United Airlines Holdings, Inc.

Good morning and welcome to the United Airlines holding earnings conference call for the fourth quarter and full year 2020. My name is Jenny and I'll be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. At that time, if you have a question, please press star followed by one on your touchtone phone. This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed, or rebroadcast without the company's permission. Your participation implies your consent to our recording of this call. If you do not agree with these terms, simply drop off the line. I will now turn the presentation over to your host for today's call, Christina Munoz, Director of Investor Relations. Please go ahead.

Thank you, Jenny. Good morning, everyone, and welcome to United's fourth quarter and full year 2020 earnings conference call. Yesterday, we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations or beliefs concerning future events and financial performance. All forward-looking statements are based upon information currently available to the company. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release, Form 10-K and 10-Q, and other reports filed with the SEC by United Airlines Holdings and United Airlines for a more thorough description of these factors. Also, during the course of our call, we will discuss several non-GAAP financial measures. For reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables at the end of our earnings release. Joining us on the call today to discuss our results and outlook are our Chief Executive Officer, Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer, Andrew Nasilla, and Executive Vice President and Chief Financial Officer, Jerry Letterman. In addition, we have other members of the executive team on the line available to assist with Q&A. And now I'd like to turn the call over to Scott. Thank you.

Thanks, Christina, and thank you all for joining our call today. 2020 was a year of going through hell, but we kept going, and a few years from now at United, we'll look back at 2020 as the year that gave us the opportunity to structurally change the airline for the better. I want to express my sincere gratitude for the outstanding work of the United team during such a difficult time. One of the most visible examples is that our employees are delivering and our customers are noticing. Our net promoter scores are up over 30 points year over year and are by far the highest they've ever been. We've been leading the charge in the industry in health and safety, network flexibility, creative financing, and the list goes on. The United team is taking this opportunity to evolve our airline for the future, and I couldn't be prouder. I'd also like to thank everyone in Washington, D.C., in both parties, along with our union partners, who worked for the extension of the payroll support program. United emerged as a leader at the beginning of this crisis, and we've further solidified that position in the fourth quarter. We had significant accomplishments in 2020, including being the first airline to recognize the potential severity of COVID-19, which allowed us to get a head start on dealing with the crisis. And we continue to be the most accurate at forecasting the course of the virus. We led on safety initiatives throughout the crisis, including being the first airline to require masks, partnering with DARPA to do the most comprehensive analysis of airflow on board aircraft ever done, and using those findings to support the need to run auxiliary power and thus have robust airflow as passengers board and deplane, something United uniquely is doing. We've led on permanent changes to improve air travel for customers, such as taking the step to permanently eliminate domestic change fees. We completed two first-of-its-kind transactions with MileagePlus and an innovative double ETC along the road to raising over $26 billion since the start of the crisis. We led on minimizing cash burn early and continuing throughout the crisis, and we were the first to see the light at the end of the tunnel, which has allowed us to begin preparing for the coverage, which does mean some spending in the near term. We've continued to lead on testing, testing, testing with flights to Hawaii, Newark to London, Houston to Latin America, and many other destinations to drive safe travel. Our cargo team continues to lead the passenger industry with cargo revenue up 77% this quarter, and their advanced preparation work allowed us to partner with Pfizer to transport the first mass shipment of COVID-19 vaccines into the United States. And that's just to name a few. Aggressively managing the challenges of 2020 depended on our ability to make big changes quickly. But the truth is that COVID-19 has changed United Airlines forever. As we recover from this crisis, we've stopped using the term return to normal because it creates an environment where it's just too easy to go back to doing what we were doing before. Instead, we want to focus on a return to new approach that applies to a wide variety of goals. When this is over, our employees, customers, the general public, and shareholders will see a new United Airlines, Specifically, there are seven areas where you'll see a new United. Number one, a commitment to changing how customers feel about United. We've made early down payments on this as the first among global U.S. airlines to permanently eliminate change fees, and the differences in the experience and interaction with our employees are what have led to the 30-plus point increase in NPS. There's more to come on this, but it was intentional to list this first, despite the fact that this is an earnings call, normally geared to more explicit financial goals. Number two, our 100% green commitment to climate change is also unique and new, not only amongst airlines, but amongst global corporations. Leaders, including CEOs around the world, need to accept the fact that we cannot and will not make a serious debt in climate change unless we begin investing in carbon sequestration. And so, United was proud to announce that we would be a large partner, along with Occidental and 1.5, in the world's largest direct air capture and sequestration project, where each plant will remove enough carbon directly from the atmosphere and permanently bury it underground each year to be the equivalent of literally planting 40 million trees per year. Number three, our employees and customers and shareholders can rightly be proud of our unique and groundbreaking climate commitments, but they can also be proud of our diversity, equity, and inclusion actions and transparency. You'll see some more substantive announcements in the weeks to come. Number four, innovation has driven our relative success during the pandemic, and it will be a hallmark of United in the future. We've changed our culture to be willing to have robust debate, even amidst this incredible uncertainty. But we force ourselves to end each meeting with an actual decision and then move rapidly to get it implemented. And we have by far the best and fastest digital team of any airline in the world. If you look at the changes we've made early and throughout the crisis to our customer-facing app, or the new technology we're testing in airports, or the COVID testing capabilities that we're making available for customers, there's simply no question that United has leapfrogged the rest of the aviation industry. Number five, we'll be focused on restoring the balance sheet. Jerry will give you more details, but it's clear that our view that we had an appropriately conservative balance sheet coming into the crisis was just wrong. Number six, we will permanently reduce our cost structure by $2 billion per year. The pandemic has forced us to look at hard ways to change the business and become more efficient. This will allow us to keep CASMX flat versus 2019 into 2023 as the permanent $2 billion cost reductions will offset normal inflationary pressures. You can take it as a personal commitment from myself, Jerry, and the entire management team that we will hit our flat CASMX target in 2023. And all of the above is what gives us confidence that by 2023, at the latest, though possibly earlier, depending on the pace of demand recovery, our EBITDA margins will exceed 2019 levels. Andrew will give you more details on the near term, but I'd just say that nobody, including us, has a perfect crystal ball on how soon this really will be over. But from the beginning of the crisis, our approach has been to be clear-eyed about the challenges and likely course of the recovery. That's often made us appear more pessimistic, and that's perhaps still true today. But being realistic instead of either optimistic or pessimistic has given us a clear advantage. As you first heard me say back in March, hope is not a strategy. At least it's not our strategy. And that remains true as we plan our recoveries. we remain flexible and can either delay or hopefully accelerate our plans for the recovery based on the actual data. But whether the demand inflection point happens in the spring, the summer, or even the fall, what we know is that the recovery is coming and we're very confident in the long term. I'll close by saying how proud I am to be a part of the best team in world aviation. 2020 tested United Airlines and our people in unprecedented ways. We went through hell and it changes forever. The lessons of 2020 weren't easy, but we've learned them, and when this is over and we return to new, we'll be a better airline for our employees and our customers. And because of that, we'll be a more profitable airline for our owners. And with that, I'll hand it over to Brett.