United Airlines Reports Third-Quarter 2018 Performance
"Our stand-out third-quarter performance, which produced double-digit revenue growth as we more than offset the steep increase in fuel costs, is proof that United is building momentum," said Oscar Munoz, chief executive officer of United Airlines. "Our growth plan has been essential to our success, and we're more confident than ever we'll achieve the ambitious adjusted earnings per share1 target of $11 to $13 we laid out for 2020."
- UAL reported third-quarter adjusted net income of $837 million, adjusted diluted earnings per share of $3.06, adjusted pre-tax earnings of $1.1 billion and adjusted pre-tax margin of 9.7 percent.2 Third-quarter adjusted diluted earnings per share increased 36 percent year-over-year.
- Consolidated passenger revenue per available seat mile (PRASM) increased 6.1 percent year-over-year, above the high end of the company's third-quarter 2018 guidance range of up 4 percent to 6 percent.
- Consolidated unit cost per available seat mile (CASM) increased 6.4 percent year-over-year.
- Consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, decreased 0.4 percent year-over-year.
- UAL's mid-continent hubs in Chicago, Denver and Houston had year-over-year capacity growth of 9.7 percent in the third quarter and led the system in unit revenue growth performance in the quarter.
- UAL now expects full-year 2018 adjusted diluted earnings per share3 to be $8.00 to $8.75. The company currently expects to recapture approximately 90 percent of the estimated $2.5 billion year-over year increase in full-year 2018 fuel expense.
For more information on UAL's fourth-quarter and full-year 2018 guidance, please visit ir.united.com for the company's investor update.
Third-Quarter Highlights
Customer Experience
- Introduced a new boarding process at 1,000 gates around the world, designed to reduce customers' stress by spending less time waiting in line and providing them with improved boarding information.
- United Airlines MileagePlus loyalty program voted Favorite Frequent-Flyer Program in Trazee Awards.
- The United Polaris lounge at Chicago O'Hare International Airport voted Best Business Class Lounge in the United States by the 2018 World Airline Awards from Skytrax.
- Debuted United Corporate Preferred, the industry's newest corporate travel program designed to offer top travel benefits to the company's most loyal business customers.
- Launched the redesigned united.com homepage, featuring a more personalized digital experience for each customer.
Operations and Employees
- In July, UAL had its best consolidated D :00 month of July in history and its highest consolidated load factor month ever.
- Carried the most-ever customers to their destinations during the summer.
- Consolidated completion factor at UAL's hubs in Houston, Chicago, Los Angeles and Washington Dulles reached third-quarter record levels.
- Achieved the top score of 100 percent on the 2018 Disability Equality Index (DEI), a prominent benchmarking metric that rates U.S. companies on their disability inclusion policies and practices, also earning UAL a place on DEI's 2018 "Best Places to Work" list.
Network and Fleet
- Announced several new international routes, including year-round nonstop service between Washington Dulles and Tel Aviv, Israel, making UAL the only airline to offer nonstop service between the two cities; daily, year-round service between San Francisco and Amsterdam; and nonstop seasonal summer service between Newark/New York and Naples, Italy, and Newark/New York and Prague, all subject to government approval.
- Added 100 flights and more than 10,000 seats daily to 12 of the country's top ski destinations during the 2018/2019 ski season, more than 8,500 seats from U.S. hubs and eight other U.S. cities connecting more customers than ever to Las Vegas for CES 2019, and more than 204,000 total seats from September through November to popular college football towns including Madison, Wisconsin, and Columbia, South Carolina.
- Announced orders to purchase 25 new Embraer E-175 and 13 new Boeing 787-9 aircraft.
- Took delivery of one Boeing 737 MAX 9 aircraft and two used Boeing 767-300 aircraft.
Community and Environment
- Committed to reducing the company's greenhouse gas emissions by 50 percent by 2050, the only U.S. airline to commit to emissions reductions, further strengthening UAL's ambition to be the world's most environmentally conscious airline.
- Launched a Crowdrise fundraising campaign to support those affected by Hurricane Florence, Typhoon Mangkhut, flooding in Western Japan, wildfires in California and other disasters.
- As part of a previously announced $8 million commitment, announced a $2 million grant to be split between the Community FoodBank of New Jersey, Urban League of Essex County, and Year Up New York, as well as a $1 million grant to First Place for Youth in Los Angeles, and a $1 million grant to the San Francisco Immigrant Legal and Education Network.
Earnings Call
UAL will hold a conference call to discuss third-quarter 2018 financial results and its financial and operational outlook for the fourth quarter and full year of 2018 on Wednesday, October 17, at 9:30 a.m. Central Time /10:30 a.m. Eastern Time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
About United
United Airlines and United Express operate approximately 4,700 flights a day to 356 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 760 mainline aircraft and the airline's United Express carriers operate 546 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
1Excludes special charges and the mark-to-market impact of equity investments, the nature of which are not determinable at this time. Accordingly, UAL is not providing earnings guidance on a GAAP basis.
2Excludes special charges, the mark-to-market impact of equity investments and imputed interest on certain capitalized leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.
3Excludes special charges and the mark-to-market impact of equity investments, the nature of which are not determinable at this time, and imputed interest on certain capitalized leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals" 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: 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, including political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; competitive pressures on pricing and on demand; demand for transportation in the markets in which we operate; our capacity decisions and the capacity decisions of our competitors; the effects of any hostilities, act of war or terrorist attack; the effects of any technology failures or cybersecurity breaches; the impact of regulatory, investigative and legal proceedings and legal compliance risks; disruptions to our regional network; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; potential reputational or other impact from adverse events in our operations, the operations of our regional carriers or the operations of our code share partners; our ability to attract and retain customers; 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; the impact of any management changes; 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 any fuel or currency hedging programs; 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; an outbreak of a disease that affects travel demand or travel behavior; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); industry consolidation or changes in airline alliances; our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; the costs and availability of aviation and other insurance; weather conditions; our ability to utilize our net operating losses to offset future taxable income; the impact of changes in tax laws; the success of our investments in airlines in other parts of the world; 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, 2017, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
-tables attached-
On January 1, 2018, United Continental Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2014-09 (Topic 606), Revenue from Contracts with Customers, and Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. As such, certain previously reported 2017 figures are adjusted in this report on a basis consistent with the new standards. See the Current Report on Form 8-K filed by UAL with the Securities and Exchange Commission on March 1, 2018 for additional information.
UNITED CONTINENTAL HOLDINGS, INC | ||||||||||||||||||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) (A) | ||||||||||||||||||||||||
Three Months Ended | % | Nine Months Ended | % | |||||||||||||||||||||
(In millions, except per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||
Passenger (B) | $ | 10,120 | $ | 9,069 | 11.6 | $ | 28,150 | $ | 25,873 | 8.8 | ||||||||||||||
Cargo | 296 | 279 | 6.1 | 903 | 790 | 14.3 | ||||||||||||||||||
Other operating revenue | 587 | 551 | 6.5 | 1,759 | 1,670 | 5.3 | ||||||||||||||||||
Total operating revenue | 11,003 | 9,899 | 11.2 | 30,812 | 28,333 | 8.7 | ||||||||||||||||||
Operating expense: | ||||||||||||||||||||||||
Salaries and related costs | 2,930 | 2,785 | 5.2 | 8,534 | 8,263 | 3.3 | ||||||||||||||||||
Aircraft fuel | 2,572 | 1,809 | 42.2 | 6,927 | 5,038 | 37.5 | ||||||||||||||||||
Regional capacity purchase | 663 | 567 | 16.9 | 1,963 | 1,652 | 18.8 | ||||||||||||||||||
Landing fees and other rent | 596 | 585 | 1.9 | 1,757 | 1,670 | 5.2 | ||||||||||||||||||
Depreciation and amortization | 564 | 556 | 1.4 | 1,662 | 1,610 | 3.2 | ||||||||||||||||||
Aircraft maintenance materials and outside repairs | 455 | 451 | 0.9 | 1,333 | 1,377 | (3.2) | ||||||||||||||||||
Distribution expenses | 427 | 377 | 13.3 | 1,162 | 1,081 | 7.5 | ||||||||||||||||||
Aircraft rent | 109 | 145 | (24.8) | 355 | 476 | (25.4) | ||||||||||||||||||
Special charges (C) | 17 | 50 | NM | 186 | 145 | NM | ||||||||||||||||||
Other operating expenses | 1,467 | 1,436 | 2.2 | 4,293 | 4,126 | 4.0 | ||||||||||||||||||
Total operating expense | 9,800 | 8,761 | 11.9 | 28,172 | 25,438 | 10.7 | ||||||||||||||||||
Operating income | 1,203 | 1,138 | 5.7 | 2,640 | 2,895 | (8.8) | ||||||||||||||||||
Operating margin | 10.9 | % | 11.5 | % | (0.6) | pts. | 8.6 | % | 10.2 | % | (1.6) | pts. | ||||||||||||
Adjusted operating margin (Non-GAAP) | 11.1 | % | 12.0 | % | (0.9) | pts. | 9.2 | % | 10.7 | % | (1.5) | pts. | ||||||||||||
Nonoperating income (expense): | ||||||||||||||||||||||||
Interest expense | (187) | (169) | 10.7 | (540) | (498) | 8.4 | ||||||||||||||||||
Interest capitalized | 18 | 20 | (10.0) | 51 | 64 | (20.3) | ||||||||||||||||||
Interest income | 28 | 17 | 64.7 | 70 | 41 | 70.7 | ||||||||||||||||||
Miscellaneous, net (C) | (1) | (13) | (92.3) | (119) | (82) | 45.1 | ||||||||||||||||||
Total nonoperating expense | (142) | (145) | (2.1) | (538) | (475) | 13.3 | ||||||||||||||||||
Income before income taxes | 1,061 | 993 | 6.8 | 2,102 | 2,420 | (13.1) | ||||||||||||||||||
Pre-tax margin | 9.6 | % | 10.0 | % | (0.4) | pts. | 6.8 | % | 8.5 | % | (1.7) | pts. | ||||||||||||
Adjusted pre-tax margin (Non-GAAP) | 9.7 | % | 10.5 | % | (0.8) | pts. | 7.7 | % | 9.1 | % | (1.4) | pts. | ||||||||||||
Income tax expense (E) | 225 | 348 | (35.3) | 435 | 855 | (49.1) | ||||||||||||||||||
Net income | $ | 836 | $ | 645 | 29.6 | $ | 1,667 | $ | 1,565 | 6.5 | ||||||||||||||
Diluted earnings per share | $ | 3.06 | $ | 2.15 | 42.3 | $ | 5.99 | $ | 5.09 | 17.7 | ||||||||||||||
Diluted weighted average shares | 273.6 | 300.6 | (9.0) | 278.0 | 307.6 | (9.6) | ||||||||||||||||||
NM Not meaningful | ||||||||||||||||||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||||||||
STATISTICS | ||||||||||||||||||||||||
Three Months Ended | % Increase/ (Decrease) | Nine Months Ended | % Increase/ (Decrease) | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Mainline: | ||||||||||||||||||||||||
Passengers (thousands) | 31,157 | 29,182 | 6.8 | 85,348 | 81,091 | 5.2 | ||||||||||||||||||
Revenue passenger miles (millions) | 56,787 | 53,515 | 6.1 | 154,382 | 146,252 | 5.6 | ||||||||||||||||||
Available seat miles (millions) | 65,819 | 63,183 | 4.2 | 183,678 | 176,710 | 3.9 | ||||||||||||||||||
Cargo ton miles (millions) | 851 | 830 | 2.5 | 2,523 | 2,406 | 4.9 | ||||||||||||||||||
Passenger revenue per available seat mile (cents) | 12.62 | 11.93 | 5.8 | 12.50 | 12.03 | 3.9 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 14.62 | 14.09 | 3.8 | 14.88 | 14.53 | 2.4 | ||||||||||||||||||
Aircraft in fleet at end of period | 760 | 751 | 1.2 | 760 | 751 | 1.2 | ||||||||||||||||||
Average stage length (miles) | 1,807 | 1,825 | (1.0) | 1,814 | 1,817 | (0.2) | ||||||||||||||||||
Average daily utilization of each aircraft (hours: minutes) | 11:23 | 10:58 | 3.8 | 10:49 | 10:30 | 3.0 | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.29 | $ | 1.68 | 36.3 | $ | 2.21 | $ | 1.66 | 33.1 | ||||||||||||||
Fuel gallons consumed (millions) | 931 | 909 | 2.4 | 2,587 | 2,537 | 2.0 | ||||||||||||||||||
Regional: | ||||||||||||||||||||||||
Passengers (thousands) | 11,729 | 10,120 | 15.9 | 33,091 | 29,563 | 11.9 | ||||||||||||||||||
Revenue passenger miles (millions) | 6,606 | 5,630 | 17.3 | 18,805 | 16,860 | 11.5 | ||||||||||||||||||
Available seat miles (millions) | 7,862 | 6,900 | 13.9 | 22,682 | 20,648 | 9.9 | ||||||||||||||||||
Passenger revenue per available seat mile (cents) | 23.10 | 22.19 | 4.1 | 22.86 | 22.36 | 2.2 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 27.49 | 27.19 | 1.1 | 27.57 | 27.38 | 0.7 | ||||||||||||||||||
Aircraft in fleet at end of period | 546 | 489 | 11.7 | 546 | 489 | 11.7 | ||||||||||||||||||
Average stage length (miles) | 552 | 542 | 1.8 | 556 | 558 | (0.4) | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.43 | $ | 1.81 | 34.3 | $ | 2.34 | $ | 1.77 | 32.2 | ||||||||||||||
Fuel gallons consumed (millions) | 180 | 156 | 15.4 | 514 | 461 | 11.5 | ||||||||||||||||||
Consolidated (Mainline and Regional): | ||||||||||||||||||||||||
Passengers (thousands) | 42,886 | 39,302 | 9.1 | 118,439 | 110,654 | 7.0 | ||||||||||||||||||
Revenue passenger miles (millions) | 63,393 | 59,145 | 7.2 | 173,187 | 163,112 | 6.2 | ||||||||||||||||||
Available seat miles (millions) | 73,681 | 70,083 | 5.1 | 206,360 | 197,358 | 4.6 | ||||||||||||||||||
Passenger load factor: | ||||||||||||||||||||||||
Consolidated | 86.0 | % | 84.4 | % | 1.6 | pts. | 83.9 | % | 82.6 | % | 1.3 | pts. | ||||||||||||
Domestic | 86.7 | % | 85.3 | % | 1.4 | pts. | 85.7 | % | 85.2 | % | 0.5 | pts. | ||||||||||||
International | 85.2 | % | 83.3 | % | 1.9 | pts. | 81.6 | % | 79.5 | % | 2.1 | pts. | ||||||||||||
Passenger revenue per available seat mile (cents) | 13.73 | 12.94 | 6.1 | 13.64 | 13.11 | 4.0 | ||||||||||||||||||
Total revenue per available seat mile (cents) | 14.93 | 14.12 | 5.7 | 14.93 | 14.36 | 4.0 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 15.96 | 15.33 | 4.1 | 16.25 | 15.86 | 2.5 | ||||||||||||||||||
Aircraft in fleet at end of period | 1,306 | 1,240 | 5.3 | 1,306 | 1,240 | 5.3 | ||||||||||||||||||
Average stage length (miles) | 1,454 | 1,480 | (1.8) | 1,453 | 1,470 | (1.2) | ||||||||||||||||||
Average full-time equivalent employees (thousands) | 89.0 | 87.3 | 1.9 | 87.1 | 86.2 | 1.0 | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.32 | $ | 1.70 | 36.5 | $ | 2.23 | $ | 1.68 | 32.7 | ||||||||||||||
Fuel gallons consumed (millions) | 1,111 | 1,065 | 4.3 | 3,101 | 2,998 | 3.4 | ||||||||||||||||||
Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for definitions of these statistics. |
UNITED CONTINENTAL HOLDINGS, INC. | |||
RETURN ON INVESTED CAPITAL (ROIC) - Non-GAAP | |||
ROIC is a non-GAAP financial measure that UAL believes provides useful supplemental information for management and investors by measuring the effectiveness of the company's operations' use of invested capital to generate profits. | |||
(in millions) | Twelve Months Ended | ||
Net Operating Profit After Tax ("NOPAT") | |||
Pre-tax income | $ | 2,722 | |
Special charges and MTM losses on equity investments (C): | |||
Impairment of assets | 155 | ||
MTM losses on equity investments | 61 | ||
Severance and benefit costs | 49 | ||
(Gains) losses on sale of assets and other special charges | 13 | ||
Pre-tax income excluding special charges and MTM losses on equity investments (Non-GAAP) | 3,000 | ||
add: Interest expense (net of income tax benefit) (a) | 707 | ||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) | 243 | ||
add: Net interest on pension (net of income tax benefit) (a) | (3) | ||
less: Income taxes paid | (26) | ||
NOPAT (Non-GAAP) | $ | 3,921 | |
Average Invested Capital (five-quarter average) | |||
Total assets | $ | 43,697 | |
add: Capitalized aircraft operating leases (b) | 4,005 | ||
less: Non-interest bearing liabilities (c) | (17,095) | ||
Average invested capital (Non-GAAP) | $ | 30,607 | |
ROIC (Non-GAAP) | 12.8 | % | |
(a) | Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges. For the twelve months ended September 30, 2018, the effective cash tax rate was 0.9%. |
(b) | The purpose of this adjustment is to capitalize the impact of aircraft operating leases. The company uses a multiple of seven times its annual aircraft rent expense to estimate the potential capitalized value and related liability of its aircraft. This is a simplified method used by many rating agencies and financial analysts to assist with the impact of operating leases on financial measures like return on invested capital. |
(c) | Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities. |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION | ||||||||||||||||||
(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on equity investments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to capital leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense. | ||||||||||||||||||
CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. | ||||||||||||||||||
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below. | ||||||||||||||||||
Three Months Ended | % Increase/ (Decrease) | Nine Months Ended | % Increase/ (Decrease) | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
CASM Mainline Operations (cents) | ||||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 12.82 | 11.98 | 7.0 | 13.13 | 12.43 | 5.6 | ||||||||||||
Special charges (C) | 0.03 | 0.08 | NM | 0.10 | 0.08 | NM | ||||||||||||
Third-party business expenses | 0.04 | 0.05 | (20.0) | 0.04 | 0.06 | (33.3) | ||||||||||||
Fuel expense | 3.25 | 2.41 | 34.9 | 3.12 | 2.39 | 30.5 | ||||||||||||
Profit sharing, including taxes | 0.19 | 0.21 | (9.5) | 0.14 | 0.17 | (17.6) | ||||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.31 | 9.23 | 0.9 | 9.73 | 9.73 | — | ||||||||||||
CASM Consolidated Operations (cents) | ||||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 13.30 | 12.50 | 6.4 | 13.65 | 12.89 | 5.9 | ||||||||||||
Special charges (C) | 0.02 | 0.07 | NM | 0.09 | 0.08 | NM | ||||||||||||
Third-party business expenses | 0.04 | 0.04 | — | 0.04 | 0.05 | (20.0) | ||||||||||||
Fuel expense | 3.49 | 2.58 | 35.3 | 3.36 | 2.55 | 31.8 | ||||||||||||
Profit sharing, including taxes | 0.17 | 0.19 | (10.5) | 0.12 | 0.16 | (25.0) | ||||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.58 | 9.62 | (0.4) | 10.04 | 10.05 | (0.1) | ||||||||||||
NM Not Meaningful |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | ||||||||||||||||||||||||||||||
Three Months Ended | $ Increase/ (Decrease) | % Increase/ (Decrease) | Nine Months Ended | $ Increase/ (Decrease) | % Increase/ (Decrease) | |||||||||||||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Operating expenses (GAAP) | $ | 9,800 | $ | 8,761 | $ | 1,039 | 11.9 | $ | 28,172 | $ | 25,438 | $ | 2,734 | 10.7 | ||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
Operating expenses, excluding special charges | 9,783 | 8,711 | 1,072 | 12.3 | 27,986 | 25,293 | 2,693 | 10.6 | ||||||||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Third-party business expenses | 29 | 33 | (4) | (12.1) | 89 | 114 | (25) | (21.9) | ||||||||||||||||||||||
Fuel expense | 2,572 | 1,809 | 763 | 42.2 | 6,927 | 5,038 | 1,889 | 37.5 | ||||||||||||||||||||||
Profit sharing, including taxes | 127 | 130 | (3) | (2.3) | 252 | 304 | (52) | (17.1) | ||||||||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 7,055 | $ | 6,739 | $ | 316 | 4.7 | $ | 20,718 | $ | 19,837 | $ | 881 | 4.4 | ||||||||||||||||
Operating income (GAAP) | $ | 1,203 | $ | 1,138 | $ | 65 | 5.7 | $ | 2,640 | $ | 2,895 | $ | (255) | (8.8) | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 1,220 | $ | 1,188 | $ | 32 | 2.7 | $ | 2,826 | $ | 3,040 | $ | (214) | (7.0) | ||||||||||||||||
Pre-tax income (GAAP) | $ | 1,061 | $ | 993 | $ | 68 | 6.8 | $ | 2,102 | $ | 2,420 | $ | (318) | (13.1) | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (29) | — | (29) | NM | 61 | — | 61 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 13 | — | 13 | NM | 13 | — | 13 | NM | ||||||||||||||||||||||
Adjusted pre-tax income (Non-GAAP) | $ | 1,062 | $ | 1,043 | $ | 19 | 1.8 | $ | 2,362 | $ | 2,565 | $ | (203) | (7.9) | ||||||||||||||||
Net income (GAAP) | $ | 836 | $ | 645 | $ | 191 | 29.6 | $ | 1,667 | $ | 1,565 | $ | 102 | 6.5 | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (29) | — | (29) | NM | 61 | — | 61 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 13 | — | 13 | NM | 13 | — | 13 | NM | ||||||||||||||||||||||
Income tax expense (benefit) related to adjustments | — | (18) | 18 | NM | (58) | (52) | (6) | NM | ||||||||||||||||||||||
Adjusted net income (Non-GAAP) | $ | 837 | $ | 677 | $ | 160 | 23.6 | $ | 1,869 | $ | 1,658 | $ | 211 | 12.7 | ||||||||||||||||
Diluted earnings per share (GAAP) | $ | 3.06 | $ | 2.15 | $ | 0.91 | 42.3 | $ | 5.99 | $ | 5.09 | $ | 0.90 | 17.7 | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 0.06 | 0.16 | (0.10) | NM | 0.67 | 0.47 | 0.20 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (0.11) | — | (0.11) | NM | 0.22 | — | 0.22 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 0.05 | — | 0.05 | NM | 0.05 | — | 0.05 | NM | ||||||||||||||||||||||
Income tax expense (benefit) related to adjustments | — | (0.06) | 0.06 | NM | (0.21) | (0.17) | (0.04) | NM | ||||||||||||||||||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 3.06 | $ | 2.25 | $ | 0.81 | 36.0 | $ | 6.72 | $ | 5.39 | $ | 1.33 | 24.7 | ||||||||||||||||
NM Not Meaningful |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | ||||||||||||||||
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. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Capital Expenditures (in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Capital expenditures (GAAP) | $ | 858 | $ | 1,120 | $ | 2,592 | $ | 2,900 | ||||||||
Property and equipment acquired through the issuance of debt and capital leases | — | 11 | 139 | 918 | ||||||||||||
Airport construction financing | — | 9 | 12 | 41 | ||||||||||||
Fully reimbursable projects | (51) | (58) | (140) | (176) | ||||||||||||
Adjusted capital expenditures (Non-GAAP) | $ | 807 | $ | 1,082 | $ | 2,603 | $ | 3,683 | ||||||||
Free Cash Flow (in millions) | ||||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 905 | $ | 577 | $ | 5,080 | $ | 2,685 | ||||||||
Less capital expenditures | 858 | 1,120 | 2,592 | 2,900 | ||||||||||||
Free cash flow, net of financings (Non-GAAP) | $ | 47 | $ | (543) | $ | 2,488 | $ | (215) | ||||||||
Net cash provided by operating activities (GAAP) | $ | 905 | $ | 577 | $ | 5,080 | $ | 2,685 | ||||||||
Less adjusted capital expenditures (Non-GAAP) | 807 | 1,082 | 2,603 | 3,683 | ||||||||||||
Free cash flow (Non-GAAP) | $ | 98 | $ | (505) | $ | 2,477 | $ | (998) | ||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||
NOTES (UNAUDITED) | ||||||||||||
(B) Select passenger revenue information is as follows (in millions): | ||||||||||||
3Q 2018 Passenger Revenue (millions) | Passenger Revenue vs. 3Q 2017 | PRASM vs. 3Q 2017 | Yield vs. 3Q 2017 | Available Seat Miles vs. 3Q 2017 | ||||||||
Mainline | $ | 4,489 | 13.6% | 6.8% | 5.4% | 6.4% | ||||||
Regional | 1,764 | 18.3% | 4.1% | 0.8% | 13.7% | |||||||
Domestic | 6,253 | 14.9% | 6.7% | 5.0% | 7.6% | |||||||
Atlantic | 1,933 | 12.1% | 7.1% | 1.3% | 4.7% | |||||||
Pacific | 1,163 | 3.4% | 5.3% | 5.1% | (1.9%) | |||||||
Latin America | 771 | (0.8%) | (3.4%) | (1.2%) | 2.7% | |||||||
International | 3,867 | 6.6% | 4.5% | 2.2% | 2.0% | |||||||
Consolidated | $ | 10,120 | 11.6% | 6.1% | 4.1% | 5.1% | ||||||
Mainline | $ | 8,304 | 10.2% | 5.8% | 3.8% | 4.2% | ||||||
Regional | 1,816 | 18.6% | 4.1% | 1.1% | 13.9% | |||||||
Consolidated | $ | 10,120 | ||||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||
NOTES (UNAUDITED) | ||||||||||||||||
(C) Special charges and MTM gains and losses on equity investments include the following: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating: | ||||||||||||||||
Impairment of assets | $ | 11 | $ | 15 | $ | 145 | $ | 15 | ||||||||
Severance and benefit costs | 9 | 23 | 34 | 101 | ||||||||||||
(Gains) losses on sale of assets and other special charges | (3) | 12 | 7 | 29 | ||||||||||||
Total special charges | 17 | 50 | 186 | 145 | ||||||||||||
Nonoperating MTM (gains) losses on equity investments | (29) | — | 61 | — | ||||||||||||
Total special charges and MTM (gains) losses on equity investments | (12) | 50 | 247 | 145 | ||||||||||||
Income tax benefit related to special charges | (3) | (18) | (41) | (52) | ||||||||||||
Income tax expense (benefit) related to MTM (gains) losses on equity investments | 6 | — | (14) | — | ||||||||||||
Total special charges and MTM (gains) losses on equity investments, net of income taxes | $ | (9) | $ | 32 | $ | 192 | $ | 93 | ||||||||
Impairment of assets: In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. The company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, in the second quarter of 2018, the company recorded a $105 million special charge ($82 million net of taxes) to write off the entire value of the intangible asset associated with its Brazil routes. This asset is not part of any collateral pledged against any of the company's borrowings. The company continues to maintain its slot assets related to Brazil since airport access is still regulated by slot allocations that are limited by airport facility constraints. For the three and nine months ended September 30, 2018, the company also recorded $11 million ($9 million net of taxes) and $40 million ($31 million net of taxes), respectively, of fair value adjustments related to aircraft purchased off lease, write-off of unexercised aircraft purchase options and other impairments related to certain fleet types and international slots no longer in use. |
During the three months ended September 30, 2017, the company recorded a $15 million ($10 million net of taxes) intangible asset impairment charge related to a maintenance service agreement. |
Severance and benefit costs: During the three and nine months ended September 30, 2018, the company recorded severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters of $5 million ($4 million net of taxes) and $19 million ($15 million net of taxes), respectively. 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 2018. Also during the three and nine months ended September 30, 2018, the company recorded other management severance of $4 million ($3 million net of taxes) and $15 million ($12 million net of taxes), respectively. |
During the three and nine months ended September 30, 2017, the company recorded $16 million ($10 million net of taxes) and $73 million ($47 million net of taxes), respectively, of severance and benefit costs related to the voluntary early-out program for its technicians and related employees, and $7 million ($5 million net of taxes) and $28 million ($18 million net of taxes), respectively, of management severance. |
(Gains) losses on sale of assets and other special charges: During the three and nine months ended September 30, 2018, the company recorded $3 million ($2 million net of taxes) of gains primarily related to the sale of aircraft engines and $7 million ($5 million net of taxes) of losses primarily related to contract termination of regional aircraft operations in Guam, respectively. |
During the three months ended September 30, 2017, the company recorded $12 million ($7 million net of taxes) of charges primarily related to damages from tropical storms. During the nine months ended September 30, 2017, in addition to the $12 million of third-quarter charges, the company recorded $17 million ($11 million net of taxes) of charges primarily associated with aircraft gains and losses. |
MTM gains and losses on equity investments: During the three and nine months ended September 30, 2018, the company recorded gains of $29 million ($23 million net of taxes) and losses of $61 million ($47 million net of taxes), respectively, for the change in market value of certain of its equity investments. For equity investments subject to MTM accounting, the company records gains and losses to Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations. |
(D) Interest expense related to capital leases of Embraer ERJ 145 aircraft |
During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to capital leases up until the purchase date. The company recognized $13 million of additional interest expense in the third quarter as a result of this change. |
(E) Effective tax rate |
The company's effective tax rate for the three and nine months ended September 30, 2018 was 21.2% and 20.7%, respectively, and the effective tax rate for the three and nine months ended September 30, 2017 was 35.0% and 35.3%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and included the impact of certain nondeductible items. The effective tax rate for the three and nine months ended September 30, 2018 also reflects the reduced federal corporate income tax rate as a result of the enactment of the Tax Cuts and Jobs Act (the "Tax Act") in December 2017 and the impact of a change in the company's mix of domestic and foreign earnings. The company continues to analyze the different aspects of the Tax Act which could potentially affect the provisional estimates that were recorded at December 31, 2017. |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"Our stand-out third-quarter performance, which produced double-digit revenue growth as we more than offset the steep increase in fuel costs, is proof that United is building momentum," said Oscar Munoz, chief executive officer of United Airlines. "Our growth plan has been essential to our success, and we're more confident than ever we'll achieve the ambitious adjusted earnings per share1 target of $11 to $13 we laid out for 2020."
- UAL reported third-quarter adjusted net income of $837 million, adjusted diluted earnings per share of $3.06, adjusted pre-tax earnings of $1.1 billion and adjusted pre-tax margin of 9.7 percent.2 Third-quarter adjusted diluted earnings per share increased 36 percent year-over-year.
- Consolidated passenger revenue per available seat mile (PRASM) increased 6.1 percent year-over-year, above the high end of the company's third-quarter 2018 guidance range of up 4 percent to 6 percent.
- Consolidated unit cost per available seat mile (CASM) increased 6.4 percent year-over-year.
- Consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, decreased 0.4 percent year-over-year.
- UAL's mid-continent hubs in Chicago, Denver and Houston had year-over-year capacity growth of 9.7 percent in the third quarter and led the system in unit revenue growth performance in the quarter.
- UAL now expects full-year 2018 adjusted diluted earnings per share3 to be $8.00 to $8.75. The company currently expects to recapture approximately 90 percent of the estimated $2.5 billion year-over year increase in full-year 2018 fuel expense.
For more information on UAL's fourth-quarter and full-year 2018 guidance, please visit ir.united.com for the company's investor update.
Third-Quarter Highlights
Customer Experience
- Introduced a new boarding process at 1,000 gates around the world, designed to reduce customers' stress by spending less time waiting in line and providing them with improved boarding information.
- United Airlines MileagePlus loyalty program voted Favorite Frequent-Flyer Program in Trazee Awards.
- The United Polaris lounge at Chicago O'Hare International Airport voted Best Business Class Lounge in the United States by the 2018 World Airline Awards from Skytrax.
- Debuted United Corporate Preferred, the industry's newest corporate travel program designed to offer top travel benefits to the company's most loyal business customers.
- Launched the redesigned united.com homepage, featuring a more personalized digital experience for each customer.
Operations and Employees
- In July, UAL had its best consolidated D :00 month of July in history and its highest consolidated load factor month ever.
- Carried the most-ever customers to their destinations during the summer.
- Consolidated completion factor at UAL's hubs in Houston, Chicago, Los Angeles and Washington Dulles reached third-quarter record levels.
- Achieved the top score of 100 percent on the 2018 Disability Equality Index (DEI), a prominent benchmarking metric that rates U.S. companies on their disability inclusion policies and practices, also earning UAL a place on DEI's 2018 "Best Places to Work" list.
Network and Fleet
- Announced several new international routes, including year-round nonstop service between Washington Dulles and Tel Aviv, Israel, making UAL the only airline to offer nonstop service between the two cities; daily, year-round service between San Francisco and Amsterdam; and nonstop seasonal summer service between Newark/New York and Naples, Italy, and Newark/New York and Prague, all subject to government approval.
- Added 100 flights and more than 10,000 seats daily to 12 of the country's top ski destinations during the 2018/2019 ski season, more than 8,500 seats from U.S. hubs and eight other U.S. cities connecting more customers than ever to Las Vegas for CES 2019, and more than 204,000 total seats from September through November to popular college football towns including Madison, Wisconsin, and Columbia, South Carolina.
- Announced orders to purchase 25 new Embraer E-175 and 13 new Boeing 787-9 aircraft.
- Took delivery of one Boeing 737 MAX 9 aircraft and two used Boeing 767-300 aircraft.
Community and Environment
- Committed to reducing the company's greenhouse gas emissions by 50 percent by 2050, the only U.S. airline to commit to emissions reductions, further strengthening UAL's ambition to be the world's most environmentally conscious airline.
- Launched a Crowdrise fundraising campaign to support those affected by Hurricane Florence, Typhoon Mangkhut, flooding in Western Japan, wildfires in California and other disasters.
- As part of a previously announced $8 million commitment, announced a $2 million grant to be split between the Community FoodBank of New Jersey, Urban League of Essex County, and Year Up New York, as well as a $1 million grant to First Place for Youth in Los Angeles, and a $1 million grant to the San Francisco Immigrant Legal and Education Network.
Earnings Call
UAL will hold a conference call to discuss third-quarter 2018 financial results and its financial and operational outlook for the fourth quarter and full year of 2018 on Wednesday, October 17, at 9:30 a.m. Central Time /10:30 a.m. Eastern Time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
About United
United Airlines and United Express operate approximately 4,700 flights a day to 356 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 760 mainline aircraft and the airline's United Express carriers operate 546 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
1Excludes special charges and the mark-to-market impact of equity investments, the nature of which are not determinable at this time. Accordingly, UAL is not providing earnings guidance on a GAAP basis.
2Excludes special charges, the mark-to-market impact of equity investments and imputed interest on certain capitalized leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.
3Excludes special charges and the mark-to-market impact of equity investments, the nature of which are not determinable at this time, and imputed interest on certain capitalized leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals" 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: 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, including political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; competitive pressures on pricing and on demand; demand for transportation in the markets in which we operate; our capacity decisions and the capacity decisions of our competitors; the effects of any hostilities, act of war or terrorist attack; the effects of any technology failures or cybersecurity breaches; the impact of regulatory, investigative and legal proceedings and legal compliance risks; disruptions to our regional network; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; potential reputational or other impact from adverse events in our operations, the operations of our regional carriers or the operations of our code share partners; our ability to attract and retain customers; 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; the impact of any management changes; 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 any fuel or currency hedging programs; 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; an outbreak of a disease that affects travel demand or travel behavior; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); industry consolidation or changes in airline alliances; our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; the costs and availability of aviation and other insurance; weather conditions; our ability to utilize our net operating losses to offset future taxable income; the impact of changes in tax laws; the success of our investments in airlines in other parts of the world; 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, 2017, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
-tables attached-
On January 1, 2018, United Continental Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2014-09 (Topic 606), Revenue from Contracts with Customers, and Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. As such, certain previously reported 2017 figures are adjusted in this report on a basis consistent with the new standards. See the Current Report on Form 8-K filed by UAL with the Securities and Exchange Commission on March 1, 2018 for additional information.
UNITED CONTINENTAL HOLDINGS, INC | ||||||||||||||||||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) (A) | ||||||||||||||||||||||||
Three Months Ended | % | Nine Months Ended | % | |||||||||||||||||||||
(In millions, except per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||
Passenger (B) | $ | 10,120 | $ | 9,069 | 11.6 | $ | 28,150 | $ | 25,873 | 8.8 | ||||||||||||||
Cargo | 296 | 279 | 6.1 | 903 | 790 | 14.3 | ||||||||||||||||||
Other operating revenue | 587 | 551 | 6.5 | 1,759 | 1,670 | 5.3 | ||||||||||||||||||
Total operating revenue | 11,003 | 9,899 | 11.2 | 30,812 | 28,333 | 8.7 | ||||||||||||||||||
Operating expense: | ||||||||||||||||||||||||
Salaries and related costs | 2,930 | 2,785 | 5.2 | 8,534 | 8,263 | 3.3 | ||||||||||||||||||
Aircraft fuel | 2,572 | 1,809 | 42.2 | 6,927 | 5,038 | 37.5 | ||||||||||||||||||
Regional capacity purchase | 663 | 567 | 16.9 | 1,963 | 1,652 | 18.8 | ||||||||||||||||||
Landing fees and other rent | 596 | 585 | 1.9 | 1,757 | 1,670 | 5.2 | ||||||||||||||||||
Depreciation and amortization | 564 | 556 | 1.4 | 1,662 | 1,610 | 3.2 | ||||||||||||||||||
Aircraft maintenance materials and outside repairs | 455 | 451 | 0.9 | 1,333 | 1,377 | (3.2) | ||||||||||||||||||
Distribution expenses | 427 | 377 | 13.3 | 1,162 | 1,081 | 7.5 | ||||||||||||||||||
Aircraft rent | 109 | 145 | (24.8) | 355 | 476 | (25.4) | ||||||||||||||||||
Special charges (C) | 17 | 50 | NM | 186 | 145 | NM | ||||||||||||||||||
Other operating expenses | 1,467 | 1,436 | 2.2 | 4,293 | 4,126 | 4.0 | ||||||||||||||||||
Total operating expense | 9,800 | 8,761 | 11.9 | 28,172 | 25,438 | 10.7 | ||||||||||||||||||
Operating income | 1,203 | 1,138 | 5.7 | 2,640 | 2,895 | (8.8) | ||||||||||||||||||
Operating margin | 10.9 | % | 11.5 | % | (0.6) | pts. | 8.6 | % | 10.2 | % | (1.6) | pts. | ||||||||||||
Adjusted operating margin (Non-GAAP) | 11.1 | % | 12.0 | % | (0.9) | pts. | 9.2 | % | 10.7 | % | (1.5) | pts. | ||||||||||||
Nonoperating income (expense): | ||||||||||||||||||||||||
Interest expense | (187) | (169) | 10.7 | (540) | (498) | 8.4 | ||||||||||||||||||
Interest capitalized | 18 | 20 | (10.0) | 51 | 64 | (20.3) | ||||||||||||||||||
Interest income | 28 | 17 | 64.7 | 70 | 41 | 70.7 | ||||||||||||||||||
Miscellaneous, net (C) | (1) | (13) | (92.3) | (119) | (82) | 45.1 | ||||||||||||||||||
Total nonoperating expense | (142) | (145) | (2.1) | (538) | (475) | 13.3 | ||||||||||||||||||
Income before income taxes | 1,061 | 993 | 6.8 | 2,102 | 2,420 | (13.1) | ||||||||||||||||||
Pre-tax margin | 9.6 | % | 10.0 | % | (0.4) | pts. | 6.8 | % | 8.5 | % | (1.7) | pts. | ||||||||||||
Adjusted pre-tax margin (Non-GAAP) | 9.7 | % | 10.5 | % | (0.8) | pts. | 7.7 | % | 9.1 | % | (1.4) | pts. | ||||||||||||
Income tax expense (E) | 225 | 348 | (35.3) | 435 | 855 | (49.1) | ||||||||||||||||||
Net income | $ | 836 | $ | 645 | 29.6 | $ | 1,667 | $ | 1,565 | 6.5 | ||||||||||||||
Diluted earnings per share | $ | 3.06 | $ | 2.15 | 42.3 | $ | 5.99 | $ | 5.09 | 17.7 | ||||||||||||||
Diluted weighted average shares | 273.6 | 300.6 | (9.0) | 278.0 | 307.6 | (9.6) | ||||||||||||||||||
NM Not meaningful | ||||||||||||||||||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||||||||
STATISTICS | ||||||||||||||||||||||||
Three Months Ended | % Increase/ (Decrease) | Nine Months Ended | % Increase/ (Decrease) | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
Mainline: | ||||||||||||||||||||||||
Passengers (thousands) | 31,157 | 29,182 | 6.8 | 85,348 | 81,091 | 5.2 | ||||||||||||||||||
Revenue passenger miles (millions) | 56,787 | 53,515 | 6.1 | 154,382 | 146,252 | 5.6 | ||||||||||||||||||
Available seat miles (millions) | 65,819 | 63,183 | 4.2 | 183,678 | 176,710 | 3.9 | ||||||||||||||||||
Cargo ton miles (millions) | 851 | 830 | 2.5 | 2,523 | 2,406 | 4.9 | ||||||||||||||||||
Passenger revenue per available seat mile (cents) | 12.62 | 11.93 | 5.8 | 12.50 | 12.03 | 3.9 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 14.62 | 14.09 | 3.8 | 14.88 | 14.53 | 2.4 | ||||||||||||||||||
Aircraft in fleet at end of period | 760 | 751 | 1.2 | 760 | 751 | 1.2 | ||||||||||||||||||
Average stage length (miles) | 1,807 | 1,825 | (1.0) | 1,814 | 1,817 | (0.2) | ||||||||||||||||||
Average daily utilization of each aircraft (hours: minutes) | 11:23 | 10:58 | 3.8 | 10:49 | 10:30 | 3.0 | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.29 | $ | 1.68 | 36.3 | $ | 2.21 | $ | 1.66 | 33.1 | ||||||||||||||
Fuel gallons consumed (millions) | 931 | 909 | 2.4 | 2,587 | 2,537 | 2.0 | ||||||||||||||||||
Regional: | ||||||||||||||||||||||||
Passengers (thousands) | 11,729 | 10,120 | 15.9 | 33,091 | 29,563 | 11.9 | ||||||||||||||||||
Revenue passenger miles (millions) | 6,606 | 5,630 | 17.3 | 18,805 | 16,860 | 11.5 | ||||||||||||||||||
Available seat miles (millions) | 7,862 | 6,900 | 13.9 | 22,682 | 20,648 | 9.9 | ||||||||||||||||||
Passenger revenue per available seat mile (cents) | 23.10 | 22.19 | 4.1 | 22.86 | 22.36 | 2.2 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 27.49 | 27.19 | 1.1 | 27.57 | 27.38 | 0.7 | ||||||||||||||||||
Aircraft in fleet at end of period | 546 | 489 | 11.7 | 546 | 489 | 11.7 | ||||||||||||||||||
Average stage length (miles) | 552 | 542 | 1.8 | 556 | 558 | (0.4) | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.43 | $ | 1.81 | 34.3 | $ | 2.34 | $ | 1.77 | 32.2 | ||||||||||||||
Fuel gallons consumed (millions) | 180 | 156 | 15.4 | 514 | 461 | 11.5 | ||||||||||||||||||
Consolidated (Mainline and Regional): | ||||||||||||||||||||||||
Passengers (thousands) | 42,886 | 39,302 | 9.1 | 118,439 | 110,654 | 7.0 | ||||||||||||||||||
Revenue passenger miles (millions) | 63,393 | 59,145 | 7.2 | 173,187 | 163,112 | 6.2 | ||||||||||||||||||
Available seat miles (millions) | 73,681 | 70,083 | 5.1 | 206,360 | 197,358 | 4.6 | ||||||||||||||||||
Passenger load factor: | ||||||||||||||||||||||||
Consolidated | 86.0 | % | 84.4 | % | 1.6 | pts. | 83.9 | % | 82.6 | % | 1.3 | pts. | ||||||||||||
Domestic | 86.7 | % | 85.3 | % | 1.4 | pts. | 85.7 | % | 85.2 | % | 0.5 | pts. | ||||||||||||
International | 85.2 | % | 83.3 | % | 1.9 | pts. | 81.6 | % | 79.5 | % | 2.1 | pts. | ||||||||||||
Passenger revenue per available seat mile (cents) | 13.73 | 12.94 | 6.1 | 13.64 | 13.11 | 4.0 | ||||||||||||||||||
Total revenue per available seat mile (cents) | 14.93 | 14.12 | 5.7 | 14.93 | 14.36 | 4.0 | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 15.96 | 15.33 | 4.1 | 16.25 | 15.86 | 2.5 | ||||||||||||||||||
Aircraft in fleet at end of period | 1,306 | 1,240 | 5.3 | 1,306 | 1,240 | 5.3 | ||||||||||||||||||
Average stage length (miles) | 1,454 | 1,480 | (1.8) | 1,453 | 1,470 | (1.2) | ||||||||||||||||||
Average full-time equivalent employees (thousands) | 89.0 | 87.3 | 1.9 | 87.1 | 86.2 | 1.0 | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 2.32 | $ | 1.70 | 36.5 | $ | 2.23 | $ | 1.68 | 32.7 | ||||||||||||||
Fuel gallons consumed (millions) | 1,111 | 1,065 | 4.3 | 3,101 | 2,998 | 3.4 | ||||||||||||||||||
Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for definitions of these statistics. |
UNITED CONTINENTAL HOLDINGS, INC. | |||
RETURN ON INVESTED CAPITAL (ROIC) - Non-GAAP | |||
ROIC is a non-GAAP financial measure that UAL believes provides useful supplemental information for management and investors by measuring the effectiveness of the company's operations' use of invested capital to generate profits. | |||
(in millions) | Twelve Months Ended | ||
Net Operating Profit After Tax ("NOPAT") | |||
Pre-tax income | $ | 2,722 | |
Special charges and MTM losses on equity investments (C): | |||
Impairment of assets | 155 | ||
MTM losses on equity investments | 61 | ||
Severance and benefit costs | 49 | ||
(Gains) losses on sale of assets and other special charges | 13 | ||
Pre-tax income excluding special charges and MTM losses on equity investments (Non-GAAP) | 3,000 | ||
add: Interest expense (net of income tax benefit) (a) | 707 | ||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) | 243 | ||
add: Net interest on pension (net of income tax benefit) (a) | (3) | ||
less: Income taxes paid | (26) | ||
NOPAT (Non-GAAP) | $ | 3,921 | |
Average Invested Capital (five-quarter average) | |||
Total assets | $ | 43,697 | |
add: Capitalized aircraft operating leases (b) | 4,005 | ||
less: Non-interest bearing liabilities (c) | (17,095) | ||
Average invested capital (Non-GAAP) | $ | 30,607 | |
ROIC (Non-GAAP) | 12.8 | % | |
(a) | Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges. For the twelve months ended September 30, 2018, the effective cash tax rate was 0.9%. |
(b) | The purpose of this adjustment is to capitalize the impact of aircraft operating leases. The company uses a multiple of seven times its annual aircraft rent expense to estimate the potential capitalized value and related liability of its aircraft. This is a simplified method used by many rating agencies and financial analysts to assist with the impact of operating leases on financial measures like return on invested capital. |
(c) | Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities. |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION | ||||||||||||||||||
(A) UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and Non-GAAP financial measures, including adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share and CASM, excluding special charges, third-party business expenses, fuel, and profit sharing, among others. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL believes that adjusting for MTM gains and losses on equity investments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to capital leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense. | ||||||||||||||||||
CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. | ||||||||||||||||||
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below. | ||||||||||||||||||
Three Months Ended | % Increase/ (Decrease) | Nine Months Ended | % Increase/ (Decrease) | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
CASM Mainline Operations (cents) | ||||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 12.82 | 11.98 | 7.0 | 13.13 | 12.43 | 5.6 | ||||||||||||
Special charges (C) | 0.03 | 0.08 | NM | 0.10 | 0.08 | NM | ||||||||||||
Third-party business expenses | 0.04 | 0.05 | (20.0) | 0.04 | 0.06 | (33.3) | ||||||||||||
Fuel expense | 3.25 | 2.41 | 34.9 | 3.12 | 2.39 | 30.5 | ||||||||||||
Profit sharing, including taxes | 0.19 | 0.21 | (9.5) | 0.14 | 0.17 | (17.6) | ||||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.31 | 9.23 | 0.9 | 9.73 | 9.73 | — | ||||||||||||
CASM Consolidated Operations (cents) | ||||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 13.30 | 12.50 | 6.4 | 13.65 | 12.89 | 5.9 | ||||||||||||
Special charges (C) | 0.02 | 0.07 | NM | 0.09 | 0.08 | NM | ||||||||||||
Third-party business expenses | 0.04 | 0.04 | — | 0.04 | 0.05 | (20.0) | ||||||||||||
Fuel expense | 3.49 | 2.58 | 35.3 | 3.36 | 2.55 | 31.8 | ||||||||||||
Profit sharing, including taxes | 0.17 | 0.19 | (10.5) | 0.12 | 0.16 | (25.0) | ||||||||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 9.58 | 9.62 | (0.4) | 10.04 | 10.05 | (0.1) | ||||||||||||
NM Not Meaningful |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | ||||||||||||||||||||||||||||||
Three Months Ended | $ Increase/ (Decrease) | % Increase/ (Decrease) | Nine Months Ended | $ Increase/ (Decrease) | % Increase/ (Decrease) | |||||||||||||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
Operating expenses (GAAP) | $ | 9,800 | $ | 8,761 | $ | 1,039 | 11.9 | $ | 28,172 | $ | 25,438 | $ | 2,734 | 10.7 | ||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
Operating expenses, excluding special charges | 9,783 | 8,711 | 1,072 | 12.3 | 27,986 | 25,293 | 2,693 | 10.6 | ||||||||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Third-party business expenses | 29 | 33 | (4) | (12.1) | 89 | 114 | (25) | (21.9) | ||||||||||||||||||||||
Fuel expense | 2,572 | 1,809 | 763 | 42.2 | 6,927 | 5,038 | 1,889 | 37.5 | ||||||||||||||||||||||
Profit sharing, including taxes | 127 | 130 | (3) | (2.3) | 252 | 304 | (52) | (17.1) | ||||||||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 7,055 | $ | 6,739 | $ | 316 | 4.7 | $ | 20,718 | $ | 19,837 | $ | 881 | 4.4 | ||||||||||||||||
Operating income (GAAP) | $ | 1,203 | $ | 1,138 | $ | 65 | 5.7 | $ | 2,640 | $ | 2,895 | $ | (255) | (8.8) | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
Adjusted operating income (Non-GAAP) | $ | 1,220 | $ | 1,188 | $ | 32 | 2.7 | $ | 2,826 | $ | 3,040 | $ | (214) | (7.0) | ||||||||||||||||
Pre-tax income (GAAP) | $ | 1,061 | $ | 993 | $ | 68 | 6.8 | $ | 2,102 | $ | 2,420 | $ | (318) | (13.1) | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (29) | — | (29) | NM | 61 | — | 61 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 13 | — | 13 | NM | 13 | — | 13 | NM | ||||||||||||||||||||||
Adjusted pre-tax income (Non-GAAP) | $ | 1,062 | $ | 1,043 | $ | 19 | 1.8 | $ | 2,362 | $ | 2,565 | $ | (203) | (7.9) | ||||||||||||||||
Net income (GAAP) | $ | 836 | $ | 645 | $ | 191 | 29.6 | $ | 1,667 | $ | 1,565 | $ | 102 | 6.5 | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 17 | 50 | (33) | NM | 186 | 145 | 41 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (29) | — | (29) | NM | 61 | — | 61 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 13 | — | 13 | NM | 13 | — | 13 | NM | ||||||||||||||||||||||
Income tax expense (benefit) related to adjustments | — | (18) | 18 | NM | (58) | (52) | (6) | NM | ||||||||||||||||||||||
Adjusted net income (Non-GAAP) | $ | 837 | $ | 677 | $ | 160 | 23.6 | $ | 1,869 | $ | 1,658 | $ | 211 | 12.7 | ||||||||||||||||
Diluted earnings per share (GAAP) | $ | 3.06 | $ | 2.15 | $ | 0.91 | 42.3 | $ | 5.99 | $ | 5.09 | $ | 0.90 | 17.7 | ||||||||||||||||
Adjusted to exclude: | ||||||||||||||||||||||||||||||
Special charges (C) | 0.06 | 0.16 | (0.10) | NM | 0.67 | 0.47 | 0.20 | NM | ||||||||||||||||||||||
MTM (gains) losses on equity investments (C) | (0.11) | — | (0.11) | NM | 0.22 | — | 0.22 | NM | ||||||||||||||||||||||
Interest expense on ERJ 145 capital leases (D) | 0.05 | — | 0.05 | NM | 0.05 | — | 0.05 | NM | ||||||||||||||||||||||
Income tax expense (benefit) related to adjustments | — | (0.06) | 0.06 | NM | (0.21) | (0.17) | (0.04) | NM | ||||||||||||||||||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 3.06 | $ | 2.25 | $ | 0.81 | 36.0 | $ | 6.72 | $ | 5.39 | $ | 1.33 | 24.7 | ||||||||||||||||
NM Not Meaningful |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | ||||||||||||||||
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. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
Capital Expenditures (in millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Capital expenditures (GAAP) | $ | 858 | $ | 1,120 | $ | 2,592 | $ | 2,900 | ||||||||
Property and equipment acquired through the issuance of debt and capital leases | — | 11 | 139 | 918 | ||||||||||||
Airport construction financing | — | 9 | 12 | 41 | ||||||||||||
Fully reimbursable projects | (51) | (58) | (140) | (176) | ||||||||||||
Adjusted capital expenditures (Non-GAAP) | $ | 807 | $ | 1,082 | $ | 2,603 | $ | 3,683 | ||||||||
Free Cash Flow (in millions) | ||||||||||||||||
Net cash provided by operating activities (GAAP) | $ | 905 | $ | 577 | $ | 5,080 | $ | 2,685 | ||||||||
Less capital expenditures | 858 | 1,120 | 2,592 | 2,900 | ||||||||||||
Free cash flow, net of financings (Non-GAAP) | $ | 47 | $ | (543) | $ | 2,488 | $ | (215) | ||||||||
Net cash provided by operating activities (GAAP) | $ | 905 | $ | 577 | $ | 5,080 | $ | 2,685 | ||||||||
Less adjusted capital expenditures (Non-GAAP) | 807 | 1,082 | 2,603 | 3,683 | ||||||||||||
Free cash flow (Non-GAAP) | $ | 98 | $ | (505) | $ | 2,477 | $ | (998) | ||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||
NOTES (UNAUDITED) | ||||||||||||
(B) Select passenger revenue information is as follows (in millions): | ||||||||||||
3Q 2018 Passenger Revenue (millions) | Passenger Revenue vs. 3Q 2017 | PRASM vs. 3Q 2017 | Yield vs. 3Q 2017 | Available Seat Miles vs. 3Q 2017 | ||||||||
Mainline | $ | 4,489 | 13.6% | 6.8% | 5.4% | 6.4% | ||||||
Regional | 1,764 | 18.3% | 4.1% | 0.8% | 13.7% | |||||||
Domestic | 6,253 | 14.9% | 6.7% | 5.0% | 7.6% | |||||||
Atlantic | 1,933 | 12.1% | 7.1% | 1.3% | 4.7% | |||||||
Pacific | 1,163 | 3.4% | 5.3% | 5.1% | (1.9%) | |||||||
Latin America | 771 | (0.8%) | (3.4%) | (1.2%) | 2.7% | |||||||
International | 3,867 | 6.6% | 4.5% | 2.2% | 2.0% | |||||||
Consolidated | $ | 10,120 | 11.6% | 6.1% | 4.1% | 5.1% | ||||||
Mainline | $ | 8,304 | 10.2% | 5.8% | 3.8% | 4.2% | ||||||
Regional | 1,816 | 18.6% | 4.1% | 1.1% | 13.9% | |||||||
Consolidated | $ | 10,120 | ||||||||||
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||
NOTES (UNAUDITED) | ||||||||||||||||
(C) Special charges and MTM gains and losses on equity investments include the following: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating: | ||||||||||||||||
Impairment of assets | $ | 11 | $ | 15 | $ | 145 | $ | 15 | ||||||||
Severance and benefit costs | 9 | 23 | 34 | 101 | ||||||||||||
(Gains) losses on sale of assets and other special charges | (3) | 12 | 7 | 29 | ||||||||||||
Total special charges | 17 | 50 | 186 | 145 | ||||||||||||
Nonoperating MTM (gains) losses on equity investments | (29) | — | 61 | — | ||||||||||||
Total special charges and MTM (gains) losses on equity investments | (12) | 50 | 247 | 145 | ||||||||||||
Income tax benefit related to special charges | (3) | (18) | (41) | (52) | ||||||||||||
Income tax expense (benefit) related to MTM (gains) losses on equity investments | 6 | — | (14) | — | ||||||||||||
Total special charges and MTM (gains) losses on equity investments, net of income taxes | $ | (9) | $ | 32 | $ | 192 | $ | 93 | ||||||||
Impairment of assets: In May 2018, the Brazil–United States open skies agreement was ratified, which provides air carriers with unrestricted access between the United States and Brazil. The company determined that the approval of the open skies agreement impaired the entire value of its Brazil route authorities because the agreement removes all limitations or reciprocity requirements for flights between the United States and Brazil. Accordingly, in the second quarter of 2018, the company recorded a $105 million special charge ($82 million net of taxes) to write off the entire value of the intangible asset associated with its Brazil routes. This asset is not part of any collateral pledged against any of the company's borrowings. The company continues to maintain its slot assets related to Brazil since airport access is still regulated by slot allocations that are limited by airport facility constraints. For the three and nine months ended September 30, 2018, the company also recorded $11 million ($9 million net of taxes) and $40 million ($31 million net of taxes), respectively, of fair value adjustments related to aircraft purchased off lease, write-off of unexercised aircraft purchase options and other impairments related to certain fleet types and international slots no longer in use. |
During the three months ended September 30, 2017, the company recorded a $15 million ($10 million net of taxes) intangible asset impairment charge related to a maintenance service agreement. |
Severance and benefit costs: During the three and nine months ended September 30, 2018, the company recorded severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters of $5 million ($4 million net of taxes) and $19 million ($15 million net of taxes), respectively. 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 2018. Also during the three and nine months ended September 30, 2018, the company recorded other management severance of $4 million ($3 million net of taxes) and $15 million ($12 million net of taxes), respectively. |
During the three and nine months ended September 30, 2017, the company recorded $16 million ($10 million net of taxes) and $73 million ($47 million net of taxes), respectively, of severance and benefit costs related to the voluntary early-out program for its technicians and related employees, and $7 million ($5 million net of taxes) and $28 million ($18 million net of taxes), respectively, of management severance. |
(Gains) losses on sale of assets and other special charges: During the three and nine months ended September 30, 2018, the company recorded $3 million ($2 million net of taxes) of gains primarily related to the sale of aircraft engines and $7 million ($5 million net of taxes) of losses primarily related to contract termination of regional aircraft operations in Guam, respectively. |
During the three months ended September 30, 2017, the company recorded $12 million ($7 million net of taxes) of charges primarily related to damages from tropical storms. During the nine months ended September 30, 2017, in addition to the $12 million of third-quarter charges, the company recorded $17 million ($11 million net of taxes) of charges primarily associated with aircraft gains and losses. |
MTM gains and losses on equity investments: During the three and nine months ended September 30, 2018, the company recorded gains of $29 million ($23 million net of taxes) and losses of $61 million ($47 million net of taxes), respectively, for the change in market value of certain of its equity investments. For equity investments subject to MTM accounting, the company records gains and losses to Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations. |
(D) Interest expense related to capital leases of Embraer ERJ 145 aircraft |
During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to capital leases up until the purchase date. The company recognized $13 million of additional interest expense in the third quarter as a result of this change. |
(E) Effective tax rate |
The company's effective tax rate for the three and nine months ended September 30, 2018 was 21.2% and 20.7%, respectively, and the effective tax rate for the three and nine months ended September 30, 2017 was 35.0% and 35.3%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and included the impact of certain nondeductible items. The effective tax rate for the three and nine months ended September 30, 2018 also reflects the reduced federal corporate income tax rate as a result of the enactment of the Tax Cuts and Jobs Act (the "Tax Act") in December 2017 and the impact of a change in the company's mix of domestic and foreign earnings. The company continues to analyze the different aspects of the Tax Act which could potentially affect the provisional estimates that were recorded at December 31, 2017. |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
The rapid Abbott ID NOW COVID-19 test – administered by GoHealth Urgent Care and their partner Dignity Health – provides results in approximately 15 minutes and will be available to United customers on the same day as their flight departing from SFO. The mail-in test option will be administered by Color and it is recommended that customers initiate testing at least 10 days prior to their trip and provide their sample within 72 hours of their trip.
The airline worked closely with Hawaii officials to ensure that any United customer – both visitors and Hawaiian residents returning home – who tests negative on either test would not be subjected to the state's current 14-day quarantine requirement. United currently offers more flights to Hawaii than any other major network carrier including daily service between San Francisco and Honolulu (HNL), Maui (OGG) and Kona (KOA). The carrier plans to increase service to Hawaii on October 15, including the resumption of service between San Francisco and Lihue (LIH) and additional flights between San Francisco and Maui and Kona.
"Our new COVID testing program is another way we are helping customers meet their destinations' entry requirements, safely and conveniently," said Toby Enqvist, Chief Customer Officer at United. "We'll look to quickly expand customer testing to other destinations and U.S. airports later this year to complement our state-of-the-art cleaning and safety measures that include a mandatory mask policy, antimicrobial and electrostatic spraying and our hospital-grade HEPA air filtration systems."
Click here for b-roll and still images of COVID-19 testing at SFO
GoHealth Urgent Care Rapid Test
United first partnered with GoHealth Urgent Care in July to test its international flight crews at SFO. United now plans to expand that testing infrastructure to include customers who wish to be tested for COVID-19 pre-flight. Customers can schedule their visits online in advance for the on-site testing facility that is located at the international terminal and will receive their results in approximately 15 minutes. GoHealth Urgent Care's dedicated COVID-19 testing area will be available from 9 a.m. to 6 p.m. PT daily.
"We are excited about expanding our partnership with United and continuing to support their proactive safety measures," said Todd Latz, CEO of GoHealth Urgent Care. "Our on-site, real-time testing for passengers is yet another example of GoHealth's nationwide efforts to fight the spread of COVID-19 and ensure a safer return to normal activities and business operations."
Color Physician-Ordered Self-Collection Test
United is working with Color to offer self-collected, mail-in tests for customers traveling to Hawaii. United will email customers traveling from San Francisco to Hawaii an invitation to purchase their physician-ordered Color self-collection kit at least 10 days ahead of their departure, collect their own samples at home 72 hours prior to their departure and return their test via overnight mail or to a drop box at SFO.
Color then processes those tests at their local, CLIA-certified COVID-19 testing laboratory and returns results via text and/or email within 24-48 hours. Color's self-collection kit includes a plastic collection tube, a non-invasive nasal swab and instructions on how to properly collect a specimen.
"Convenient, widespread COVID-19 testing with fast and reliable results is critical to a return to normalcy and to accelerate the economic recovery," said Caroline Savello, Chief Commercial Officer at Color. "We are proud to partner with United to support the safe and responsible return of travelers to the skies."
United CleanPlusSM
Since the start of the pandemic, United has been a leader among U.S. airlines in enacting new policies and innovations designed to keep employees and passengers safer when traveling. It was the first U.S. airline to mandate masks for flight attendants, quickly following with all customers and employees. United was also among the first U.S. carriers to announce it wouldn't permit customers who refused to comply with the airline's mandatory mask policy to fly with them while the face mask policy is in place. United was also the first U.S. airline to roll out touchless check-in for customers with bags, and the first to require passengers take an online health assessment before traveling. And last week, the airline announced it will apply Zoono Microbe Shield, an EPA registered antimicrobial coating that forms a long-lasting bond with surfaces and inhibits the growth of microbes, to its entire mainline and express fleet before the end of the year.
For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
About GoHealth Urgent Care
GoHealth Urgent Care is one of the country's fastest-growing, largest and most technology-forward urgent care companies. At GoHealth Urgent Care, we provide unparalleled experiences that are effortless, personal and connected through partnerships with market-leading health systems and our communities as a whole. GoHealth Urgent Care operates approximately 150 urgent care centers in the greater New York metropolitan area, the Portland, Oregon-Vancouver, Washington metropolitan area, the San Francisco Bay Area, Hartford and South Eastern Connecticut, Winston-Salem and Charlotte, North Carolina, St. Louis and Springfield, Missouri, Oklahoma City, Oklahoma, Northwest Arkansas and Delaware. GoHealth Urgent Care is a TPG Growth portfolio company, the middle market and growth equity investment platform of TPG, which has more than $103 billion of assets under management. To learn more, please visit www.gohealthuc.com.
About Color
Color is a leader in distributed healthcare and clinical testing. Color makes population-scale healthcare programs accessible, convenient, and cost-effective for everyone. Color works with health systems, employers, and national health initiatives around the world including the million-person All of Us Research Program by the National Institutes of Health. For more information about Color and its response to COVID-19, visit www.color.com.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO, Sept. 23, 2020 /PRNewswire/ -- Let's say you live in Chicago, have $250 to spend on a flight and are looking to go somewhere warm for the holidays. Or you're on the east coast and want to head west for a last-minute getaway to visit a national park. Now, instead of doing multiple, time-consuming searches online, United Airlines has launched a quick and easy way to see all your travel options in one place.
United today announced that it is the first U.S. airline to introduce an interactive map feature powered by Google Flight Search Enterprise Technology. Customers can access Map Search on United.com to easily compare and shop for flights, based on departure city, budget and location type, including popular national park, skiing and cultural destinations. This new digital tool displays fares in a map view, allowing customers to simultaneously compare travel to a variety of destinations in a single search.
"We've reinvented the way people search for flights and introduced something new for our customers that is simpler, provides better results and is easy to use," said Linda Jojo, Executive Vice President for Technology and Chief Digital Officer. "Leveraging the power of Google's Flight Search technology, we are able to provide an all-in-one solution that streamlines the search process and allows our customers to more easily find the flights that work best for them."
Customers can apply over a dozen filters to their map search, including viewing non-stop only flights, specific or flexible dates, and one-way or round-trip options. Additionally, customers can set their preferred departure city and maximum price preference, and filter options based on the type of destination they're looking to visit. The feature currently offers filters to view destinations that are popular for the following offerings:
- National Parks
- Beaches
- Beer & Breweries
- Culture
- Food & Drink
- Hiking
- Outdoors
- Romantic
- Skiing & Snowboarding
- Snorkeling and Scuba
The 'national park' filter was a more recent addition to United's map search feature given the increased interest we've received from customers over the past few months for flights to destinations where they can more easily recreate responsibly. These Map Search filters were designed to highlight the destination types that are most popular with today's traveler, including the top national park destinations served by United. The airline operates more flights to more national park destinations than any other U.S. carrier.
In addition to the filter options available on Map Search, MileagePlus members can also use the tool to view all of their past travels with United. With the "Where I've Been" feature, the map will highlight all the destinations a customer has traveled to with United.
This tool was developed in direct response to customer feedback and United and Google are continuing to collaborate on enhancing this innovative map search capability. Map Search follows a number of recent innovations introduced by United to streamline the travel process. Earlier this month, United debuted its Destination Travel Guide, which allows customers to filter and view destinations' COVID-19 related travel restrictions. Additionally, as part of its United CleanPlusSM program, the airline recently introduced touchless check-in, text alerts for passengers on standby and upgrade lists to reduce person-to-person interaction, and a new chat function to give customers a contactless option to receive immediate access to information about cleaning and safety procedures.
Since the start of the pandemic, United has been a leader among U.S. airlines in enacting new policies and innovations designed to keep employees and passengers safer when traveling. It was the first U.S. airline to mandate masks for flight attendants, quickly following with all customers and employees. United was also among the first U.S. carriers to announce it wouldn't permit customers who refused to comply with the airline's mandatory mask policy to fly with them while the face mask policy is in place. United was also the first U.S. airline to roll out touchless check-in for customers with bags, and the first to require passengers take an online health assessment before traveling. And last week, the airline announced it will apply Zoono Microbe Shield, an EPA registered antimicrobial coating that forms a long-lasting bond with surfaces and inhibits the growth of microbes, to its entire mainline and express fleet before the end of the year.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
The antimicrobial coating, created by Zoono Group Limited, a New Zealand Company and distributed in the USA by MicroSonic Solutions, will serve as an added layer of protection that complements the airline's existing, daily electrostatic spraying regimen before departing flights.
"This long-lasting, antimicrobial spray adds an extra level of protection on our aircraft to help better protect our employees and customers," said Toby Enqvist, United's Chief Customer Officer. "As part of our layered approach to safety, antimicrobials are an effective complement to our hospital-grade HEPA air filtration system, mandatory mask policy for customers and daily electrostatic spraying. We've overhauled our policies and procedures and continue to implement new, innovative solutions that deliver a safer onboard experience."
The Zoono Microbe Shield works by bonding to surfaces and creating a protective layer that resembles microscopic pins once dry which rupture cell walls and membranes when microbes come in contact with them. The chemical is classified by the EPA as Category IV, which is the lowest level of toxicity. During an aircraft's deep cleanings, United will use the NovaRover which is designed to apply a super fine mist of the antimicrobial that coats all surfaces in a 12-foot radius with a single spray. United will apply the antimicrobial to aircraft overnight every seven days using electrostatic sprayers to refresh and fortify the protective layer, while continuing to electrostatic spray disinfectant to the aircraft cabin before almost every departure.
For a video demonstration of the NovaRover click here.
"MicroSonic is proud to provide United with the most advanced application of antimicrobial protection for their aircraft," said Nick Federico, MicroSonic's President. "Our proprietary NovaRover system combined with Zoono Microbe Shield will deliver an additional effective layer of microbial protection, reassuring customers and crew that the environment inside United aircraft is more safe and clean."
United is currently applying Zoono Microbe Shield on aircraft at Chicago O'Hare International Airport and expects to expand it to each of its six other hubs and approximately 200 U.S. airports where United aircraft remain overnight in the coming months. The airline plans to deploy NovaRovers at ten airports, including each of United's seven hubs as well as Boston, Cleveland and Las Vegas.
United CleanPlusSM
United is focused on delivering a new level of cleanliness on the ground and in the air as part of its United CleanPlus program. In addition to the initiatives mentioned above, several of the airline's precautionary measures to further ensure a cleaner environment include:
At Check-In
- Implementing temperature checks for employees and flight attendants working at hubs and other airports throughout the airline's system
- Installing sneeze guards at check-in and gate podiums
- Promoting social distancing with floor decals to help customers stand six feet apart
- Becoming the first airline in the world to roll out touchless check-in capabilities for customers with bags
At the Gate
- Disinfecting high-touch areas such as door handles, handrails, elevator buttons, telephones and computers
- Providing hand sanitizer and disinfectant wipes to customers
- Rolling out Clorox Total 360 Electrostatic Sprayers in select markets to disinfect gate areas at United's hub airports
- Enabling customers to self-scan boarding passes
- Boarding fewer customers at a time and, after pre-boarding, boarding from the back of the plane to the front
- Introduced real-time seat assignment update text and email notifications to further United's touchless airport experience
On Board
- Using electrostatic spraying to disinfect aircraft prior to flight
- Running cabin air circulation system that circulates air through high-efficiency particulate air (HEPA) filters on all mainline aircraft from boarding through deplaning
- Using UV light to disinfect flight decks
- Was the first U.S. airline to mandate masks for flight attendants, later following with all employees and customers
- Disinfecting high-touch areas – such as tray tables and armrests – prior to boarding
- Reducing contact between flight attendants and customers during snack and beverage service
- Deplaning in groups of five rows at a time to reduce crowding
- Providing onboard items including pillows and blankets upon request
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
About MicroSonic Solutions
MicroSonic Solutions offers comprehensive, proprietary antimicrobial solutions that are effective, fast, and fit into every cleaning protocol. We provide innovative spray technologies and antimicrobial chemistries to protect our customers from microbial threats. MicroSonic Solutions is headquartered in Burr Ridge, IL. Learn more at www.microsonicsolutions.com.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
In addition to this commitment, United today also signed on to The Board Challenge, a movement among companies looking to accelerate change. United, like other Charter Pledge Partners, currently has a diverse board including one Black board member and is encouraging other corporations to do the same. The company and its Board of Directors believe that diverse leadership improves its ability to serve the millions of customers who choose to fly United across the globe.
"Change comes from the top, and by making this commitment, we will expand and diversify the leaders that are helping to guide United forward during some of the toughest challenges we have faced," said Scott Kirby, CEO. "As our search progresses, I am reminded of the wealth of untapped diverse talent that is out there and the ongoing responsibility that we, as corporate leaders, have to confront systemic racism head-on and actively recruit this talent at all levels of our organizations."
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
Domestically, United plans to fly 46% of its full schedule in October 2020 compared to October of last year, compared to the 38% schedule it plans to fly domestically in September 2020. The airline also plans to resume eight routes to Hawaii, pending approval of the state's pre-arrival COVID testing program.
Internationally, United expects to fly 33% of its schedule compared to October of 2019, which is up compared to the 29% schedule it plans to fly in September. United continues to respond to the growth in leisure travel demand by adding flights to cities in Mexico, Central America and South America.
"We continue to be data-driven and realistic in our approach to rebuilding our network," said Ankit Gupta, United's vice president of Domestic Network Planning. "Because October is typically a slower month for leisure travel, we're adjusting our schedules to reflect these seasonal changes in customer demand while resuming service or adding capacity on routes where we're seeing increased customer demand for travel."
United is being just as thoughtful in its approach to enhancing the customer experience as it is in rebuilding its network. Earlier this week, the airline was the first U.S. legacy carrier to permanently eliminate change fees on all standard Economy and Premium cabin tickets for travel within the U.S. In addition, starting on January 1, 2021, any United customer can fly standby for free on a flight departing the day of their travel regardless of the type of ticket or class of service. United has also been a leader in safety and enhanced cleaning protocols; as part of its United CleanPlus program, the airline established a partnership with Clorox and Cleveland Clinic in May, was a leader in establishing mandatory face covering policies for both customers and employees and was the first airline to roll out touchless check-in for baggage. Yesterday, United also launched the Destination Travel Guide, a first among U.S. airlines, which makes it easy for customers to plan their travel by helping them easily see local COVID-19 restrictions in all 50 states.
United is even realigning its schedule patterns with the customer in mind to match the current demand for leisure travel. In October, the airline plans to add more flights on days popular with leisure travelers looking to get a head start on long weekend getaways and will schedule fewer flights on days where demand is traditionally lower.
Domestic
- Resuming or starting new service on nearly 50 routes, including 37 routes from United's Chicago, Denver and Houston hubs.
- Resuming additional service to Florida including Washington-Dulles to Sarasota and Miami, and Denver to Fort Myers.
- Resuming service between Los Angeles and Eugene, Medford and Redmond/Bend in Oregon.
International
- Resuming service to 14 international destinations including Bogota, Colombia; Buenos Aires, Argentina; Lima, Peru and Panama City, Panama.
- Increasing to twice daily service between New York/Newark and Tel Aviv and resuming three-times weekly service between Washington, D.C. and Tel Aviv on October 25.
- Resuming or increasing service to Cancun, Mexico City and Puerto Vallarta in Mexico from its hubs in Chicago, Denver, Houston, New York/Newark and Washington, D.C.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"In his 22-year career with United, Mike has led from the heart, empowering employees and making strategic decisions that have continually fueled and supported United's success," said Jon Roitman, the airline's senior vice president and chief operations officer. I look forward to his leadership of the airport operations team as we help the best employees in the business navigate the challenges of the pandemic and begin to return our airline to the kind of culture, growth and prosperity we all want to see."
Hanna currently serves as vice president of United's Chicago O'Hare hub and has more than 25 years of aviation experience. He has held roles in all areas of airport operations, including cabin cleaning, lavatory servicing, fueling, ramp and customer service.
"I look forward to continuing to work alongside the United team to move us forward during this unprecedented time and provide a great experience for our customers whenever and wherever they fly United," Hanna said.
Prior to overseeing the airline's team at O'Hare, he held positions of increasing responsibility at United's San Francisco hub, ascending to vice president of Airport Operations where he led both the airline's San Francisco and Los Angeles hubs. He has also served as general manager of United's operations in Seattle, Salt Lake City and Ontario, California.
Hanna holds a dual degree in marketing and management from Humboldt State University and a certification in human resources from Loyola Marymount University. He is married and has three children.
Hanna will continue to lead operations at O'Hare until the airline names his successor.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872.825.8640, media.relations@united.com
"We know it's a challenge to keep up with the ever-changing list of travel restrictions, policies and regulations so we are offering a simple, easy tool that helps customers decide where to travel next," said Linda Jojo, Executive Vice President for Technology and Chief Digital Officer. "By providing the most up-to-date information on the destinations we serve, customers can compare and shop for travel with greater confidence and help them find the destinations that best fit their preferences."
The Destination Travel Guide currently highlights travel restrictions and leisure offerings in the U.S. by state, and will expand to include all international destinations the airline serves in the coming weeks. Customers viewing the color-coded map can click on each state to view local regulations and travel guidances. There is also the option to filter the map by state to view specific information on each destination, including:
- Medical certificate needed (such as negative COVID test)
- Non-essential shops open
- Tourism accommodation open
- Restaurants open
- Bars and cafes open
- Museum and heritage sites open
- Mask in public required
- Physical distancing required
The new map feature follows several recent innovations from United that were designed to enhance the travel experience. As part of its United CleanPlus program, the airline recently introduced touchless check-in, text alerts for passengers on standby and upgrade lists to reduce person-to-person interaction, and a new chat function to give customers a contactless option to receive immediate access to information about cleaning and safety procedures.
Committed to Ensuring a Safe Journey
Through the United CleanPlus program, the airline is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind, including:
- Requiring all travelers – including crew members – to wear face coverings and potentially revoking travel privileges for customers who do not follow these requirements, as underscored in a recent video from United CEO Scott Kirby.
- Using state-of-the-art high-efficiency (HEPA) filters on most United mainline aircraft to circulate air and remove up to 99.97% of airborne particles.
- Using electrostatic spraying before departure for enhanced cabin sanitation.
- Adding a step to the check-in process, based on a recommendation from the Cleveland Clinic, requiring customers to acknowledge they do not have symptoms for COVID-19 and agree to follow our policies, including wearing a mask on board.
- Offering customers a touchless baggage check-in experience at more than 200 airports across the United States; United is the first U.S. airline to make this technology available.
For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
United is also extending its waiver for new tickets issued through December 31, 2020, to permit unlimited changes with no fee. This policy applies to all ticket types issued after March 3, 2020 and is valid for domestic and international travel. With these improvements, no U.S. airline gives their customers more flexibility when booking – and changing – their travel plans than United Airlines.
"Change is inevitable these days – but it's how we respond to it that matters most. When we hear from customers about where we can improve, getting rid of this fee is often the top request," said Scott Kirby, CEO of United Airlines, in a video message to customers. "Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won't be following that same playbook as we come out of this crisis. Instead, we're taking a completely different approach – and looking at new ways to serve our customers better."
The new change fee policy applies to all standard Economy and Premium cabin tickets for travel within the U.S. 50 states, Puerto Rico and the U.S. Virgin Islands and customers will not be limited in the number of times they adjust their flights.
Additionally, United is giving customers more flexibility to change their flights on the day of their travel so they can head home if a meeting ends earlier or enjoy a few more hours on vacation. With the ability to list for same-day standby for free, customers will now have an option to take a different flight with the same origin and destination airports as their original itinerary if space is available at departure. This enhanced option will be available to all customers for travel within the U.S. and to and from international destinations beginning on January 1, 2021. Customers who want to switch flights will be able to add themselves to the standby list through United's award-winning mobile app, on united.com or at the airport no later than 30 minutes prior to departure for domestic flights and one hour before departure on international flights.
The carrier is also improving the travel experience for its MileagePlus members including waiving all redeposit fees on award travel for flights changed or cancelled more than 30 days before departure and allowing all MileagePlus Premier members to confirm a different flight on the day of their travel. As a way to thank MileagePlus Premier members for their loyalty, beginning January 1, 2021, all Premier members will be able to confirm a seat for free on a different flight with the same departure and arrival cities as their original ticket. This expanded option will allow MileagePlus Silver members and above to confirm a new seat in the same ticket fare class if space is available. Earlier this year, United announced that it will extend status for MileagePlus Premier and Global Services members through January 2022. United also reduced thresholds for Premier qualification by 50 percent for each status level, to make reaching an even higher status tier easier.
For more information on United's new flexible travel policies, visit https://www.united.com/ual/en/us/fly/travel/change-fee.html.
United CleanPlusSM
In addition to these more flexible options, earlier this year, United Airlines began to roll out United CleanPlus: the company's commitment to putting health and safety at the forefront of the entire customer experience, with the goal of delivering an industry-leading standard of cleanliness. United partnered with Clorox and Cleveland Clinic to help guide its United CleanPlus policies and practices. Several of the airline's precautionary measures to further ensure a cleaner environment include:
At Check-In
- Implementing temperature checks for employees and flight attendants working at hubs and other airports throughout the airline's system
- Installing sneeze guards at check-in and gate podiums
- Promoting social distancing with floor decals to help customers stand six feet apart
- Becoming the first airline in the world to roll out touchless check-in capabilities for customers with bags
At the Gate
- Disinfecting high-touch areas such as door handles, handrails, elevator buttons, telephones and computers
- Providing hand sanitizer and disinfectant wipes to customers
- Rolling out Clorox Total 360 Electrostatic Sprayers in select markets to disinfect gate areas at United's hub airports
- Enabling customers to self-scan boarding passes
- Boarding fewer customers at a time and, after pre-boarding, boarding from the back of the plane to the front
- Introduced real-time seat assignment update text and email notifications to further United's touchless airport experience
On Board
- Using electrostatic spraying to disinfect aircraft prior to flight
- Running high-efficiency particulate air (HEPA) filters on all mainline aircraft from boarding through deplaning
- Disinfecting high-touch areas – such as tray tables and armrests – prior to boarding
- Reducing contact between flight attendants and customers during snack and beverage service
- Deplaning in groups of five rows at a time to reduce crowding
- Providing onboard items including pillows and blankets upon request
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872.825.8640, media.relations@united.com
"United has served mainland China for more than three decades and we look forward to continuing to connect customers traveling between the U.S. and Shanghai with two additional flights beginning in September," said Patrick Quayle, United's vice president of International Network and Alliances.
United service to Shanghai
Flight | Depart | Day | Time | Arrive | Time |
UA 857 | San Francisco | Weds., Fri., Sat., Sun | 11:00 a.m. | Shanghai | 5:45 p.m.+1 day |
UA 858 | Shanghai | Mon., Thurs., Sat., Sun. | 9:40 p.m. | San Francisco | 8:55 p.m. |
In July, United began operating twice-weekly service between San Francisco and Shanghai via Seoul. United was the largest U.S. carrier serving China prior to suspending service in February due to COVID-19. In 2019, United operated five daily flights between Shanghai and its hubs in San Francisco, Los Angeles, Chicago and New York/Newark.
Committed to Ensuring a Safe Journey
United is committed to putting health and safety at the forefront of every customer's journey, with the goal of delivering an industry-leading standard of cleanliness through its United CleanPlus program. United has teamed up with Clorox and Cleveland Clinic to redefine cleaning and health safety procedures from check-in to landing and has implemented more than a dozen new policies, protocols and innovations designed with the safety of customers and employees in mind, including:
- Requiring all travelers – including crew members – to wear face coverings and potentially revoking travel privileges for customers who do not follow these requirements, as underscored in a recent video from United CEO Scott Kirby.
- Using state-of-the-art high-efficiency (HEPA) filters on most United mainline aircraft to circulate air and remove up to 99.97% of airborne particles.
- Using electrostatic spraying on all mainline aircraft before departure for enhanced cabin sanitation.
- Adding a step to the check-in process, based on a recommendation from the Cleveland Clinic, requiring customers to acknowledge they do not have symptoms for COVID-19 and agree to follow our policies, including wearing a mask on board.
- Offering customers a touchless baggage check-in experience at more than 200 airports across the United States; United is the first and only U.S. airline to make this technology available.
For more details on all the ways United is helping keep customers safe during their journey, please visit united.com/cleanplus.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com