United Airlines (UAL) investor relations material

Industry transformation and customer focus

• The industry is shifting from a cost-driven to a customer-centric model, with product, loyalty programs, and service quality now key differentiators rather than just price and schedule.

• Only a few airlines are expected to achieve strong brand loyalty and double-digit margins, while cost-focused carriers will serve niche markets.

• Investments in clubs, cabins, food, and technology like Starlink are seen as essential for long-term differentiation and margin expansion.

• The transformation is expected to stabilize the industry, with a healthier competitive landscape emerging over the next five years.

• Financial discipline and return on invested capital are becoming central, with shareholders holding management accountable for sustainable profitability.

Financial performance and margin outlook

• Double-digit margin targets are driven by premium product demand, disciplined cost management, and network optimization.

• Cost reductions have been achieved through procurement restructuring and operational efficiencies, with further tailwinds expected as new aircraft are delivered.

• Bookings and revenue trends are strong, especially in corporate and international segments, with double-digit year-on-year improvements in forward bookings.

• The balance sheet is at its strongest, with a mix of secured borrowing and sale-leasebacks, aiming for investment-grade status by 2026 or 2027.

• Segment disclosure for the loyalty program is planned to enhance transparency and potentially drive valuation multiples higher.

Operational updates and near-term trends

• Newark hub disruptions are being addressed through capacity caps and operational buffers, leading to improved reliability and profitability.

• A brief tech outage in Q3 is being mitigated by moving systems to the cloud, with no expected impact on results.

• International and corporate travel are showing particular strength for Q4, with some seasonality shifts observed post-pandemic.

• The Blue Sky partnership with JetBlue is expected to enhance customer choice and ancillary revenue, with benefits materializing in the coming months.

• Premium product segmentation, including the Polaris Studio Suite, will continue to expand, offering more choices and monetization opportunities.