United Airlines Holdings, Inc.

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Thank you, Krista. Good morning, everyone, and welcome to United's second quarter 2025 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, which 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. Unless otherwise noted, we will be discussing our financial metrics on the non-GAAP basis on this call. Please refer to the related definitions and reconciliations in our press release. 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, Executive Vice President and Chief Operations Officer, Toby Inquist, Executive Vice President and Chief Commercial Officer, Andrew Nocella, and Executive Vice President and Chief Financial Officer, Mike Leskinen. In addition, we have other members of the executive team on the line available for Q&A. And now, I'd like to kick the call over to Scott.

Thanks, Christina, and good morning, everyone. The second quarter was yet another proof point that the United Next strategy continues to work and that the two brand-loyal, revenue-diverse airlines continue to generate the bulk of industry profits. I'm extremely proud of the team for executing a strong operation and navigating through a volatile macro period and unique short-term issues that impacted United at Newark while still managing to grow earnings and margins for the first half of the year. Newark faced unique challenges this quarter, but with the help and partnership of the FAA and DOT, it has rebounded stronger and has been the best performing airport in the New York City area. But I know that everyone, including us, cares more about the future than the past. So I'm going to start today with the two macro drivers of our industry, supply and demand. From a supply perspective, it's deja vu all over again. This is almost the exact same setup that we had a year ago at this time, with weak RASM results across the industry, leading to supply cuts starting in mid-August, leading to better margin results, which then led to strong stock price performance. But demand also matters in this equation, and demand, while it's stabilized, was about five points weaker in the first half of the year than we were expecting at the start of the year. As we've looked closely at the data, we've had a hypothesis that seems increasingly correct. Demand was weak for the last five months due to high levels of uncertainty for both businesses and consumers. I'm sure that's not a shocking thesis, but in the past few weeks, the level of uncertainty has declined. The tax situation has settled after the reconciliation bill passed. The geopolitical situation in the Middle East appears to have stabilized. And while tariffs are not yet certain, I think the market and most businesses have a much better read on how they'll manage in a narrower range of outcomes. And encouragingly, that higher level of certainty has translated into a meaningful inflection point in demand. It's only three weeks worth of data. Andrew will give you more detail. But as uncertainty has declined, we've seen an improvement in booked revenue, including a double-digit acceleration in business demand. So to summarize the macro, supply is adjusting once again, just like it did last year. Demand feels to us like it has inflected upward and is returning toward the normal trend line we expected at the start of the year. And bigger picture, for United, the industry, and United industry-specific transformation we've been discussing over the last few years continues to play out. One, revenue diversity, and that includes basic economy just as well as premium, is the only formula that works in the U.S. to have industry-leading margins. Two, the two brand-loyal airlines continue to just gradually win share quarter over quarter, and the advantages that we have are structural, permanent, irreversible, and they're growing, and it's simply not practical to copy them. Three, cost convergence, specifically at the high-cost airports, is making the economics of flying at those airports for low-cost carriers very challenging. For what it's worth, the only remaining successful LCC around the globe, in my view, is Ryanair. And guess what? That's because they're the only LCC that stayed true to their founding principles and don't fly to high-cost airports like London Heathrow or Charles de Gaulle.