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Thank you, United Airlines, for joining us at the conference today. Scott Kirby, CEO, Christina Munoz from IR, Mike Buskinen is also with us today. I'm dropping everything off the stage. We are going to do a fireside chat format today. If you have questions, you want to put them in through the pigeonhole. I have that device up here, and I can try to work those into the conversation. Before we begin, Christina is going to give us a few required disclaimers, and then I'll hand the mic over to Scott. First of all, thank you guys for joining me. us. And then I'll hand the mic over to Scott to talk a little bit about the state of the state, and then we'll dig into the Q&A. Yeah. Awesome. Thanks, Dave. The remarks made during this fireside chat may contain forward-looking statements which represent the company's current expectations concerning future events and financial performance. All forward-thinking statements are based upon information currently available to the company. A number of factors could cause actual results to differ from our current expectations. Please refer to our most recent filings. For further information, additionally, today's remarks may include non-GAAP financial measures. Please refer to our most recent earnings release for those non-GAP and GAAP measures. Thank you. All right. Now that you've been properly disclaimed. That was the highlight of the day. I'm not sure if you want to actually say anything, given the stock performance today. Yeah, I'll start. Yeah. No kidding. I don't want to screw it up. Well, thanks, everyone, for joining us and to everyone listening online. I'll be brief. I'm sure we'll talk in Q&A about the more near-term. Near-term, though, is developing much like we thought. Oil prices have been high, as everyone knows. Demand has remained strong, as is well publicized. So we feel pretty good about moving it as oil prices come down, moving to 100% revenue, 100% recovery, probably even sooner than we otherwise would have as oil price prices start to come down. So we feels good about the near-terms. More importantly, we feel great about the strategy and the execution that we have had at United. We've been on a long-term journey to build a brand-loyal airline that was durable, that had resilience in the revenue, that had diversity in the multiple revenue streams, not just concentrated in one area. And we thought that that would lead to higher margins in good times and provide a lot more resilience when times were more difficult. And I think both last year and this year, there's been a lot of curveballs thrown last year, and then oil prices this year are pretty remarkable compared to the history that I've been in in the airline industry to see how resilient our results have been even in that environment. It really is because we've won brand-loyal customers. I mean, you get the customers wanting to go with you. It leads to much better financial results. Financially, as we look forward, you know, we're, you know, this year's oil prices aside, we remain solidly on pace, you know, to have 50% conversion, free cash flow conversion moving towards 75% as we start to taper off the number of aircraft deliveries that we'll take towards the end of the decade. We'll be moving from 50% to 75%, so we feel good about that. We think that there's an awful lot of upside for us, not uniquely, but us, the biggest upside in the loyalty program. We've got a great partnership with Chase, but it's a decade old. And the other deals have been modernized. And we're just in the opening innings of starting to modernize our deal. You can see it through the disclosed financials that there's opportunity for us there compared to some of our peers. And We look forward to that. We do expect to double the EBITDA in that particular business, WBDA, and that particular business provides further upside. So we kind of look forward. We had a really good strategy. The team has done a great job executing whether it was the commercial initiatives, the operation, financials. We've done a good job of executing even though we've been growing a lot, generating significant free cash flow and expect those numbers to go up more as we aren't spending as much on CapEx in the years to come. Committed to getting to investment grade and hope to do that soon. And those are the things that we are focused on at United. So we feel good. All right. So you've described United, the decommoditized brand loyal airline. Called the changes at United and in the industry structural, permanent and irreversible, which if you need a second career after this one, the marketing and the tagline here is great. But for investors and generalists who maybe heard that pitch before, from this industry in particular, what do you think is fundamentally different about the market and about United today that would make somebody who's not as familiar with the story that you'd want to kind of emphasize? So I got asked by a reporter, they didn't publish it, but a reporter at an interview recently, like, what's the biggest change in the last 10 or 15 years in the aviation industry? And I said, it is the emergence for the first time of true brand-loyal airlines. and there's two of us. And for most of history, brand loyal meant your schedule. That's the commodity part of the business. If you live in Dallas, you're probably an American Airlines frequent flyer. If you living in Houston, you are probably a United frequent flyers. If you're living in Atlanta, you probably a Delta frequent flyier. If you are living in Nashville, you will probably be a Southwest frequent flyyer because of the schedule. And so there are a lot of customers who the schedule drives it. But most people in the country live in markets where there's multiple airlines that have similar schedule utility. You know, you live in smaller cities, you're in Chicago, you'll live in New York, live in Los Angeles. Multiple airlines have schedule utility is equal. So that commodity part of the business is a toss-up. So it's the first time that airlines have differentiated themselves on everything else that matters to customers. And I list four things in that bucket. at technology, product, reliability, and service. And you look at it like technology at United is, we're a clear leader across the board and around the globe. You can see it in the app, but the app is the tip of the iceberg for everything else that comes underneath it. We can just do things, we are doing things now that no other airline that we're working on, that no airline is even thinking about yet. So we're way ahead on technology and reliability. I think we, in about November of last year, moved into the point where we're the best operator, certainly in the country. I don't track every airline around the globe, but Newark, for those of you here in New York, Newark is now the most reliable of the three New York airports, a remarkable change. Thank you to the FAA for helping us get there. On product, we're doing more to invest nose to tail in the cabins than anyone. And you could feel it and see it that you get on airplanes, whether it's seat back entertainment, we're gonna have Starlink on our whole fleet by next year. We're already close to 500 aircraft with Starlink today, just across the board on product. And when you do all that, your people feel great, they're proud of the airline and they deliver great customer service. And because of that, we've just won overwhelming market share. You look at competitive markets, I'm not picking on any one airline, but three big hubs where we had a big or have a big competitor in all three of those hubs in the last five or six years, we've won about 20 points of local market share. Normally, one to two points is a big move in airlines. And when I say it's structural, permanent, and irreversible, what I mean is those customers have switched to United in all of those markets, not just one, in all those markets. And for someone to switch back, because the schedule utilities, let's call it equal, ours actually is better in all them, but let's just call it approximately equal. To switch back those other airlines have to be better than us. If you're on a scale of one to 100, and we're 100 and they're a 50, They get into 75, they don't get 50% of the benefit. They get zero because they still aren't as good. They gotta kinda get to 110 before they can switch. And that's a decade-long process. It assumes we sit still. It's tens of billions of dollars of investment. That's why I say it's structural, permanent, and irreversible. Because you get, in a business like this, you get a big enough lead, the others can't catch up. They just can't. And in those competitive markets, they're forced to be what we call a spill carrier. When we sell out of seats, they sell tickets. But when we're not sold out, they don't sell tickets, and so I do believe it is structural, it is permanent, it is irreversible. You can see it in the financial results, and I realize other airlines might disagree with it, but it is structurally permanent and irreversable. All right, thank you for that. So you have talked about this path to double-digit pre-tax margin in 27 and getting free cash flow going from 50 to 75%. Doubling the contribution to the loyalty program gets a long way there. But as you think about the rest of the levers that you have to play with, premium mix, change to the network, efficiencies, investments in technology. What are the other sort of two or three things that really move the needle that investors should be paying attention to? It's maybe a boring answer. It's continuing to do what we're doing. If you'd have asked me to make a bet on February 26th where we'd be at double digit pre-tax margins in 2026 or not, I would have bet an awful lot of money that we would. Now, two days later, the war in Iran started, and that upended the fuel prices. But we were almost certainly gonna be double digit margins this year. And so a lot of it is just letting that play out. I think you just look at where we are right now, like nothing special needs to happen. I'm increasingly, it's early to give 2027 guidance and stuff can change. but i'm increasingly confident that 2027 will be double-digit pre-tax margins all that has to happen is the current environment plays out you don't need anything special for us to be at double digit margins so i think we're going to move i think by next you know i think will be moving into double digit margins uh next year and then i think the path you know I think that's sort of call that 12 we get into 12 percent with no other sort of structural changes in the industry and other structural changes I think is what kind of get us to mid double digit margin one of those This has already happened, obviously, with one airline. There's still an awful lot of airlines that are break-even or worse. If you're break- even or worse as an airline, that means you've got a bunch of flying that loses money. It's just simple math. It is what's happening, and I don't know when that's gonna get fixed, but that's upside for us. But I think we're, the current steady-state pace, we're at double-digit margins. The current performance of the business is double- digit margins. And just all the core things that we're doing drive more next year. I really don't even include the upside from the loyalty program explicitly in that. I think that's the core airline. I think the doubling the EBITDA and the loyalty programs probably comes on top of that. Okay. So if you think about that projection into 2027, I'm assuming you're assuming some normalization of the crisis in the Middle East. It feels to me like when I look at consensus, and this is my read, investors have kind of taken the targets we had for 26 and just pushed them into 27. Is that the right way to think about it, or is there more? Well, certainly if oil prices are normalized for 2027, our goal internally will be to make up for 2025 and 2026. And so I would want us to have margins, and our goal has been a point a year, I would wanna have margins that are three point higher than 2024. So if I looked out today, We had a forecast that was less than three points of margin growth compared to 2024, because a lot happened in 2025, a lot's happened this year. I'd be pushing hard to figure out how we get to, so that's about 11%. Okay, so upside to that, it's not just going to be a push from 2026 to 2027. Correct. Well, I don't think it will be. Yeah. And just I watch the dynamics in the market of what's happening. It feels, I feel more confident, you know, it can't be 100%, but I feel more confident about that path than I would have even a few months ago. And I'm assuming some of that confidence comes from kind of what you're seeing in terms of the consumer and the demand environment in relation to the fair increases that the industry is pushing. Yeah, you Know, I have expected more of an elasticity effect. I still think there still will be. Like, I mean, you can't, you now, we all took economics. You can't expect Q to not change. but the demand environment is pretty strong. But sort of a lot of pricing cleanup, I guess, has happened. We're starting from a structurally better or tactically better base. You know, that's where we'll probably start to come down. And have you seen anywhere in the portfolio, leisure, regional, domestic, international, main cabin, whatever, however you want to slice it, where you've seen some demand response in response to higher fuel? Not really. You know, you always have some markets that are stronger and some that are weaker. But nothing that I think is structural. I think it's just normal noise. Okay. And I think earlier this year you started out kind of saying you'd be at 100% fuel recapture by Q4. That pace that you laid out pre-start of the year, is it kind of like the similar, or are you feeling a little bit more optimistic, less optimistic? Well, I think the demand and the revenue environment has been spot on with what we were thinking. But oil prices have come down, and so have fuel prices. So the hurdle to get to 100% is lower. So I think 100% ought to be moving forward just because oil prices are coming down. The demand environment is very much like we thought it would be. So one of the $65,000 questions that I continue to get asked is, fares are going up, unit revenue is fantastic right now, but at some point it all comes down, fares will then come down with it. How much of this can you keep? As much as possible. Well, look, we are gonna recover less than, we're gonna be a little below 50% in this quarter. So we haven't recovered 100% yet. So I'll look forward to getting to 100%. And as I said earlier, I'm feeling really good about double-digit margins next year. I'm not going to talk about specifics of pricing, but I'm feelin' really good double-digit margins this year. You can interpret that as you will. But as you think about the market normalizing for fuel, what are the things that have changed in the business that should allow you to kind of keep some of that as price? Well, like I said, earlier, I think we were going to be at double- digit margins this years. So not a lot has had to change. Tactically, at United, we've pulled some capacity. There's no point in flying flights that are going to burn cash just because fuel prices have come up. But we really haven't changed much of anything at United. We've always had confidence. The strategy's been working. Everything we see, the strategy's working. So really, we stuck to the strategy. And I think we would have been at double digits this year. So it's pretty easy to think you're You're going to get that plus a little bit next year. You just got to keep executing. All right. And on that topic of the strategy and product innovation, you guys have done a lot of product announcements in the last sort of 12 months. The Coastliners, the XLRs, Lifeline, Polaris, Polarist Studio. Of everything in the pipeline, what are the two or three things that you're kind of most excited about bringing to customers and think have the most potential to move the earnings needle? Well, Starlink on 100% of the fleet is going to be the biggest. That is goingto be a differentiator versus every other airline. We're going tobe the first to get there. We're gong to be, Southwest is goingtoget there, too. Alaska's going to getthere, but everyone else is going tobet miles behind. And that, by far, is going ot be thebiggest. And then all the other stuff are just, you know, it's the hundreds of little things that we're doing to invest for the customer that make the difference, not one or two things. It's a culture of investing for the customer and the hundreds of other things. So I was going to say a second one. It's one we already have, but we've got some cool stuff coming, and we've Got some really cool ideas. It's the technology that customers experience, you know, using our app. I mean, you Know, anybody that's flown another, like it's the most universal comment I get from people that have flown United and have flown other airlines is how much better the app is than anything that they've ever seen anywhere else. And it's not just the app that really is the tip of the iceberg. It's all the other things that go under the app that make it. And we built a data strip, we built data, like we spent the last, we started it ten years ago, getting off of mainframes. Spending money to get on modern technology, not just in the cloud, but getting on modern technologies platforms. Organizing our data in ways that you could use it. And those are the kind of projects that are hard for airlines to do, because there's no immediate ROI. You spent, we probably spent close to a billion dollars, just taking our existing systems, putting them in modern systems that did exactly the same thing as they did before. But once you get it in there, it just opens up all kinds of possibilities. I really think we're the only ones that have done that. And so we have some really cool stuff that we're going to do. Anything you want to kind of share, tease out a little bit? All right. And then I guess as you think about that level of investment going into support premium, I'd be curious to hear how you think about measuring that pace of investment. Because it sounds like, hey, this is stuff we haven't done, and if we do it, we can get customers to pay us more. How do you thinkabout prioritizing? It is, you know, you're getting this from a guy who likes math and is good at math and understands math. But this is an art, this part is an arc, not a science. Because this is a challenge for everyone that has building a brand loyal airline. Every single individual decision, you say, if I make the decision to spend more on meals, spend more on wine, whatever, hundreds of decisions like that, every single one of those, if you look at it and say, well, really? Like, we spend an extra five million on wine and you think we're going to get enough people switching airlines because of the wine? And the answer is no. It's always no. And And it's correct that the answer is no. And so any one decision saying no, again, letting the finance department say no, sorry, Mike, letting the financial department say, no, which they always want to do, is the right short-term tactical answer. But you string several hundred of those decisions together and all of a sudden the brand is different. This is about building a brand. And so I don't have a perfect formula for it. I think of this as, you know, we have this vision of a brand loyal airlines, mountain off in the distance and we're driving towards it and as long as our results absolute and relative results are there they're mile markers along the way to that mountain and as well as they're good I feel like we're on the right path and if they start to get bad in one way or another then you've got a question what you're doing so we just keep putting a little bit more a little bit more in every year we watch what's happening you know with market not just financials we watch as a market share which then leads to financials of course I watch this happening with different classes of traffic, and we use all that data to try to do a little more art than science on what it means, but then we also have all kinds of great anecdotal data that supports Starlink as a 90-plus NPS for in-flight service, and the rest of our Wi-Fi I assure you is not a 90 plus NPS. Somebody told me earlier today that just in the past weekend for Memorial Day as load factors picked up, somebody just went and ran the analysis because it's heavy load factors, that flights with seat back entertainment had a 15 point higher NPS than not. Normally it's five or six points, but it's 15 points when flights are full because that amps up the stress. So we do a lot of time going through data like that. So lots of anecdotal data that informs the judgment of how much is the right amount. And how does this affect the cost profile of the business, right? Obviously running an airline is an inflationary endeavor. We spend more. We've been on a path really for at least seven or eight years to add about, we've about a point of chasm X to our expense base for investing in the customer, and that's in the chasm x. We're trying to be, we've done a pretty good job on cost compared to everyone else. That's core efficiency. I'd much rather drive real core efficiency in the business and not cut the customer expense. I mean, the challenge in an airline is it's a lot like the U.S. government budget and entitlements. Like, 90% of our expenses are fixed. Maybe not 90. 80% of their expenses are fix. You know, fuel, labor contracts, airport landing fees, all those kinds of things are largely fixed. And so, you know, if you've got 20% of your budget to play with and you want to cut Chasm X by 10%, you've got to take 10% out of the customer, 10% of the customer. And you do that 10 years in a row, and holy cow, you're way behind. That's what's happened to some airlines. Like, they've been great at ChasmX and terrible at Ernie's Profile because customers care about that stuff. And we've been investing about a point of Chasm X. We don't do it all at once. We do kind of a point every year embedded within the Chasmx that we've got at the company. And I know the answer to this, but I'm going to ask it anyway, because I get asked it by investors. In a time like this, when your budget's been blown by a factor out of your control with oil, is there any temptation from the Department of No to pull back on some of those investments? Or are you just going full board? No. And we prepared for times like this. We prepared by having the best balance sheet we've had in over 30 years. We're prepared by being at the top of the industry in profit margins. We are confident that this, one way or another, will be temporal. That either oil prices will come back down and or capacity will come out of the indusrty, so we have not pulled back at all. And as you think about, then, the outlook for the next level of efficiency coming out of a network, where does it come from? You've gauged up quite a bit. I mean, I think you've got a little bit more work to do in the mid-con house, but. Gage, because Boeing and Airbus have both been behind on aircraft deliveries, Gage hasn't happened yet. Gage is yet to come. So Gage's coming, and we continue to use technology to just get more and more efficient with, whether it's utilizing crews, running the operation better, just across the board, how we schedule and manage maintenance. As good as the app is, that customers can see or investors can go see. Our underlying technology for how we run the airline, we should do a tour someday and let people come out and see what the technology our maintenance technicians work with, and you could do a two-year at another airline what their maintenance technicians work with. Technology is embedded so deeply in United. I think that's an unheralded, unappreciated advantage that we have. I listed it first in those things about brand loyal, was technology, those four items. I think it's probably an underappreciated advantage that we have at United. And do you think there's still quite a bit of runway for you in that? I absolutely do. And I think a bunch of AI, I am now a believer, like a bunch the stuff that people do with AI I think is ridiculous, like summarize your email. Like, good grief, I wanna read my email. But its ability to code and take your own data and just go experiment, like the revenue management guys, there's things that I wanted to do for 20 years, but to experiment with it would have taken a year. Each one of those experiments, I had like 10 experiments, each one of them would have take a year of programming before you could even try and run it, and then it might not work. Like an analyst can do it in a week now, You can write those, literally, you know, a good analyst can do it in a week and just run experiments and see what works. It's got some really good potential. And how are you adapting that and rolling it out in the organization? Are you changing or are you just training the existing people, changing the way you're programming this? I was talking to another company I cover, and they've kind of gone away from this old idea of having, like, a team of developers to come in and think about stuff and just moving to much more. It started with me. I hired an AI tutor for programming, and I won't tell you, but, like, it turned me around, like with a few hours of lessons, like amazing what you can do totally on your own, and so we're going into the business units, and we're creating our own training programs to make people go be coders and experiment and try in a bunch of parts of the company. That's exciting. All right, so let's see here. Obviously, you guys have been doing great on on-time departures. You know, cancel rates very, very low. Operational discipline is a part of that, but also, obviously, some of the changes at Newark, potential changes at Chicago. Like, how much of the differential step-up in performance is just because you're swimming in a less crowded stream versus you guys are really getting better at doing what you want to get done? You know, Newark's a big deal. Chicago never went up, so that's not anything. Newark is a big thing. It's a really big deal that the FAA finally, after 10 years of me banging or 9 years of my head against that wall, is managing the airport to equal the capacity. It's just crazy that we schedule more flights than the airport can handle. This is like when the FIFA World Cup comes here. I don't know how many seats does that stadium set? 80,000? let's say 80,000, if it seats 80, 000, would you sell 100,000 tickets to the game? Like it's just dumb. But that's what we used to do with scheduling at Newark. And so that's been a big, really big deal for Newark, but I also think, I mean, part of the, we're, you know, we are a technology-focused airline. I mean I have it in, partly I have, it in my blood. But the technology that we have to run our airline, like we watch what happens with our competitors when their storms come through and like good grief like the next day sometimes two days later like what the hell's going on there um and i mean we know but um we've just and we used to have that like we had hell week three years ago at newark that was really really bad and we thought we had pretty good systems and technology but that was a pivotal wake-up moment for us we can now crew crew is where this happens at airlines like anytime airlines are canceling after the weather's gone through it's crew issues that are you know there's been some other airlines that have had it recently but, you know, crew issues that can linger at some places for days. We can now, the same person can process over ten times as much crew cancellation issues when there's events so that we can just stay ahead of it. So we're literally 10x what we could do. We thought we were the best before. We're 10x What We Could Do three years ago. And that means we just have automated when weather comes through, like, kind of push the button, let the system run. I mean, it's harder than that. But, you know, we're pretty much always the next day up and running. And we cancel less during the day of the event because we have so much confidence about the next day, we don't have to cancel as much. And so we really, like, everywhere we fly, anytime there's an irregular operation, we come through at the best of every airline in our cities. So I think when we had this conversation the last couple years, we've, at some point in the conversation, always talked about constraints, whether it's pilot constraints or airspace constraints, controller constraints. that's a little bit moved out of focus, given the conflict in the Gulf. I'm assuming they've not moved out of focus for you. What are you worried about in terms of your ability to meet your financial objectives for the airline from an input constraint? I'm not the worrying type. What are we monitoring? The constraint that is real and it's not something to worry about, especially if you're an investor, is engines and components with engines, forging and castings in engines. You know, look, I'm sorry, like, there's just not enough. There's still 800 or 900 aircraft around the globe that are grounded for engines, and that is not getting fixed this decade. And, you know, as rates go up at Boeing and Airbus, like they're producing gliders and they're both fighting with the engine manufacturers. There's just Not Enough Engines. Like, supply is going to be constrained around the Globe because there are Not Enough Engines, it's not about how many Boeing can produce. It's not how many Airbus can produce, It is about the engines, and there are not enough engines, and they're not going to be for many, many years. And what about sort of air traffic and controllers and that kind of issue? Yes, I think that under this administration and Secretary Duffy and Administrator Bedford, they're going to work to improve. I think we're goingto get more capacity into the system, but most of that will just be to run better. So that'll be much better. If we do that, block times will come down. You know, there's a bunch of routes that you can go look at that took longer, takes longer today than it did 50 years ago to fly the route, even though the planes fly a lot faster. It's all because of the air traffic control. So I think we'll be able to save time. So we'll burn less gas. You know we'll use the air more efficiently, employees more efficiently. Customers will be better. It's less a constraint mostly on growth. It's going to be more about efficiency across the board. We'll burn less fuel, need less employee time, less customer time sitting on airplanes. And I think that we're on a good trajectory to finally make that happen with the FAA. I mean, I've been doing more research on the FIA component of the airspace management part of it. It seems like there would be some opportunity to optimize the allocation of space, which would then allow you to run faster. Yeah, they're working on it. but you know it's an easy problem to describe in the real world solving it is not as easy as you know sure because the world doesn't work as clean as you know if it was deterministic it'd be an easy problem for math minds to solve but the world is stochastic and so you can plan great for exactly where every airplane is going to be six hours from now but you know to within 100 feet but the chances that they're all going to be within 100 foot of where you thought they were six hours earlier is pretty small But do you think there's any opportunity? I think there are tons of opportunities. But we've probably got to experiment with it, take it a step at a time. Over the horizon still? You know, it depends on where you think the horizon is. It's close enough to the horizon that we're working on it, working on with the FAA. They're actually working on It. Cool. So let's talk a little bit about structure and sort of the structural change in the industry. Obviously, we've gone through the bankruptcy spirit, which is something that you would have seen the cards going and commented as much. And Southwest changing its business model, right? Obviously, there's been a pretty significant change in the discount space. How is that affecting your business? How is it changing your opportunity set? How is the discount? How is your business changing how you're thinking about? You know, the discount set, particularly the ULCC's, is, truth is, is no longer that dramatic. One of the things that happened to the ULC's is the big airports priced them out of the market. Like, you know, when the New York airports are charging $52 per employment and Spirit and Frontier's average fare is $58, like, you don't have to be a rocket scientist to know that flying to the Newark area airport doesn't work. Like, spending $52 before you've paid for your gas or your employees or your airplanes or anything else, or anything else like it just doesn't work and so i think that that portion of the market is one way or another going to retreat to the niche that works the niche that works is big is leisure markets that don't have competition from big airlines the allegiance model works and you know there's markets to orlando and sort of orlando vegas Vegas, maybe a few other beaches, but trying to fly in Atlanta is not going to work for any ULCC. What about Chicago and Vegas? Does that work anywhere now? No, it's too expensive. Yeah? It's too expense for them to fly, and we are price competitive because we've upgaged and we've got basic economy. It doesn't work. I mean, I look at the P&Ls of every airline, and I bet that I know the PNLs of my competitors better than most of their CEOs know the route-by-route P&Ls, those routes don't work. I know they love them. Look, there's a golden rule for airlines. Every airline in the world could earn its cost of capital if they would just follow the golden rule. Don't fly places that lose money. Have the discipline to stop flying places that lose money, and I, by the way, have closed three hubs in my career. As much as I like to be aggressive, I've closed three hubs in my career. Delta, by the way, closed three hubs. You cannot be successful if you're dragging around an anchor. And you cannot be successful if your not willing to pull the losses on places that lose money. Most airlines aren't. It's hard on your ego. For some people, at least, it's hard in the ego. Most airlines aren't, but that's the golden rule of investing. And, you know, spirit didn't learn it in time. And I don't know if Frontier is going to either. So what do you think happens prospectively then? I think they're going to be materially smaller. I don't know if they go bankrupt and shrink, or they just shrink, or somebody goes away, or, they're gonna be materally smaller. Cuz they gotta shrink down to the niche that works. Eventually they're in a niche that's solidly profitable for them. There's a good profitable model there. You know, Spirit used to be solidly profitably. When they started to grow outside of their niche, you get out of your niche, you're in trouble. And they got out of their nich. And Chicago Vegas is out of the niche. So is this more organic consolidation, or Do you think there's going to be opportunities for larger scale consolidation? I don't know. Are you asking me about consolidation? Yeah. I've been waiting for you to get there. Why? Well, look, here's my, I'll just speak for United instead of others. I thought there was, I for many years have thought there is, that only the kind of big transaction that we tried was the only one that made economic sense. And none of the other deals made sense. And also knew, though, that the big transaction required a willing partner, which we clearly don't have. So I don't think that United, at least, is going to participate in any consolidation for any time I can see in the foreseeable future. So this thesis is out there that was swing big for American, and then maybe it's easier to do a smaller deal? It's just idiotic. Sorry. For anyone that had it. Like, I just don't understand that at all. You're not going to offend me. I'm like... I don' understand that all. But that was definitely not the plan. Okay. I mean, do you think, though, that there would have been room to get that deal done? It's not about room to get the deal done. Like, look, I have immense respect for Joanna and her team and what they're trying to do, and I wish them luck. And by the way, we're going to try to help them be successful. But I already talked about discipline. Like I've been disciplined enough to close three hubs. The last thing I'm going to do is buy a route network that loses money. And I think for us, I can do the math, too. We've got to somehow think we can improve JetBlue's margin by 25 points to make it work. That seems mathematically close to impossible to me. I never understood why everyone thought we were going to do it. I never said it. I never hinted at it. I never understand why everyone though we were gonna do it It just seems mathematically not doable. I'm pretty good at math. So I never interested it. All right. So, you guys have obviously also made a lot of progress on the balance sheet. Kind of improving the quality of the, getting closer to, I guess, to investment grade rating. When you get there, what changes? Anything besides cost of debt, or is there gonna be a more formal change in capital return priorities? I'm sure there will be. We're gonna get there first, and then we'll have a good robust discussion. It's my confidence in your ability to do that. Robust discussion with our board, who will appropriately want to be involved in that. But let's get there first. And, you know, look, 50% free cash flow now and then moving to 75%. By the time we're moving towards the end of the decade, we're going to have a lot of free cash. I think we'll be solidly investment grade. And, a huge, a big chunk of that will be some form of capital return to shareholders. Assuming we progress the way we think. Conversation with the board at a later date. Yeah. Okay. So CapEx, less than $8 billion in 26. It's kind of inside of your multi-year band that you guys have laid out, around $7 to $9 billion. The capital hierarchy for within that $8 million, right? Obviously, you've got some aircraft delivery. Beyond the aircraft delivery, where are you spending the reinvestment? Technology. Technology? Okay. Customer-facing, internally-facing? Both. Like the app, the connected media? But it's, I mean, it's sort of all of the above. We're spending on the app, we're gonna be spending more on, we are spending more AI now, we are running experiments, we're spending money in revenue management, we're spend money in the operation, sort of across the board. You know, we, I already said, like, we spent close to now about eight years getting our platforms modernized, largely modernized and getting them in data lakes where we have easy access the data they're not in you know crazy you know some of the old you know systems that um are a lot of places we also by the way we're sort of in this unique we used to be an advantage like we got lucky on this one we're the only airline i think in the world that owns our own reservation system we run on shares um you know we don't have to go through saver we're not go through apollo like they're so difficult to deal with for others i've talked to other airline ceos to try to do stuff like i mean your data is all there like you're kind of stuck so we're just in a better place because we did that now it's doing things to use all that data but we're really we're kind of growing across where our goal is within a year to be also to be twice as product 100% increase in productivity for our DT team as measured by it's hard to measure it for sure but you could measure by you know lines I don't know if you measure by lines of code I'm sure it's the right metric but you know to double the amount that they do now as you think about maybe if we drill into the revenue management system component of that right there's been some talk about you know whether it's ai within the the the revenue manager process or supporting the revenue-management process um you know your your experience with with with coding with coding and and getting the data getting large series of regressions done sort of very quickly and being able to kind of do that stuff as you roll that into the system should we be expecting that to show up in a better unit revenue outcome, lower cost? That's a better unit revenue outcome. What about the extra time that the analysts that would have spent a year building a model that can get it done in a week done? They didn't spend the year before. To me, the promise of AI is much less what everyone else is talking about, about doing things that people already do faster. Efficiency. The promise of AI and by the way, I don't think you can justify the trillions of investment if all you're going to do is like read your email a little bit faster and do that kind of stuff. I think you can justify the trillions of dollars in investment if you're going to do things that nobody thought were possible before and do new things. I'll give you one good example. Every flight's a story at United for customers. The goal is to get to a point where anytime there's a flight delay, we tell customers in clear, plain English that we send them text messages, We're going to start sending them videos, like maintenance videos and cool stuff, about exactly what's going on with their airplane and why, and try to give them really good information. Because generally, most people in here fly, and if you know what's cool, it's the uncertainty that's the killer. You walk up to a gate, and it says your flight's on time, and you're supposed to be boarding, and there's no airplane at the gate. I don't think that happens at United, but that does happen at some airlines. It infuriates you. And so giving people good information, the goal I've set for the team is, pretend I'm on the flight and I've asked what's going on with my flight, what would you tell me? I want to tell all of our customers that. And we've been doing that. We call it every flight's a story. And some of the results, I got some phenomenal statistics when we do it and do it well. But it's really hard to do for 6,000 flights a day, especially when there's weather and it's uncertain thunderstorms. Maybe the airport's closing. Maybe it's not. You don't know. And so it's real. It's really, really hard. It's hard to deal. And I think we're probably two to three times better than any other airline in the world just because we're the only airline that's really worked on it and tried to do it. We've decided that the current path that we're on is never going to get to the nirvana that we want. And we've started a brand-new work path that's built kind of native AI, building the right data so that it doesn't require any human intervention, that the AI will be able to tell you about every flight and what's going on with every flight with no human intervention, just from all the other data that we have and everything else that it can see about the system. By the way, I think that'll be great for customers. It won't only help with customers. It'll cause more brand-loyal customers to fly United. It'll be unique. It'll feel different than any other airline in the world when we're able to do that. But I'm convinced we're going to find all kinds of ways to run our operation more efficiently when we've built that. And that, to me, is what AI can do. When we're building that, we're going to be able to run the airline better, a lot better than we could before, because we built that infrastructure for every flight story. So that's one of my favorite examples of what we're trying to do. Thank you for sharing that. Question from the audience. If you sort of disaggregate the customer reviews into areas where you are performing and areas whereyou can still improve, what are the things you're doing to improve those areas whereyoudeed to get better from a customer experience standpoint? Look, we're trying to improve across the board. Like, the nearest term thing that we can do applies to every customer, which is Wi-Fi. You know, like I told you, 90-plus NPS when we have Starlink on the airplane. I actually, like, now the most common complaint, I'm not counting, like my flight got delayed for whatever reason, but the most commonly structural complaint that I now get is about Wi-FI. And partly it's because we've raised the bar on Wi-fi by getting Starlink gone. and the, you know, legacy providers that we have, you know, just aren't, it's dramatically different. And so getting that done as fast as possible is probably number one on my list for customers. Anywhere else that you are thinking about? We're doing it across the board. It's not like there's some one magic bullet. This is about running the airline, running the airline well, doing all the hundreds of things well. We have a great team that's doing it. Like, it doesn't, there's not some magic bullet. It's about executing and executing on everything. Okay. And the part of that execution obviously is cultural transformation. We talked about this, I think, the last time you were with us. You've gotten the flight attendant agreement done. How's the level of satisfaction, buy-in? How are you thinking about the team? Our people are great. They're doing a great job. Our flight attendants, by the way, did a great job as we were going through negotiations. A lot of times, you've heard airlines, if people have followed along you know bleed through and lead to bad customer service that did not happen at United our flight attendants were awesome they're the best in the world I'm glad they got the industry leading contract that they deserve but you know you guys go fly and you decide but I think the culture at United is great our people are proud I told our team that I have the easiest job of anyone at United because I really only have one responsibility create an airline that they're proud of because if they're they're gonna take care of everything else and they're importantly they're gonna want you the customers to feel the same way and and I hear that from them all the time I had someone stopped me walking through the hotel here today just in there is civilian clothes and he's all excited he's a pilot United pilot you know wanted to stop and take a picture and and just excited I just I hear it from you know all the I was at my daughter's wedding this weekend, which is pretty cool. Thank you. I had to get that in somewhere. It's Kalshi Betting Market. No, I'm not. It's kidding. But there was a retired United pilot that retired two years ago. He was there. He was just bragging to everyone, like, oh, United is the greatest. I hate that I hadto retire. And he's married to a captain for another airline. Anyway, she was, well, You'll know who it was if I tell you everything. But anyway, she was wishing it was like that in her airline. But it's just great, and I hear it from them all the time. I see it in the customer satisfaction score. I see in our MPS scores across the board. They're doing a great job. And momentum is great. You get momentum. That's another reason, by the way, to make the kind of product investments. I really look at the product investments through the lens of how our employee's going to feel about this. And I don't want our employees in a position where they have to apologize. If they're having to apologize for something, they're behind the eight ball, and Wi-Fi was the last structural thing that people had to apologize for, and God, it can't get fixed fast enough. Can't get Starlink 100% fast enough Sounds like the employee buy-in is there, the product innovation is rolling. You got a group of generalist investors, and obviously investors on the webcast listening today. What's the bull case? Why is United the right place to put an incremental dollar of capital to work? And what's the one thing you think the market doesn't understand about the story? You know, first, I think we had a great strategy and we've executed it really well, and we're going to continue. We have a no excuses mantra at United. Like, we've got all kinds of stuff happening. You can come make excuses, but, you know, our chief operating officer, I used no excuses because I went to the Air Force Academy. Our chief operating office, Toby Engfist, says, especially talking about the weather, it may not be our fault, but it is our responsibility. And that matters to how you behave on everything, but it also matters how you take care of customers. And winning brand-loyal customers, really, we've proven the last two years, like, you know, this was close to a recessionary environment for many airlines. You can look across the results that we have resilience, and when times are good, we do even better. We outperform when times were good even more, and we retain more of the revenue when times Are bad. And, you know, we've been investing a lot, growing and buying aircraft. But, you Know, as we've said all along, that starts to taper towards the end of the decade. So if you care about free cash flow, which we do, that number is starting to go up. And you're getting it at just a remarkable multiple. I do not think that airlines like United or Delta, by the way, are going to trade at, you know, eight, nine multiples once we've proven, you know, durability, sustainability of earnings, high free cash flow conversion in the years to come. And so I think you're getting a pretty screaming bargain. I don't know what's going to happen with stock tomorrow. I know it's going to happen straight to horror moves tomorrow. A lot of volatility. I wish it was less volatility. But if you're a long term investor, it's hard to come up with much better to me. All right. With that, I think we're going to close it down. Thank you, Scott. Thank joining us. Thanks, everybody. Thank you all for supporting the SDC. Enjoy the rest of the conference.