Key Financial Results
- Q1 EPS: $1.19 (within $1.00-$1.50 guidance, 31% YoY) despite $340 million higher fuel bill
- Q1 Revenue: Record $14.6 billion (10.6% YoY)
- TRASM: 6.9% YoY, all regions posted positive PRASM
- Pretax Margin: 3.4% (40 bps YoY)
- Free Cash Flow: $2.9 billion in Q1
- Debt Paydown: $3.1 billion paid down, including $2 billion of secured notes

Strategic Position
Management emphasized “permanent and irreversible” structural changes at United, positioning the airline as a “brand loyal” carrier differentiated from commoditized competitors. Strong balance sheet enables tactical adjustments while maintaining long-term focus.

Fuel Crisis Response & Guidance

Fuel Recovery Timeline:
- Q2: 40%-50% of fuel cost increases recovered
- Q3: 70%-80% recovery
- Q4: 85%-100% recovery
- 2027 Target: 10%+ pretax margin

2026 Guidance:
- Q2 EPS: $1.00-$2.00 (fuel assumed at ~$4.30/gallon)
- Full Year EPS: $7.00-$11.00 (widened range for multiple scenarios)
- Full year RASM: Double-digit increase expected

Capacity Adjustments:
- ~5 points of capacity removed for rest of 2026
- Q3/Q4: Flat to +2% YoY (several points below original plan)
- Removed marginal flying: off-peak days, red-eyes, low-margin routes
- Also pulled Tel Aviv and Dubai flights (1.5 points of capacity)

Revenue Performance & Trends

Pricing Power:
- Jan-Feb: Yields +4% YoY
- Early March: +12% YoY
- Late March: +18% YoY
- April (latest week): +20% YoY for all future travel
- Implemented 5 broadly successful price increases plus baggage fee increases

Demand Strength (Pre-fuel spike):
- Business revenues: +12% (Jan-Feb), accelerated to +14% in Q1, +25% last two weeks
- Leisure: +6% (Jan-Feb), currently mid-single digits
- Premium revenues: +13.6% on +4.4% capacity; Premium RASM +8.9%
- Loyalty revenue: +13%
- Strong demand across all customer types and regions

Advance Bookings: 23% of Q2 and 8% of Q3 sold before fuel price increases

International vs Domestic: International showing stronger pricing power than domestic (contrary to expectations)

Major Commercial Initiatives (Years in Development)

1. “Nested Selling” website redesign – better product merchandising driving increased upselling
2. Base fares in premium cabins – similar to Basic Economy, offering choice
3. 50 A321 “Coastliners” – Polaris on transcon routes (NY-LA/SF)
4. A321 XLR – 20 lie-flat beds + 12 Premium Plus for 8-hour Atlantic crossings
5. Combined 100 A321s with premium narrow-body configuration
6. CRJ450 – extending premium service to smaller communities
7. “Relax Row” – family product transforming 3 seats into flat surface on long-haul
8. MileagePlus enhancements – rewarding co-brand credit card holders with more miles and redemption discounts

Fleet & Operations
- Taking delivery of 16+ Boeing 787-9s in 2026 (33 over next 2 years) – high premium configuration
- Finished Q1 first in on-time departures among 8 largest US carriers
- Cancellation rate 44% lower than next two largest carriers
- Record Q1 NPS since pandemic
- App usage hit record 86%
- Reached tentative agreement with flight attendants (voting concludes May 12)

Balance Sheet Strength
- Highest credit rating in almost 30 years
- Paid down $3.1 billion debt in Q1
- First unsecured issuance since 2019: $2 billion across two bonds
– 5-year at 5.37%, 3-year at 4.87% (first high-yield <5% coupon since Ford 4 years ago)
- Credit spreads compressed to historically low levels versus investment-grade peers
- “Knocking on door” of investment grade
- Tripled cash balance in preparation for industry shocks

Fuel Availability Assessment
- US: No availability concerns, only price issue
- Europe/Asia: Currently price issue, not availability
- Good visibility for 4-5 weeks
- As prices rise (crack spreads widening beyond Brent), price acts as rationing function
- Longer strait closure increases risk in Europe/Asia

Chicago O’Hare FAA Cap
FAA ordered ~300 peak-day flights cut (May-October). United won 38 points of business traveler market share in Chicago through quality/service differentiation. Growth constrained but brand loyalty foundation unchanged.

Consolidation Rumors
CEO declined to comment on merger speculation with American Airlines, stating he wouldn’t provide anything new. Emphasized aspiration to build larger brand capturing international flows currently going to foreign competitors, but noted “anything that might be an answer comes with complications.”

Management expressed confidence in passing through 100% of fuel increases and achieving double-digit margins in 2027, supported by brand strength, demand resilience, and disciplined capacity management.