Oscar shares ‘proof, not promises’ at aviation conference - United Hub

Oscar shares ‘proof, not promises’ at aviation conference

By The Hub team, March 15, 2017

At the JP Morgan Aviation, Transportation and Industrials Conference in New York today, our CEO, Oscar Munoz highlighted the progress we've been making in delivering "proof, not promises" since we rolled out our corporate strategy on Investor Day: to be the best airline in the world for our employees, customers and investors.

Here's a brief recap of what Oscar presented:

Earning employee trust and elevating leadership We've re-engaged our front-line workforce and we believe we have built the best executive team in the industry. "When you travel with United, and you interact with anybody from our company, and you ask them how they're feeling about their company and their future, you're gonna see some more positivity than you've seen before."

Improving operational reliability We made significant improvements on all operating metrics in 2016, and 2017 is shaping up to be another great year.

Creating the world's leading network – We have the best network potential given our airport hub positioning in the five largest markets in the U.S. We're going to start realizing our network potential by improving connectivity through our hubs and by competing and winning in our local hub markets by offering products and flight times that appeal to customers, especially frequent business travelers.

Delivering a highly competitive and profitable customer experience From products like Basic Economy to United PolarisSM business class, we plan to win back customers — and win new ones — across the price spectrum with differentiated products. Of the marketing investment in Polaris, Oscar said, "We should make a big deal of it; it's transformative. The pride from our employee base about seeing things like this in the press, going from what used to be 'What's wrong with United?' to an exciting 'What's next?' has been part of the overall strategy to reengage and get our employees a lot more enthusiastic about what they've done. It's not just about the customers, it's also about the employees and the pride they take in the product."

Powering our business through technology IT represents our largest capital expenditure on an annual basis. "The apps that we provided to our employees are terrific. You don't see it [as customers], but you're going to feel it. Because one of the things that's important in a huge, operational logistics company is really around communicating."

Building our future through financial strength Oscar spoke about questions he received early in his tenure about whether United should just cede ground and accept that we're always going to be number two in terms of margin: "We have a defined strategy with specific points that we think we can close the gap. All other things being equal, I understand the math that people worry about, but we have initiatives that are worth sizable amounts of money that can generate returns to shareholders and close this margin gap."

Revenue and capacity Close-in bookings have remained strong, and a new revenue management system is on the horizon for later this year. We now expect full-year 2017 consolidated capacity growth to be 2.5-3.5 percent, versus our prior guidance of 1-2 percent, to align with our summer schedule plans. We also announced that we have lowered our full-year 2017 non-fuel cost per available seat mile guidance from 3.5-4.5 percent to 2.5-3.5 percent.

You can view the presentation and an archived version of the full webcast on ir.united.com.

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