant tools to better serve customers.
- The company received the CIO 100 award, an acknowledged mark of enterprise excellence in business technology.
- Launched a new online portal, United Jetstream, in an effort to simplify the travel management process and give corporate and agency customers an intuitive suite of self-service tools.
About United
United Airlines and United Express operate approximately 4,500 flights a day to 338 airports across five continents. In 2017, United and United Express operated more than 1.6 million flights carrying more than 148 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, Newark/New York, San Francisco and Washington, D.C. United operates 744 mainline aircraft and the airline's United Express carriers operate 518 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 191 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the NYSE 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," "forecast," "guidance," "outlook," "goals" 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 comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, cost reduction initiatives and fleet replacement programs; costs associated with any modification or termination of our aircraft orders; our ability to utilize our net operating losses; our ability to attract and retain customers; potential reputational or other impact from adverse events in our operations; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic and political conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; 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); economic and political instability and other risks of doing business globally; our ability to cost-effectively hedge against increases in the price of aircraft fuel if we decide to do so; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; 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; the effects of any technology failures or cybersecurity breaches; disruptions to our regional network; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; the success of our investments in airlines in other parts of the world; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; the impact of any management changes; labor costs; 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; weather conditions; 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, 2016, 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-
| (In millions, except per share data) | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
% Increase/ (Decrease) |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|
| Operating revenue: Passenger: Mainline |
$6,582 | $6,295 | 4.6 | $26,552 | $25,414 | 4.5 |
| Operating revenue: Passenger: Regional | 1,498 | 1,466 | 2.2 | 5,852 | 6,043 | (3.2) |
| Operating revenue: Passenger: (B) Total passenger revenue | 8,080 | 7,761 | 4.1 | 32,404 | 31,457 | 3.0 |
| Operating revenue: Cargo | 304 | 250 | 21.6 | 1,035 | 876 | 18.2 |
| Operating revenue: Other operating revenue | 1,054 | 1,041 | 1.2 | 4,297 | 4,223 | 1.8 |
| Operating revenue:Other operating revenue: Total operating revenue | 9,438 | 9,052 | 4.3 | 37,736 | 36,556 | 3.2 |
| Operating expense: Salaries and related costs |
2,704 | 2,568 | 5.3 | 11,045 | 10,275 | 7.5 |
| Operating expense: Aircraft fuel(C) | 1,875 | 1,555 | 20.6 | 6,913 | 5,813 | 18.9 |
| Operating expense: Landing fees and other rent | 570 | 553 | 3.1 | 2,240 | 2,165 | 3.5 |
| Operating expense: Regional capacity purchase | 580 | 552 | 5.1 | 2,232 | 2,197 | 1.6 |
| Operating expense: Depreciation and amortization | 539 | 504 | 6.9 | 2,149 | 1,977 | 8.7 |
| Operating expense: Aircraft maintenance materials and outside repairs | 479 | 448 | 6.9 | 1,856 | 1,749 | 6.1 |
| Operating expense: Distribution expenses | 328 | 316 | 3.8 | 1,349 | 1,303 | 3.5 |
| Operating expense: Aircraft rent | 145 | 159 | (8.8) | 621 | 680 | (8.7) |
| Operating expense: Special charges (D) | 31 | (31) | NM | 176 | 638 | NM |
| Operating expense: Other operating expenses | 1,458 | 1,423 | 2.5 | 5,657 | 5,421 | 4.4 |
| Operating expense: Total operating expenses | 8,709 | 8,047 | 8.2 | 34,238 | 32,218 | 6.3 |
| Operating income: Operating income | 729 | 1,005 | (27.5) | 3,498 | 4,338 | (19.4) |
| Operating margin: | 7.7% | 11.1% | (3.4) pts. | 9.3% | 11.9% | (2.6) pts. |
| Operating margin, excluding special charges (A) (Non-GAAP) | 8.1% | 10.8% | (2.7) pts. | 9.7% | 13.6% | (3.9) pts. |
| Nonoperating income (expense): Interest expense |
(171) | (148) | 15.5 | (643) | (614) | 4.7 |
| Nonoperating income (expense): Interest capitalized | 20 | 24 | (16.7) | 84 | 72 | 16.7 |
| Nonoperating income (expense): Interest income | 16 | 11 | 45.5 | 57 | 42 | 35.7 |
| Nonoperating income (expense): Miscellaneous, net (D) | 6 | (8) | NM | 3 | (19) | NM |
| Nonoperating income (expense): Total nonoperating expense | (129) | (121) | 6.6 | (499) | (519) | (3.9) |
| Income before income taxes: Income before income taxes | 600 | 884 | (32.1) | 2,999 | 3,819 | (21.5) |
| Pre-tax margin:Pre-tax margin | 6.4% | 9.8% | (3.4) pts. | 7.9% | 10.4% | (2.5) pts. |
| Pre-tax margin: Pre-tax margin, excluding special charges and reflecting hedge adjustments (A) (Non-GAAP) | 6.7% | 9.5% | (2.8) pts. | 8.4% | 12.2% | (3.8) pts. |
| Income tax expense: Income tax expense (E) | 20 | 487 | (95.9) | 868 | 1,556 | (44.2) |
| Net income: Net income | $580 | $397 | 46.1 | $2,131 | $2,263 | (5.8) |
| Earnings per share: Earnings per share, diluted | $1.99 | $1.26 | 57.9 | $7.02 | $6.85 | 2.5 |
| Weighted average shares: Weighted average shares, diluted | 291.8 | 315.7 | (7.6) | 303.6 | 330.3 | (8.1) |
|
||||||
| Statistics: |
|
NM Not meaningful |
| Statistics: | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
% Increase/ (Decrease) |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|
| Mainline: Passengers (thousands) |
26,926 | 25,590 | 5.2 | 108,017 | 101,007 | 6.9 |
| Mainline:Revenue passenger miles (millions) | 47,192 | 45,608 | 3.5 | 193,444 | 186,181 | 3.9 |
| Mainline:Available seat miles (millions) | 57,866 | 55,440 | 4.4 | 234,576 | 224,692 | 4.4 |
| Mainline:Cargo ton miles (millions) | 910 | 790 | 15.2 | 3,316 | 2,805 | 18.2 |
| Mainline:Passenger revenue per available seat mile (cents) | 11.37 | 11.35 | 0.2 | 11.32 | 11.31 | 0.1 |
| Mainline:Average yield per revenue passenger mile (cents) | 13.95 | 13.80 | 1.1 | 13.73 | 13.65 | 0.6 |
| Mainline:Aircraft in fleet at end of period | 744 | 737 | 0.9 | 744 | 737 | 0.9 |
| Mainline:Average stage length (miles) | 1,775 | 1,804 | (1.6) | 1,806 | 1,859 | (2.9) |
| Mainline:Average daily utilization of each aircraft (hours: minutes) | 10:16 | 9:54 | 3.7 | 10:27 | 10:06 | 3.5 |
| Regional: Passengers (thousands) |
10,487 | 10,433 | 0.5 | 40,050 | 42,170 | (5.0) |
| Regional:Revenue passenger miles (millions) | 5,957 | 5,930 | 0.5 | 22,817 | 24,128 | (5.4) |
| Regional:Available seat miles (millions) | 7,162 | 7,078 | 1.2 | 27,810 | 28,898 | (3.8) |
| Regional:Passenger revenue per available seat mile (cents) | 20.92 | 20.71 | 1.0 | 21.04 | 20.91 | 0.6 |
| Regional:Average yield per revenue passenger mile (cents) | 25.15 | 24.72 | 1.7 | 25.65 | 25.05 | 2.4 |
| Regional:Aircraft in fleet at end of period | 518 | 494 | 4.9 | 518 | 494 | 4.9 |
| Regional:Average stage length (miles) | 558 | 560 | (0.4) | 558 | 564 | (1.1) |
| Consolidated (Mainline and Regional): Passengers (thousands) |
37,413 | 36,023 | 3.9 | 148,067 | 143,177 | 3.4 |
| Consolidated (Mainline and Regional)Revenue passenger miles (millions) | 53,149 | 51,538 | 3.1 | 216,261 | 210,309 | 2.8 |
| Consolidated (Mainline and Regional)Available seat miles (millions) | 65,028 | 62,518 | 4.0 | 262,386 | 253,590 | 3.5 |
| Consolidated (Mainline and Regional)Passenger load factor | 81.7% | 82.4% | (0.7) pts. | 82.4% | 82.9% | (0.5) pts. |
| Consolidated (Mainline and Regional)Domestic | 85.2% | 85.2% | — | 85.2% | 85.4% | (0.2) pts. |
| Consolidated (Mainline and Regional)Internal | 77.2% | 78.9% | (1.7) pts. | 78.9% | 80.0% | (1.1) pts. |
| Consolidated (Mainline and Regional)Passenger revenue per available seat mile (cents) | 12.43 | 12.41 | 0.2 | 12.35 | 12.40 | (0.4) |
| Consolidated (Mainline and Regional)Total revenue per available seat mile (cents) | 14.51 | 14.48 | 0.2 | 14.38 | 14.42 | (0.3) |
| Consolidated (Mainline and Regional)Average yield per revenue passenger mile (cents) | 15.20 | 15.06 | 0.9 | 14.98 | 14.96 | 0.1 |
| Consolidated (Mainline and Regional)Aircraft in fleet at end of period | 1,262 | 1,231 | 2.5 | 1,262 | 1,231 | 2.5 |
| Consolidated (Mainline and Regional)Average stage length (miles) | 1,431 | 1,441 | (0.7) | 1,460 | 1,473 | (0.9) |
| Consolidated (Mainline and Regional)Average full-time equivalent employees (thousands) | 85.6 | 84.8 | 0.9 | 86.0 | 83.9 | 2.5 |
| Note:See Part II, Item 6 Selected Financial Data of the company's annual report on Form 10-K for the year ended December 31, 2016 for the definition of these statistics. | ||||||
| (In millions, except per share data) | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
% Increase/ (Decrease) |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|
| Operating income: Operating income | $729 | $1,005 | (27.5) | $3,498 | $4,338 | (19.4) |
| Operating margin:Operating margin: | 7.7% | 11.1% | (3.4) pts. | 9.3% | 11.9% | (2.6) pts. |
| Operating income, excluding special charges (Non-GAAP) | 760 | 974 | (22.0) | 3,674 | 4,976 | (26.2) |
| Operating margin, excluding special charges (Non-GAAP) | 8.1% | 10.8% | (2.7) pts. | 9.7% | 13.6% | (3.9) pts. |
| Adjusted EBITDA, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | $1,305 | $1,474 | (11.5) | $5,826 | $6,939 | (16.0) |
| Adjusted EBITDA margin, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | 13.8% | 16.3% | (2.5) pts. | 15.4% | 19.0% | (3.6) pts. |
| Pre-tax income | $600 | $884 | (32.1) | $2,999 | $3,819 | (21.5) |
| Pre-tax margin | 6.4% | 9.8% | (3.4) pts. | 7.9% | 10.4% | (2.5) pts. |
| Pre-tax income, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | 631 | 857 | (26.4) | 3,175 | 4,462 | (28.8) |
| Pre-tax margin, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | 6.7% | 9.5% | (2.8) pts. | 8.4% | 12.2% | (3.8) pts. |
| Net income: Net income | $580 | $397 | 46.1 | $2,131 | $2,263 | (5.8) |
| Net income: Net income, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | 408 | 562 | (27.4) | 2,052 | 2,857 | (28.2) |
| Diluted earnings per share: Diluted earnings per share | $1.99 | $1.26 | 57.9 | $7.02 | $6.85 | 2.5 |
| Diluted earnings per share: Diluted earnings per share, excluding special charges and reflecting hedge adjustments (a) (Non-GAAP) | 1.40 | 1.78 | (21.3) | 6.76 | 8.65 | (21.8) |
| Net cash provided by operating activities: Net cash provided by operating activities | $728 | $658 | 10.6 | $3,413 | $5,542 | (38.4) |
| Capital expenditures: Capital expenditures | $1,098 | $880 | 24.8 | $3,998 | $3,223 | 24.0 |
| Capital expenditures: Adjusted capital expenditures (Non-GAAP) | 1,046 | 1,078 | (3.0) | 4,729 | 3,347 | 41.3 |
| Free cash flow: Free cash flow, net of financings (Non-GAAP) | $(370) | $(222) | NM | $(585) | $2,319 | NM |
| Free cash flow: Free cash flow (Non-GAAP) | (318) | (420) | NM | (1,316) | 2,195 | NM |
| (a) Hedge adjustments include prior period gains (losses) on fuel derivative contracts settled in the current period. See note D for further information. | ||||||
| (b) The company recorded a special income tax benefit adjustment of $192 million in 2017 and a special income tax expense adjustment of $180 million in 2016. See note E for further information on the income tax adjustments. | ||||||
| (in millions) | Twelve Months Ended December 31, 2017 |
||||
|---|---|---|---|---|---|
| Return On Invested CapitalNet Operating Profit After Tax (NOPAT) Pre-tax income |
$2,999 | ||||
| Return On Invested CapitalSpecial charges (D): Severance and benefit costs |
116 | ||||
| Return On Invested Capital Impairment of assets |
25 | ||||
| Return On Invested Capital (Gains) losses on sale of assets and other special charges |
35 | ||||
Pre-tax income excluding special charges and reflecting hedge adjustments - Non-GAAP |
3,175 | ||||
add: Interest expense (net of income tax benefit) (a) |
639 | ||||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) |
302 | ||||
add: Net interest on pension (net of income tax benefit) (a) |
41 | ||||
less: Income taxes paid |
(20) | ||||
NOPAT - Non-GAAP |
$4,137 | ||||
| Return On Invested CapitalInvested Capital (five-quarter average) Total assets |
$41,753 | ||||
add: Capitalized aircraft operating leases (b) |
4,585 | ||||
less: Non-interest bearing liabilities (c) |
(16,394) | ||||
Average invested capital - Non-GAAP |
$29,944 | ||||
Return On Invested Capital - Non-GAAP |
13.8% | ||||
|
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|
UNITED CONTINENTAL HOLDINGS, INC. |
|
(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 operating income (loss) excluding special charges, income (loss) before income taxes excluding special charges and reflecting hedge adjustments, net income (loss) excluding special charges and reflecting hedge adjustments, net earnings (loss) per share excluding special charges and reflecting hedge adjustments, and CASM, as adjusted, among others. 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 non-recurring charges 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, fuel sales and non-air mileage redemptions, 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 recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. In addition, the company believes that adjusting for prior period gains and losses on fuel derivative contracts settled in the current period is useful because the adjustments allow investors to better understand the cash impact of settled fuel derivative contracts in a given period. Pursuant to SEC Regulation G, UAL has included the following reconciliations of reported Non-GAAP financial measures to comparable financial measures reported on a GAAP basis. |
| Statistics: | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
% Increase/ (Decrease) |
Nine Months Ended December 31, 2017 |
Nine Months Ended December 31, 2016 |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|
| CASM Mainline Operations (cents) Cost per available seat mile (CASM) |
12.90 | 12.43 | 3.8 | 12.59 | 12.22 | 3.0 |
| Cost per available seat mile (CASM)Special charges (D) | 0.06 | (0.06) | NM | 0.07 | 0.29 | NM |
| Cost per available seat mile (CASM)Third-party business expenses | 0.12 | 0.13 | (7.7) | 0.12 | 0.11 | 9.1 |
| Cost per available seat mile (CASM)Fuel expense | 2.68 | 2.33 | 15.0 | 2.46 | 2.16 | 13.9 |
| CASM Mainline OperationsCASM, excluding special charges, third-party business expenses and fuel | 10.04 | 10.03 | 0.1 | 9.94 | 9.66 | 2.9 |
| CASM Mainline OperationsProfit sharing per available seat mile | 0.08 | 0.22 | (63.6) | 0.15 | 0.28 | (46.4) |
| CASM Mainline OperationsCASM, excluding special charges, third-party business expenses, fuel, and profit sharing | 9.96 | 9.81 | 1.5 | 9.79 | 9.38 | 4.4 |
| CASM Consolidated Operations (cents)Cost per available seat mile (CASM) | 13.39 | 12.87 | 4.0 | 13.05 | 12.70 | 2.8 |
| CASM Mainline Operations (cents)Special charges (D) | 0.04 | (0.05) | NM | 0.07 | 0.25 | NM |
| CASM Mainline Operations (cents)Third-party business expenses | 0.12 | 0.11 | 9.1 | 0.10 | 0.10 | — |
| CASM Mainline Operations (cents) Fuel expense | 2.88 | 2.49 | 15.7 | 2.64 | 2.29 | 15.3 |
| CASM Mainline Operations (cents) CASM, excluding special charges, third-party business expenses and fuel | 10.35 | 10.32 | 0.3 | 10.24 | 10.06 | 1.8 |
| CASM Mainline Operations (cents) Profit sharing per available seat mile | 0.07 | 0.19 | (63.2) | 0.13 | 0.25 | (48.0) |
| CASM Mainline Operations (cents) CASM, excluding special charges, third-party business expenses, fuel, and profit sharing | 10.28 | 10.13 | 1.5 | 10.11 | 9.81 | 3.1 |
| (In millions) | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
$ Increase/ (Decrease) |
% Increase/ (Decrease) |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
$ Increase/ (Decrease) |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|---|---|
| Operating expenses | $8,709 | $8,047 | $662 | 8.2 | $34,238 | $32,218 | $2,020 | 6.3 |
| Operating expensesSpecial charges (D) | 31 | (31) | 62 | NM | 176 | 638 | (462) | NM |
| Operating expenses, excluding special charges Operating expenses, excluding special charges | 8,678 | 8,078 | 600 | 7.4 | 34,062 | 31,580 | 2,482 | 7.9 |
| Operating expenses, excluding special chargesThird-party business expenses | 72 | 69 | 3 | 4.3 | 277 | 257 | 20 | 7.8 |
| Operating expenses, excluding special chargesFuel expense | 1,875 | 1,555 | 320 | 20.6 | 6,913 | 5,813 | 1,100 | 18.9 |
| Operating expensesProfit sharing, including taxes | 45 | 122 | (77) | (63.1) | 349 | 628 | (279) | (44.4) |
| Operating expensesOperating expenses, excluding fuel, profit sharing, special charges and third-party business expenses | $6,686 | $6,332 | $354 | 5.6 | $26,523 | $24,882 | $1,641 | 6.6 |
| Operating income | $729 | $1,005 | $(276) | (27.5) | $3,498 | $4,338 | $(840) | (19.4) |
| Operating incomeLess: Special charges (D) | 31 | (31) | 62 | NM | 176 | 638 | (462) | NM |
| Operating incomeOperating income, excluding special charges | $760 | $974 | $(214) | (22.0) | $3,674 | $4,976 | $(1,302) | (26.2) |
| Operating incomeIncome before income taxes | $600 | $884 | $(284) | (32.1) | $2,999 | $3,819 | $(820) | (21.5) |
| Operating incomeSpecial charges and hedge adjustments before income taxes (D) | 31 | (27) | 58 | NM | 176 | 643 | (467) | NM |
| Operating incomeIncome before income taxes and excluding special items | $631 | $857 | $(226) | (26.4) | $3,175 | $4,462 | $(1,287) | (28.8) |
| Operating incomeNet income | $580 | $397 | $183 | 46.1 | $2,131 | $2,263 | $(132) | (5.8) |
| Operating incomeSpecial charges and hedge adjustments, net of tax (D) | (172) | 165 | (337) | NM | (79) | 594 | (673) | NM |
| Operating incomeNet income, excluding special charges and reflecting hedge | $408 | $562 | $(154) | (27.4) | $2,052 | $2,857 | $(805) | (28.2) |
| Diluted earnings per shareDiluted earnings per share | $1.99 | $1.26 | $0.73 | 57.9 | $7.02 | $6.85 | $0.17 | 2.5 |
| Diluted earnings per shareSpecial charges and hedge adjustments | 0.11 | (0.09) | 0.20 | NM | 0.58 | 1.95 | (1.37) | NM |
| Diluted earnings per shareTax effect related to special charges and hedge adjustments | (0.70) | 0.61 | (1.31) | NM | (0.84) | (0.15) | (0.69) | NM |
| Diluted earnings per shareDiluted earnings per share, excluding special items | $1.40 | $1.78 | $(0.38) | (21.3) | $6.76 | $8.65 | $(1.89) | (21.8) |
|
UAL provides financial metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA), that we believe provide useful supplemental information for management and investors by measuring profit and profit as a percentage of total operating revenues. Adjusted EBITDA is EBITDA excluding special charges that are non-recurring and that management believes are not indicative of UAL's ongoing performance. Adjusted EBITDA also includes hedge adjustments to reflect the cash impact of fuel derivative contracts settled in the current period. |
||||||||||||||||
| EBITDA (In millions) |
Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net income: Net income |
$580 | $397 | $2,131 | $2,263 | ||||||||||||
| Net income Adjusted for:Depreciation and amortization | 539 | 504 | 2,149 | 1,977 | ||||||||||||
| Net income Adjusted for:Interest expense | 171 | 148 | 643 | 614 | ||||||||||||
| Net income Adjusted for:Interest capitalized | (20) | (24) | (84) | (72) | ||||||||||||
| Net income Adjusted for:Interest income | (16) | (11) | (57) | (42) | ||||||||||||
| Net income Adjusted for:Income tax expense(E) | 20 | 487 | 868 | 1,556 | ||||||||||||
| Net income Adjusted for:Special charges and hedge adjustments before income taxes (D) | 31 | (27) | 176 | 643 | ||||||||||||
| Adjusted EBITDA, excluding special charges and reflecting hedge adjustments - Non-GAAPAdjusted EBITDA, excluding special charges and reflecting hedge adjustments - Non-GAAP | $1,305 | $1,474 | $5,826 | $6,939 | ||||||||||||
|
UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt and capital leases, airport construction financing and excluding fully reimbursable projects is useful to investors in order to appropriately reflect the non-reimbursable funds 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. |
||||||||||||||||
| Capital Expenditures (In millions) |
Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
||||||||||||
| Capital expenditures:Capital expenditures | $1,098 | $880 | $3,998 | $3,223 | ||||||||||||
| Capital expenditures:Property and equipment acquired through the issuance of debt and capital leases | 17 | 271 | 935 | 386 | ||||||||||||
| Capital expenditures:Airport construction financing | 1 | 23 | 42 | 91 | ||||||||||||
| Capital expenditures:Fully reimbursable projects | (70) | (96) | (246) | (353) | ||||||||||||
| Capital expenditures:Adjusted capital expenditures – Non-GAAP | $1,046 | $1,078 | $4,729 | $3,347 | ||||||||||||
| Free Cash Flow (In millions) |
||||||||||||||||
| Free Cash Flow:Net cash provided by operating activities | $728 | $658 | $3,413 | $5,542 | ||||||||||||
| Free Cash Flow:Less capital expenditures | 1,098 | 880 | 3,998 | 3,223 | ||||||||||||
| Free Cash Flow:Free cash flow, net of financings - Non-GAAP | $(370) | $(222) | $(585) | $2,319 | ||||||||||||
| Free Cash Flow:Net cash provided by operating activities | $728 | $658 | $3,413 | $5,542 | ||||||||||||
| Free Cash Flow:Less adjusted capital expenditures – Non-GAAP | 1,046 | 1,078 | 4,729 | 3,347 | ||||||||||||
| Free Cash Flow:Free cash flow - Non-GAAP | $(318) | $(420) | $(1,316) | $2,195 | ||||||||||||
| Notes (Unaudited): | 4Q 2017 Passenger Revenue (millions) |
Passenger Revenue vs. 4Q 2016 |
PRASM vs. 4Q 2016 |
Yield vs. 4Q 2016 |
Available Seat Miles vs. 4Q 2016 |
|---|---|---|---|---|---|
| Mainline:Mainline | $3,626 | 7.3% | 0.3% | 0.1% | 7.1% |
| Regional:Regional | 1,453 | 2.7% | 1.0% | 1.9% | 1.7% |
| Domestic:Domestic | 5,079 | 6.0% | (0.1%) | 0.0% | 6.0% |
| Atlantic:Atlantic | 1,312 | 5.3% | 1.3% | 1.5% | 4.0% |
| Pacific:Pacific | 986 | (4.3%) | (2.9%) | 0.6% | (1.4%) |
| Latin America:Latin America | 703 | 1.6% | (0.6%) | 2.6% | 2.3% |
| International:International | 3,001 | 1.1% | (0.4%) | 1.9% | 1.4% |
| Consolidated:Consolidated | 8,080 | 4.1% | 0.2% | 0.9% | 4.0% |
| Mainline:Mainline | $6,582 | 4.6% | 0.2% | 1.1% | 4.4% |
| Regional:Regional | 1,498 | 2.2% | 1.0% | 1.7% | 1.2% |
| Consolidated:Consolidated | 8,080 |
| (In millions, except per gallon) | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
% Increase/ (Decrease) |
Nine Months Ended December 31, 2017 |
Nine Months Ended December 31, 2016 |
% Increase/ (Decrease) |
|---|---|---|---|---|---|---|
| Mainline fuel expense excluding hedge impacts Mainline fuel expense excluding hedge impacts | $1,551 | $1,270 | 22.1 | $5,770 | $4,640 | 24.4 |
| Hedge losses reported in fuel expense (a) | — | (20) | NM | (2) | (217) | NM |
| Total mainline fuel expenseTotal mainline fuel expense | 1,551 | 1,290 | 20.2 | 5,772 | 4,857 | 18.8 |
| Regional fuel expense Regional fuel expense | 324 | 265 | 22.3 | 1,141 | 956 | 19.4 |
| Consolidated fuel expenseConsolidated fuel expense | $1,875 | $1,555 | 20.6 | $6,913 | $5,813 | 18.9 |
| Mainline fuel consumption (gallons)Mainline fuel consumption (gallons) | 820 | 804 | 2.0 | 3,357 | 3,261 | 2.9 |
| Mainline average aircraft fuel price per gallonMainline average aircraft fuel price per gallon | $1.89 | $1.60 | 18.1 | $1.72 | $1.49 | 15.4 |
| Mainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expenseMainline average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense | $1.89 | $1.58 | 19.6 | $1.72 | $1.42 | 21.1 |
| Regional fuel consumption (gallons)Regional fuel consumption (gallons) | 160 | 158 | 1.3 | 621 | 643 | (3.4) |
| Regional average aircraft fuel price per gallonRegional average aircraft fuel price per gallon | $2.03 | $1.68 | 20.8 | $1.84 | $1.49 | 23.5 |
| Consolidated fuel consumption (gallons)Consolidated fuel consumption (gallons) | 980 | 962 | 1.9 | 3,978 | 3,904 | 1.9 |
| Consolidated average aircraft fuel price per gallonConsolidated average aircraft fuel price per gallon | $1.91 | $1.62 | 17.9 | $1.74 | $1.49 | 16.8 |
| Consolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expenseConsolidated average aircraft fuel price per gallon excluding hedge losses recorded in fuel expense | $1.91 | $1.60 | 19.4 | $1.74 | $1.43 | 21.7 |
|
||||||
|
(a) UAL allocates 100 percent of losses from settled hedges that were designated for hedge accounting to mainline fuel expense. |
| (In millions) | Three Months Ended December 31, 2017 |
Three Months Ended December 31, 2016 |
Year Ended December 31, 2017 |
Year Ended December 31, 2016 |
|---|---|---|---|---|
| Operating: Severance and benefit costs |
$15 | $10 | $116 | $37 |
| Operating:Impairment of assets | 10 | — | 25 | 412 |
| Operating:Labor agreement costs | — | (60) | — | 64 |
| Operating:Cleveland airport lease restructuring | — | — | — | 74 |
| Operating:(Gains) losses on sale of assets and other special charges | 6 | 19 | 35 | 51 |
| Operating:Subtotal | 31 | (31) | 176 | 638 |
| Other nonoperating (gains) losses:Other nonoperating (gains) losses | — | — | — | (1) |
| Total special charges:Total special charges | 31 | (31) | 176 | 637 |
| Income tax benefit related to special charges:Income tax benefit related to special charges | (11) | 12 | (63) | (229) |
| Total special charges, net of income taxes:Total special charges, net of income taxes | 20 | (19) | 113 | 408 |
| Income tax adjustments (E) | (192) | 180 | (192) | 180 |
| Hedge adjustments: prior period gains on fuel derivative contracts settled in the current period:Hedge adjustments: prior period gains on fuel derivative contracts settled in the current period | — | 4 | — | 6 |
| Total special charges and hedge adjustments, net of income taxes:Total special charges and hedge adjustments, net of income taxes | $(172) | $165 | $(79) | $594 |
|
Special charges, hedge adjustments and income tax adjustments |
|
Severance and benefit costs: During the three months and year ended December 31, 2017, the company recorded $10 million ($6 million net of taxes) and $83 million ($53 million net of taxes), respectively, of severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters (the "IBT"). In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. Also during the three months and year ended December 31, 2017, the company recorded $5 million ($3 million net of taxes) and $33 million ($21 million net of taxes), respectively, of severance primarily related to its management reorganization initiative. |
|
During the three months and year ended December 31, 2016, the company recorded $10 million ($6 million net of taxes) and $37 million ($24 million net of taxes), respectively, of severance and benefit costs related to a voluntary early-out program for the company's flight attendants and other severance agreements. |
|
Impairment of assets: In the fourth quarter of 2017, the company recorded a $10 million ($6 million net of taxes) impairment charge related to obsolete spare parts inventory. During 2017, United recorded a $15 million ($10 million net of taxes) intangible asset impairment charge related to a maintenance service agreement. |
|
In April 2016, the Federal Aviation Administration ("FAA") announced that, effective October 30, 2016, it would designate Newark Liberty International Airport ("Newark") as a Level 2 schedule-facilitated airport under the International Air Transport Association Worldwide Slot Guidelines. The designation was associated with an updated demand and capacity analysis of Newark by the FAA. In the second quarter of 2016, the company determined that the FAA's action impaired the entire value of its Newark slots because the slots are no longer the mechanism that governs take-off and landing rights. Accordingly, the company recorded a $412 million special charge ($264 million net of taxes) to write off the intangible asset. |
|
Labor agreement costs and related items: In 2016, the fleet service, passenger service, storekeeper and other employees represented by the International Association of Machinists and Aerospace Workers (IAM) ratified seven new contracts with the company which extended the contracts through 2021. Also in 2016, the technicians and related employees represented by the International Brotherhood of Teamsters (IBT) ratified a six-year joint collective bargaining agreement which extended the contract through 2022. During 2016, the company recorded $171 million ($110 million net of taxes) of special charges primarily for payments in conjunction with the IAM and IBT agreements described above. As part of the ratified contract with the IBT, the company amended some of its technicians and related employees' postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $60 million gain ($38 million net of taxes) for accelerated recognition of a prior service credit in one of the plans. Also, as part of the ratified contract with the Association of Flight Attendants, the company amended two of its flight attendant postretirement medical plans. The amendments triggered curtailment accounting, resulting in the recognition of a one-time $47 million gain ($30 million net of taxes) for accelerated recognition of a prior service credit. |
|
Cleveland airport lease restructuring: During 2016, the City of Cleveland agreed to amend the company's lease, which runs through 2029, associated with certain excess airport terminal space (principally Terminal D) and related facilities at Hopkins International Airport. The company recorded an accrual for remaining payments under the lease for facilities that the company no longer uses and will continue to incur costs under the lease without economic benefit to the company. This liability was measured and recorded at its fair value when the company ceased its right to use such facilities leased to it pursuant to the lease. The company recorded a special charge of $74 million ($47 million net of taxes) related to the amended lease. |
|
Hedge adjustments: Prior to 2017, the company used certain combinations of derivative contracts that were economic hedges but did not qualify for hedge accounting under U.S. generally accepted accounting principles. As with derivatives that qualified for hedge accounting, the economic hedges and individual contracts were part of the company's program to mitigate the adverse financial impact of potential increases in the price of fuel. The company recorded changes in the fair value of the various contracts that were not designated for hedge accounting to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations. During the three months and year ended December 31, 2016, for fuel derivative contracts that settled in the three months and year ended December 31, 2016, the company recorded mark-to-market gains of $4 million and $6 million, respectively, in prior periods. |
|
(E) Effective tax rate: The company's effective tax rate for the three months and year ended December 31, 2017 was 3.5% and 29.0%, respectively. The company's effective tax rate for the three months and year ended December 31, 2016 was 55.1% and 40.7%, respectively. The rate for both 2017 periods was impacted by a one-time, $192 million benefit due to the passage of the Tax Cuts and Jobs Act in the fourth quarter of 2017. The rate for both 2016 periods was impacted by a special tax expense of $180 million. In 2016, the company recorded approximately $180 million of deferred income tax expense adjustments in AOCI, which related to losses on fuel hedges designated for hedge accounting. Accounting rules required the adjustments to remain in AOCI as long as the company had fuel derivatives designated for cash flow hedge accounting. In 2016, we settled all of our fuel hedges and have not entered into any new fuel derivative contracts for hedge accounting. Accordingly, the company reclassified the $180 million to income tax expense in 2016. |
|
The effective tax rates for the 2017 and 2016 periods represented a blend of federal, state and foreign taxes and the impact of certain nondeductible items. The effective tax rate for the three months and year ended December 31, 2017 reflects the impact of a change in the 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, March 27, 2020 /PRNewswire/ -- Oscar Munoz, Chief Executive Officer, and J. Scott Kirby, President, today issued the following message to nearly 100,000 United Airlines (NASDAQ: UAL) employees:
To our United Family:
Today, Congress passed an emergency COVID-19 response bill that includes significant financial backing for the airline industry. This decisive, bipartisan action by our elected leaders in Washington, D.C. is good news for our country, our economy, our health care system, our industry, and importantly our family here at United Airlines.
The impact of COVID-19 on demand for air travel has been dramatic and unprecedented – far worse than even the aftermath of 9/11. This federal assistance buys us time to adapt to this new environment and assess how long it will take for our economy to begin to recover. But, what this means for you right now is that *United will not conduct involuntary furloughs or pay cuts in the U.S. before September 30th*.
Everyone had a role in this effort and, as you always do, you came through for us. While Oscar, Scott, our union leaders and our government affairs and regulatory teams worked around-the-clock, on behalf of all of you, to educate leaders in the federal government about the unique and dramatic impact the COVID-19 outbreak has had on United Airlines, our United Airlines family sprang into action.
Your participation in the last few days was critical. More than 30,000 of you sent more than 100,000 messages to your representatives in Congress and another 5,000 signed a petition for international employees and retirees. Our union leaders also activated their organizations to amplify the message for the good of our company. The speed at which everyone stepped up and acted was remarkable and shows that when we come together, we can accomplish incredible things for our company. Thank you for what you did to help in getting this legislation passed.
We also wanted to pause and thank you for performing at your best to take care of our customers and each other through all of this uncertainty. Our operations teams have literally been on the front lines of this crisis, working directly with our customers and helping them navigate the ever-changing series of schedule adjustments, government mandates and restrictions on places prohibiting travel.
Specifically, our pilots, flight attendants, airport agents, ramp service, technicians and catering teams are showing up at airports all across the country, every day, helping customers and one another, and looking for opportunities to do the right thing. But they're not the only ones who continue to go the extra mile in these trying times – it should be no surprise that our contact center employees have been particularly tested, handling nearly one million calls in the last two weeks alone. Through it all, they are doing what they do best: being there for our customers and remaining upbeat and positive.
Across the board, we've never been prouder of this team and what we stand for but unfortunately our work is just beginning. As we look forward, the lessons of past disruptions like 9/11 tell us that we can't pretend that we are out of the woods. Things are very different today than they were just four weeks ago.
The global economy has taken a big hit, and we don't expect travel demand to snap back for some time. Our April schedule is already cut by more than 60% and we expect our load factors to fall into the teens or single digits even with 60% less capacity. We are currently planning to make even deeper cuts in May and June.
And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year. We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority. That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.
Amid these questions about United's future and this disruption to our daily routines, we feel it's more important than ever to connect with you. Social distancing makes that challenging, of course, but our team has found a way for us to use technology to host a "virtual town hall" next Thursday, April 2nd, where we can talk more about these challenges and answer your questions. We'll soon have more details on timing and how you can participate. We hope you will.
We remain in the business of serving people even when there are fewer people traveling. And even in this time of uncertainty, some things are constant: we still have the best airline professionals in the world; we still put our customers at the center of everything we do; we still operate in the best hubs; and we still have a deep-seated culture of caring for one another.
So when travel demand returns - and it will return - we will bounce back and be ready to accelerate towards our goal of becoming the best airline in the history of aviation.
Thank you for all you do.
Oscar and Scott
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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 in this release are forward-looking and thus reflect the Company's 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 the Company's 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," "remains," "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 the Company on the date of this release. The Company undertakes 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.
The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the Company's ability to execute its strategic operating plan, including its 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 its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's 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 the Company's fleet; disruptions to the Company's regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's 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 the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the existing outbreak of coronavirus and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; 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; the Company's ability to maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872-825-8640, media.relations@united.com
Flights continuing from now through May schedule
- Newark/New York – Frankfurt (Flights 960/961)
- Newark/New York – London (Flights 16/17)
- Newark/New York – Tel Aviv (Flights 90/91)
- Houston – Sao Paulo (Flights 62/63)
- San Francisco – Tokyo-Narita (Flights 837/838)
- San Francisco – Sydney (Flights 863/870)
In addition to the above, United has reinstated the following flights to help displaced customers who still need to get home.
Flights through 3/27 outbound
- Newark/New York – Amsterdam (Flights 70/71)
- Newark/New York – Munich (Flights 30/31)
- Newark/New York – Brussels (Flights 999/998)
- Washington-Dulles – London (Flights 918/919)
- San Francisco – Frankfurt (Flights 58/59)
- Newark/New York – Sao Paulo (Flights 149/148)
Flights through 3/29 outbound
- San Francisco – Seoul (Flights 893/892)
In destinations where government actions have barred us from flying, we are actively looking for ways to bring customers who have been impacted by travel restrictions back to the United States. This includes working with the U.S. State Department and the local governments to gain permission to operate service.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO, March 20, 2020 /PRNewswire/ -- United continues to aggressively manage the impact of the coronavirus (COVID-19) outbreak on our employees, our customers and our business. Due to government mandates or restrictions in place prohibiting travel, the airline is reducing its international schedule by 95% for April. The revised international schedule will be viewable on united.com on Sunday, March 22:
Atlantic
- United is drawing down its remaining trans-Atlantic operation. The final westbound departures will take place on March 25, with the exception of its Cape Town-New York/Newark service which will operate as previously scheduled with the last flight departing Cape Town on March 28.
Pacific
- United will reduce its remaining trans-Pacific operation starting March 22, with final eastbound departures on March 25, with the exception of service between San Francisco and Tahiti and San Francisco and Sydney which will have final returns to San Francisco on March 28.
- United will maintain some Guam flights as well as a portion of its Island Hopper service.
Latin America
- United will reduce its Mexico operation over the next five days. After March 24, it will only maintain a small number of daytime flights to certain destinations in Mexico.
- United will draw down its remaining Central and South America operations. The last southbound departures will take place March 24.
Canada
- United will temporarily suspend all flying to Canada effective April 1.
In destinations where government actions have barred us from flying, we are actively looking for ways to bring customers who have been impacted by travel restrictions back to the United States. This includes working with the U.S. State Department and the local governments to gain permission to operate service.
SOURCE United Airlines
For further information: media.relations@united.com
To our United family:
We hope you and your loved ones are well.
In these difficult and uncertain times, we want to continue to keep you updated about all the ways we are aggressively managing the impact of the coronavirus (COVID-19) on our company.
Since you last heard from Oscar and Scott on Sunday, companies around the world, especially in the travel industry, have announced painful steps they've been forced to take to deal with this crisis. Marriott shuttered a number of properties around the world, furloughing tens of thousands of workers. MGM Resorts also closed facilities and will begin furloughs next week. Scandinavian Airlines announced temporary layoffs for 90% of its staff.
In Sunday's message, Oscar and Scott were very direct about just how dire this situation has become and what the company is doing to minimize the impact on you, your families and your paycheck.
Importantly, today's message to all of you is co-signed by many of our labor union partners – and includes a specific request for actions you can take to help.
In recent years, and together with our labor leaders, United has made significant investments in our people and created tens of thousands of high-quality jobs. And we are together now, doing everything possible to protect those jobs.
Earlier this week, we jointly signed a letter to leaders in the federal government calling for bipartisan action by the Administration and the United States Congress to support you, the men and women of United Airlines. Oscar and our partners in organized labor have been front-and-center in Washington D.C. for the past month, leading the charge to educate our representatives about the severe impact COVID-19 has had on our business and all of you.
While many in Washington, D.C. now realize the gravity of this situation, time is running out. The airline has made a number of drastic cuts over the last several weeks to reduce our costs: including slashing capital spending, freezing hiring, cutting payments to contractors and vendors, eliminating all discretionary spending and even cutting our corporate officers' salary by 50% while reducing Oscar and Scott's salary to zero.
However, as travel demand continues to plummet, even more cost-cutting measures will be required soon to keep our company afloat. To be specific, if Congress doesn't act on sufficient government support by the end of March, our company will begin to take the necessary steps to reduce our payroll in line with the 60% schedule reduction we announced for April. May's schedule is likely to be cut even further.
To that end, it's time for our representatives to hear from all of you.
Your voice matters - whether you work on the ramp, greet customers in the lobby, take calls in our contact centers, prepare food for passengers, service our planes or fly on our aircraft - and our representatives in government need to understand what's at stake if they do not act.
Please consider sending a letter or email to your representatives in Washington, D.C. urging them to take quick, bipartisan action to protect airline jobs.
There's one other important way for you to pitch in and help. Thousands of United employees have applied for a company offered leave of absence - which is an important way to help the company reduce costs. As we continue to reduce our schedule, we will continue to offer additional COLA opportunities so if you have not already applied, please consider doing so.
None of us caused COVID-19. But we continue to be among the most severely affected by the economic impact of this crisis, due to the outbreak's breathtaking effect on travel demand.
The hard work you do every day matters. And the role you play in the U.S. economy matters. It's time for the people of United Airlines to put a face on what will happen if the federal government does not act.
Thank you for all you are doing for our customers and each other during this extraordinary time.
In unity,
Oscar and Scott
Captain David Bourne
Director Airline Division
International Brotherhood of Teamsters
Ken Diaz
MEC President, United Airlines Master Executive Council
Association of Flight Attendants - CWA
Sito Pantoja
General Vice President
International Association of Machinists and Aerospace Workers
Craig Symons
President
Professional Airline Flight Control Association
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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 in this release are forward-looking and thus reflect the Company's 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 the Company's 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," "remains," "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 the Company on the date of this release. The Company undertakes 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.
The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the Company's ability to execute its strategic operating plan, including its 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 its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's 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 the Company's fleet; disruptions to the Company's regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's 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 the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the existing outbreak of coronavirus and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior, such as the existing threat of COVID-19; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; 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; the Company's ability to maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872-825-8640, media.relations@united.com
International
Across the Atlantic, Pacific and Latin America, United will operate approximately 45 daily flights in April.
|
United's International Schedule for April 2020 |
||
|
|
||
|
Atlantic |
||
|
New York/Newark |
Brussels Frankfurt London-Heathrow Mumbai New Delhi Tel Aviv |
Daily Daily Daily Daily Daily Daily |
|
Washington Dulles |
London-Heathrow |
Daily
|
Pacific | ||
New York/Newark | Tokyo-Narita | 4x / weekly |
San Francisco | Melbourne Osaka Seoul Singapore Sydney Tokyo-Haneda Tokyo-Narita | 3x / weekly 5x / weekly 3x / weekly Daily Daily Daily Daily |
Latin America | ||
Mexico | ||
Houston | Cancún Guadalajara Leon Los Cabos Mazatlán México City Monterrey Puerto Vallarta | Daily Daily Daily Daily Saturdays Daily Daily Daily |
Los Angeles | Los Cabos | Daily |
San Francisco | Los Cabos Puerto Vallarta Cancun | Daily Daily Daily |
Chicago | Cancun | Daily |
New York / Newark | Cancun | Daily |
Caribbean | ||
New York / Newark | Antigua Nassau Providenciales Punta Cana Santo Domingo San Juan St. Lucia St. Thomas | Saturdays Daily Daily Daily Daily Daily Saturdays Daily |
Central and South America | ||
Houston | Belize City Sao Paulo | Daily Daily |
Domestic
While United does not plan to suspend service to any single U.S. city now - with the exception of Mammoth Lakes, CA - the airline is closely monitoring demand as well as changes in state and local curfews and government restrictions across the U.S. and will adjust its schedule accordingly throughout the month.
United's Domestic Suspensions | ||
| ||
Hub | Route Suspensions | Remaining Service |
Denver | Arcata/Eureka | LAX, SFO |
New York/Newark | Akron/Canton | ORD |
Hilton Head | IAD, ORD | |
Honolulu | DEN, IAH, LAX, ORD, SFO | |
Omaha | DEN, IAH, ORD | |
Portland, Oregon | DEN, IAH, ORD, SFO | |
Seattle | DEN, IAD, IAH, LAX, ORD, SFO | |
Sacramento | DEN, IAH, LAX, ORD, SFO | |
Knoxville | DEN, IAH, IAD, ORD | |
Fayetteville | DEN, IAH, ORD | |
Salt Lake City | DEN, IAH, LAX, ORD, SFO | |
Washington Dulles | Grand Rapids | DEN, EWR, ORD |
Honolulu | DEN, IAH, LAX, ORD, SFO | |
Portland, Oregon | DEN, IAH, ORD, SFO | |
Sacramento | DEN, IAH, LAX, ORD, SFO | |
Houston | Hartford | DEN, IAD, ORD |
Boise | DEN, LAX, ORD, SFO | |
Grand Rapids | DEN, EWR, ORD | |
Lexington | IAD, ORD | |
Ontario, California | DEN, SFO | |
Palm Springs | DEN, LAX, SFO | |
San Jose, California | DEN | |
Akron/Canton | ORD | |
Reno | DEN, LAX, SFO | |
Edmonton, Canada | DEN | |
Vancouver, Canada | DEN, LAX, ORD, SFO | |
Los Angeles | Austin | DEN, EWR, IAD, IAH, ORD, SFO |
Baltimore | DEN, IAH, ORD | |
Kahului (Maui) | DEN, SFO | |
Kona | DEN, SFO | |
Lihue | DEN, SFO | |
Madison | DEN, EWR, IAD, ORD | |
San Antonio | DEN, EWR, IAD, IAH, ORD | |
St. George | DEN | |
Mammoth, California | Seasonal Suspension | |
Chicago | Bismarck | DEN |
Kahului (Maui) | DEN, SFO | |
Chicago | Bozeman | DEN, LAX, SFO |
Fresno | DEN, LAX, SFO | |
Spokane | DEN, SFO | |
Palm Springs | DEN, LAX, SFO | |
Reno | DEN, LAX, SFO | |
San Jose, California | DEN | |
Ottawa, Canada | IAD | |
Eugene | DEN, LAX, SFO | |
Wilmington | IAD | |
Jackson, Mississippi | IAH | |
San Francisco | Nashville | DEN, EWR, IAD, IAH, ORD |
Baltimore | DEN, IAH, ORD | |
Columbus, Ohio | DEN, EWR, IAD, IAH, ORD | |
Detroit | DEN, EWR, IAD, IAH, ORD | |
Indianapolis | DEN, EWR, IAD, IAH, ORD | |
Kansas City | DEN, EWR, IAD, IAH, ORD | |
Madison | DEN, EWR, IAD, ORD | |
Omaha | DEN, IAH, ORD | |
Philadelphia | DEN, IAD, IAH, ORD | |
Pittsburgh | DEN, EWR, IAD, IAH, ORD | |
Raleigh/Durham | DEN, EWR, IAD, IAH, ORD | |
San Antonio | DEN, EWR, IAD, IAH, ORD | |
St. Louis | DEN, EWR, IAD, IAH, ORD | |
Tampa | DEN, EWR, IAD, IAH, ORD | |
Toronto, Canada | DEN, EWR, IAD, IAH, ORD | |
Mammoth Lakes, California | Seasonal Suspension | |
Fort Lauderdale | DEN, EWR, IAD, IAH, ORD | |
New Orleans | DEN, EWR, IAD, IAH, ORD | |
Fayetteville | DEN, IAH, ORD | |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
To our United family:
In the message we sent to you last Thursday, we promised to stay in close touch about the impact of the coronavirus on our business and the steps that we're taking to aggressively manage it.
In just the last few days, the impact of the coronavirus has really hit home and disrupted the daily routines of hundreds of millions of people in the United States and around the world. State and local governments continue to close schools, encourage people to avoid bars and restaurants and cancel more large gatherings. This weekend, President Trump announced new travel restrictions for the United Kingdom and Ireland. Watching this unfold, you won't be surprised to hear that the impact of the coronavirus on our business has also gotten quite a bit worse.
As the leaders of the 100,000 people of United, we feel a deep obligation to each of you to run our company in a way that protects you -- and your ability to provide for your family at home. We also owe it to you, especially in a crisis, to be open with you about important decisions we face.
We want to share some numbers to help you understand just how bad the impact of the coronavirus has been on our business. As you know, March is typically our busiest month of the year. But this year, in just the first two weeks of March, we have welcomed more than one million fewer customers on board our aircraft than the same period last year. We're also currently projecting that revenue in March will be $1.5 billion lower than last March.
The bad news is that it's getting worse. We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.
Since late January, we have taken steps to aggressively manage this crisis and to keep you informed every step of the way - sharply reducing schedules, imposing a hiring freeze, introducing a voluntary leave program, dramatically reducing discretionary spending, cutting CEO base salary 100% and deferring a salary increase. Our competitors have started to follow suit: on Friday, Delta announced a 40% schedule reduction and a 100% salary cut for their CEO and over the weekend, American said it will reduce its international capacity by 75%.
We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck. But, based on the severity of the situation, that no longer appears realistic.
This weekend, we began conversations with our union leadership about how to reduce our payroll expense in a way that minimizes what we know will be painful for all of us. Earlier this evening, we convened a call with Corporate Officers to update them on the severity of the situation and let them know we will be cutting their salary by 50%.
Let us be clear: these are not the only next steps. Tomorrow, we will announce an approximately 50% cut in capacity for April and May. We also now expect these deep cuts to extend into the summer travel period. Even with those cuts, we're expecting load factors to drop into the 20-30% range -- and that's if things don't get worse.
Together, we're facing an unprecedented challenge. When medical experts say that our health and safety depends on people staying home and practicing social distancing, it's nearly impossible to run a business whose shared purpose is "Connecting people. Uniting the world."
We both hate to have to write a note like this, but we have made a commitment to be honest and transparent with you. While it's now clear that this is going to painful for our people, we promise that you are at the very top of our priority list. We are working night and day on support and ideas to keep as much pay as we possibly can flowing to you -- even if gets worse from here and demand temporarily plummets to zero.
This crisis is moving really quickly. It's having an impact on nearly every aspect of our lives, and it may feel to you like everything is changing. But, the most important thing about our business hasn't changed: you've shown us that even in these difficult times, we're still United and focused on caring for our customers and each other together. That's always been the essential ingredient to our success. It's what will get us through this crisis in the near term, and it's also what will allow us to fulfill United's incredible potential in the long-term.
We'll continue to communicate frequently and transparently in the days ahead.
With resolve,
Oscar and Scott
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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 in this release are forward-looking and thus reflect the Company's 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 the Company's 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," "remains," "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 the Company on the date of this release. The Company undertakes 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.
The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the Company's ability to execute its strategic operating plan, including its 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 its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's 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 the Company's fleet; disruptions to the Company's regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's 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 the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the existing outbreak of coronavirus and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior, such as the existing threat of COVID-19; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; 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; the Company's ability to maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
Every customer. Every flight. Every day.
United continues to strengthen 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 MileagePlus award miles will never expire
- Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
- Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
- Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
- Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
- Gave Economy customers a choice of complimentary snacks on domestic flights
- Made DIRECTV free for every customer on more than 200 aircraft
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
NEW ORLEANS, Feb. 28, 2020 /PRNewswire/ -- United Airlines will unveil the newest addition to its network of United Club locations with the opening of a brand-new 6,000-square-foot United Club at Louis Armstrong New Orleans International Airport. Located in the airport's brand-new terminal, near gate C7, the club offers customers a wide variety of amenities to work, relax and refresh during their travels. The new United Club opens starting Saturday, Feb. 29.
"Our expansion into New Orleans showcases United's commitment to transforming the customer experience across all touch points and complements the beautiful new terminal at Louis Armstrong New Orleans International Airport," said Alexander Dorow, United's managing director of premium services. "It's a fresh location for us to begin our evolution to become more local and reach new audiences."
Menu highlights in the new club location include inventive twists on regional favorites including muffuletta and pimento cheese sliders, gumbo and rice, Cajun pepper dip and Creole egg salad. The drink selection includes local staples like Abita Amber beer and Southern Comfort, along with a variety of beer, wine and cocktail options.
The New Orleans United Club features 95 seats, with a variety of seating areas for productivity, privacy and dining. For customers looking to stay connected, the club offers complimentary high-speed Wi-Fi and many power outlets and USB ports.
The New Orleans United Club location is the first United Club to open this year and is part of United's ongoing commitment to renovate and introduce new United Club locations throughout its network. The company is also working on brand-new United Club locations at Newark Liberty International Airport – to open in 2021 – and Phoenix Sky Harbor International Airport, which will open later this year. Construction will also begin on a brand-new and larger United Club location at Daniel K. Inouye International Airport in Honolulu. Additionally, this summer, United will unveil its United Polaris lounge at Washington Dulles International Airport – the sixth location in the United Polaris lounge network. For more information on United Club locations, visit united.com/unitedclub.
Every customer. Every flight. Every day.
United continues to strengthen 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 MileagePlus award miles will never expire
- Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
- Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
- Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
- Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
- Gave Economy customers a choice of complimentary snacks on domestic flights
- Made DIRECTV free for every customer on more than 200 aircraft
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872.825.8640, media.relations@united.com
The agreement, which extends into 2029, builds on one of the industry's strongest co-brand card portfolios with seven consecutive quarters of double-digit year-over-year growth and a long history of providing cardmembers with extra benefits that reward people traveling United's expansive global route network.
"United Airlines, Chase and Visa have a longstanding partnership that delivers top benefits to customers to help them get the most out of their travel, while returning robust value to our respective businesses," said Luc Bondar, United's vice president of Loyalty. "This extension strengthens ties with our partners at Chase and Visa and is expected to drive growth across our industry-leading credit card portfolio, enhance our cardholders travel experience and provide more opportunities to easily earn and redeem miles to travel United's industry leading route network."
"We're pleased to extend our decades-long relationship with United and Visa in order to deliver even more value to our joint cardmembers," said Ed Olebe, president of Chase Co-Brand Cards. "The program has deep cardmember loyalty and fantastic momentum, with exciting new offerings and experiences for our customers to look forward to in 2020 and beyond."
The extended agreement will build on one of the world's strongest co-brand card portfolios, with premium customers in premium markets. The portfolio of cards includes the new United Business Card, United Explorer Card, United Club Card, United Club Business Card and United TravelBank Card. Customers traveling with eligible MileagePlus credit cards have access to benefits that make traveling United's leading route network better than ever including perks such as free checked bags, priority boarding and increased mileage earn on every day spending.
"Visa is proud to extend our partnership with United and Chase to bring best-in-class card benefits and travel experiences to cardholders," said Kirk Stuart, senior vice president, head of North America Merchant at Visa. "We look forward to building on the program's success to deliver more value, enhance cardholder engagement and create rewarding payment experiences."
Earlier this year, United and Chase launched a new Business card and celebrated with the highest ever bonuses for all United co-brand cards for the first time ever. In 2018, United and Chase launched the award-winning United Explorer card, with even more best-in-class benefits including an up to $100 Global Entry or TSA Pre-Check statement credit and 2X earn on hotel stays and restaurant purchases.
United also continues to invest in making MileagePlus the top loyalty program for its members. Last year the airline announced that MileagePlus miles never expire and announced a partnership with CLEAR to offer free and discounted memberships to MileagePlus members. United also introduced PlusPoints, a new industry-leading upgrade benefit for Premier members.
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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".
About Chase
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with assets of $2.7 trillion and operations worldwide. Chase serves nearly half of America's households with a broad range of financial services, including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans and payment processing. Customers can choose how and where they want to bank: More than 4,900 branches in 38 states and the District of Columbia, 16,000 ATMs, mobile, online and by phone. For more information, go to chase.com.
About Visa
Visa Inc. (NYSE: V) is the world's leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company's relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device, for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
The United and Vistara agreement offers customers a simplified experience when planning travel between dozens of destinations throughout India including Ahmedabad, Bengaluru, Chandigarh, Goa, Hyderabad, Jodhpur, Srinagar, Thiruvananthapuram, Udaipur, Varanasi and more.
"We are excited to offer our shared customers the option of building a seamless itinerary when planning travel to cities beyond New Delhi and Mumbai," said John Gebo, United's senior vice president of Alliances. "United has connected customers to India for more than 15 years with daily flights between New York/Newark and Delhi and Mumbai and our new service between San Francisco and New Delhi. Our relationship with Vistara opens up even more options for customers to travel between our East and West Coast hubs and multiple destinations throughout India."
Vistara's Chief Commercial Officer, Vinod Kannan said, "Vistara today connects the length and breadth of India, and we are delighted to offer the country's only five-star flying experience to customers of United on their Indian domestic flights. The U.S. continues to be one of the biggest source markets for foreign travelers into India and the region, and this partnership allows us to provide a seamless travel offering for customers to and from the U.S."
As India's highest-rated airline on Skytrax and TripAdvisor, winner of several 'Best Airline' awards, and the only 5-star rated airline in India (Apex 2020), Vistara has consistently raised the bar for operations and service delivery in the Indian aviation industry in a short span of five years. The airline is poised to grow its fleet by adding more than 50 narrow-body and wide-body aircraft, including Airbus A321neo and Boeing B787-9, in the next three years.
Every customer. Every flight. Every day.
United continues to strengthen 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 MileagePlus award miles will never expire
- Committed $40 million toward a new investment initiative focused on accelerating the development of sustainable aviation fuels and other decarbonization technologies
- Established Miles on a Mission, a first-of-its-kind crowdsourcing platform which gives customers a simple way to donate miles to non-profit organizations and charities in need of air travel
- Launched ConnectionSaver, a digital tool dedicated to improving the experience for customers with connecting flights
- Instituted PlusPoints, new upgrade benefits for MileagePlus Premier members
- Gave Economy customers a choice of complimentary snacks on domestic flights
- Made DIRECTV free for every customer on more than 200 aircraft
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 and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 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 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 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".
About Vistara (TATA SIA Airlines Limited)
TATA SIA Airlines Limited, known by the brand name Vistara, is a joint venture between Tata Sons Limited and Singapore Airlines Limited (SIA) with Tata Sons holding the majority stake of 51% in the company and SIA holding the remaining 49%. Vistara brings together Tata's and SIA's legendary hospitality and renowned service excellence to offer the finest full-service flying experience in India. Vistara commenced its commercial operations on January 9, 2015 with an aim to set new standards in the aviation industry in India and it today connects destinations across India and abroad. The airline now connects 35 destinations, operates over 200 flights a day with a fleet of 32 Airbus A320 and 7 Boeing 737-800NG aircraft, and has flown more than 20 million customers since starting operations.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com