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
United Airlines Expects To Deliver Peer-Leading Pre-Tax Margin Growth During First-Quarter 2019
- Reported first-quarter net income of $292 million, diluted EPS of $1.09, pre-tax earnings of $367 million and pre-tax margin of 3.8 percent, expanding pre-tax margin 1.8 points versus the first quarter of 2018.
- Reported first-quarter adjusted net income of $309 million, adjusted diluted EPS of $1.15, adjusted pre-tax earnings of $389 million, adjusted pre-tax margin of 4.1 percent, expanding adjusted pre-tax margin 2.1 points versus the first quarter of 2018.1
- Total passenger revenue increased 7.1 percent versus the first quarter of 2018.
- First-quarter passenger revenue per available seat mile (PRASM) increased 1.1 percent year-over-year.
- Consolidated first-quarter unit cost per available seat mile (CASM) decreased 2.1 percent year-over-year.
- Consolidated first-quarter CASM, excluding special charges, third-party business expenses, fuel and profit sharing, decreased 1.8 percent year-over-year.
- Repurchased $527 million of its common shares in the first-quarter of 2019, at an average purchase price of $83.68 per share.
- For the second consecutive quarter the airline reported adjusted pre-tax margin expansion.
"We delivered another strong financial quarter in which we made important progress on our customer investments while making strategic decisions to manage our costs and producing pre-tax margin growth that we expect will lead our peers," said Oscar Munoz, chief executive officer of United Airlines. "That's why we are more confident than ever that we'll reach our long-term adjusted EPS targets we unveiled last year. I want to thank all 93,000 of our employees for their incredible work as we overcame some unique challenges and refocused our efforts in 2019 toward elevating the United experience for our customers."
For more information on UAL's second-quarter and full-year 2019 guidance, please visit ir.united.com for the company's investor update.
First-Quarter 2019 Highlights
Operations and Employees
- Flew the most revenue passengers ever for a first quarter in company history.
- Despite a weather-challenged first quarter, achieved second-highest mainline on-time departures rate performance versus the major U.S. airlines.
- Launched Backstage 2019 which will bring all 25,000 flight attendants to Chicago for an event which will help us elevate the way customers feel about their United experience.
- Earned 100 percent score on Human Rights Campaign Foundation's annual scorecard on LGBTQ workplace equality.
- Broke ground on a state-of-the-art Technical Operations Center at Los Angeles International Airport that will enable the airline to provide exceptional service for all of its aircraft fleets.
- Announced headquarters will remain at the iconic Willis Tower in the airline's hometown of Chicago, while making investments to completely transform the current workspace and experience.
Customer Experience
- Introduced a re-imagined mobile app to customers around the world featuring a more dynamic experience that updates customers at each step of their travel journey while adding enhancements that make managing travel easier.
- Announced free live DIRECTV on 211 Boeing 737 United aircraft equipped with seat back TV, providing more than 100 channels of live television.
- Introduced the relaunch of the United MileagePlus X app, which offers United MileagePlus® members a unique opportunity to earn award miles for everyday purchases.
- Opened the fifth of its award-winning United Polaris Lounges at Los Angeles International Airport.
- Opened a brand-new 5,000-square-foot United Club at Fort Lauderdale-Hollywood International Airport - the first of four new United Club locations set to open in 2019.
- Announced next step in airline's commitment to making customers more comfortable by adding more than 1,600 United Polaris® business class and United First seats to nearly 250 international and domestic aircraft.
- Launched new state-of-the-art United Meetings product, available on the airline's business portal, United Jetstream, which makes managing travel and redeeming rewards for meetings and events quicker and more streamlined.
- Became the first U.S. airline to offer non-binary gender options throughout all booking channels in addition to providing the option to select the title "Mx." during booking and in a MileagePlus customer profile, providing customers the ability to identify themselves corresponding with what is indicated on their passports or identification.
Network
- Began new service from four hubs to 18 cities in 12 states and one province and launched new nonstop seasonal service between San Francisco and Amsterdam.
- Announced 11 new domestic routes.
- Filed an application with the U.S. Department of Transportation for a total of six daily nonstop flights to Tokyo Haneda Airport from six of the airline's hubs.
Fleet
- Announced a brand new and revolutionary regional flying experience with the addition of the two-cabin, 50-seat Bombardier CRJ 550 aircraft, offering customers on key regional routes more legroom, storage and amenities than any other 50-seat regional aircraft operating today.
- Became first carrier in the world to operate all three Dreamliner models as its first 787-10 began regular service in January from Los Angeles International Airport to Newark Liberty International Airport.
- Took delivery of four Boeing 737 MAX 9 aircraft (prior to the March 13, 2019 Federal Aviation Administration order grounding U.S.-registered 737 MAX aircraft) and four Boeing 787-10 aircraft.
Community and Environment
- Donated $1 million to Feeding America's Shutdown Response Fund to directly support the food banks providing food for families of federal workers.
- Launched Her Art Here, a first-of-its-kind contest designed to find and uplift underrepresented women artists by providing a chance to paint a canvas like no other - a United Airlines aircraft.
Earnings Call
UAL will hold a conference call to discuss its first-quarter 2019 financial results and its financial and operational outlook for second-quarter and full-year 2019 on Wednesday, April 17, at 9:30 a.m. Central time /10:30 a.m. Eastern time. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 355 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 779 mainline aircraft and the airline's United Express carriers operate 569 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
1 Excludes special charges, the mark-to-market impact of financial instruments and imputed interest on certain finance leases. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.
2Excludes special charges and the mark-to-market impact of financial instruments, the nature of which are not determined at this time, and imputed interest on certain finance leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to execute our strategic operating plan, including our growth, revenue-generating and cost-control initiatives; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); risks of doing business globally, including instability and political developments that may impact our operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; our capacity decisions and the capacity decisions of our competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in our supply of aircraft fuel; our ability to cost-effectively hedge against increases in the price of aircraft fuel, if we decide to do so; the effects of any technology failures or cybersecurity breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving our aircraft or operations, the aircraft or operations of our regional carriers or our code share partners or the aircraft or operations of another airline; our ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in our fleet; disruptions to our regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of our investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of our aircraft orders; disruptions in the availability of aircraft, parts or support from our suppliers; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; labor costs; an outbreak of a disease that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where we operate; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to comply with the terms of our various financing arrangements; our ability to realize the full value of our intangible assets and long-lived assets;-; and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
-tables attached-
On January 1, 2019, United Continental Holdings, Inc. ("UAL") adopted Accounting Standards Update No. 2016-02, Leases ("Topic 842"). As such, certain previously reported 2018 figures are adjusted in this report on a basis consistent with Topic 842.
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) | ||||||||||||
Three Months Ended | % | |||||||||||
(In millions, except per share data) | 2019 | 2018 | ||||||||||
Operating revenue: | ||||||||||||
Passenger | $ | 8,725 | $ | 8,149 | 7.1 | |||||||
Cargo | 286 | 293 | (2.4) | |||||||||
Other operating revenue | 578 | 590 | (2.0) | |||||||||
Total operating revenue | 9,589 | 9,032 | 6.2 | |||||||||
Operating expense: | ||||||||||||
Salaries and related costs | 2,873 | 2,726 | 5.4 | |||||||||
Aircraft fuel | 2,023 | 1,965 | 3.0 | |||||||||
Regional capacity purchase | 688 | 630 | 9.2 | |||||||||
Landing fees and other rent | 588 | 579 | 1.6 | |||||||||
Depreciation and amortization | 547 | 524 | 4.4 | |||||||||
Aircraft maintenance materials and outside repairs | 408 | 440 | (7.3) | |||||||||
Distribution expenses | 360 | 342 | 5.3 | |||||||||
Aircraft rent | 81 | 127 | (36.2) | |||||||||
Special charges (B) | 18 | 40 | NM | |||||||||
Other operating expenses | 1,508 | 1,397 | 7.9 | |||||||||
Total operating expense | 9,094 | 8,770 | 3.7 | |||||||||
Operating income | 495 | 262 | 88.9 | |||||||||
Operating margin | 5.2 | % | 2.9 | % | 2.3 | pts. | ||||||
Adjusted operating margin (Non-GAAP) (A) | 5.3 | % | 3.3 | % | 2.0 | pts. | ||||||
Nonoperating income (expense): | ||||||||||||
Interest expense | (188) | (162) | 16.0 | |||||||||
Interest capitalized | 22 | 18 | 22.2 | |||||||||
Interest income | 29 | 17 | 70.6 | |||||||||
Miscellaneous, net (B) | 9 | 47 | (80.9) | |||||||||
Total nonoperating expense | (128) | (80) | 60.0 | |||||||||
Income before income taxes | 367 | 182 | 101.6 | |||||||||
Pre-tax margin | 3.8 | % | 2.0 | % | 1.8 | pts. | ||||||
Adjusted pre-tax margin (Non-GAAP) (A) | 4.1 | % | 2.0 | % | 2.1 | pts. | ||||||
Income tax expense (D) | 75 | 37 | 102.7 | |||||||||
Net income | $ | 292 | $ | 145 | 101.4 | |||||||
Diluted earnings per share | $ | 1.09 | $ | 0.51 | 113.7 | |||||||
Diluted weighted average shares | 268.3 | 284.9 | (5.8) | |||||||||
NM Not meaningful | ||||||||||||
UNITED CONTINENTAL HOLDINGS, INC. | |||||||||||||||
PASSENGER REVENUE INFORMATION AND STATISTICS | |||||||||||||||
Passenger revenue information is as follows: | |||||||||||||||
1Q 2019 | Passenger | PRASM | Yield | Available | 1Q 2019 | ||||||||||
Domestic | $ | 5,367 | 8.0% | 0.6% | 0.9% | 7.4% | 36,726 | ||||||||
Atlantic | 1,331 | 6.3% | (2.8%) | (4.8%) | 9.4% | 10,626 | |||||||||
Pacific | 1,121 | 4.9% | 4.5% | 2.2% | 0.3% | 10,923 | |||||||||
Latin America | 906 | 5.3% | 2.6% | 2.3% | 2.6% | 7,370 | |||||||||
International | 3,358 | 5.6% | 1.4% | (0.1%) | 4.1% | 28,919 | |||||||||
Consolidated | $ | 8,725 | 7.1% | 1.1% | 0.5% | 5.9% | 65,645 | ||||||||
Select operating statistics are as follows: | ||||||||||||
Three Months Ended | % | |||||||||||
2019 | 2018 | |||||||||||
Passengers (thousands) | 36,454 | 34,495 | 5.7 | |||||||||
Revenue passenger miles (millions) | 53,097 | 49,849 | 6.5 | |||||||||
Available seat miles (millions) | 65,645 | 61,977 | 5.9 | |||||||||
Passenger load factor: | ||||||||||||
Consolidated | 80.9 | % | 80.4 | % | 0.5 | pts. | ||||||
Domestic | 82.6 | % | 82.8 | % | (0.2) | pts. | ||||||
International | 78.7 | % | 77.5 | % | 1.2 | pts. | ||||||
Passenger revenue per available seat mile (cents) | 13.29 | 13.15 | 1.1 | |||||||||
Total revenue per available seat mile (cents) | 14.61 | 14.57 | 0.3 | |||||||||
Average yield per revenue passenger mile (cents) | 16.43 | 16.35 | 0.5 | |||||||||
Aircraft in fleet at end of period | 1,348 | 1,295 | 4.1 | |||||||||
Average stage length (miles) | 1,448 | 1,443 | 0.3 | |||||||||
Average full-time equivalent employees | 88,730 | 85,561 | 3.7 | |||||||||
Average aircraft fuel price per gallon | $ | 2.05 | $ | 2.11 | (2.8) | |||||||
Fuel gallons consumed (millions) | 985 | 932 | 5.7 | |||||||||
Note: See Part II, Item 6, Selected Financial Data, of UAL's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, for definitions of these statistics. |
UNITED CONTINENTAL HOLDINGS, INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In millions) | March 31, 2019 | December 31, 2018 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,848 | $ | 1,694 | |||
Short-term investments | 2,219 | 2,256 | |||||
Receivables, less allowance for doubtful accounts | 1,789 | 1,426 | |||||
Aircraft fuel, spare parts and supplies, less obsolescence allowance | 972 | 985 | |||||
Prepaid expenses and other | 780 | 733 | |||||
Total current assets | 7,608 | 7,094 | |||||
Total operating property and equipment, net | 28,586 | 27,399 | |||||
Operating lease right-of-use assets | 5,065 | 5,262 | |||||
Other assets: | |||||||
Goodwill | 4,523 | 4,523 | |||||
Intangibles, less accumulated amortization | 3,144 | 3,159 | |||||
Restricted cash | 103 | 105 | |||||
Notes receivable, net | 512 | 516 | |||||
Investments in affiliates and other, net | 1,098 | 966 | |||||
Total other assets | 9,380 | 9,269 | |||||
Total assets | $ | 50,639 | $ | 49,024 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Advance ticket sales | $ | 6,006 | $ | 4,381 | |||
Accounts payable | 2,707 | 2,363 | |||||
Frequent flyer deferred revenue | 2,388 | 2,286 | |||||
Accrued salaries and benefits | 1,660 | 2,184 | |||||
Current maturities of long-term debt | 1,201 | 1,230 | |||||
Current maturities of finance leases | 133 | 123 | |||||
Current maturities of operating leases | 639 | 719 | |||||
Other | 601 | 553 | |||||
Total current liabilities | 15,335 | 13,839 | |||||
Other long-term liabilities and deferred credits: | |||||||
Long-term debt | 12,734 | 12,215 | |||||
Long-term obligations under finance leases | 236 | 224 | |||||
Long-term obligations under operating leases | 5,145 | 5,276 | |||||
Frequent flyer deferred revenue | 2,750 | 2,719 | |||||
Postretirement benefit liability | 1,287 | 1,295 | |||||
Pension liability | 1,454 | 1,576 | |||||
Deferred income taxes | 898 | 828 | |||||
Other | 998 | 1,010 | |||||
Total other long-term liabilities and deferred credits | 25,502 | 25,143 | |||||
Stockholders' equity | 9,802 | 10,042 | |||||
Total liabilities and stockholders' equity | $ | 50,639 | $ | 49,024 | |||
UNITED CONTINENTAL HOLDINGS, INC. | |||||||
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) | |||||||
(In millions) | Three Months Ended | ||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net cash provided by operating activities | $ | 1,915 | $ | 1,709 | |||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (1,609) | (944) | |||||
Purchases of short-term and other investments | (724) | (596) | |||||
Proceeds from sale of short-term and other investments | 768 | 840 | |||||
Loans made to others | — | (10) | |||||
Investment in affiliates | (27) | — | |||||
Other, net | 12 | 15 | |||||
Net cash used in investing activities | (1,580) | (695) | |||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of long-term debt | 646 | 673 | |||||
Payments of long-term debt | (250) | (189) | |||||
Repurchases of common stock | (513) | (529) | |||||
Principal payments under finance leases | (20) | (18) | |||||
Capitalized financing costs | (17) | (16) | |||||
Other, net | (29) | (16) | |||||
Net cash used in financing activities | (183) | (95) | |||||
Net increase in cash, cash equivalents and restricted cash | 152 | 919 | |||||
Cash, cash equivalents and restricted cash at beginning of the period | 1,799 | 1,591 | |||||
Cash, cash equivalents and restricted cash at end of the period | $ | 1,951 | $ | 2,510 | |||
Investing and Financing Activities Not Affecting Cash: | |||||||
Property and equipment acquired through the issuance of debt | $ | 92 | $ | 60 | |||
Operating lease conversions to finance lease | 36 | — | |||||
Right-of-use assets acquired through operating leases | 51 | 103 | |||||
Property and equipment acquired through finance leases | 8 | — | |||||
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 | $ | 2,833 | |
Adjustments: | |||
Special charges and mark-to-market ("MTM") losses on financial instruments: | |||
Impairment of assets | 362 | ||
Termination of a maintenance service agreement | 64 | ||
Severance and benefit costs | 33 | ||
MTM losses on financial instruments | 33 | ||
(Gains) losses on sale of assets and other special charges | 6 | ||
Pre-tax income excluding special charges and MTM losses on financial instruments (Non-GAAP) | 3,331 | ||
add: Interest expense (net of income tax benefit) (a) | 693 | ||
add: Interest component of capitalized aircraft rent (net of income tax benefit) (a) | 193 | ||
add: Net interest on pension (net of income tax benefit) (a) | (12) | ||
less: Income taxes paid | (14) | ||
NOPAT (Non-GAAP) | $ | 4,191 | |
Average Invested Capital (five-quarter average) | |||
Total assets | $ | 49,392 | |
less: Non-interest bearing liabilities (b) | (16,966) | ||
Average invested capital (Non-GAAP) | $ | 32,426 | |
ROIC (Non-GAAP) | 12.9 | % | |
(a) | Income tax benefit measured based on the effective cash tax rate. The effective cash tax rate is calculated by dividing cash taxes paid by pre-tax income excluding special charges and MTM gains on financial instruments. For the twelve months ended March 31, 2019, the effective cash tax rate was 0.4%. |
(b) | Non-interest bearing liabilities include advance ticket sales, frequent flyer deferred revenue, deferred income taxes and other non-interest bearing liabilities. |
UNITED 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 financial instruments is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis. UAL believes that adjusting for interest expense related to finance leases of Embraer ERJ 145 aircraft is useful to investors because of the accelerated recognition of interest expense. |
CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges is useful to investors because special charges are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, ground handling and catering services for third parties and fuel sales, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. |
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below. |
Three Months Ended March 31, | % | |||||||||
2019 | 2018 | |||||||||
CASM (cents) | ||||||||||
Cost per available seat mile (CASM) (GAAP) | 13.85 | 14.15 | (2.1) | |||||||
Special charges (B) | 0.02 | 0.07 | NM | |||||||
Third-party business expenses | 0.05 | 0.05 | — | |||||||
Fuel expense | 3.08 | 3.17 | (2.8) | |||||||
Profit sharing, including taxes | 0.05 | 0.02 | 150.0 | |||||||
CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (Non-GAAP) | 10.65 | 10.84 | (1.8) | |||||||
NM Not Meaningful |
UNITED CONTINENTAL HOLDINGS, INC. | ||||||||||||||||
NON-GAAP FINANCIAL RECONCILIATION (Continued) | ||||||||||||||||
Three Months Ended | $ | % | ||||||||||||||
(in millions) | 2019 | 2018 | ||||||||||||||
Operating expenses (GAAP) | $ | 9,094 | $ | 8,770 | $ | 324 | 3.7 | |||||||||
Special charges (B) | 18 | 40 | (22) | NM | ||||||||||||
Operating expenses, excluding special charges | 9,076 | 8,730 | 346 | 4.0 | ||||||||||||
Adjusted to exclude: | ||||||||||||||||
Third-party business expenses | 30 | 31 | (1) | (3.2) | ||||||||||||
Fuel expense | 2,023 | 1,965 | 58 | 3.0 | ||||||||||||
Profit sharing, including taxes | 33 | 17 | 16 | 94.1 | ||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 6,990 | $ | 6,717 | $ | 273 | 4.1 | |||||||||
Operating income (GAAP) | $ | 495 | $ | 262 | $ | 233 | 88.9 | |||||||||
Adjusted to exclude: | ||||||||||||||||
Special charges (B) | 18 | 40 | (22) | NM | ||||||||||||
Adjusted operating income (Non-GAAP) | $ | 513 | $ | 302 | $ | 211 | 69.9 | |||||||||
Pre-tax income (GAAP) | $ | 367 | $ | 182 | $ | 185 | 101.6 | |||||||||
Adjusted to exclude: | ||||||||||||||||
Special charges (B) | 18 | 40 | (22) | NM | ||||||||||||
MTM gains on financial instruments (B) | (17) | (45) | 28 | NM | ||||||||||||
Interest expense on ERJ 145 finance leases (C) | 21 | — | 21 | NM | ||||||||||||
Adjusted pre-tax income (Non-GAAP) | $ | 389 | $ | 177 | $ | 212 | 119.8 | |||||||||
Net income (GAAP) | $ | 292 | $ | 145 | $ | 147 | 101.4 | |||||||||
Adjusted to exclude: | ||||||||||||||||
Special charges (B) | 18 | 40 | (22) | NM | ||||||||||||
MTM gains on financial instruments (B) | (17) | (45) | 28 | NM | ||||||||||||
Interest expense on ERJ 145 finance leases (C) | 21 | — | 21 | NM | ||||||||||||
Income tax expense (benefit) related to adjustments above | (5) | 1 | (6) | NM | ||||||||||||
Adjusted net income (Non-GAAP) | $ | 309 | $ | 141 | $ | 168 | 119.1 | |||||||||
Diluted earnings per share (GAAP) | $ | 1.09 | $ | 0.51 | $ | 0.58 | 113.7 | |||||||||
Adjusted to exclude: | ||||||||||||||||
Special charges (B) | 0.07 | 0.14 | (0.07) | NM | ||||||||||||
MTM gains on financial instruments (B) | (0.07) | (0.16) | 0.09 | NM | ||||||||||||
Interest expense on ERJ 145 finance leases (C) | 0.08 | — | 0.08 | NM | ||||||||||||
Income tax benefit related to adjustments | (0.02) | — | (0.02) | NM | ||||||||||||
Adjusted diluted earnings per share (Non-GAAP) | $ | 1.15 | $ | 0.49 | $ | 0.66 | 134.7 | |||||||||
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 finance leases is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. UAL also believes that adjusting net cash provided by operating activities for capital expenditures and adjusted capital expenditures is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives. |
Three Months Ended | |||||||||
Capital Expenditures (in millions) | 2019 | 2018 | |||||||
Capital expenditures (GAAP) | $ | 1,609 | $ | 944 | |||||
Property and equipment acquired through the issuance of debt | 92 | 60 | |||||||
Property and equipment acquired through finance leases | 8 | — | |||||||
Adjusted capital expenditures (Non-GAAP) | $ | 1,709 | $ | 1,004 | |||||
Free Cash Flow (in millions) | |||||||||
Net cash provided by operating activities (GAAP) | $ | 1,915 | $ | 1,709 | |||||
Less capital expenditures | 1,609 | 944 | |||||||
Free cash flow, net of financings (Non-GAAP) | $ | 306 | $ | 765 | |||||
Net cash provided by operating activities (GAAP) | $ | 1,915 | $ | 1,709 | |||||
Less adjusted capital expenditures (Non-GAAP) | 1,709 | 1,004 | |||||||
Free cash flow (Non-GAAP) | $ | 206 | $ | 705 | |||||
UNITED CONTINENTAL HOLDINGS, INC. |
NOTES (UNAUDITED) |
(B) Special charges and MTM gains on financial instruments include the following: |
Three Months Ended | |||||||||
(In millions) | 2019 | 2018 | |||||||
Operating: | |||||||||
Impairment of assets | $ | 8 | $ | 23 | |||||
Severance and benefit costs | 6 | 14 | |||||||
(Gains) losses on sale of assets and other special charges | 4 | 3 | |||||||
Total special charges | 18 | 40 | |||||||
Nonoperating MTM gains on financial instruments | (17) | (45) | |||||||
Total special charges and MTM gains on financial instruments | 1 | (5) | |||||||
Income tax expense related to special charges and MTM gains on financial instruments | — | 1 | |||||||
Total special charges and MTM gains on financial instruments, net of income taxes | $ | 1 | $ | (4) | |||||
Impairment of assets: During the three months ended March 31, 2019, the company recorded an $8 million fair value adjustment for aircraft purchased off lease. During the three months ended March 31, 2018, the company recorded a $23 million fair value adjustment for aircraft purchased off lease and impairments related to certain fleet types and certain international slots no longer in use. | |
Severance and benefit costs: During the three months ended March 31, 2019 and 2018, the company recorded $2 million and $8 million, respectively, of severance and benefit costs primarily related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the company and received a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. Also during the three months ended March 31, 2019 and 2018, the company recorded $4 million and $6 million, respectively, of management severance. | |
MTM gains on financial instruments: During the three months ended March 31, 2019 and 2018, the company recorded gains of $14 million and $45 million, respectively, for the change in market value of its investment in Azul Linhas Aéreas Brasileiras S.A. During the first quarter of 2019, the company recorded gains of $3 million for the change in fair value of certain derivative assets related to equity of Avianca Holdings S.A. For equity investments and derivative assets subject to MTM accounting, the company records gains and losses as part of Nonoperating income (expense): Miscellaneous, net in its statements of consolidated operations. | |
(C) Interest expense related to finance leases of Embraer ERJ 145 aircraft | |
During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. The provisions of the new lease agreement resulted in a change in accounting classification of these new leases from operating leases to finance leases up until the purchase date. The company recognized $21 million of additional interest expense in the three months ended March 31, 2019 as a result of this change. | |
(D) Effective tax rate | |
The company's effective tax rate for the three months ended March 31, 2019 and 2018 was 20.4% and 20.3%, respectively. The effective tax rate represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items and the impact of a change in the company's mix of domestic and foreign earnings. |
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
United Airlines Preparing New Nonstop Seasonal Service Between New York/Newark and Cape Town, South Africa
"We are always looking at ways to expand our industry-leading international route network to offer our customers more convenient options. We're thrilled to announce the addition of Africa to our global route offering," said Patrick Quayle, United's vice president of International Network. "This new flight will provide customers with the only nonstop service between the United States and Cape Town."
United's nonstop service between New York/Newark and Cape Town will decrease the current travel time from New York to Cape Town by more than four hours and provide customers from more than 80 U.S. cities with easy one-stop access to Cape Town. If approved, United's service between New York/Newark and Cape Town will be operated with Boeing 787-9 Dreamliner aircraft featuring 48 seats in United Polaris business class, 88 seats in United Economy Plus and 116 seats in United Economy.
Proposed Flight Schedule, Beginning December 15, 2019* | ||||
From | To | Depart | Arrive | Aircraft |
New York/Newark | Cape Town | 8:30 p.m. | 6:00 p.m. +1 | Boeing 787-9 |
Cape Town | New York/Newark | 8:50 p.m. | 5:45 a.m. +1 | Boeing 787-9 |
*Subject to government approval | ||||
Cape Town is the oldest city in South Africa and the country's center of trade and commerce. Located at the shore of Table Bay, the city is home to some of the most popular attractions in South Africa including Table Mountain, Kirstenbosch Botanical Gardens and the Victoria and Alfred Waterfront. Travelers to South Africa often begin their African journey in Cape Town before touring the Cape Winelands, viewing the African penguins at Boulder Beach or traveling beyond Cape Town to explore South Africa's natural beauty including its many national parks, game reserves and beautiful coastlines and beaches of the KwaZulu-Natal and Western Cape provinces.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 355 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 779 mainline aircraft and the airline's United Express carriers operate 569 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Continental 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
National Diversity Council Awards United Chief Digital Officer Linda Jojo with 2019 Top 50 Most Powerful Women in Technology
Since joining United in 2014, Jojo has played a critical role in differentiating the company's operations and customer experience by using innovative data analytics, digital products and e-commerce. Under her leadership, United has issued over 60,000 mobile devices to its pilots, flight attendants, gate agents and technicians to increase mobility and arm employees with real-time data in order to provide more personal and caring service to its customers while improving the airline's operation. Her team has also recently redesigned united.com and released a new, upgraded mobile app to provide intuitive assistance along every step of their journey. These enhancements have maintained United's status as the number one downloaded app in the industry and delivered accelerative revenue growth through digital channels.
"The entire United family is incredibly proud of Linda for being recognized as one of the Top 50 Most Powerful Women in Technology," said United's Chief Executive Officer, Oscar Munoz. "This award is a true testament to her outstanding leadership abilities and the impact she is making not only at United, but across the corporate landscape. She has accomplished a lot in her time at United, and I look forward to all she and her team will do in the future as our airline continues to grow and excel."
Jojo was selected for the 2019 Top 50 Most Powerful Women in Technology Award based on the following criteria:
- Top leader in her organization and profession
- Directly contributes to business growth or strategic direction of the organization
- Effective role model who inspires other women and is active in mentoring
- Operates with the highest integrity and ethical behavior
- Demonstrates a commitment to corporate citizenship
In addition to her work at United, Jojo is passionate about preparing young people for careers in Science, Technology, Engineering and Math (STEM). She is vice chair of the Board of Trustees of the Adler Planetarium in Chicago, an organization with a mission to connect young people to STEM fields through exploration of space and the stars. She is also a member of the Rensselaer Polytechnic Institute board of trustees. Jojo holds a bachelor's degree in computer science and a master's degree in industrial engineering from Rensselaer Polytechnic Institute.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 355 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 779 mainline aircraft and the airline's United Express carriers operate 569 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Continental 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 Airlines Again Receives "Best-of-the-Best" Award for Commitment to Diversity and Inclusion Across All Communities
"Connecting people and uniting the world is not only about linking global cultures, it's about demonstrating that investing in inclusivity is what is right in our hearts and right for our business," said Lori Bradley, senior vice president of Global Talent Management at United Airlines. "We are proud of this distinction and are excited about the future of our relationship with NGLCC and NBIC."
United's diversity and inclusion initiatives include efforts to build a more inclusive workplace and customer experience. Through these initiatives, the airline demonstrates its commitment to engaging with and advocating for the LGBT community, people of color, women, veterans, people with disabilities and others. This recognition follows the airline's recent announcement that United became the first U.S. airline to offer non-binary gender options throughout all booking channels in addition to providing the option to select the title "Mx." during booking and in a MileagePlus customer profile. United customers and employees have the option to identify themselves as M(male), F(female), U(undisclosed) or X(unspecified), corresponding with what is indicated on their passports or identification.
"This designation is highly competitive and is bestowed only to corporations that we see constantly striving to strengthen and celebrate diversity," said NGLCC Co-Founder and President Justin Nelson. "These corporations being honored are true leaders in ongoing global commitments to create a better future for all diverse communities in business."
Since receiving the Best-of-the-Best honor in 2018, United has continued to expand its Business Resource Groups (BRGs) across the U.S. and internationally for employees, adding more chapters for LGBT employees and women, as well as establishing a new BRG for employees with disabilities. The airline has also since hosted a record number of Girls in Aviation Day events in locations across the system and continues to lead the industry by employing the highest number of female pilots.
Alongside partner organizations, customers and employees, United will continue working to build the world's most inclusive airline. For more information on United's commitment to diversity and inclusion, visit https://hub.united.com/diversity-inclusion-fact-sheet/.
Every customer. Every flight. Every day.
In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers' best interests at the heart of its service. In addition to today's announcement, United recently announced that luxury skincare line Sunday Riley will make products exclusively for United customers to experience in amenity kits, released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats.
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 355 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 779 mainline aircraft and the airline's United Express carriers operate 569 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Continental 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