United Airlines Holdings, Inc.UALNASDAQ
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Operator: Good morning, and welcome to United Airlines Holdings' Earnings Conference Call for the Third Quarter of 2025. My name is Regina, and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. 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, Kristina Edwards, Managing Director of Investor Relations. Please go ahead.
Kristina Munoz: 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 Nocella; 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 put the call over to Scott.
Scott Kirby: Thanks, Kristina, and good morning, everyone. For the last few years, we've talked about an industry that is transforming and the United Airlines is competitively positioned to win. For United, that's meant winning brand loyal customers. The third quarter is another data point that is consistent with the structural, permanent and irreversible changes is occurring in this industry. We delivered strong third quarter results despite macro volatility in the first 9 months of the year, and we now expect to grow earnings for the full year. The first 3 quarters of the year were an economic downturn for airlines at least and our ability to grow earnings in the face of the macro issues is proof that the brand [indiscernible] 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 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 or widely known and easy to forecast 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 2 points on the revenue side and likewise, 2 points on the cost side. On the revenue side, it starts with winning brand loyal customers. United is investing over $1 billion in customer product enhancements annually. And that investment is in all cabins and class 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 and on-time flight power in every seat, seatback screens, a great loyalty program, just to name a few. For brand loyal customers, we -- all the benefits I just mentioned, plus expansive clubs, more seats upfront, better food, 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 is the foundation of keeping them brand loyal. From basic economy all the way to the 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 customer 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 pre-game warm-ups for taking the United loyalty program to another level. But in order to invest over $1 billion 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 and 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, et cetera, or by adding utilization flying late at night on off-peak days [indiscernible] 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 efficiencies through our use of technology that can also improve the customer experience. In public discussions, we 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 CASM-ex. These technology investments are efficient for costs, but they also help us to run a more reliable operation for customers. And secondly, on costs, 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 1 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'd bet that our multiples move up meaningfully as well. I'll now turn it back to the team for a run through the quarter and our outlook.
Brett Hart: Thank you, Scott, and good morning. This summer was the busiest in United's history. We surpassed 1 billion available seat miles in a single day and flew over 48 million customers in the quarter. Even with these volumes as well as significant summer weather disruptions and system-wide ATC challenges, our operation was resilient this quarter. The third quarter marked our lowest rate of cancellations for any third quarter in company history, and 6 of our 7 hubs ranked first or second for on-time departures. We continue to adapt under pressure and to maintain flexibility during irregular operations, preserving travel plans for more than 290,000 customers by managing delays rather than canceling flights for the use of [ connection sale ]. This is what drives the most value to our customers and helps build the brand loyalty we speak so much about. And our customer NPS score was up nearly 7% this summer versus summer 2024. This performance is a testament to the dedication of our United team. So thank you to each of you. At United, we remain focused on innovation and providing our teams with the most advanced tools in the industry to help them deliver their best every day. We are modernizing applications for employees that allows us to recover faster, scale support for customers, enabling better experiences even when things don't go as planned. We also continue to invest in our industry-leading digital customer experience with a new dedicated section and our mobile app focused on making tight connections smoother and more predictable for customers through real-time personalized tools and communication, driving further improvements in our customer experience and NPS scores. As we continue to take aircraft deliveries, we will also be growing our team. In 2026, we expect to hire over 2,000 pilots and over 3,200 new flight attendants. We are all proud of the fact that we continue to be a destination for great talent with over 27,000 applicants in just a few days for the most recent flight attendant posting. Regarding the negotiations with the AFA, we met with the mediator in mid-September, and our negotiation is scheduled for the end of October. We remain focused on getting our flight attendants, the best in the industry, the industry-leading contract they deserve. I want to thank Secretary, Duffy; Administrator, Bedford and the administration for their support and leadership on the improvement at Newark. We are pleased with the FAA's announcement that flights in Newark will be capped through October 2026 at 72 operations per hour, which better matches the capacity of the airport. The reduction in emissions, along with the continued focus on technology upgrades and ATC staffing further underpins our confidence in Newark's long-term outlook. Newark achieved its best ever on-time departure and Star D0 for any third quarter, clear proof that the investments being made are working. Yesterday, our first Starlink Equipped Boeing 737-800 took off from Newark following FAA certification last month. This marks a major milestone in our journey to deliver the fastest, most reliable and free for Mileage Plus members, WiFi in the skies. More than half of our regional flight now has StarLink successfully installed. We believe this superior in-flight experience will be truly game-changing as it expands across the remainder of our fleet by 2027. Thank you to the entire United team for your continued hard work and commitment to excellence this quarter. I will now hand it over to Andrew to provide an update on the revenue environment.
Andrew Nocella: Thanks, Brett. United's top line revenues increased 2.6% to $15.2 billion in the quarter on a 7.2% increase in capacity. Consolidated TRASM for the quarter was down 4.3%. Domestic PRASM was down 3.3% in Q3 on 6.6% more capacity, premium cabins outperformed the main cabin once again. After a long stream of positive RASM in quarters, United's international flights in Q3 had PRASM down 7.1%. Global long-haul demand continues to spread both earlier and later in the year out of Q3 making those periods stronger, but trade we take any day. Premium revenues were up 6% year-over-year and PRASM for premium cabins outperformed the main cabin by 5 points. United had the company's all-time highest business revenue [indiscernible] during the week ended October 5 of the top 5 best weeks in our history, 3 of the remaining 4 occurred in September 2025. Leisure demand is also healthy as we head into Q4. Not unlike 2024, capacity and demand are simply better balanced in the last quarter of this year, particularly for global long-haul flying. We saw bookings inflect positive in early July, and industry revenues are expected to be positive year-over-year for all remaining months of 2025. We expect our consolidated RASM to meaningfully improve in Q4 year-over-year. International RASMs in Q4 will outperform domestic based on the current outlook. We also expect that Q4 will have United's best revenue quarter ever, but also have the highest absolute RASM of any quarter of 2025. As you can see by the stressed financials at many airlines, it is clear much of their domestic flying once again lost money in 2025, but also in the peak summer quarter. It is already beginning, but we believe more unprofitable industry flying will continue to be scaled back, although the timing remains uncertain. While the supply/demand imbalance did impact United's profits in the third quarter, we can report all 7 of our hubs who are profitable in the quarter. We, at United, remained focused on refinements we can make to the network and commercial strategies to build a stronger margin, particularly in the third quarter of each year. Two years ago, we focused on adjustments to our Q1 network deployment that led to nearly a 4-point improvement in pretax margins. And in 2026, we're going to take a similar approach to Q3. For most of recent prepandemic history, Q3 RASMs were consistent with Q2 and Q4, with the modest peaking of the capacity in Q3, where marginal RASM was greater than marginal CASM. However, in 2024, we saw GAAP emerge where Q3 RASM at United trailed Q2 and Q4. We expect -- in 2025, we expect this gap to once again exist and to have widened. This Q3 issue appears to be an industry issue not specific to United. As much as we love the relative Q4 performance in recent years, the idea that Q3 trails by the magnitude we've seen in 2024 and in 2025 represents an opportunity for margin expansion. In 2026, we'll adjust how peaked our summer capacity plan is by ending the summer schedule a week early, operating 15% fewer Red Eye flights and tended more capacity from the July 4 holiday to name a few, in pursuit of higher margins. I also expect that our Atlantic capacity year-over-year, excluding Tel Aviv will be flat to negative in Q3 2026. United's business model now has a more balanced demand levels across more of the year as our increasingly optimal mix between leisure demand, premium leisure demand and business demand is yet another emerging advantage we have over commodity-based airlines. United's ability to further de-seasonalize capacity, we think, creates yet another opportunity for cost convergence versus commodity airlines, they only see profit opportunities on peak leisure travel demand days or months. I think it's interesting to note, profitability is now inversely correlated with aircraft utilization in the U.S. The highest utilization airlines have the lowest margins. Mileage Plus had another strong quarter with total loyalty revenues up over 9%, overhead remuneration was up 15% year-over-year and should end the year up over 12%. We are seeing increased retention of cardholders along with higher spend as United's brand grows. Today, I'd also like to share my view of where United has come from in the past decade, why our actual 2025 results thus far have proven so durable and what we expect to drive continued gains among brand loyal customers and double-digit margins down the line. Starting with our many transformational annual investments of over $1 billion for our customers, we have successfully decommoditized most of United's passenger revenues. We believe that our tilt to brand loyal capacity and products in the last 5 years was well timed, but also consistent with the demand profile in our hub cities, which is why it's worked so well and why our premium efforts will be more margin accretive than others. However, it's important to understand we're always investing to create value for all passengers in all cabins. Even our most premium yield passengers often fly in the main cabin and our efforts to convert passengers to brand loyal clearly starts in the main cabin. Basic Economy has altered the competitive landscape in the U.S. and providing United a profitable entry far to attract many customers over a full life cycle. Quality and value matters more than ever to U.S. consumers, clubs that are not overcrowded, enhanced meals, great wind, industry leading technology, great customer service, seat-back screens and fast WiFi to name a few, those are the attributes we focus on. The quality part of the product offering was often overlooked by many as we favored simplicity and low cost. In our view, quality goes well beyond the schedule we offer are inherent excellent reliability. Smaller details do matter, and that combined with best-in-class customer service our team members deliver sets us up for success. Consistency of our products and services was unsurprisingly low at the early stages of our transformation, but is now reaching critical mass. United now operates 765 jets with more than 146,000 seat-back screens. These screens are 1 way of defining a premium airline in the U.S. Our signature interior conversion is now at 64% and an investment of over $1.6 million. At United, we've proven our ability to increase our relative RASM with the best results, while at the same time increasing domestic gauge by almost 20% since 2019. We said a decade ago that not all capacity was created equal, and our results have proven that business case. The statement is only true for Brand Loyal Airlines. Domestic gauge is expected to once again accelerate in 2027 as our [ 200 A321 ] fleet reaches critical mass after years of delay, helping drive better customer experience, but also creating cost convergence with others. This gauge increases a proven formula for margin growth and accelerate as we retire smaller, lower-margin A319 and A320 aircraft from our fleet by 2030. United hubs can support this higher gauge and allows us to accept more basic economy fasteners at a profit. Our transformation is making the world a smaller place for United and allowed us to add unique find places including, but not limited to, Greenland and Mongolia. A large thanks to the 100,000-plus United team members together have built this durable generational lead. I'm going to turn it over to Mike to talk about our financial results. Mike?
Michael Leskinen: Thanks, Andrew. We delivered a strong third quarter. Customers are speaking with their wallets and are increasingly choosing to fly United because of our strong operational performance and the significant investments we made and continue to make in the airline. StarLink is another example of how we're differentiating our customer experience for the better. This quarter, I'm particularly proud of our team for our disciplined cost management. I expect that our [ negative 0.9% ] CASM-ex performance will be industry-leading. As Scott mentioned, we made strategic investments in our products that drive higher costs, but we are helping to offset those by running the core airline more efficiently. And those investments are increasingly differentiating United Airlines, creating brand loyal customers, decommoditizing United and driving solid margins and returns on capital. We've been investing over $1 billion annually over the last few years into improving our aircraft, our clubs, our food and our WiFi, and we expect to spend another $1 billion next year. We increased the amount we spend on food by 25% this year. We're investing $1 billion on our rollout of Starlink WiFi so that our customers have the best-in-class connectivity. Our investments in clubs doubled in 2025 and is expected to more than double in 2026 as demand for this product continues to grow. These are just a few examples, but it's important to note that we're doing this all while delivering industry-leading cost performance. Being able to invest in our customer experience is possible because we're simultaneously driving efficiency in the core operation. That produces meaningful and permanent savings. Some examples include: modernizing all of our maintenance technologies so that can be used on iPads, allowing our technicians quicker access to United resources. For example, before introducing iPads throughout the shift, our technicians would walk to and from our hangers and aircraft, checking the aircraft's paper logbook, printing manuals from the legacy mainframe systems at the hangar and ordering parts from their terminal at the hangar to ultimately fix the aircraft. Today, iPads give technicians the ability to instantaneously access, troubleshooting manuals and order parts, all while at the aircraft, turning airplanes faster and improving the efficiency of our workforce. Additionally, significant investments in people, process and technology have been made to improve our recovery from IROPs events which enables us to restart the airline following an event much quicker than we have in the past. One particular tool already in use is our Orca tool, which optimizes aircraft routing, crew pairings and customer connections so that our targeted delays or cancels prioritize our customers and the optimal plan for guiding the airline through significant events. Our operational leadership and frontline employees are performing the best in our history. This has led to United leading the industry in the quickest recovery following significant events and you can see the direct impact of that comparing our third quarter cost to others in the industry. We're not just looking to make our operation more efficient. We're making process changing -- changes and using AI to make -- the work of our headquarters management team more efficient too. In fact, our management headcount is 4% lower than last year as this efficiency work continues, we're planning to shrink another 4% in 2026. This is a new culture at United Airlines, and as such, I'm going to give a long-term framework on how we're thinking about CASM-ex. General inflation in this industry is running about 3% to 4% annually, and we expect that to continue inclusive of labor. At United, our gauge growth should provide about a 1-point annual tailwind through the end of the decade. We're also committed to driving efficiency into the core business of another 1 point per year. So together, our core CASM-ex growth should run up at 1% to 2% annually if we did nothing else. But as we've been highlighting, United is transforming because of our investments we have made into improving the customer experience and decommoditizing air travel. You should expect that to continue. And on average, we expect that to add about 1 point of CASM-ex pressure per year that is more than offset by revenue generation. Altogether, our CASM-ex run rate should run up around 2% to 3% annually. Now turning to the quarter. We delivered third quarter earnings per share of $2.78 above the top end of our guidance range of $2.25 to $2.75. And ahead of Wall Street expectations of $2.68. Our pretax margin was 8% and would have been a point higher absent the disruptions earlier this year at Newark. We had industry-leading operational performance that underpins strong unit cost performance. Our third quarter CASM-ex was down 0.9%. Our costs in the quarter did benefit by approximately 1 point of expense moving to the fourth quarter, primarily driven by maintenance and approximately 1 point from the timing of certain labor contracts. Looking to the fourth quarter. The momentum in the revenue environment, Andrew described continues, and we expect fourth quarter EPS to be $3 to $3.50, that brings our full year EPS towards the better half of our full year 2025 guidance range of $9 to $11 and should position us to be the only airline to grow earnings this year. This demonstrates that winning brand loyal customer drives resilience in the business and when the economy rallies provides upside. As I mentioned last quarter, the industry now has 2 brand loyal, structurally profitable and revenue diverse airlines, which together will represent about 100% of industry profits in 2025. We continue to target double-digit pretax margins in the long term. Turning to the balance sheet. We continue to march towards our goal of an investment-grade balance sheet. During the quarter and earlier this month, we bought back [ 377 ] aircraft off of expensive COVID Air leases to carry implied interest rates in the high single digits. This accelerated our deleveraging efforts while further optimizing our cost of capital. We've eliminated all expensive financing from the balance sheet and have no fixed coupons over 6%, an average floating margin of 1.9% and an average cost of debt of less than 5%. These actions are being noticed by the rating agencies. We are upgraded by S&P to BB+ from BB on August 12, the highest they have rated us in over 2 decades. This change gives recognition to the fact that our business plan is working as our earnings grow and become more resilient and continue our migration towards investment-grade credit ratings. Free cash flow generation also remains a key focus, and we expect to generate over $3 billion in free cash flow this year. I've talked about free cash flow conversion around 50%, and this year, we're trending well above that due to the timing of aircraft deliveries. As aircraft deliveries accelerate and CapEx rises, we expect to remain in the 50% range. And as we exit the decade, we expect the conversion to accelerate closer to around 75%. On the buyback, we continue to take a measured approach and take advantage of opportunistic moves in the market while also working towards getting our net leverage below 2x. To wrap it up, I want to thank the team for their continued execution. Our ability to manage through what has been an earnings recession for the airline industry has been remarkable. And while I still think there is upside to our absolute margin, and that matters the most, our relative margin is outstanding. My confidence in the financial future continues to grow as we exit the year. United Airlines and the industry continue to transform into a customer-centric brand-loyal business. United Airlines will continue to provide more value to our customers, to our employees and to our shareholders. Now back to Kristina to start Q&A.
Kristina Munoz: Thanks, Mike. We will now take questions from the analyst community. We want to get to as many of you as possible, so please limit yourself to 1 question and if absolutely needed 1 follow-up question. Regina, please describe the procedure to ask a question.
Operator: [Operator Instructions] The first question comes from the line of Catherine O'Brien with Goldman Sachs.
Catherine O'Brien: So first, a follow-up to Scott's margin commentary to kick off the call. We've seen domestic main cabin seats come out of the market this year, although there has been backfill. You noted that system margins would go up a couple of points if the industry rationalized more. But what's your view on what would happen to main cabin margins if there was a step function change in main cabin supply? Would that narrow or even close the gap between main cabin and premium cabin margins? Or there just always going to be a gap given the demand profile of price-sensitive versus more premium customers?
Scott Kirby: So thanks, Catherine. That's an interesting and, I think, insightful question. But to answer it, I'm going to give you some of the -- I think you guys take a step back and give some of the history and evolution of the industry. And for most of my career, essentially everyone associated with the airline industry -- airline executives, including myself for the first decade, but Wall Street analysts and investors have thought of the airline industry as a commodity, not just price, but that schedule. Schedule drove everything. And that's how most of us thought of the industry. And by the way, it's why people on Wall Street right notes that essentially every seat is created equal and do competitive capacity analysis or implicitly the assumption that every seat is created equal. I also think, by the way, it's the reason we trade at such low multiples because that's what happens in commodity industries. But what we've proven and continue to prove in the last few years is that it is possible to transform into a [ brand loyal airline ], which is dramatically different than the commoditized portion of the industry. For brand loyal customers, if you think about those, I think that the majority of customers in the industry, they're not all, but they're the majority of the customers in the industry. And for them, schedule is still the #1 factor. That's kind of how we got to thinking of this as a commoditized industry. But most customers have multiple airlines that have broadly competitive and similar schedules that give them the option. And so most of those customers like to choose an airline to give their loyalty to accumulate miles, get the credit card, go on great exotic destinations around the globe. And winning those customers is the winning formula. You have to win them, you have to give them great value, but winning those customers is the winning formula. And for those customers, it starts with the schedule, but that's just the starting point. And from there, it's the product, it's the technology, it's the service, it's how people treat all of them that allow us to win those customers. And we look at the data from the last 5 years in each of our hubs, we've won significant market share of customers that live in those cities. And it's those brand loyal customers that we have won. And that's something that we've been working on for almost a decade now, billions of dollars of investments to get there, a focused strategy that has been consistent over time. That's why I say that is structural, that is a structural change, but because it's structural, it's permanent and irreversible. What that means on the commodity portion of the business, we do have some of our seats that are being supplied to the commodity portion of the business. It's less -- the percentage is less than others, but everyone does. I think that portion of the business currently loses money for everyone. For the ultra low-cost carriers, they're 100% commoditized, and you can see how much it loses, but it really loses money across the board. Brand loyal is higher margin, but commodity loses money. That supply is adjusting in the commodity portion of the business. I think it is going to -- I just started the tip of the sphere is the airlines that are 100%, but it's not going to stop there. And I think within a couple of years, the supply and demand will be balanced for the commodity portion of the business, and it will be profitable for everyone. I think it will be low margin as all commodity businesses are, but it will be profitable. But the great news for us is that the majority of our revenue is going to come from the brand loyal customers. I think we're proving this year that, that revenue stream is resilient in tough times, but that also has more -- even more upside in the good times. So I think commoditized seats on an airline, the more commoditized seats you have, the lower the margins are going to be. I think they will be profitable. But that future really is going to go into the couple of brand loyal airlines that I think are going to be able to achieve more stability in earnings, less cyclicality, more stability and mid-teens margins.
Catherine O'Brien: I really appreciate it. Maybe if I can squeeze in a quick follow-up for Mike on cost. So last quarter, you had said fourth quarter costs will look similar to 2Q inclusive of [indiscernible] deal. There's quite a lot of moving pieces since then with the flight attendants and some maintenance shift. Can you just update us on pulling that tethered could CASM still be close to that 2Q reference point? Or if not, just help us frame it a bit more?
Michael Leskinen: Thanks for the question, Catie. And look, we -- we've got about a point benefit from maintenance moving from 3Q into 4Q, as I said. We also get about 1 point benefit from the labor agreement. Underlying that, we also got a further third point of goodness that I think is indicative of what you're going to see in the future from us of underlying core efficiency. So all that came together for really an excellent result. I do expect 4Q to trend up from the 3Q level, but really proud of those results.
Operator: Our next question comes from the line of Jamie Baker with JPMorgan.
Jamie Baker: So a question for Andrew. Last week, the topic of premium leisure yields exceeding certain corporate yields came up. Obviously, it's easy to find isolated examples of this. But my question to you is how widespread might this be across your network? And does this potentially represent a secular change? Or should investors still remain focused on corporate yields as representing the gold standard in the long run, the way they clearly were a decade ago?
Andrew Nocella: Happy to, it's a really good question, Jamie. And it's a new [indiscernible] based on everything else in our business that's complicated. So the answer is the premise is correct that we've seen the growth, the premium leisure and the yield quality accelerate really fast. And when we look at it across our domestic system, we find, in fact, the quality of premium leisure business often exceeds that traditional corporate business, which, by the way, is a much smaller percentage of United business than it was in 2019. I think the distinction that I'll give you, that's a little bit different is that, that same phenomenon is not yet true in global long haul, that the corporate there does remain a much higher yield than the premium leisure business at this point. But again, premium leisure continues to accelerate. The percentage of the cabinet continues to grow, and our overall sold load factors and Polaris continue to grow. So we seek through RM, the best of both worlds. We seek to maintain all that corporate business and gain corporate share, while at the same time, as we reconfigure aircraft, taken on more and more premium leisure business. So I couldn't be more excited about this trend, like it's just an amazing thing that I don't think anybody would have predicted in 2019, but it's come true and it's come true quarter after quarter, I think for 3 years in a row now, and it will come true again in the Q4 this year, and we will lean further into premium capacity next year as a result with things we planned a couple of years ago.
Jamie Baker: And somewhat related to that, Andrew, the relationship between revenue and nominal GDP got a lot of airplay during the recovery from COVID. It's not really a talking point anymore, but the bull case at 1 time, was it enough structural change has taken place that we would see the industry exceed the pre-COVID long-term relationship. And certainly, based on the A48 data that hasn't happened yet, maybe you crunched the numbers differently. But is this topic merely a blast from the past or something that we should continue thinking about? Do you think about it, put it that way?
Andrew Nocella: I don't think about it that way anymore. And I don't think about it that way. In a large part, what Scott gave is a narrative on how we're different, how a few airlines like us are different. And our revenue streams are simply different and durable relative to the commodity-based airline. So when you look at the GDP relationship, you're looking at one big total of revenues, and it doesn't distinguish the high-quality airlines and the high-quality seats from the low-quality seats. And that's the thing that I think has been lost in the formula that we all used to rely upon. So no, we do not rely upon that formula as we used to.
Operator: Our next question comes from the line of Andrew Didora with Bank of America.
Andrew Didora: First question for Andrew. I guess I noticed the air traffic liability fell only 3% sequentially. If I look back historically, it's been closer to down [indiscernible] so I think this clearly supports some of the bullish commentary that you've had on the call. I guess my question, how should we read into this decline in the ATL? Does this speak to just the strong pricing that you're seeing? Or does it say something just in terms of how you're booked today for the rest of the year in terms of volumes than maybe you typically are at this point in time?
Andrew Nocella: Those facts are correct in terms of the ATL. I would -- it's the momentum in the business. It is clearly a lot of good bookings that we've taken over the last few months and months reflecting our outlook for Q4, which we're really proud of the outlook for Q4 and how it is inflected nicely from Q3. We're also booked a little bit ahead as we go into Q4 that reflects that. But overall, we've seen a really good environment. I said in my prepared remarks, what we saw from business traffic at United, our bookings over the last few weeks, which have been really amazing. So looking forward to a positive news for Q4 and great 2026.
Andrew Didora: Got it. And then just as a follow-up, I kind of wanted to ask you on the Latin America results in the quarter. Your calls are very focused on margins. So just curious, why did you grow so much in Latin America in 3Q when it seems like the RASM performance certainly didn't warrant it. Just curious your thoughts there and how maybe you can fix that going forward?
Andrew Nocella: Yes. I think that's a very fair question. Look, results for Latin, we're disappointed. As we look towards Q4, I think Latin will have our largest sequential improvement, but that's not an easy -- it [ is an ] easy comp, I guess, at the end of the day. So look, I expect elevated year-over-year capacity in the region to exist for approximately another 2 quarters by United and the industry, while competitive capacity tailwinds are favorable across most of our network in the coming quarters, that isn't true in Latin America, and that's very focused on Mexico and Central America. As we see in our domestic line, we believe most of the new competitive line in the region to the United States is unprofitable and transitory. We have a good position in Houston, and we intend to hold our ground. Noncore, non-Houston line by United that underperformed will be removed. And I'll also say deep south line is setting up for a nice peak season driving improvements. But core United capacity [indiscernible] from Houston to Mexico and Central America will continue as planned, and we remain very focused on the long term when it comes to our Houston hub and our Latin American franchise.
Operator: Our next question comes from the line of Sheila Kahyaoglu with Jefferies.
Sheila Kahyaoglu: Maybe 2 questions. The first one, short term. Can we talk about the sequential unit revenue trajectory for Q4, the moving pieces of domestic versus international. It's just somewhat interesting that international is going to outperform given where schedules are shaping up? Can you just give us a little bit of data on the booking curve and how the holidays are looking?
Andrew Nocella: Sure. Look, it's Andrew. Q4 is setting up nicely, as I've indicated. And I think as you all can figure out, if you look at our guidance, we're seeing really significant sequential gains in our RASMs. I'll start off with is Newark clearly had a substantial negative impact on Q3 of a little more than 1 point and while we're always yield focused as a premium branded loyal airline, we did temporarily use lower prices across all products to regain share following that event, and that continued for most of Q3. New York share did rebound first with lower yield in local leisure passengers and then with higher yield leisure and corporate business following the improvement throughout the quarter. And while the impact of bookings is largely dissipated, we did build a small deficit of Q3 bookings traveling into Q4, which is in our guide, by the way. The remainder of our Q3 gap relates to the timing of events in 2024, including the Paris Olympics and CrowdStrike. And I think that's pretty simple math that others in the industry have explained. So I'm really excited about the inflection. I think all 3 international entities are going to see really good sequential improvement. By the way, I think Atlantic, even with elevated capacity will absolutely be positive in Q4 year-over-year and probably the same is true for our Pacific entity. And so we did see this onetime gap in Q3 based on how we shape capacity. And as I said earlier in my prepared remarks, we're going to alter our schedule for 2026 to account for that. And then in the end, across the entire globe, Hawaii has definitely been a strong spot for us. But I'd say the rest of the globe is all performing at the same rate, which is a rate we're pretty happy with when we look again at the sequential improvement.
Sheila Kahyaoglu: And maybe a longer-term question. So maybe for you, if you'd like. You mentioned the 100 bps of margin improvement per year. How do you think about that as [indiscernible] 2% to 3% per year. It implies margin expansion is assuming [indiscernible] low to mid-single digits per year. So how do you think about the drivers of that? And obviously, a significant divergence from history?
Scott Kirby: Yes, it does -- the math means that RASM has to outperform CASM. I do expect that to happen. I mean if you look at next year, [indiscernible] comps to start with. But we just continue to have a lot of traction with brand loyal customers and look deeper into the data where we won market share in each of our hubs and how that is reacted -- how that is flowing through the margins. I feel pretty confident that we ought to be able to get at least 1 point of margin per year. And I think if you kind of look at this year, there's been an unprecedented amount of stuff that has happened this year kind of across the whole industry at a macro level and also to us, specifically in Newark. And the fact that we're going to grow earnings this year, I think, is quite remarkable. I use the word resilient, but it's also a demonstration that our strategy. If you strip all that out, we [indiscernible] more than a margin -- a full point of margin this year. And so we feel really confident to dig into the data on brand loyal customers and what's happening in each of our hubs that that's going to be a tailwind. And I also briefly mentioned it in my opening remarks, but we have some really big ideas on the loyalty program, which we're not going to tell you today for anyone else asking, but I think we're going to double the EBITDA by the end of the decade in that program, which is going to add more. I think we're just beginning to realize the full potential of the loyalty program, and there's a lot of -- a lot of runway there.
Michael Leskinen: Sheila, I can help the pile on. When I talked about the CASM-ex buildup, I talked about 1% to 2% of CASM-ex related to inflation after we manage -- have the opportunity to drive Engage. And then we're adding a point as we create more segmentation, more premium product. We're adding that point very cautiously because it's driving consumer preference. It's driving consumers to upgrade their cabins, driving consumers to buy what is a premium product. And so that's profit accretive. If it wasn't profit accretive, we wouldn't spend it.
Andrew Nocella: And then I'll just [indiscernible] since we're all talking for next year, our premium capacity will be up 2 to 3 points more than our total capacity. I'm not going to give you guidance for next year. But we've preprogrammed this long ago to make advantage of these premium trends. And we know that we need to change our commercial strategies, our configurations and our products in order to achieve those RASM gains. And the good news is we've preplanned it, and it's going to happen.
Operator: Our next question will come from the line of Duane Pfennigwerth with Evercore ISI.
Duane Pfennigwerth: I appreciate you've covered a lot of good stuff already. But I wondered if we could bridge from the tone mid-September conferences to today, not really about the third quarter, but forward bookings. I assume you have a good head start on 4Q bookings and advanced yields year-over-year. Can you comment on how much of a head start you've built, specifically maybe on advanced book yields. And is your relative optimism about transatlantic, is that a volume comment? Or is that a yield comment?
Andrew Nocella: Look, definitely, over the next 2 months, we've booked ourselves ahead versus last year. So we go into the quarter, booked a couple of points ahead, which was intentional on our part. We did use a little bit of yield to make that happen again, but that was intentional based on what we did last year and how we manage the capacity. And so we're happy with that. On the Atlantic, there's a Tel Aviv story, which is different than the rest. But Atlantic, again, we've learned a lot about Q3 seasonality and where capacity should be placed, and we are going to be a lot more prudent with July and August in particular next year and push capacity out into the other quarters. And so as we look at Atlantic, and you can see the numbers, we're growing pretty swiftly in Q3 or Q4, sorry. And I told you already that we expect we will be positive RASM across the Atlantic. So we properly placed our capacity. We're aware of the demand trends, and we're very happy with what it looks like. And the last thing I'll add is, in particular for us, the propensity or the share of revenue in premium cabins is the lowest in Q3 and the highest in Q4, which favors United Airlines given our business-centric airline and how we do well. And so we're heading into amazingly, which is a point of strength Q4 across the Atlantic, which, again, I don't think if we went back to 2017, '18 or '19, I would be able to say that. And I'm really excited about that. I think that opens up all kinds of possibilities for the airline on how we manage our capacity and it's off to a great start. We're early in the quarter, but it's off to a great start.
Duane Pfennigwerth: And just quickly on costs. Mike, can you talk more specifically about the maintenance expense that shifted here? It just -- I mean, the muscle memory is such that there always seems to be something that's going to come back and then it never does. So I think you've been good and conservative there. Is there an accrual for flight attendants specifically baked into the 4Q guide? And should we think about 2026 as one of your framework 2 to 3 years?
Michael Leskinen: Thanks, Duane. I think there are 3 questions in there. Let me try to address them in order. 2020, the quarter, the 1% movement was primarily engines. This happens with some frequency where an engine event that we had been expecting pushes from 3Q to 4Q or 2Q to 3Q that happens. And then, yes, sometimes what happens is that another separate engine event pushes from 4Q into 1Q and therefore, you don't see a catch up. I do think you'll see the catch-up of that point in 4Q of this year. So that was the point. Regarding flight attendants, look, we've got the best flight attendants in the business. They deserve an industry-leading contract. We're going to give them an industry-leading contract. We're hoping to get back to the negotiation table here in late October and very optimistic we will have a ratified deal in 2026, early 2026 to get them that industry-leading pay, but we're not going to accrue for expenses in the quarter when we don't expect a ratification in that quarter. And then your final question around 2026. I think that 2% to 3% is the right expectation for CASM-ex as you look over a multi-year time frame. We have -- we do have a build to pay on the labor front. I've been saying for some time that, that bill is 2 to 3 points when all of those labor agreements ratify. And so we will have some added expense relative to that in 2026.
Operator: Our next question comes from the line of Conor Cunningham with Melius Research.
Conor Cunningham: Scott, I know you asked us not to ask about the doubling of the loyalty EBITDA, but it's a pretty big cat, so I have to ask. Maybe you could talk about -- you redid the deal with the -- on your credit card with Chase right before the pandemic. I think that we're getting up to the time when we start to renegotiate a new one. So maybe you could talk about what is the driver behind doubling in terms of a new rate and versus what you're going to do behind the scenes to make the loyalty program more valuable?
Andrew Nocella: Well, look, I'll start. Look, we -- I mean, we couldn't be more excited about the opportunity. There's a lot going on in the space, and I'm not going to divulge the details of our Chase contract in terms of its term, that remains confidential, but the term doesn't go forever, just like every contract we enter into. I think the broader point is when we think about the frequent flyer program, United is a true loyalty program. And loyalty is different than a reward program. And it's important that we manage our program in that vein. And there are a bunch of things we can do to take advantage of our unique status. And we think there's only in the United States, 2 to 4 loyalty programs, everything else we talk about is a reward program. And so we're not going to announce it today, but we're going to be working very hard to make sure that consumers fully understand the distinction between our program and the alternatives and the rewards and the value that can be achieved at United in a way that I don't think has been done in the past. So I think that's enough of a hint for now and more to come. But as Scott said, we're very excited about this, and we'll see where we get.
Conor Cunningham: Okay. We'll look forward to that. Maybe sticking with the whole hub stuff in capacity in general. Scott, I think you did interview not too long ago, you talked about how United only fights [indiscernible] from the high ground. When you first came here -- when you guys first came there to take over United and reshape it, you talked a fair bit about the Mid-Con hub strategy. I was hoping you could just mark where we are in terms of that rebuild. It just seems like there's -- the industry is in flux right now. There's an opportunity to kind of start to potentially think about focus cities and whatnot. Can you just talk about the opportunity beyond the 7 hubs in general?
Andrew Nocella: Well, I'll start off and I'm sure Scott can add some of his listening to the conversation. But we haven't completed the United next assignment that we set out to do. We should complete that either probably in late 2026 or maybe early 2027, and that goal is to reach a certain level of connectivity, critical mass engage that allows us to achieve much higher domestic margins than we have traditionally achieved in our domestic hubs. As I've said many times and I'll say again today, international margins lead the way united. And while I expect that to be true over the long run, I do expect the gap to be able to shrink dramatically based on what we plan for the hubs. And in particular, this gauge calculation, we still remain under-gauged, that gauge is going to change our cost convergence calculation even further allow us to capture more share the high end and more share at the low end all profitably. But we still have roughly 1 to 2 more years to go. We'll figure out the exact end point. But after that end point, we will take a broader look beyond our hubs at what makes sense. But we're very careful to make sure that whatever flying we add is margin accretive, and that will be a test beyond our hubs. But for right now, still very focused on our hubs.
Operator: Our next question comes from the line of Scott Group with Wolfe Research.
Scott Group: I've got 2 quick ones, I'll just lump them into one. The loyalty EBITDA doubling, like just a rough starting point, like what percentage of the EBITDA is it today? I just want to get a sense of the base. And then Mike, just your point about 2 to 3 points -- point bill from labor. Is that all 2 to 3 points incremental that comes [indiscernible], have you realized some of that from some of the other labor deals? I just want to -- [indiscernible] incremental 2 to 3 points, I guess, that's what I'm trying to figure out?
Michael Leskinen: Let me take the expense question, Scott. This is not the time where we would give 2026 guidance and nor do we give CASM and TRASM guidance anymore. But what I will tell you is with the underlying inflation, with the labor headwinds we expect, we feel very confident about margin expansion and growth in earnings in 2026. For more detail on that, you're going to have to wait for the Q4 call. I'll give loyalty to Andrew.
Kristina Munoz: We can answer -- I mean, Andrew just answered a very similar question right before this, Scott. And we'll have to -- we'll also wait and see for an Investor Day when we provide a clear breakdown of the contribution of this business. But it's obviously a very meaningful portion of our earnings. And for those of you that have -- that are next in the queue, I'd suggest you take my recommendation to limit yourself to 1 question.
Operator: Our next question comes from the line of Tom Fitzgerald with TD Cowen.
Thomas Fitzgerald: I was wondering if you could just update us on the cadence of Starlink installation as we move through 2026 and then how the opportunities that opens up for Connective Media?
Andrew Nocella: I'll give it a start. For United Express, I think we're over halfway through at this point with the [ Embraer 175s ] and the [indiscernible] on board the aircraft, by the way, is amazing. Hopefully, everybody tuned into the today show yesterday to see that demonstration on board. And if you haven't, you can find it on social media and TikTok because it was quite amazing. Our first 737-800 took off yesterday from New York to Houston with dramatically higher NPS scores like off the chart on that aircraft equipped with StarLink. It is a game changer, a gate-to-gate experience, reliable and as fast as your living room. This is going to be a unique differentiator versus our other competition. And I'd tell you like of all the things we put onboard aircraft, all the changes we've made, whether it's wine or food or better seats, StarLink could be the biggest of them all. And as you pointed out, one of the more exciting things is how we intersect StarLink and the ability to deliver unique content to each and every seat in our Connected Media business. Obviously, we have, I think, through the end of 2027 to install StarLink on all of our aircraft, and we're going to do it on every single one of our aircraft. And when we have that fully enabled. So it's still a bit down the road, the unique things we can do by no one who's in a seat and being able to deliver unique content to that seat very quickly. And by the way, that's not only the media opportunity, but that's about delivering [indiscernible] to help in the travel journey, whether you're luggage made an onboard the aircraft or what you're about to eat or any other thing you need to know to make sure that you are stress-free when you travel on United Airlines. So, so much upside. Again, I'm going to go back to the NPS scores on that flight the other day, we're off the chart, like a game changer for United. We couldn't be more excited about this. It's one of the biggest things we've done in a really long time and may be underappreciated, but it will soon be appreciated.
Toby Enqvist: And if you want to geek out, this is Toby on statistics, we had 145 paying customers, 170 devices connected on the inaugural and 145 gigabytes used on the flight, which is about 1,000x more than a normal life. But [indiscernible] nerves out there.
Operator: Our next question comes from the line of Mike Linenberg with Deutsche Bank.
Michael Linenberg: Scott, I know this fourth quarter, I believe, you're going to be making a decision on the future shape and size of your wide-body fleet. And I know historically or at least the prevailing view has been that bringing on another airplane type, especially on the widebody side comes with various pain points. Can you just discuss some of the factors like how has that evolved? Or is it still as prohibitively expensive to bring on an additional type? Just your thoughts around that?
Michael Leskinen: Mike, this is Mike. I'm going to take that question. You're right. We're always thinking about fleet decisions and this fourth quarter is an important decision for us. There are complexity costs around having additional aircraft types. That is always true for United given the nature of our hub network that has not changed. The larger we grow and to the extend it to a larger sub fleet that gives us opportunity to mitigate. But there are also different capabilities of different aircraft and you need different range and you need different gauge. And so we're weighing those against one another, and we're weighing the price, and we're weighing the expected maintenance cost of the aircraft, and we're going to make the decision that optimizes profits for the long term for United. So stay tuned.
Operator: Our next question comes from the line of Savi Syth with Raymond James.
Savanthi Syth: I was curious if you could remind us again how you're thinking about the fleet plan. It seems like you had a few more deliveries this year than you had additionally planned, so Airbus and Boeing getting their act together. So curious how you're thinking about kind of 2026 and how that progresses?
Michael Leskinen: Thanks, Savi. Look, Boeing is definitely getting their act together on the narrowbody side. And we're getting some additional deliveries versus what we had expected. And I think that's going to continue in '26. And maybe even '27. On the widebody front, we're still seeing some delays, although there's reason for some optimism on that front as well. To the extent that occurs, we'll see additional deliveries that will drive CapEx up in the short term. But the updating on the narrow-body side, in particular, combined with the financing terms and our prices, it is margin accretive. It's pretty quickly actually even return on capital accretive. And so we're welcoming -- welcoming some faster deliveries of delivery of aircraft. And as I talk about free cash conversion, we run a whole multitude of scenarios, and I feel very good about expanding free cash conversion even with growing CapEx.
Operator: Our next question will come from the line of Ravi Shanker with Morgan Stanley.
Ravi Shanker: Apologies if I missed this, but I think there hasn't been much talk of the government shutdown so far. If you can just help quantify what you're seeing out there? What are some of the puts and takes in terms of the range of outcomes and whether that is your active guard building your guidance for the quarter?
Unknown Executive: Okay. I'll try. First, the controllers, despite a lot of the press, the controllers are professionals. The vast majority of the controller workforce is showing the business, we also have more communication and coordination at all levels with the FAA than I ever have seen in my entire career. And the sum of those 2 means that the system is actually running well. We have our most cancellation rate in a decade for October, second best on-time performance. From a bookings perspective, the first couple of weeks, there hasn't really been a measurable impact in the first couple of weeks of October. Though I think the longer this drags on, obviously, the risk will grow on both of those points. So I hope our politicians will figure out how to get in the room, compromise and get something done.
Unknown Executive: Rob, to your question of an active guide. I think we calibrated the range of earnings per share for Q4 with government shutdown in mind. It's one active [indiscernible], but we've got reasonable room there for continued government shutdown, but it's not infinite.
Operator: Our next question comes from the line of Brandon Oglenski with Barclays.
Brandon Oglenski: I think I'm going to ask like a nerdy and geeky question of Andrew here. But speaking of brand loyal airlines versus commoditized low-cost carriers, I think from our perception, the booking window might actually be shorter at the lower end of the market, especially for like a spirit right now. So I guess can you talk to -- we're going to see another big chunk of capacity come out of the low end of the market here. That's disclosed by them in their reorganization plan. How is that going to impact dynamics competitively, especially as we go through the fourth quarter here. I don't mean to make this a near-term question, but I guess any insights you can provide would be helpful?
Andrew Nocella: Sure. I'll give it a try. Clearly, future schedules have been recently loaded that are materially different than past schedules and unprofitable capacity is leaving the system. Certain airlines definitely have a very close-in booking curve based on pricing and how they price relative to others, I suppose, is the macro level thing, I would say. And their booking curves are different than United's booking curves because we have a full range of customers and products and flying all over the world. What it means for the future, look, as more and more unprofitable capacity comes out, we'll continue to adjust, but I'll tell you, basic economy is an entry point. There's always going to be ultra low-cost carriers in the marketplace. They may have different names over time. And we will always be competitive with them. The one thing we do think is going to change is unprofitable flying is going to be diminished because it just doesn't make sense in the long run, whether it be for United or any other carrier, we're going to make adjustments to Q3 as I reiterated earlier and others will [indiscernible] and are being forced to make adjustments. So it's a really great setup as that unprofitable capacity and that commoditized capacity leaves the system and supply and balance demand rebalance to a great outlook.
Operator: We will now switch to the media portion of the call. [Operator Instructions] Our first question will come from the line of Niraj Chokshi with the New York Times.
Niraj Chokshi: I was just curious, you guys have talked about how premium demand will be resilient in a downturn. Can you just kind of talk through a little bit more about how that is, why you believe that?
Scott Kirby: Sure. Actually, I call it brand loyal demand instead of premium demand to start with because many of our brand loyal customers are flying in economy. They sometimes fly up -- upfront as well, but they often are flying in economy. And -- and that demand has been resilient, I think, is resilient. There are people that, one, in many cases, do have the income to continue traveling. Travel is high on the list of what people want to do and most of those people do. [indiscernible] of business travelers that are flying for business. And because you have a higher share there, that's what really makes that resilient. If demand kind of bleeds off on the lower end when there's economic stress, there's more seats available on United Airlines for those brand loyal customers. And so it makes it resilient. And you can see that in our results this year, I think.
Operator: Our next question comes from the line of Rajesh Singh with Reuters.
Rajesh Singh: Scott, I had a question on Russian overflights. United said this week that restrictions on flying over Russia means you are effectively bought from flying directly to China, from Chicago, Washington or New York. And United have called for expanding a proposed ban on Russian overflights to include Hong Kong. Should this band be included to other countries to bar their airlines from using Russian aerospace for flights to the U.S? And the second part of my question is that how much of a competitive disadvantage is it for U.S. airlines compared with other non-U.S. carriers that are currently using the same aerospace?
Scott Kirby: Well, I'm going to focus on China. And I absolutely think this is just a matter of basic fairness. The Russian government does not allow U.S. airlines to fly over Russia. And we are competing with Chinese airlines that are allowed to. By the way, a country that is supporting Russia in the Ukrainian war. And a perfect example is we used to fly from New York to Hong Kong, and we cannot do it now. And we're competing with a Chinese airline that is allowed to fly from New York to Hong Kong, and that just isn't right, that isn't fair. And all we want is a level playing field and I absolutely think we should get it. And I really appreciate that this administration is looking at the issue and focusing on the issue and it started. They started with Beijing and Shanghai, and I hope they will continue the logical efforts and include the other large Chinese city, Hong Kong in those efforts.
Operator: Our next question comes from the line of Leslie Josephs with CNBC.
Leslie Josephs: With the shutdown, is there a certain point that you think the airline could start feeling some of the impact we heard from another airline that maybe if they went on for 10 days longer, which we're kind of in that territory now that things could get a little bit more difficult? Is there any sort of cutoff that you see there? And then second, there are a lot of other airlines large and small that are trying to go premium now. How successful do you think that can be? And how long do you think it takes to, I guess, to go upscale in certain products?
Scott Kirby: So on the first question, the answer is we don't know. It was a little unprecedented or at least it doesn't happen often, so you don't really know. So I -- I think that at least for the first couple of weeks, people thought it was going to get resolved, so they just kind of continue business as usual. But as time goes on, as people read headlines and say, it's not going to get resolved soon, people start to lose confidence in the government and the government's ability to resolve this. And that's going to start to impact books. So I don't know when that happens. It's not some magic step function. But every day that goes by, the risk to the U.S. economy grows. So I hope we will avoid an unforced error here. And the second question on other airlines. Look, we've been doing the investment in the customer for a decade. It is billions of dollars of CapEx and OpEx. There's 2 ways that you can get market -- you can get revenue improvements from the kinds of premium investments that people are making. One, you can get your own customer base to buy up to those products; two, you can get market share shift. The other airlines, I think, will have some success in getting their own customers to pay more for some of their products. But the biggest upside is getting market share shift, and you're not going to get market share shift away from an airline that's been investing for a decade. Another airline getting a little bit better than they are today. Is it going to come nowhere close to what United is. And a brand loyal customer is not going to say, all of a sudden, airline X closed one of 100 points of gap between United and them. So I'm going to switch my loyalty. They're going to stick with United. So I think they might have upside in their own customer base, but there's really not much upside in the market share shift part of it.
Operator: And I will now turn the call back over to Kristina Edwards for closing comments.
Kristina Munoz: Thanks, Regina. Thanks for flying with us this season. We'll see you again next quarter. Please contact Investor and Media Relations if you have any further questions.
Operator: Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect.