A Message From Oscar Munoz and Scott Kirby
Everyone had a role in this effort and, as you always do, you came through for us. While Oscar, Scott, our union leaders and our government affairs and regulatory teams worked around-the-clock, on behalf of all of you, to educate leaders in the federal government about the unique and dramatic impact the COVID-19 outbreak has had on United Airlines, our United Airlines family sprang into action.
Your participation in the last few days was critical. More than 30,000 of you sent more than 100,000 messages to your representatives in Congress and another 5,000 signed a petition for international employees and retirees. Our union leaders also activated their organizations to amplify the message for the good of our company. The speed at which everyone stepped up and acted was remarkable and shows that when we come together, we can accomplish incredible things for our company. Thank you for what you did to help in getting this legislation passed.
We also wanted to pause and thank you for performing at your best to take care of our customers and each other through all of this uncertainty. Our operations teams have literally been on the front lines of this crisis, working directly with our customers and helping them navigate the ever-changing series of schedule adjustments, government mandates and restrictions on places prohibiting travel.
Specifically, our pilots, flight attendants, airport agents, ramp service, technicians and catering teams are showing up at airports all across the country, every day, helping customers and one another, and looking for opportunities to do the right thing. But they're not the only ones who continue to go the extra mile in these trying times – it should be no surprise that our contact center employees have been particularly tested, handling nearly one million calls in the last two weeks alone. Through it all, they are doing what they do best: being there for our customers and remaining upbeat and positive.
Across the board, we've never been prouder of this team and what we stand for but unfortunately our work is just beginning. As we look forward, the lessons of past disruptions like 9/11 tell us that we can't pretend that we are out of the woods. Things are very different today than they were just four weeks ago.
The global economy has taken a big hit, and we don't expect travel demand to snap back for some time. Our April schedule is already cut by more than 60% and we expect our load factors to fall into the teens or single digits even with 60% less capacity. We are currently planning to make even deeper cuts in May and June.
And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year. We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority. That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.
Amid these questions about United's future and this disruption to our daily routines, we feel it's more important than ever to connect with you. Social distancing makes that challenging, of course, but our team has found a way for us to use technology to host a "virtual town hall" next Thursday, April 2nd, where we can talk more about these challenges and answer your questions. We'll soon have more details on timing and how you can participate. We hope you will.
We remain in the business of serving people even when there are fewer people traveling. And even in this time of uncertainty, some things are constant: we still have the best airline professionals in the world; we still put our customers at the center of everything we do; we still operate in the best hubs; and we still have a deep-seated culture of caring for one another.
So when travel demand returns - and it will return - we will bounce back and be ready to accelerate towards our goal of becoming the best airline in the history of aviation.
Thank you for all you do.
Oscar and Scott
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this release are forward-looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the Company's operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.
The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the Company's ability to execute its strategic operating plan, including its growth, revenue-generating and cost-control initiatives; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); risks of doing business globally, including instability and political developments that may impact its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in the Company's fleet; disruptions to the Company's regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the existing outbreak of coronavirus and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; the Company's ability to maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872-825-8640, media.relations@united.com
Everyone had a role in this effort and, as you always do, you came through for us. While Oscar, Scott, our union leaders and our government affairs and regulatory teams worked around-the-clock, on behalf of all of you, to educate leaders in the federal government about the unique and dramatic impact the COVID-19 outbreak has had on United Airlines, our United Airlines family sprang into action.
Your participation in the last few days was critical. More than 30,000 of you sent more than 100,000 messages to your representatives in Congress and another 5,000 signed a petition for international employees and retirees. Our union leaders also activated their organizations to amplify the message for the good of our company. The speed at which everyone stepped up and acted was remarkable and shows that when we come together, we can accomplish incredible things for our company. Thank you for what you did to help in getting this legislation passed.
We also wanted to pause and thank you for performing at your best to take care of our customers and each other through all of this uncertainty. Our operations teams have literally been on the front lines of this crisis, working directly with our customers and helping them navigate the ever-changing series of schedule adjustments, government mandates and restrictions on places prohibiting travel.
Specifically, our pilots, flight attendants, airport agents, ramp service, technicians and catering teams are showing up at airports all across the country, every day, helping customers and one another, and looking for opportunities to do the right thing. But they're not the only ones who continue to go the extra mile in these trying times – it should be no surprise that our contact center employees have been particularly tested, handling nearly one million calls in the last two weeks alone. Through it all, they are doing what they do best: being there for our customers and remaining upbeat and positive.
Across the board, we've never been prouder of this team and what we stand for but unfortunately our work is just beginning. As we look forward, the lessons of past disruptions like 9/11 tell us that we can't pretend that we are out of the woods. Things are very different today than they were just four weeks ago.
The global economy has taken a big hit, and we don't expect travel demand to snap back for some time. Our April schedule is already cut by more than 60% and we expect our load factors to fall into the teens or single digits even with 60% less capacity. We are currently planning to make even deeper cuts in May and June.
And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year. We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority. That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.
Amid these questions about United's future and this disruption to our daily routines, we feel it's more important than ever to connect with you. Social distancing makes that challenging, of course, but our team has found a way for us to use technology to host a "virtual town hall" next Thursday, April 2nd, where we can talk more about these challenges and answer your questions. We'll soon have more details on timing and how you can participate. We hope you will.
We remain in the business of serving people even when there are fewer people traveling. And even in this time of uncertainty, some things are constant: we still have the best airline professionals in the world; we still put our customers at the center of everything we do; we still operate in the best hubs; and we still have a deep-seated culture of caring for one another.
So when travel demand returns - and it will return - we will bounce back and be ready to accelerate towards our goal of becoming the best airline in the history of aviation.
Thank you for all you do.
Oscar and Scott
About United
United's shared purpose is "Connecting People. Uniting the World." We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 791 mainline aircraft and the airline's United Express partners operate 581 regional aircraft. United is a founding member of Star Alliance, which provides service to 195 countries via 26 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this release are forward-looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to the Company's operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.
The Company's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the Company's ability to execute its strategic operating plan, including its growth, revenue-generating and cost-control initiatives; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); risks of doing business globally, including instability and political developments that may impact its operations in certain countries; demand for travel and the impact that global economic and political conditions have on customer travel patterns; the Company's capacity decisions and the capacity decisions of its competitors; competitive pressures on pricing and on demand; changes in aircraft fuel prices; disruptions in the Company's supply of aircraft fuel; the Company's ability to cost-effectively hedge against increases in the price of aircraft fuel, if it decides to do so; the effects of any technology failures, cybersecurity or significant data breaches; disruptions to services provided by third-party service providers; potential reputational or other impact from adverse events involving the Company's aircraft or operations, the aircraft or operations of its regional carriers or its code share partners or the aircraft or operations of another airline; the Company's ability to attract and retain customers; the effects of any terrorist attacks, international hostilities or other security events, or the fear of such events; the mandatory grounding of aircraft in the Company's fleet; disruptions to the Company's regional network; the impact of regulatory, investigative and legal proceedings and legal compliance risks; the success of the Company's investments in other airlines, including in other parts of the world; industry consolidation or changes in airline alliances; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; costs associated with any modification or termination of the Company's aircraft orders; disruptions in the availability of aircraft, parts or support from its suppliers; the Company's ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with its union groups; any disruptions to operations due to any potential actions by the Company's labor groups; labor costs; the existing outbreak of coronavirus and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the impact of any management changes; extended interruptions or disruptions in service at major airports where the Company operates; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements, environmental regulations and the United Kingdom's withdrawal from the European Union); the seasonality of the airline industry; weather conditions; the costs and availability of aviation and other insurance; the costs and availability of financing; the Company's ability to maintain adequate liquidity; the Company's ability to comply with the terms of its various financing arrangements; the Company's ability to realize the full value of its intangible assets and long-lived assets; any impact to the Company's reputation or brand image and other risks and uncertainties set forth under Part I, Item 1A., "Risk Factors," of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as well as other risks and uncertainties set forth from time to time in the reports it files with the SEC.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872-825-8640, media.relations@united.com
These industry firsts, along with other new options like the ability to combine multiple travel credits and use them on partner airlines, give United customers more flexibility than any other airline. For customers who have travel credits issued on or before August 31, 2021, United is also allowing a one-time opportunity to share these credits with friends and family.
This represents the continuation of the customer experience transformation underway at United, putting the customer first every step of the way. United continues to invest in ways to enhance the travel experience including introducing new policies to encourage and make it simple for customers to return to travel.
"Unlike most airlines where travel credits are difficult to use, at United we're doing something different," said Toby Enqvist, chief customer office for United. "We're showing our customers they have credits – and we're making them easier than ever to use. It's not just the right thing to do for our customers, but it's also the right way to re-introduce more customers to the United travel experience, which we're convinced will make them more likely to fly with us in the future."
Using the United app or United.com, customers with an electronic travel certificate (ETC) or a future flight credit (FFC), can enjoy more options and flexibility than ever including the ability to:
- Automatically see and apply available travel credits on the check-out page when rebooking travel – this is will be available to MileagePlus members first with availability for all customers in the near future
- Combine multiple travel credits to apply when booking new travel plans (customers can now combine multiple Future Flight Credits (FFCs) or Electronic Travel Certificates (ETCs), and will soon be able to combine ETCs and FTCs together)
- Book travel on partner airlines
- Purchase extra legroom seats and pre-pay for checked baggage at time of check-out
- Share travel credits with a friend or family member from wholly unused travel credits issued on or before August 31, 2021 by applying travel credits as payment on check-out screen
As customers return to flying with United, they will notice other new service upgrades including the option to pre-order snacks and beverages online and through United's app. And customers can book trips with confidence knowing that if their plans change, they have the flexibility to adjust their travel with no change fees. United was the first global U.S. airline to eliminate change fees on most tickets and to allow all customers to fly standby for free on the same day of travel to the same destination.
United Next
United is more focused than ever on its commitment to customers and employees. In addition to today's announcement, United has recently:
- Launched an ambitious plan to transform the United customer experience by adding and upgrading hundreds of aircraft as well as investing in features like larger overhead bins, seatback entertainment in every seat and the industry's fastest available Wi-Fi.
- Announced a goal to create 25,000 unionized jobs by 2026 that includes careers as pilots, flight attendants, agents, technicians, and dispatchers.
- Announced that United will train at least 5,000 pilots by 2030 through the United Aviate Academy, with the plan of at least half being women and people of color.
- Required all U.S. employees to receive a COVID-19 vaccination.
- Became the first airline to offer customers the ability to check their destination's travel requirements, schedule COVID-19 tests and more on its mobile app and website.
- Invested in emerging technologies that are designed to decarbonize air travel, like an agreement to work with urban air mobility company Archer, an investment in aircraft startup Heart Aerospace and a purchase agreement with Boom Supersonic.
- Committed to going 100% green by 2050 by reducing 100% of our greenhouse gas emissions without relying on traditional carbon offsets, including a recent agreement to purchase one and a half times the amount of all of the rest of the world's airlines' publicly announced Sustainable Aviation Fuel commitments combined.
- Eliminated change fees for all economy and premium cabin tickets for travel within the U.S.
About United
United's shared purpose is "Connecting People. Uniting the World." In 2019, United and United Express® carriers operated more than 1.7 million flights carrying more than 162 million customers. United has the most comprehensive route network among North American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. For more about how to join the United team, please visit united.com/careers and more information about the company is at united.com. 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
"This new flight to Lagos has been highly anticipated by our customers and offers the first ever nonstop service between Washington, D.C. and Nigeria, as well as convenient, one-stop connections to over 80 destinations throughout the Americas including Houston and Chicago," said Patrick Quayle, United's vice president of international network and alliances. "On behalf of all of United we'd like to offer our sincere thanks to the Nigerian Civil Aviation Authority and U.S. Department of Transportation for supporting our plans to provide this service."
"We are honored to work with our partners at United Airlines to welcome their second nonstop connection from Dulles International to the African continent," said Carl Schultz, acting vice president of airline business development at the Metropolitan Washington Airports Authority. "Lagos joins nearly 50 other nonstop international destinations currently served by the National Capital Region's gateway to the world."
United will operate this route with a Boeing 787 Dreamliner featuring 28 United Polaris® business class lie-flat seats, 21 United Premium Plus® premium economy seats, 36 Economy Plus® seats and 158 standard economy seats. This flight is the only service between the U.S. and Nigeria to offer premium economy product. Flights will depart Washington, D.C. on Monday, Thursday and Saturday and return from Lagos on Tuesday, Friday and Sunday.
This new flight builds on United's expansion into Africa and solidifies United's leadership position to Africa from the D.C. metro area, with more flights to the continent than any other airline. Just this year, United launched new service between New York/Newark and Johannesburg, South Africa and between Washington, D.C. and Accra, Ghana. And this December and January, United will increase its service to Accra from three weekly flights to daily* as customers travel home for the winter holidays. United is also returning its popular service between New York/Newark and Cape Town, South Africa on December 1.
United's new flights comply with each country's COVID-19 protocols and customers should check destination requirements before traveling.
Making International Travel Easier
United is the only U.S. airline to offer its own one-stop-shop where customers can conveniently get "travel-ready" by finding a location to schedule a COVID-19 test as well as upload and store their test results and vaccination records directly through the airline's website and award-winning mobile app with the Travel-Ready Center. The airline's easy-to-use travel tool available on United's mobile app enables customers to reduce stress and save valuable time at the airport right from the palm of their hand. United also announced a collaboration with Abbott and became the first U.S. carrier to set up an easy way for international travelers to bring a CDC-approved test with them, self-administer while abroad, and return home.
United Next
United is more focused than ever on its commitment to customers and employees. In addition to today's announcement, United has recently:
- Launched an ambitious plan to transform the United customer experience by adding and upgrading hundreds of aircraft as well as investing in features like larger overhead bins, seatback entertainment in every seat and the industry's fastest available Wi-Fi.
- Announced a goal to create 25,000 unionized jobs by 2026 that includes careers as pilots, flight attendants, agents, technicians, and dispatchers.
- Announced that United will train at least 5,000 pilots by 2030 through the United Aviate Academy, with the plan of at least half being women and people of color.
- Required all U.S. employees to receive a COVID-19 vaccination.
- Became the first airline to offer customers the ability to check their destination's travel requirements, schedule COVID-19 tests and more on its mobile app and website.
- Invested in emerging technologies that are designed to decarbonize air travel, like an agreement to work with urban air mobility company Archer, an investment in aircraft startup Heart Aerospace and a purchase agreement with Boom Supersonic.
- Committed to going 100% green by 2050 by reducing 100% of our greenhouse gas emissions without relying on traditional carbon offsets, including a recent agreement to purchase one and a half times the amount of all of the rest of the world's airlines' publicly announced Sustainable Aviation Fuel commitments combined.
- Eliminated change fees for all economy and premium cabin tickets for travel within the U.S.
About United
United's shared purpose is "Connecting People. Uniting the World." In 2019, United and United Express® carriers operated more than 1.7 million flights carrying more than 162 million customers. United has the most comprehensive route network among North American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. For more about how to join the United team, please visit united.com/careers and more information about the company is at united.com. United Airlines Holdings, Inc. is traded on the Nasdaq under the symbol "UAL".
*daily flights to Accra this winter are subject to government approval
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO and DES PLAINES, Ill., Sept. 9, 2021 /PRNewswire/ -- United and Honeywell today announced a joint multimillion-dollar investment in Alder Fuels – a cleantech company that is pioneering first-of-its-kind technologies for producing sustainable aviation fuel (SAF) at scale by converting abundant biomass, such as forest and crop waste, into sustainable low-carbon, drop-in replacement crude oil that can be used to produce aviation fuel. When used together across the fuel lifecycle, the Alder technologies, coupled with Honeywell's Ecofining™ process, could have the ability to produce a carbon-negative fuel at spec with today's jet fuel. The goal of the technologies is to produce fuel that is a 100% drop-in replacement for petroleum jet fuel.
As part of the agreement, United is committing to purchase 1.5 billion gallons of SAF from Alder when produced to United's requirements. United's purchase agreement, which is one and a half times the size of the known purchase commitments of all global airlines combined, makes this easily the largest publicly announced SAF agreement in aviation history. United's purchase agreement with Alder also surpasses the previous record set by the airline in 2015 through its investment in Fulcrum BioEnergy with its option to purchase up to 900 million gallons of SAF.
"Since announcing our 100% green commitment in 2020, United has stayed focused on decarbonizing without relying on the use of traditional carbon offsets. Part of that commitment means increasing SAF usage and availability since it's the fastest way to reduce emissions across our fleet. However, to scale SAF as quickly as necessary, we need to look beyond existing solutions and invest in research and development for new pathways like the one Alder is developing," said United CEO Scott Kirby. "United has come further than any other airline making sustainable travel a reality by using SAF to power flights. Our leadership gives customers confidence that they are flying with an airline that recognizes the responsibility we have to help solve climate change."
"As a pioneer of the SAF market with UOP Ecofining™ technology, our work with United and Alder on this new technology will help transform the industry and support the growth of a zero-carbon economy," said Darius Adamczyk, Honeywell chairman and chief executive officer. "This solution will not only advance United's SAF commitment but can help the aviation industry meet its commitments to decouple increases in carbon emissions from growth in passengers."
According to the U.S. Department of Energy (DOE), U.S. forestry residues and agricultural residues alone could provide enough biomass energy to generate more than 17 billion gallons of jet fuel and displace 75% of U.S. aviation fuel consumption. If the U.S. were to broadly adopt regenerative agricultural practices, which capture more carbon in healthier soil compared to traditional methods, the U.S. could generate an additional seven billion gallons of SAF, which would completely replace the U.S.'s current fossil jet fuel consumption.
Alder's technology and demand for its fuel from the aviation industry create a large new market for biomass from regenerative practices. Use of this biomass further enables Alder's production process to be carbon negative over the fuel's lifecycle.
"Aviation poses one of the greatest technology challenges for addressing climate change and SAF has demonstrated the greatest potential. However, there is insufficient raw material to meet demand," said Bryan Sherbacow, CEO of Alder Fuels and senior advisor to World Energy, the company that owns and operates the world's first SAF refinery. "Alder's technology revolutionizes SAF production by enabling use of widely available, low-cost and low-carbon feedstock. The industry is now a major step closer to using 100% SAF with our drop-in fuel that accelerates the global transition to a zero-carbon economy."
Prior to founding Alder, Sherbacow built the world's first SAF refinery utilizing Honeywell's technology and subsequently contracted with United, enabling the airline to become the first globally to use SAF in regular operations on a continuous basis. Since then, United has purchased more SAF than any other airline and, with this agreement now, has more than 70% of the airline industry's publicly announced SAF commitments. Alder's research is supported by the U.S. Defense Logistics Agency, the DOE and a partnership with DOE's National Renewable Energy Laboratory (NREL), focused on developing technology to process organic waste and sustainable, non-food plant material into carbon-negative transportation fuels.
Honeywell innovation established the SAF market with its UOP Ecofining process, which is the first technology used to maximize SAF production for commercial aviation. Building on Honeywell's focus to create sustainable technology, Honeywell will utilize its expertise and proven process of developing sustainable fuels alongside Alder, applying proprietary hydroprocessing design to the process to jointly commercialize the technology. Commercialization is expected by 2025. This announcement is a clear example of how Honeywell's Sustainable Technology Solutions business can partner with early-stage companies and help them scale faster, access customers and advance research and development to help drive sustainability at the global level.
United's joint investment in Alder is the latest by United Airlines Ventures, a venture fund launched earlier this year that focuses on startups, upcoming technologies, and sustainability concepts that will complement United's goal of net zero emissions by 2050 -- without relying on traditional carbon offsets. In 2020, United became the first airline to announce a commitment to invest in carbon capture and sequestration and has since followed with investments in electric vertical takeoff and landing aircraft and 19-seat electric aircraft that have the potential to fly customers up to 250 miles before the decade's end.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
About United Airlines Ventures
United's corporate venture capital fund, United Airlines Ventures, allows the airline to continue investing in emerging companies that have the potential to influence the future of travel. The new fund will concentrate on sustainability concepts that will complement United's goal of net zero emissions by 2050 -- without relying on traditional carbon offsets -- as well as revolutionary aerospace developments and innovative technologies that are expected to create value for customers and United's operation. For more information about United Airlines Ventures, please visit https://www.united.com/ventures.
About Honeywell
Honeywell (www.honeywell.com) is a Fortune 100 technology company that delivers industry-specific solutions that include aerospace products and services; control technologies for buildings and industry; and performance materials globally. Our technologies help aircraft, buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.
About Alder Fuels
Alder Fuels, founded by biofuel and aviation industry entrepreneur Bryan Sherbacow, is a process technology and project development company in the low-carbon energy industry. Alder is commercializing a process to produce crude oil that is carbon negative, scalable and cost-competitive with the petroleum it replaces. Critical to rapid, world-scale deployment, the process will be compatible with the existing petroleum refining and logistics infrastructure. The company's collaboration with United Airlines and Honeywell UOP is expected to propel use of new forms of biomass to power commercial aircraft, reduce fossil fuel consumption and commercialize technologies benefiting the flying public. It builds upon a decade-old relationship among the stakeholders in pioneering commercialization of industry-leading SAF technology. For more information about Alder Fuels, visit http://www.alderfuel.com/.
Forward Looking Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this press 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 United's and Honeywell's operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this press release are based upon information available to us on the date of this press release. Neither United nor Honeywell undertakes any 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. United's and Honeywell's actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the risks and uncertainties set forth under Part II, Item 1A., "Risk Factors," of United Airlines Holdings, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and Honeywell's Annual Report on Form 10-K for the year ended December 31, 2020, as well as other risks and uncertainties set forth from time to time in the reports United Airlines Holdings, Inc. and Honeywell file with the U.S. Securities and Exchange Commission.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com; Honeywell, Mike Hockey, Mike.hockey@honeywell.com, 832 285 4933; Alder Fuels, Alex Gibson, 803-361-3016, agibson@apcoworldwide.com
The live webcast will be available on the investor relations section of United's website at ir.united.com. The company will archive the audio webcast on the website within 24 hours of the presentation, and the webcast will be available for a limited time.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
MileagePlus®Members can donate miles to non-profits providing air travel, medical care and meals to Afghan evacuees through United's mile crowd-sourcing platform, Miles on a Mission
For the last week, United has directly supported the Department of Defense and its mission to transport Afghan evacuees to the U.S.
Participating non-profits, include:
- Miles4Migrants: A non-profit that is using miles to book air travel for Afghans who have left their home country, and need flight assistance to reach their final destination.
- Americares: A health-focused relief and development organization mobilizing medical professionals to provide in-flight medical care on United relief flights to the U.S.
- World Central Kitchen: A food-focused, global relief organization that will provide meals to Afghan refugees as they arrive at various locations across the world.
"United has been proud to put our expertise to work and partner with the Department of Defense over the last week to help urgently evacuate thousands of people from Afghanistan," said Suzi Cabo, managing director of global community engagement, United Airlines. "We're now ready to offer our MileagePlus community the opportunity to support those organizations that are providing critical support to those Afghans and their families that risked their own lives to help our servicemen and women. We know our most loyal customers will step up to support those in need because they always do."
United's mile-raising campaign is an extension of the airline's ongoing collaboration with Americares, World Central Kitchen and Miles4Migrants to support the Afghanistan relief efforts. Medical professionals from Americares have joined United volunteers on several of the airline's recent relief flights to bring Afghan refugees, American citizens and service members to the U.S. United has also supported the efforts of World Central Kitchen at Washington Dulles International Airport as they provide comforting meals for all Afghan evacuees arriving in the U.S.
In addition to helping transport Afghan refugees to the U.S., United is working with partner organizations to help support the thousands of refugees who will need to be resettled across the country once they have been fully processed by the U.S. Government. United is partnering with Miles4Migrants to provide critically needed air travel to fly Afghan citizens from several military bases in the U.S. to their final destinations.
"Like so many, we have been watching the tragic situation in Afghanistan unfold, and are working to support Afghans in their time of need however possible," said Andy Freedman, co-founder and managing director at Miles4Migrants. "We are grateful to have the support of MileagePlus members to help us fly as many Afghan refugees and other displaced persons from around the world to safe new homes."
Additionally, United is working closely with Walgreens to ensure the passengers on the airline's relief flights have all the critical personal care items they need to comfortably travel. Walgreens has generously donated personal care and comfort items to United including diapers, disinfecting wipes, feminine hygiene products, baby bottles and more, which are being provisioned onboard United's CRAF flights to the U.S.
So far, United has operated 13 international missions, carrying more than 3,908 U.S. citizens and Afghan evacuees safely to the U.S. More than 8,000 United employees have raised their hands to participate in these missions – working as crew members, onboard translators, volunteer onboard medics, coordinating the complex operation and more. Many of these employees have personal or family ties to Afghanistan and/or are military veterans.
For more information on United's mile-raising campaign, or to donate, please visit donate.mileageplus.com/afghanrefugeesupport.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
United remains the only airline that gives customers destination-specific travel requirements and the ability to upload country-specific required forms, testing results and vaccination records, all within the United App and on United.com. To date, nearly 3.3 million vaccination records, test results and destination entry forms have been submitted through United's online platforms
"United continues to deliver solutions that make it simple for customers to understand and meet all testing and vaccination requirements directly through our award-winning digital channels," said Linda Jojo, United's executive vice president for technology and Chief Digital Officer. "As more Americans resume international travel, this enhancement to our mobile app and website will give our customers confidence and peace-of mind knowing they have access to all of the information and services they need right in the palm of their hand or on their laptop."
Through United's Travel Ready Center, customers can view a list of localized, eligible COVID testing locations, now including select Albertsons Companies and Walmart locations, as well as additional popular drug store, pharmacy chains, and local healthcare providers across the country. Customers can then select their preferred location and schedule an appointment directly through United's website and mobile app. Once the test is reviewed, customers will see a status indicator informing them that they are "travel-ready" and can receive their mobile boarding pass. The airline plans to continue to expand its offering, including adding international testing sites for customers flying to the U.S. This process was designed with privacy in mind so that limited personal data is involved.
"At Albertsons Companies, we are always seeking convenient solutions for our customers, especially during the COVID-19 pandemic. Our partnership with United Airlines, to provide access to pre-travel COVID testing, is just another example of this intent," said Omer Gajial, Albertsons Companies SVP of Pharmacy and Health. "With our integrated testing solution, our customers can easily schedule their COVID-19 test at one of our convenient store locations, and results are seamlessly and confidentially delivered to United Airlines."
"Our TrustAssure™ platform was engineered to deliver a compliant, clinically sound, state of the art solution that leverages interoperability to thousands of COVID testing locations around the world," said Joseph Gonzalez, Chief Strategy Officer for CLX Health. "The domestic expansion of our TrustAssure network of premier national retail partners supporting COVID-19 testing, including Albertsons and Walmart locations in the United States, will provide travelers a multitude of choices virtually anywhere in the country to help them meet their travel requirements."
"Together with United, Albertsons and Walmart, we innovated at speed and scale to help implement a solution for United's customers, creating a system designed to give them greater support and confidence to navigate the new complexities introduced as a result of COVID-19," said Emily Weiss, global lead of Accenture's Travel industry group. "We are proud to help with this effort and provide a solution to make meeting travel requirements easier for customers as they continue to resume flying domestically and internationally."
Today's news is the latest initiative the airline has introduced in recent months to make travel easier for customers who need proof of a negative COVID-19 test. United was the first to set up an easy way for international travelers to bring a CDC-approved test with them, self-administer while abroad, and return home through an innovative collaboration with Abbott. United was also the first airline to offer COVID-19 tests to customers traveling from San Francisco to Hawaii, and the first to launch a free transatlantic COVID-19 testing pilot program for customers traveling from Newark to London.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
About Albertsons Companies
Albertsons Companies is a leading food and drug retailer that operates more than 1,700 pharmacies across 34 states and the District of Columbia under several well-known banners including Safeway, Vons, Albertsons, Jewel-Osco, Acme, Shaw's, Tom Thumb, Randalls, United Supermarkets, Market Street, Haggen, and Carrs
About CLX Health and TrustAssure™
CLX Health, a privately and wholly owned SiriusIQ company, delivers a clinically sound, cloud-based, multi-stakeholder solution which manages a Covid-19 testing ecosystem of physicians, clinics, hospitals, laboratories, and consumers. CLX Health's TrustAssure™ Global Network of Covid-19 testing partners and providers offer over 5,000 integrated locations across the United States and access to more than 15,000 locations in over 81 countries world-wide to support various "ready to" solutions for work, entertainment, and travel related engagements. For more information, please visit https://www.trustassure.com. To schedule a COVID-19 test, visit: https://booking.trustassure.app/
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"Nothing brings people together like the opportunity to cheer on the teams they love," said Ankit Gupta, vice president of domestic network planning at United. "This upcoming season, United is adding even more direct flights to college and professional football games than we've ever added before so our customers can reunite with the teams, tailgates and touchdowns they may have missed last season."
College Football
United is adding 58 new flights to help some of the most loyal fans in college sports cheer on their teams including adding 44 point to point flights for 21 of their biggest away games. Some of these flights include:
September:
- Austin, TX to Bentonville, AR to see University of Texas at University of Arkansas
- Lincoln, NE to Lansing, MI to see University of Nebraska at Michigan State University
October:
- State College, PA to Cedar Rapids, IA to see Pennsylvania State University at University of Iowa
- Birmingham, AL to College Station, TX to see University of Alabama at Texas A&M University
- Greenville/Spartanburg, SC to Syracuse, NY to see Clemson University at Syracuse University
- Los Angeles, CA to South Bend, IN to see University of Southern California at University of Notre Dame
- Raleigh, NC to South Bend, IN to see University of North Carolina at University of Notre Dame
November:
- Baton Rouge, LA to Birmingham, AL to see Louisiana State University at University of Alabama
- South Bend, IN to San Francisco, CA to see University of Notre Dame at Stanford University
Professional Football
United isn't forgetting about diehard professional football fans and will add 16 new direct flights for four of the most highly anticipated games of the early season, including flights between:
- Green Bay, WI and New Orleans, LA to watch two of the most proficient offenses square off opening weekend in the Big Easy on Sept. 12
- Green Bay, WI and San Francisco, CA to witness the San Francisco 49ers host one of their fiercest conference rivals under the lights of Levi's Stadium the weekend of Sept. 26
- Tampa, FL and Boston, MA when the "GOAT" returns to his old stomping ground on Oct. 3
- Buffalo, NY and Kansas City, MO to see the road team get a shot at revenge the weekend of Oct. 10
The addition of these new point-to-point routes is just the latest way the airline is creatively rebuilding its network. United started to prepare for the return of air travel more than a year ago, matching its flying schedule to demand by maintaining close coordination between its network planning teams and the airline's operating groups. In September, United will fly 88% of its 2019 domestic schedule. To purchase one of these flights, visit https://www.united.com/en-us/game-day.
As customers book trips this fall, they will notice new upgrades to United's service as part of its customer experience transformation. Updates include the option to pre-order snacks and beverages online and through United's app. And customers can book trips with confidence knowing that if their plans change, they have the flexibility to adjust their travel. United was the first global U.S. airline to eliminate change fees on most tickets and to allow all customers to fly standby for free on the same day of travel to the same destination.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"We were proud to do our part to encourage more Americans to get their shot and were thrilled by the overwhelming response we received. This prize clearly struck an emotional chord with our customers, as the opportunity to travel and connect with people and places that matter most is something that clearly has been missed during the pandemic," said United's CEO, Scott Kirby. "I'd like to extend my personal gratitude to everyone who entered the sweepstakes and more importantly, made the decision to get vaccinated."
United is the only U.S. airline to offer its own one-stop-shop where customers can conveniently get "travel-ready" by uploading and storing their COVID-19 test results and vaccination records directly through the airline's website and award-winning mobile app with the Travel-Ready Center. The airline's easy-to-use travel tool enables customers to reduce stress and save valuable time at the airport right from the palm of their hand.
All of the grand prize winners are already starting to plan out the adventures they and their families will have in the upcoming year thanks to United. Ashley Cronkhite is an advertising professional who began working at a grocery store during the pandemic. She plans to travel to European destinations including Ireland and Italy with her best friend – her mom. Robert Simicak plans to travel to national parks around the U.S. with his wife, who is a frontline healthcare worker in Cleveland. Lauren Aldredge will experience her first time flying in a premium cabin and will be traveling to celebrate her 30th birthday with her partner. Sean Husmoe plans to travel with his wife and daughters to check off the final two continents that they have not yet visited, including South America and Antarctica. Lauren M. plans to travel with her family, including a trip to Tahiti with her husband.
The rest of United's customers will have no shortage of opportunities to plan long-awaited getaways of their own, as the airline has continued to grow its schedule in response to increased travel demand. Since May, the airline has launched new flights to Greece, Iceland, South Africa, Ghana and Croatia, and has resumed service as countries like Italy, Portugal, Spain and France re-opened to vaccinated travelers or travelers with a negative COVID test. For those planning to stay closer to home, United is adding nearly 150 flights to warm-weather destinations across the U.S, just in time for the winter holiday season.
Travel-Ready Center
Since its launch, United customers have been able to easily access testing or vaccine requirements needed for travel destinations, upload country specific required forms, completed testing results and vaccination records as well as have them verified, all within United's award-winning mobile app and website with the Travel-Ready Center. The Travel-Ready Center is an industry-leading digital platform that offers customers the ability to choose from thousands of COVID-19 testing providers across the country, book appointments and receive confirmation whether their test results meet their destination's requirements. Once requirements are validated, customers will see a status indicator informing them that they are "travel-ready" and receive their mobile boarding pass. United is the only airline that offers its customers these services as part of an integrated experience within its own app and website. The airline was also the first to set up an easy way for international travelers to bring a CDC-approved test with them, self-administer while abroad, and return home through an innovative collaboration with Abbott.
Mileage Plus: A 40-Year Legacy
United introduced its MileagePlus loyalty program in 1981 and over the past four decades, it has continued to be a leading airline loyalty program, with a number of industry-first innovations designed to enhance the travel experience for members. United added its Premier® program in 1983 and then its first loyalty credit card in 1987. More recently, in 2019, United announced that MileagePlus award miles never expire, and introduced PlusPoints for MileagePlus Premier members, giving customers more flexibility in how they choose to fly. United has also proudly worked together with MileagePlus members to contribute to the communities it serves, most notably donating 3.4 billion miles to charity organizations since 2003.
MileagePlus was named the 2020 Best Frequent Flyer Program by Global Traveler for the 17th consecutive year and was recently recognized as the Best Overall Frequent Flyer program by WalletHub.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United's parent, United Airlines Holdings, Inc., is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
CHICAGO, July 28, 2021 /PRNewswire/ -- Starting today on select flights, all United customers – no matter what cabin of service they're flying in – can use the airline's award-winning mobile app and website to pre-order meals, snacks and beverages up to five days before they're scheduled to travel. United is the first and only U.S. airline to offer economy customers the option to pre-order snacks and beverages, a reflection of the customer experience transformation underway at the airline.
United's pre-order technology is an extension of the airline's contactless payment platform that allows customers to store payment information in a digital wallet. United's pre-order option is now available on select flights departing from Chicago to Orange County, CA Sacramento, CA and San Diego, and will expand to all flights over 1,500 miles by early fall.
"Our new pre-order option reflects the customer experience transformation taking place at United – customers in our economy cabins will have an easy, convenient way to choose their snack or drink, and our flight attendants can move through the cabin faster, delivering more personalized service," said Toby Enqvist, chief customer officer for United. "This new feature also builds on our existing contactless payment technology, which has enabled us to safely resume our inflight food and beverage program on select flights."
How It Works
- Five days prior to departure, customers will see an option in the Reservation Details section of the United app or on United.com to pre-order food and beverage items available for their specific flight. Customers will also receive an email notifying them when pre-order is available.
- In economy cabins, customers can pre-order snacks and beverages from United's buy-on-board menu. They will be asked to enter their credit card information but will not be charged until the items are served to them onboard.
- In premium cabins, customers can select their meal option directly from the United app or website. Once they make their selection, they will get a receipt emailed to them.
About United's Contactless Payment Technology
For customers looking to purchase drinks and snack items while onboard, United's contactless payment platform allows them to store their payment information in a digital wallet on the United app and on United.com prior to departure.
- Once in flight, customers can access a menu to view available items either on the United app or in Hemispheres® magazine.
- Rather than handing the flight attendant a credit card, the flight attendant will ask for the customer's name and seat to confirm the card on file.
- Once confirmed, customers will receive their products and the card on file will be charged.
About United's Newly Enhanced Buy-On-Board Menu
United recently unveiled its refreshed buy-on-board menu, which includes a wide variety of food and beverage offerings including:
- Adult Beverage Options: Mango White Claw®; red, white and sparkling wine, and new beer options such as Breckenridge Brewery Juice Drop Hazy IPA and Michelob ULTRA®.
- Three New Snack Boxes: A Tapas snack box with European-inspired offerings; a Takeoff snack box with high-protein options; a Recline snack box with movie theater themed treats.
- A la Carte Snack Options: Including chips, dips, trail mix and chocolate-covered dried fruit.
New Domestic Premium Cabin Menu Items
United also introduced brand-new meal offerings to customers seated in domestic premium cabins on flights over 1,500 miles and hub-to-hub flights over 800 miles.
- The enhanced meal service includes a choice of entrees – including fresher options like egg scramble with plant-based chorizo and grilled chicken breast with orzo and lemon basil pesto – sides and dessert.
- United has also teamed with Eli's Cheesecake to create a uniquely United chocolate pie flavor called "Pie in the Sky."
- The meals will be served on one tray, with items individually wrapped, to limit person-to-person contact and further the safety of our employees and customers.
United's pre-order technology is available beginning July 28 for flights departing on or after August 2. The technology will initially be available on flights from Chicago O'Hare International Airport to San Diego International Airport, Sacramento International Airport, Orange County's John Wayne Airport and Honolulu's Daniel K. Inouye International Airport.
For information on snacks available, United's contactless payment technology and FAQs, visit United.com/snacktime.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
United is the only U.S. airline to offer its own one-stop-shop where customers can conveniently get "travel-ready" by uploading and storing their COVID-19 test results and vaccination records directly through the airline's website and award-winning mobile app with the Travel-Ready Center. The airline's easy-to-use travel tool enables customers to reduce stress and save valuable time at the airport right from the palm of their hand. United also announced a new collaboration with Abbott and became the first U.S. carrier to set up an easy way for international travelers to bring a CDC-approved test with them, self-administer while abroad, and return home.
"Today's announcement is yet another major milestone in recovering from the COVID-19 pandemic with the opening of one of the most important markets from the U.S." said Patrick Quayle, vice president of international network and alliances at United. "United has demonstrated that we can operate flights between the U.S. and England safely and we are eager to help rebuild these economies by facilitating business and leisure travel."
United in England
United has provided service to London Heathrow for nearly 30 years and over the course of the pandemic has maintained continuous service between the U.S. and London. In August, United is increasing its service from Houston to London from five times weekly to daily and adding a second daily flight from Washington, D.C. United will continue operating daily flights to London from Chicago, New York/Newark, San Francisco. The airline plans to continue offering these six daily flights in September.
United flies to more European destinations than any other U.S. carrier, and is welcoming back customers on more than 30 daily flights to 16 destinations in Europe this summer. The carrier has expanded its service to Europe including new routes to Dubrovnik, Croatia; Reykjavik, Iceland and Athens, Greece. All of these flights are available for purchase on united.com. To see the full list of reopened countries where United is flying visit united.com/reopen. Customers should review local country requirements before they travel.
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 SM 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. To manage entry requirements in different destinations, and find places to get tests, customer can visit Travel Ready Center on United's app and website.
About United
United's shared purpose is "Connecting People. Uniting the World." For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of UAL is traded on the Nasdaq under the symbol "UAL".
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com
"Thanks to the professionalism and perseverance of the United employees who have worked so hard to take care of our customers through the pandemic, our airline has reached a meaningful turning point: we're expecting to be back to making a profit once again," said United Airlines CEO Scott Kirby. "As we emerge from the most disruptive crisis our company has faced, we're now focused squarely on our United Next strategy that will transform our customers' onboard experience and help fulfill United's incredible potential."
*For purposes of this release, profitability refers to positive adjusted pre-tax income, which is a non-GAAP financial measure calculated as pre-tax income excluding special charges (credits), unrealized gains and losses on investments, net. We are not providing a target for or a reconciliation to pre-tax income, the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts. |
Second Quarter Financial Results
- Reported second quarter 2021 capacity down 46% compared to second quarter 2019.
- Reported second quarter 2021 net loss of $0.4 billion, adjusted net loss3 of $1.3 billion.
- Reported second quarter 2021 total operating revenue of $5.5 billion, down 52% compared to second quarter 2019.
- Reported second quarter 2021 Total Revenue per Available Seat Mile (TRASM) of down 11.3% compared to second quarter 2019.
- Reported second quarter 2021 operating expenses down 42%, down 32% excluding special charges (credits)4, compared to second quarter 2019.
- Reported second quarter 2021 pre-tax margin of negative 10.3%, negative 29.2% on an adjusted5 basis.
- Reported second quarter 2021 adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin6 of negative 10.7%.
- Raised secured financing collateralized by substantially all of United's network of slots, routes, and gates — made up of $4 billion in a private offering of bonds, a $5 billion term loan, and a $1.75 billion revolving credit facility. This is a first of its kind financing and the largest non-merger financing transaction in airline history.
- Reported second quarter 2021 ending available liquidity7 of approximately $23 billion.
Outlook
- Expects third quarter 2021 capacity to be down around 26% compared to third quarter 2019, up 39% quarter over quarter.
- Based on current trends, the company expects third quarter 2021 TRASM growth to be positive compared to the third quarter 2019, the first quarter of positive TRASM growth since the second quarter of 2020.
- Expects third quarter 2021 cost per available seat mile, excluding fuel, profit sharing, third-party business expenses, and special charges (CASM-ex)2 to be up approximately 17% compared to third quarter 2019 (includes a 6-point headwind largely driven by lower stage length and lower gauge of our network, including the temporary grounding of 52 Boeing Pratt & Whitney powered 777 widebody aircraft).
- Third quarter 2021 estimated fuel price of approximately $2.17 per gallon.
- Expects third quarter 2021 adjusted pre-tax income1 to be positive, the first quarter of positive adjusted pre-tax income since fourth quarter 2019. Additionally, expects fourth quarter 2021 adjusted pre-tax income1 to be positive.
- Expects 2022 cost per available seat mile, excluding fuel, profit sharing, third-party business expenses, and special charges (CASM-ex)2 to be lower than 2019.
Key Highlights
- Announced the purchase of 270 new Boeing and Airbus aircraft – the largest combined order in the airline's history and the biggest by an individual carrier in the last decade.
- As part of "United Next" announced plans to retrofit 100% of the mainline, narrow-body fleet to transform the customer experience and create a new signature interior with a roughly 75% increase in premium seats per departure, larger overhead bins, seatback entertainment in every seat and the industry's fastest available WiFi.
- Established a new diversity goal by striving to have 50% of students at the new United Aviate Academy be women and people of color.
- Launched the first-of-its-kind Eco-Skies Alliance℠ program through which corporate customers contributed to the purchase of approximately 3.4 million gallons of sustainable aviation fuel (SAF) in 2021.
- Entered into a commercial agreement with Denver-based aerospace company Boom Supersonic to add aircraft to United's global fleet as well as a cooperative sustainability initiative — a move that facilitates a leap forward in returning supersonic speeds to aviation.
- Provided customers the ability to schedule COVID-19 tests and have results reviewed in advance through United's industry-leading Travel-Ready Center.
- Teamed up with more than a dozen new environmental, nonprofit partners to strengthen the company's sustainability commitment to become 100% green by reducing its greenhouse gas emissions 100% by 2050.
- Launched a new, corporate venture fund – United Airlines Ventures – which will allow the airline to continue investing in emerging companies that have the potential to influence the future of travel.
- Offered loyalty program members the chance to win free flights for a year's worth of travel through "Your Shot to Fly" sweepstakes to encourage COVID-19 vaccinations in support of the Biden administration's national effort to encourage people to get vaccinated.
- Announced a first-of-its-kind collaboration to use Abbott's BinaxNOW™ COVID-19 Home Test and Abbott's NAVICA app to help make the international travel experience more seamless.
Taking Care of Our Customers
- Introduced three new promotions that let eligible MileagePlus® Premier® members "Pick Your Path" depending on their upcoming travel plan giving members the chance to fast track their Premier status or earn bonus miles.
- Expanded beer, wine, and snacks to nearly all flights over two hours including new options like White Claw® Hard Seltzer, Breckenridge Brewery Juice Drop Hazy IPA, and Kona Brewing Co. Big Wave Golden Ale.
Reimagining the Route Network
- Announced seven new domestic routes and three new international routes and launched 39 domestic routes and five international routes, with 10 more international routes planned to launch in 2021.
- New route announcements included Dubrovnik, Croatia to Newark/New York; Athens, Greece to Washington, D.C.; and Reykjavik, Iceland to Chicago.
- New route launches included two new long-haul international routes from Accra, Ghana to Washington, DC, and Johannesburg, South Africa to Newark/New York, and three new routes to Hawaii including Maui/Kahului to Newark/New York, Honolulu to Orange County, and Kona to Chicago.
- Resumed nonstop service on 33 domestic routes and 14 international routes compared to the first quarter of 2021.
- Compared to March 2021, United had nonstop service in 55 more domestic and 24 more international routes in June 2021.
- Announced plans to fly roughly 80% of its full schedule in July 2021 compared to July 2019.
Assisting the Communities We Serve
- Announced a program with the Golden State Warriors to launch the Franchise Fund, a program designed to support minority-owned Bay Area small businesses.
- More than 5 million miles donated from United's customers to charities in need of travel through United's Miles on a Mission program.
- Over 18,200 pounds of food and beverages ($66,400 value) donated to local food banks.
- Over $326,000 raised for Airlink, World Central Kitchen, Americares, and Global Giving via CrowdRising to support COVID-19 relief efforts in India, including a $40,000 donation by United Airlines.
Additional Noteworthy Accomplishments
- Celebrated the 40th anniversary of the MileagePlus program by giving away 4 million miles to essential healthcare workers.
- Recently redesigned United mobile app was voted the Best Travel App in the 25th annual Webby Awards.
- Joined forces with Chase and Visa to offer eligible United MileagePlus Visa cardmembers the ability to earn five total miles for every dollar donated to select charities supporting the LGBTQ+ community.
- Became the first corporation in at least five years to be presented with the "Volunteer Group of the Year" award from Food Bank of the Rockies. Also, helped Food Bank of the Rockies raise the equivalent of 30,400 meals via a fundraiser.
- In the second quarter of 2021, through a combination of cargo-only flights and passenger flights, United has transported nearly 298 million pounds of freight, which includes nearly 48 million pounds of vital shipments, such as medical kits, PPE, pharmaceuticals, and medical equipment, and more than 765,000 pounds of military mail and packages.
- In the second quarter of 2021, there was an uptick in COVID-19 vaccine shipments, where United shipped 225,000 pounds of vaccines.
_________________________________________________________________________ |
1. Adjusted pre-tax income is a non-GAAP financial measure calculated as pre-tax income excluding special charges (credits), unrealized (gains) losses on investments, net. We are not providing a target for or a reconciliation to pre-tax income, the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts. |
2. CASM-ex (adjusted operating expense per available seat mile) is a non-GAAP measure that excludes fuel, profit sharing, third-party business expense and special charges. We are not providing a target or reconciliation to CASM, the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts. |
3. Excludes special charges (credits), unrealized (gains) losses on investments, net, debt extinguishment and modification fees and special termination benefits. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. |
4. Excludes operating special charges (credits). Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. Second quarter 2019 operating expenses were $9.859 billion, excluding $71 million of special charges. |
5. Adjusted to exclude special charges (credits), unrealized (gains) losses on investments, net, debt extinguishment and modification fees and special termination benefits. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. |
6. Adjusted EBITDA margin is a non-GAAP financial measure calculated as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), excluding special charges and unrealized (gains) losses on investments, divided by total operating revenue. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release. |
7. Includes cash, cash equivalents, short-term investments and undrawn credit facilities. |
Earnings Call
UAL will hold a conference call to discuss second-quarter 2021 financial results as well as its financial and operational outlook for the third-quarter 2021 and beyond, on Wednesday, July 21, at 9:30 a.m. CT/10:30 a.m. ET. 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'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".
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this release, including statements regarding our outlook for the remainder of 2021, 2022 and 2023, 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," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "forecast," "guidance," "outlook," "goals," "targets" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as conditional statements, 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: the adverse impacts of the ongoing COVID-19 global pandemic, and possible outbreaks of another disease or similar public health threat in the future, on our business, operating results, financial condition, liquidity and near-term and long-term strategic operating plan, including possible additional adverse impacts resulting from the duration and spread of the pandemic; unfavorable economic and political conditions in the United States and globally; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; our reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; adverse publicity, harm to our brand; reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners, or another airline; terrorist attacks, international hostilities or other security events, or the fear of terrorist attacks or hostilities, even if not made directly on the airline industry; increasing privacy and data security obligations or a significant data breach; disruptions to our regional network and United Express flights provided by third-party regional carriers; the failure of our significant investments in other airlines, equipment manufacturers and other aviation industry participants to produce the returns or results we expect; further changes to the airline industry with respect to alliances and joint business arrangements or due to consolidations; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned; our reliance on single suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions on our operations; extended interruptions or disruptions in service at major airports where we operate; the impacts of seasonality and other factors associated with the airline industry; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; any damage to our reputation or brand image; the limitation of our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; the costs of compliance with extensive government regulation of the airline industry; costs, liabilities and risks associated with environmental regulation and climate change; the impacts of our significant amount of financial leverage from fixed obligations, the possibility we may seek material amounts of additional financial liquidity in the short-term and the impacts of insufficient liquidity on our financial condition and business; failure to comply with the covenants in the MileagePlus financing agreements, resulting in the possible acceleration of the MileagePlus indebtedness, foreclosure upon the collateral securing the MileagePlus indebtedness or the exercise of other remedies; failure to comply with financial and other covenants governing our other debt; changes in, or failure to retain, our senior management team or other key employees; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions; increases in insurance costs or inadequate insurance coverage; and other risks and uncertainties set forth under Part II, Item 1A., "Risk Factors," of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, 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-
UNITED AIRLINES HOLDINGS, INC STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED) | ||||||||||||||||||||||||
Three Months Ended June 30, | % Increase/ (Decrease) | Six Months Ended June 30, | % Increase/ (Decrease) | |||||||||||||||||||||
(In millions, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||
Passenger revenue | $ | 4,366 | $ | 681 | 541.1 | $ | 6,682 | $ | 7,746 | (13.7) | ||||||||||||||
Cargo | 606 | 402 | 50.7 | 1,103 | 666 | 65.6 | ||||||||||||||||||
Other operating revenue | 499 | 392 | 27.3 | 907 | 1,042 | (13.0) | ||||||||||||||||||
Total operating revenue | 5,471 | 1,475 | 270.9 | 8,692 | 9,454 | (8.1) | ||||||||||||||||||
Operating expense: | ||||||||||||||||||||||||
Salaries and related costs | 2,276 | 2,170 | 4.9 | 4,500 | 5,125 | (12.2) | ||||||||||||||||||
Aircraft fuel | 1,232 | 240 | 413.3 | 2,083 | 1,966 | 6.0 | ||||||||||||||||||
Depreciation and amortization | 620 | 618 | 0.3 | 1,243 | 1,233 | 0.8 | ||||||||||||||||||
Landing fees and other rent | 564 | 429 | 31.5 | 1,083 | 1,052 | 2.9 | ||||||||||||||||||
Regional capacity purchase | 547 | 388 | 41.0 | 1,026 | 1,125 | (8.8) | ||||||||||||||||||
Aircraft maintenance materials and outside repairs | 302 | 110 | 174.5 | 571 | 544 | 5.0 | ||||||||||||||||||
Distribution expenses | 139 | 31 | 348.4 | 224 | 326 | (31.3) | ||||||||||||||||||
Aircraft rent | 52 | 47 | 10.6 | 107 | 97 | 10.3 | ||||||||||||||||||
Special charges (credits) | (948) | (1,449) | NM | (2,325) | (1,386) | NM | ||||||||||||||||||
Other operating expenses | 957 | 528 | 81.3 | 1,831 | 1,981 | (7.6) | ||||||||||||||||||
Total operating expense | 5,741 | 3,112 | 84.5 | 10,343 | 12,063 | (14.3) | ||||||||||||||||||
Operating loss | (270) | (1,637) | (83.5) | (1,651) | (2,609) | (36.7) | ||||||||||||||||||
Nonoperating income (expense): | ||||||||||||||||||||||||
Interest expense | (426) | (196) | 117.3 | (779) | (367) | 112.3 | ||||||||||||||||||
Interest capitalized | 22 | 17 | 29.4 | 39 | 38 | 2.6 | ||||||||||||||||||
Interest income | 12 | 11 | 9.1 | 19 | 37 | (48.6) | ||||||||||||||||||
Unrealized gains (losses) on investments, net | 147 | 9 | NM | 125 | (310) | NM | ||||||||||||||||||
Miscellaneous, net | (49) | (207) | (76.3) | (68) | (906) | (92.5) | ||||||||||||||||||
Total nonoperating expense, net | (294) | (366) | (19.7) | (664) | (1,508) | (56.0) | ||||||||||||||||||
Loss before income tax benefit | (564) | (2,003) | (71.8) | (2,315) | (4,117) | (43.8) | ||||||||||||||||||
Income tax benefit | (130) | (376) | (65.4) | (524) | (786) | (33.3) | ||||||||||||||||||
Net loss | $ | (434) | $ | (1,627) | (73.3) | $ | (1,791) | $ | (3,331) | (46.2) | ||||||||||||||
Diluted loss per share | $ | (1.34) | $ | (5.79) | (76.9) | $ | (5.60) | $ | (12.59) | (55.5) | ||||||||||||||
Diluted weighted average shares | 323.6 | 280.7 | 15.3 | 320.1 | 264.6 | 21.0 | ||||||||||||||||||
NM Not meaningful | ||||||||||||||||||||||||
UNITED AIRLINES HOLDINGS, INC. PASSENGER REVENUE INFORMATION AND STATISTICS | |||||||||||||||||||||
Passenger revenue information is as follows (in millions, except for percentage changes): | |||||||||||||||||||||
2Q 2021 Passenger Revenue | Passenger Revenue vs. 2Q 2020 | PRASM vs. | PRASM vs. | Yield vs. | Available Seat Miles vs. 2Q 2020 | Available Seat Miles vs. 2Q 2019 | 2Q 2021 | 2Q 2021 | |||||||||||||
Domestic | $ | 3,288 | 506.6% | 57.0% | (15.7%) | (32.7%) | 286.1% | (40.4%) | 24,717 | 20,587 | |||||||||||
Atlantic | 323 | 466.7% | 14.4% | (61.0%) | (35.2%) | 396.3% | (57.0%) | 6,065 | 2,827 | ||||||||||||
Pacific | 132 | 288.2% | 42.7% | (48.8%) | 13.8% | 172.1% | (77.3%) | 2,438 | 587 | ||||||||||||
Latin America | 623 | 1,197.9% | (10.1%) | (23.4%) | (44.8%) | 1,343.1% | (7.2%) | 6,393 | 4,513 | ||||||||||||
International | 1,078 | 675.5% | 33.3% | (41.6%) | (32.8%) | 481.6% | (53.1%) | 14,896 | 7,927 | ||||||||||||
Consolidated | $ | 4,366 | 541.1% | 45.0% | (23.0%) | (33.2%) | 342.0% | (45.9%) | 39,613 | 28,514 | |||||||||||
Select operating statistics are as follows: | ||||||||||||||||||||||||
Three Months Ended June 30, | % Increase/ (Decrease) | Six Months Ended June 30, | % Increase/ (Decrease) | |||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||
Passengers (thousands) | 23,909 | 2,813 | 749.9 | 38,583 | 33,172 | 16.3 | ||||||||||||||||||
Revenue passenger miles (millions) | 28,514 | 2,970 | 860.1 | 45,762 | 46,199 | (0.9) | ||||||||||||||||||
Available seat miles (millions) | 39,613 | 8,963 | 342.0 | 69,983 | 69,901 | 0.1 | ||||||||||||||||||
Passenger load factor: | ||||||||||||||||||||||||
Consolidated | 72.0 | % | 33.1 | % | 38.9 | pts. | 65.4 | % | 66.1 | % | (0.7) | pts. | ||||||||||||
Domestic | 83.3 | % | 35.7 | % | 47.6 | pts. | 75.4 | % | 65.6 | % | 9.8 | pts. | ||||||||||||
International | 53.2 | % | 26.8 | % | 26.4 | pts. | 48.8 | % | 66.8 | % | (18.0) | pts. | ||||||||||||
Passenger revenue per available seat mile (cents) | 11.02 | 7.60 | 45.0 | 9.55 | 11.08 | (13.8) | ||||||||||||||||||
Total revenue per available seat mile (cents) | 13.81 | 16.46 | (16.1) | 12.42 | 13.52 | (8.1) | ||||||||||||||||||
Average yield per revenue passenger mile (cents) | 15.31 | 22.93 | (33.2) | 14.60 | 16.77 | (12.9) | ||||||||||||||||||
Cargo revenue ton miles (millions) | 892 | 496 | 79.8 | 1,657 | 1,191 | 39.1 | ||||||||||||||||||
Aircraft in fleet at end of period | 1,315 | 1,307 | 0.6 | 1,315 | 1,307 | 0.6 | ||||||||||||||||||
Average stage length (miles) | 1,309 | 1,075 | 21.8 | 1,297 | 1,347 | (3.7) | ||||||||||||||||||
Employee headcount, as of June 30 (in thousands) (a) | 84.4 | 91.8 | (8.1) | 84.4 | 91.8 | (8.1) | ||||||||||||||||||
Average aircraft fuel price per gallon | $ | 1.97 | $ | 1.18 | 66.9 | $ | 1.87 | $ | 1.76 | 6.3 | ||||||||||||||
Fuel gallons consumed (millions) | 625 | 204 | 206.4 | 1,115 | 1,114 | 0.1 | ||||||||||||||||||
(a) The 2021 employee headcount includes approximately 4,500 employees who participated in the Company's voluntary leave programs | ||||||||||||||||||||||||
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, 2020, for definitions of these statistics. |
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION
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 earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), 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, CASM, excluding special charges, third-party business expenses, fuel, and profit sharing (CASM-ex), and operating expenses excluding special charges, among others. UAL believes that adjusting for special charges (credits), nonoperating debt extinguishment and modification fees, nonoperating special termination benefits and settlement losses and nonoperating credit losses is useful to investors because these items are not indicative of UAL's ongoing performance. UAL believes that adjusting for unrealized (gains) losses on investments, net is useful to investors because those unrealized gains or losses may not ultimately be realized on a cash basis.
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 (credits), third-party business expenses, fuel and profit sharing. UAL believes that adjusting for special charges (credits) is useful to investors because special charges (credits) 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, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel costs from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because this exclusion allows investors to better understand and analyze our operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.
Reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures are included below.
Three Months Ended June 30, | Six Months Ended June 30, | Year Ended | |||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | 2019 | 2019 | |||||||||||||||
CASM (cents) | |||||||||||||||||||||
Cost per available seat mile (CASM) (GAAP) | 14.49 | 34.72 | 13.56 | 14.78 | 17.26 | 13.70 | 13.67 | ||||||||||||||
Special charges (credits) | (2.40) | (16.17) | 0.10 | (3.32) | (1.98) | 0.07 | 0.09 | ||||||||||||||
Third-party business expenses | 0.08 | 0.65 | 0.05 | 0.08 | 0.15 | 0.05 | 0.06 | ||||||||||||||
Fuel expense | 3.11 | 2.68 | 3.26 | 2.97 | 2.81 | 3.17 | 3.14 | ||||||||||||||
Profit sharing | — | — | 0.22 | — | — | 0.14 | 0.17 | ||||||||||||||
CASM, excluding special charges (credits), third-party business | 13.70 | 47.56 | 9.93 | 15.05 | 16.28 | 10.27 | 10.21 | ||||||||||||||
Adjusted EBITDA | June | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||
2021 | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | |||||||||||||||||||||
Net income (loss) | $ | 183 | $ | (434) | $ | (1,627) | $ | 1,052 | $ | (1,791) | $ | (3,331) | 1,344 | ||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||
Depreciation and amortization | 207 | 620 | 618 | 560 | 1,243 | 1,233 | 1,107 | ||||||||||||||||||||
Interest expense, net of capitalized interest and interest income | 133 | 392 | 168 | 132 | 721 | 292 | 269 | ||||||||||||||||||||
Income tax expense (benefit) | 41 | (130) | (376) | 302 | (524) | (786) | 377 | ||||||||||||||||||||
Special charges (credits) | (245) | (948) | (1,449) | 71 | (2,325) | (1,386) | 89 | ||||||||||||||||||||
Nonoperating unrealized (gains) losses on investments, net | (107) | (147) | (9) | (34) | (125) | 310 | (51) | ||||||||||||||||||||
Nonoperating debt extinguishment and modification fees | — | 62 | — | — | 62 | — | — | ||||||||||||||||||||
Nonoperating special termination benefits and settlement losses | — | — | 231 | — | 46 | 231 | — | ||||||||||||||||||||
Nonoperating credit loss on BRW term loan and guarantee | — | — | — | — | — | 697 | — | ||||||||||||||||||||
Adjusted EBITDA, excluding operating and | $ | 212 | $ | (585) | $ | (2,444) | $ | 2,083 | $ | (2,693) | $ | (2,740) | $ | 3,135 | |||||||||||||
Adjusted EBITDA margin | 9.2 | % | (10.7) | % | (165.7) | % | 18.3 | % | (31.0) | % | (29.0) | % | 14.9 | % | |||||||||||||
NM Not Meaningful | |||||||||||||||||||||||||||
UNITED AIRLINES HOLDINGS, INC.
NON-GAAP FINANCIAL RECONCILIATION (Continued)
UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities 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, adjusted capital expenditures, and aircraft operating lease additions is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives.
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Capital Expenditures (in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Capital expenditures, net of flight equipment purchase deposit returns (GAAP) | $ | 861 | $ | 39 | $ | 1,305 | $ | 1,998 | |||||||
Property and equipment acquired through the issuance of debt, finance leases, | 252 | 498 | 761 | 626 | |||||||||||
Adjustment to property and equipment acquired through other financial | 26 | (53) | (14) | (53) | |||||||||||
Adjusted capital expenditures (Non-GAAP) | $ | 1,139 | $ | 484 | $ | 2,052 | $ | 2,571 | |||||||
Free Cash Flow (in millions) | |||||||||||||||
Net cash provided by (used in) operating activities (GAAP) | $ | 2,675 | $ | (130) | $ | 3,122 | $ | (67) | |||||||
Less capital expenditures, net of flight equipment purchase deposit returns | 861 | 39 | 1,305 | 1,998 | |||||||||||
Free cash flow, net of financings (Non-GAAP) | $ | 1,814 | $ | (169) | $ | 1,817 | $ | (2,065) | |||||||
Net cash provided by (used in) operating activities (GAAP) | $ | 2,675 | $ | (130) | $ | 3,122 | $ | (67) | |||||||
Less adjusted capital expenditures (Non-GAAP) | 1,139 | 484 | 2,052 | 2,571 | |||||||||||
Less aircraft operating lease additions | 33 | 12 | 175 | 33 | |||||||||||
Free cash flow (Non-GAAP) | $ | 1,503 | $ | (626) | $ | 895 | $ | (2,671) | |||||||
(a) United entered into agreements with third parties to finance through sale and leaseback transactions new Boeing model 787 aircraft and Boeing model 737 MAX aircraft subject to purchase agreements between United and Boeing. In connection with the delivery of each aircraft from Boeing, United assigned its right to purchase such aircraft to the buyer, and simultaneous with the buyer's purchase from Boeing, United entered into a long-term lease for such aircraft with the buyer as lessor. Eleven Boeing model aircraft were delivered in 2021 under these transactions (and each is presently subject to a long-term lease to United). Upon delivery, the company accounted for the aircraft, which have a repurchase option at a price other than fair value, as part of Flight equipment on the company's balance sheet and the related obligation as Other current liabilities and Other financial liabilities from sale-leasebacks (noncurrent) since they do not qualify for sale recognition. If the repurchase option is not exercised, these aircraft will be accounted for as leased assets at the time of the option expiration and the related assets and liabilities will be adjusted to the present value of the remaining lease payments at that time. This adjustment reflects the difference between the recorded amounts and the present value of future lease payments at inception. | |||||||||||||||
UNITED AIRLINES HOLDINGS, INC. NON-GAAP FINANCIAL RECONCILIATION (Continued) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Increase/ (Decrease) | % Increase/ (Decrease) | Six Months Ended June 30, | Increase/ (Decrease) | % Increase/ (Decrease) | ||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Operating expenses (GAAP) | $ | 5,741 | $ | 3,112 | $ | 2,629 | 84.5 | $ | 10,343 | $ | 12,063 | $ | (1,720) | (14.3) | |||||||||||||||
Special charges (credits) | (948) | (1,449) | (501) | NM | (2,325) | (1,386) | 939 | NM | |||||||||||||||||||||
Operating expenses, excluding special charges | 6,689 | 4,561 | 2,128 | 46.7 | 12,668 | 13,449 | (781) | (5.8) | |||||||||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Third-party business expenses | 30 | 58 | (28) | (48.3) | 56 | 102 | (46) | (45.1) | |||||||||||||||||||||
Fuel expense | 1,232 | 240 | 992 | 413.3 | 2,083 | 1,966 | 117 | 6.0 | |||||||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 5,427 | $ | 4,263 | $ | 1,164 | 27.3 | $ | 10,529 | $ | 11,381 | $ | (852) | (7.5) | |||||||||||||||
Operating loss (GAAP) | $ | (270) | $ | (1,637) | $ | (1,367) | (83.5) | $ | (1,651) | $ | (2,609) | (958) | (36.7) | ||||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (credits) | (948) | (1,449) | $ | (501) | NM | (2,325) | (1,386) | 939 | NM | ||||||||||||||||||||
Adjusted operating loss (Non-GAAP) | $ | (1,218) | $ | (3,086) | $ | (1,868) | (60.5) | $ | (3,976) | $ | (3,995) | $ | (19) | (0.5) | |||||||||||||||
Operating margin | (4.9) | % | (111.0) | % | 106.1 | pts. | (19.0) | % | (27.6) | % | 8.6 | pts. | |||||||||||||||||
Adjusted operating margin (Non-GAAP) | (22.3) | % | (209.2) | % | 186.9 | pts. | (45.7) | % | (42.3) | % | (3.4) | pts. | |||||||||||||||||
Pre-tax loss (GAAP) | $ | (564) | $ | (2,003) | $ | (1,439) | (71.8) | $ | (2,315) | $ | (4,117) | $ | (1,802) | (43.8) | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (credits) | (948) | (1,449) | (501) | NM | (2,325) | (1,386) | 939 | NM | |||||||||||||||||||||
Unrealized (gains) losses on investments, net | (147) | (9) | 138 | NM | (125) | 310 | (435) | NM | |||||||||||||||||||||
Debt extinguishment and modification fees | 62 | — | 62 | NM | 62 | — | 62 | NM | |||||||||||||||||||||
Special termination benefits | — | 231 | (231) | NM | 46 | 231 | (185) | NM | |||||||||||||||||||||
Credit loss on BRW term loan and guarantee | — | — | — | NM | — | 697 | (697) | NM | |||||||||||||||||||||
Adjusted pre-tax loss (Non-GAAP) | $ | (1,597) | $ | (3,230) | $ | (1,633) | (50.6) | $ | (4,657) | $ | (4,265) | $ | 392 | 9.2 | |||||||||||||||
Pre-tax margin | (10.3) | % | (135.8) | % | 125.5 | pts. | (26.6) | % | (43.5) | % | 16.9 | pts. | |||||||||||||||||
Adjusted pre-tax margin (Non-GAAP) | (29.2) | % | (219.0) | % | 189.8 | pts. | (53.6) | % | (45.1) | % | (8.5) | pts. | |||||||||||||||||
Net loss (GAAP) | $ | (434) | $ | (1,627) | $ | (1,193) | (73.3) | $ | (1,791) | $ | (3,331) | $ | (1,540) | (46.2) | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (credits) | (948) | (1,449) | (501) | NM | (2,325) | (1,386) | 939 | NM | |||||||||||||||||||||
Unrealized (gains) losses on investments, net | (147) | (9) | 138 | NM | (125) | 310 | (435) | NM | |||||||||||||||||||||
Debt extinguishment and modification fees | 62 | — | 62 | NM | 62 | — | 62 | NM | |||||||||||||||||||||
Special termination benefits | — | 231 | (231) | NM | 46 | 231 | (185) | NM | |||||||||||||||||||||
Credit loss on BRW term loan and guarantee | — | — | — | NM | — | 697 | (697) | NM | |||||||||||||||||||||
Income tax expense related to adjustments | 203 | 241 | (38) | NM | 494 | 227 | 267 | NM | |||||||||||||||||||||
Adjusted net loss (Non-GAAP) | $ | (1,264) | $ | (2,613) | $ | (1,349) | (51.6) | $ | (3,639) | $ | (3,252) | $ | 387 | 11.9 | |||||||||||||||
Diluted loss per share (GAAP) | $ | (1.34) | $ | (5.79) | $ | (4.45) | (76.9) | $ | (5.60) | $ | (12.59) | $ | (6.99) | (55.5) | |||||||||||||||
Adjusted to exclude: | |||||||||||||||||||||||||||||
Special charges (credits) | (2.93) | (5.17) | (2.24) | NM | (7.26) | (5.24) | $ | 2.02 | NM | ||||||||||||||||||||
Unrealized (gains) losses on investments, net | (0.46) | (0.03) | 0.43 | NM | (0.39) | 1.17 | (1.56) | NM | |||||||||||||||||||||
Debt extinguishment and modification fees | 0.19 | — | 0.19 | NM | 0.19 | — | 0.19 | NM | |||||||||||||||||||||
Special termination benefits | — | 0.82 | (0.82) | NM | 0.15 | 0.87 | (0.72) | NM | |||||||||||||||||||||
Credit loss on BRW term loan and guarantee | — | — | — | NM | — | 2.64 | (2.64) | NM | |||||||||||||||||||||
Income tax expense (benefit) related to | 0.63 | 0.86 | (0.23) | NM | 1.54 | 0.86 | 0.68 | NM | |||||||||||||||||||||
Adjusted diluted loss per share (Non-GAAP) | $ | (3.91) | $ | (9.31) | $ | (5.40) | (58.0) | $ | (11.37) | $ | (12.29) | $ | (0.92) | (7.5) | |||||||||||||||
NM Not Meaningful |
UNITED AIRLINES HOLDINGS, INC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In millions) | June 30, 2021 | December 31, 2020 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 20,838 | $ | 11,269 | |||
Short-term investments | 230 | 414 | |||||
Restricted cash | 254 | 255 | |||||
Receivables, less allowance for credit losses (2021 — $71; 2020 — $78) | 1,793 | 1,295 | |||||
Aircraft fuel, spare parts and supplies, less obsolescence allowance (2021 — $518; 2020 — $478) | 912 | 932 | |||||
Prepaid expenses and other | 646 | 635 | |||||
Total current assets | 24,673 | 14,800 | |||||
Total operating property and equipment, net | 32,331 | 31,466 | |||||
Operating lease right-of-use assets | 4,421 | 4,537 | |||||
Other assets: | |||||||
Goodwill | 4,527 | 4,527 | |||||
Intangibles, less accumulated amortization (2021 — $1,519; 2020 — $1,495) | 2,827 | 2,838 | |||||
Restricted cash | 216 | 218 | |||||
Deferred income taxes | 647 | 131 | |||||
Investments in affiliates and other, less allowance for credit losses (2021 — $606; 2020 — $522) | 1,407 | 1,031 | |||||
Total other assets | 9,624 | 8,745 | |||||
Total assets | $ | 71,049 | $ | 59,548 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,218 | $ | 1,595 | |||
Accrued salaries and benefits | 2,228 | 1,960 | |||||
Advance ticket sales | 6,960 | 4,833 | |||||
Frequent flyer deferred revenue | 2,099 | 908 | |||||
Current maturities of long-term debt | 1,881 | 1,911 | |||||
Current maturities of operating leases | 583 | 612 | |||||
Current maturities of finance leases | 144 | 182 | |||||
Payroll Support Program deferred credit | 1,132 | — | |||||
Other | 819 | 724 | |||||
Total current liabilities | 18,064 | 12,725 | |||||
Long-term liabilities and deferred credits: | |||||||
Long-term debt | 32,303 | 24,836 | |||||
Long-term obligations under operating leases | 4,920 | 4,986 | |||||
Long-term obligations under finance leases | 250 | 224 | |||||
Frequent flyer deferred revenue | 4,086 | 5,067 | |||||
Pension liability | 2,501 | 2,460 | |||||
Postretirement benefit liability | 988 | 994 | |||||
Other financial liabilities from sale-leasebacks | 1,683 | 1,140 | |||||
Other | 1,350 | 1,156 | |||||
Total long-term liabilities and deferred credits | 48,081 | 40,863 | |||||
Total stockholders' equity | 4,904 | 5,960 | |||||
Total liabilities and stockholders' equity | $ | 71,049 | $ | 59,548 | |||
UNITED AIRLINES HOLDINGS, INC. CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) | |||||||
(In millions) | Six Months Ended June 30, | ||||||
2021 | 2020 | ||||||
Cash Flows from Operating Activities: | |||||||
Net cash provided by (used in) operating activities | $ | 3,122 | $ | (67) | |||
Cash Flows from Investing Activities: | |||||||
Capital expenditures, net of flight equipment purchase deposit returns | (1,305) | (1,998) | |||||
Purchases of short-term investments | — | (550) | |||||
Proceeds from sale of short-term investments | 184 | 1,774 | |||||
Other, net | 11 | 14 | |||||
Net cash used in investing activities | (1,110) | (760) | |||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuance of debt, net of discounts and fees | 11,116 | 4,371 | |||||
Proceeds from equity issuance | 532 | 1,135 | |||||
Payments of long-term debt, finance leases and other financing liabilities | (4,072) | (564) | |||||
Repurchases of common stock | — | (353) | |||||
Other, net | (22) | (18) | |||||
Net cash provided by financing activities | 7,554 | 4,571 | |||||
Net increase in cash, cash equivalents and restricted cash | 9,566 | 3,744 | |||||
Cash, cash equivalents and restricted cash at beginning of the period | 11,742 | 2,868 | |||||
Cash, cash equivalents and restricted cash at end of the period | $ | 21,308 | $ | 6,612 | |||
Investing and Financing Activities Not Affecting Cash: | |||||||
Property and equipment acquired through the issuance of debt, finance leases and other | $ | 761 | $ | 626 | |||
Lease modifications and lease conversions | 59 | 470 | |||||
Right-of-use assets acquired through operating leases | 214 | 48 | |||||
Notes receivable and warrants received for entering into agreements | 139 | — | |||||
UNITED AIRLINES HOLDINGS, INC. NOTES (UNAUDITED) | ||||||||||||||||
Special charges (credits) and unrealized (gains) and losses on investments, net include the following: | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Operating: | ||||||||||||||||
CARES Act grant | $ | (1,079) | $ | (1,589) | $ | (2,889) | $ | (1,589) | ||||||||
Impairment of assets | 59 | 80 | 59 | 130 | ||||||||||||
Severance and benefit costs | 11 | 63 | 428 | 63 | ||||||||||||
(Gains) losses on sale of assets and other special charges | 61 | (3) | 77 | 10 | ||||||||||||
Total operating special charges (credits) | (948) | (1,449) | (2,325) | (1,386) | ||||||||||||
Nonoperating unrealized (gains) losses on investments, net | (147) | (9) | (125) | 310 | ||||||||||||
Nonoperating debt extinguishment and modification fees | 62 | — | 62 | — | ||||||||||||
Nonoperating special termination benefits and settlement losses | — | 231 | 46 | 231 | ||||||||||||
Nonoperating credit loss on BRW Aviation Holding LLC and BRW Aviation LLC ("BRW") term loan and | — | — | — | 697 | ||||||||||||
Total nonoperating special charges and unrealized (gains) losses on investments, net | (85) | 222 | (17) | 1,238 | ||||||||||||
Total operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net | (1,033) | (1,227) | (2,342) | (148) | ||||||||||||
Income tax expense, net of valuation allowance | 203 | 241 | 494 | 227 | ||||||||||||
Total operating and non-operating special charges (credits) and unrealized (gains) losses on | $ | (830) | $ | (986) | $ | (1,848) | $ | 79 | ||||||||
CARES Act grant: During the six months ended June 30, 2021, the company received approximately $5.8 billion in funding pursuant to certain Payroll Support Programs under the CARES Act ("PSP2" and "PSP3") which included an approximately $1.7 billion unsecured loan. The company recorded $1.1 billion and $2.9 billion as grant income during the three and six months ended June 30, 2021, respectively. The company also recorded $52 million and $99 million for the related warrants issued to United States Treasury ("Treasury") as part of the agreements related to PSP2 and PSP3, within stockholders' equity, as an offset to the grant income in the three and six months ended June 30, 2021, respectively. The company deferred recognition of $1.1 billion of the funds received under the PSP3 program as of June 30, 2021 as the funds can only be used for the payment of eligible salaries, wages and benefits. The company expects the remainder of the PSP3 funds will be recognized as income in the third quarter of 2021.
During the three and six months ended June 30, 2020, the company received approximately $4.5 billion in funding pursuant to a separate Payroll Support Program under the CARES Act, which consisted of a $3.2 billion grant and a $1.3 billion unsecured loan. The company recognized $1.6 billion of the grant as a credit to Special charges (credit) and $57 million in warrants issued to Treasury, within stockholder's equity, as an offset to the grant income.
Impairment of assets: During the three and six months ended June 30, 2021, the company recorded $59 million of impairments primarily related to 64 Embraer EMB 145LR aircraft and related engines that United retired from its regional aircraft fleet.
During the three and six months ended June 30, 2020, the company recorded impairment charges of $80 million and $130 million, respectively, for its China routes, which was primarily caused by the COVID-19 pandemic and the company's subsequent suspension of flights to China.
Severance and benefit costs: During the three and six months ended June 30, 2021, the company recorded charges of $11 million and $428 million, respectively, related to pay continuation and benefits-related costs provided to employees who chose to voluntarily separate from the company. The company offered, based on employee group, age and completed years of service, pay continuation, health care coverage, and travel benefits. Approximately 4,500 employees elected to voluntarily separate from the company.
During the three and six months ended June 30, 2020, the company recorded $63 million related to pay continuation and benefits provided to employees who chose to voluntarily separate from the company.
(Gains) losses on sale of assets and other special charges: During the three and six months ended June 30, 2021, the company recorded charges of $61 million and $77 million, respectively, primarily related to incentives for certain of its front-line employees to receive a COVID-19 vaccination and the termination of the lease associated with three floors of its headquarters at the Willis Tower in Chicago in the first quarter of 2021.
Nonoperating unrealized gains and losses on investments, net: During the three and six months ended June 30, 2021, the company recorded $90 million of gains related to its equity investments and warrants in the equity of Clear Secure, Inc. (formerly, Alclear, Inc.). Clear Secure, Inc. undertook its initial public stock offering in June 2021. Also during the three and six months ended June 30, 2021, the company recorded gains of $57 million and $35 million, respectively, primarily for the change in the market value of its investment in Azul Linhas Aéreas Brasileiras S.A. ("Azul").
During the three and six months ended June 30, 2020, the company recorded gains of $9 million and losses of $310 million, respectively. The losses in the six months ended June 30, 2020 were primarily due to a $284 million decrease in the market value of the company's investment in Azul and a $24 million decrease in the fair value of the Avianca Holdings S.A. ("AVH") share call options, AVH share appreciation rights and AVH share-based upside sharing agreement.
Nonoperating debt extinguishment and modification fees: On April 21, 2021, United issued, through a private offering to eligible purchasers, $4.0 billion in aggregate principal amount of two series of notes, consisting of $2.0 billion in aggregate principal amount of 4.375% senior secured notes due 2026 and $2.0 billion in aggregate principal amount of 4.625% senior secured notes due 2029. United used the net proceeds from the offering of the notes and borrowings under a new $5.0 billion term loan facility to repay in full the $1.4 billion aggregate principal amount outstanding under the then-existing term loan facility included in the Amended and Restated Credit and Guaranty Agreement, dated as of March 29, 2017 (the "Existing Credit Agreement"), the $1.0 billion aggregate principal amount outstanding under the revolving credit facility included in the Existing Credit Agreement and the $520 million aggregate principal amount outstanding under the CARES Act loan. During the three and six months ended June 30, 2021, the company recorded $62 million of charges for fees and discounts related to the issuance of new debt and the prepayment of these debt agreements.
Nonoperating special termination benefits and settlement losses: During the six months ended June 30, 2021, as part of a first quarter voluntary separation program, the company recorded $46 million of special termination benefits in the form of additional subsidies for retiree medical costs for certain U.S.-based front-line employees. The subsidies were in the form of a one-time contribution into the employee's Retiree Health Account of $125,000 for full-time employees and $75,000 for part-time employees.
During the three and six months ended June 30, 2020, the company recorded $231 million of settlement losses related to the company's primary defined benefit pension plans covering certain U.S. non-pilot employees, and special termination benefits offered under voluntary separation programs to certain U.S. based front-line employees participating in the non-pilot defined benefit pension plan and postretirement medical programs.
Nonoperating credit loss on BRW term loan and related guarantee: During the six months ended June 30, 2020, the company recorded a $697 million expected credit loss allowance for the company's Term Loan Agreement (the "BRW Term Loan"), with, among others, BRW Aviation Holding LLC and BRW Aviation LLC, and the related guarantee. BRW's equity and BRW's holdings of AVH equity are secured as a pledge under the BRW Term Loan, which is currently in default.
Effective tax rate:
The company's effective tax rates for the three and six months ended June 30, 2021 were 23.0% and 22.6%, respectively. The effective tax rates for the three and six months ended June 30, 2020 were 18.8% and 19.1%, respectively. The provision for income taxes is based on the estimated annual effective tax rate which represents a blend of federal, state and foreign taxes and includes the impact of certain nondeductible items. The effective tax rates for the three and six months ended June 30, 2021 were impacted by $74 million and $79 million, respectively, of valuation allowance related to unrealized capital losses and state attributes. The effective tax rates for the three and six months ended June 30, 2020 were impacted by $64 million and $130 million, respectively, of valuation allowance related to unrealized capital losses.
SOURCE United Airlines
For further information: United Airlines Worldwide Media Relations, 872.825.8640, media.relations@united.com
