United Airlines Holdings, Inc.

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 Edwards, Managing Director of Investor Relations. Please go ahead.

Thanks, Regina. Good morning, everyone, and welcome to United's third 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 a non-GAAP basis on this call, and historical operational metrics will exclude pandemic years of 2020 to 2022. Please refer to the related definitions and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures at the end of our earnings release. Joining us on the call today to discuss our results and outlook are Chief Executive Officer Scott Kirby, President Brett Hart, Executive Vice President and Chief Commercial Officer, Andrew Nacella, and Executive Vice President and Chief Financial Officer, Mike Leskinen. We also have other members of the executive team on the line available for the Q&A. And now I'll flip the call over to Scott.

Thanks, Christina, and good morning, everyone. For the last few years, we've talked about an industry that is transforming and a United Airlines that is competitively positioned to win. For United, that's meant winning brand-loyal customers. Third quarter is another data point that is consistent with the structural, permanent, and irreversible change that is occurring in this industry. We delivered strong third quarter results despite macro volatility in the first nine months of the year, and we now expect to grow earnings for the full year. The first three quarters of the year were an economic downturn for airlines at least, and our ability to grow earnings in the face of macro issues is proof that the brand loyal United Next strategy is resilient in tough times, and a clear proof point on our path to solid double-digit margins. What we've really proven is air travel is not a commodity. Our calls in the last few years, we've spent a lot of time appropriately talking about the industry structure and making predictions about how that would play out in the future. We're now seeing those predictions come true, and even though it's only the second or third inning, I think the general contours of how that is going to end are widely known and easy to forecast to everyone at this point. And given that, I think it's time to shift the focus and talk about how United, gets to double-digit margins even in the current industry environment. There are two points on the revenue side and likewise two points on the cost side. On the revenue side, it starts with winning brand-loyal customers. United is investing over a billion dollars in customer product enhancements annually, and that investment is in all cabins and classes of service. Every customer who flies United gets more value. For basic economy customers, we don't just offer them a competitively priced ticket. We offer them the best app, an on-time flight, power in every seat, seat back screens, a great loyalty program, just to name a few. For brand loyal customers, we offer all the benefits I just mentioned, plus expansive clubs, more seats up front, better food, a more extensive route network to exotic destinations around the globe, and a loyalty program that gives bigger rewards and a tremendous amount of utility for their miles. And most importantly, our people are our best asset, and they're delivering for all of our customers each and every day. We're in the people business, and our people have done an amazing job of caring and providing friendly service that makes customers feel good, and it's the foundation of keeping them brand loyal. From basic economy all the way to Polaris class, every United customer simply gets more value at United than what our competitors offer, and that's why they're brand loyal. It's also why we're winning more brand loyal customers every day, and it's the important competitive advantage that's giving us a generational lead versus most of the industry. We believe that winning brand loyal customers sets up our second revenue advantage, the potential to double the EBITDA from our loyalty program in the years to come. We're still in the pregame warm-ups for taking the United Loyalty Program to another level. But in order to invest over a billion dollars per year in incremental customer products and services, we had to find a different and better way to manage costs. Historically, airlines looking to reduce costs have focused on cutting customer-friendly amenities like food because most of our expense is in areas we can't control, like union contracts, airport fees, fuel, etc., or by adding utilization flying late at night on off-seat days or at slower times of the year. United is doing the exact opposite of that industry dogma. Namely, investing more for the customer and focusing on flying at times that can be profitable instead of just trying to maximize aircraft utilization. And you can see it in our numbers. Our major cost focus at United is to drive real cost efficiency through our use of technology that can also improve the customer experience. In public discussions, we've tended to focus more on the app and customer-facing technology, but we're doing far more behind the scenes, and we're the most cutting-edge technology airline in the world. Mike will give you some examples of these technology-driven savings that allow us to lower true CASMAX. These technology investments are efficient for cost, but they also help us to run a more reliable operation for customers. And secondly, on cost, we have large gauge increases coming as both Boeing and Airbus get back to a better delivery cadence. This strategy is working, and I expect us to add at least a point or more of margin each year normalized for any unusual macroeconomic activity up or down. which gets us to the low teen margins in this industry capacity environment. But as I said earlier, the industry restructuring, i.e. each airline focusing its capacity in markets where they can be profitable, is only in the second or third inning. And as that process plays out, I expect that to add several more margin points to United, moving us up into the mid-teens margins. And as we deliver on that, I bet that our multiples move up meaningfully as well. And I'll turn it back to the team for a run through the quarter and our outlook.