Good morning, welcome to United Airlines Holdings Earnings Conference Call for the second quarter 2021. My name is Brandon, 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 touch-tone 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, Kristina Munoz, Director of Investor Relations. Please go ahead. Thanks, Brandon. Good morning, everyone, and welcome to United's second quarter 2021 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 a 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 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 Gerry Laderman. In addition, we have other members of the executive team on the line available to assist with the Q&A. Now I'd like to turn the call over to Scott. Thanks, Kristina. Good morning, everyone, and thanks for joining us today. It was great to see many of you in person at our United Next event last month in New York, and personally, it's been great to be back out on the road during the quarter talking to employees and customers and hearing anecdote after anecdote about how great it is to be back traveling. Thank you also to all the people of United Airlines for all that they did to take care of our customers and each other through the crisis, and for all that they're doing now to really and truly change the customer experience at United Airlines. Before I really begin, I thought I'd take a moment to address the most talked about issue among airline investors recently, the Delta variant. As you'll hear from our bosses today, we haven't seen any impact at all on bookings, which continue to just get stronger and stronger every week. Of course, that is backwards-looking data. Since early 2020, however, no airline has been more willing to candidly acknowledge the risks and challenges posed by COVID-19, and importantly, no airline has been quicker to aggressively confront them than United. We've worked hard to protect that operational flexibility. In fact, it's part of why we haven't had the same mass crew cancellation challenges that our competitors have faced as we ramped our schedule over the last couple of months. That all said, we think the most likely outcome is that the continued recovery and demand continues largely unabated. That's the most likely and logical outcome because the evidence is overwhelming that someone who's vaccinated is highly protected against severe disease, hospitalization, and death. The unvaccinated still face an elevated risk of serious illness and death from COVID-19. In fact, recent reporting says that over 97% of hospitalizations are for unvaccinated people, which implies that you're about 50 times more likely to wind up in the hospital for COVID if you're unvaccinated. The unvaccinated are also a smaller and shrinking percentage of the general population and an even smaller minority among the most vulnerable groups. For United Airlines specifically, our customer surveys at the end of June also revealed that 84% of our MileagePlus members were already fully vaccinated. While we expect case counts to rise, given the vaccination rates, they will still remain well below the peaks and hospitalizations and deaths will not rise nearly as much. That leads to the logical outcome that the reopening continues on track. I'd acknowledge that shutting down or continuing the reopening also has a political dimension to it, that's a lot harder to predict. It's possible we'll have a temporary pullback in the reopening. Given the data science around vaccines, that seems like a lower probability outcome, and regardless, it will be temporary even if it does happen. Turning now back to our results. Gerry and Andrew will provide a lot more detail, but if I was going to briefly summarize where things stand right now, I'd say the demand is recovering even faster than we had hoped domestically, both leisure and business demand. Internationally, we see the exact same pattern every time new borders are reopened. While the U.S. isn't yet open to Europeans, the data and science, including the demonstrated safety of air travel, similar vaccination and case rates, and similar level of variants in Europe and the U.S., support an opening, and we expect it to happen at some point. When the borders do open, we expect to see the same robust hockey stick increase in demand that we've already seen domestically. On the cost front, we remain on target for the near and long term. As Gerry will detail, assuming the grounded 777s are back flying, we expect our 2022 CASM-ex will be lower than 2019, which means we're right on track to deliver CASM-ex that's 4% lower in 2023 and 8% lower in 2026, as we shared at our United Next event last month. Today, with the robust demand trends that we see and our return to profitability, we don't just see the light at the end of the tunnel, we're exiting the tunnel. We're focused on upgauging our hubs, significantly improving the product, and decommoditizing air travel by transforming our customers' onboard experience. This opportunity is unique to United, and it's why we're so confident in our 2023 and 2026 financial targets. As we exit the tunnel, there's still a steep hill to climb to get back to and then exceed our pre-COVID margins. We also have some important upcoming tailwinds that will benefit United more than others. First, our coastal hubs and our decision, which stands alone among large network carriers, not to retire wide-body aircraft, means that we're ready to capture the pent-up demand for long-haul international travel. Second, our opportunity to upgauge our fleet while also driving increased connectivity as part of United Next means we can accelerate the margin improvements we saw from investments in the mid-con hubs in 2018 and 2019. Of course, our confidence in United's future is also fueled by the incredible performance of the United team. Even in the midst of a global pandemic, our NPS scores rocketed up 30 points year-over-year, and our 50-point year-over-year improvement in the J.D. Power survey was the largest of any U.S. airline. This customer-centric service culture and an influx of nearly 500 new aircraft, along with an unprecedented retrofit of our existing narrow bodies, will transform our customers' experience. It will also usher in an incredible new post-pandemic era for United's customers, employees, and shareholders, creating a new era driven by innovation that makes the travel experience better. I'm really proud of the work the team did in the second quarter to innovate for the customers and our employees. With that, I'll turn it to Brett. Thanks, Scott. I want to start by congratulating the entire United family on our expected return to profitability in the second half of this year. The United team has worked towards this milestone of achieving positive adjusted pre-tax income for over a year, and we could not be more proud. During the second quarter, United continued our work to make the travel experience safer and more convenient for our customers. We recently made new enhancements to our already industry-leading app to allow customers to schedule COVID-19 tests and have results directly verified through the Travel-Ready Center platform within the United app. In May, we announced a first-of-its-kind collaboration to use Abbott's COVID-19 home test and app to enable our customers to self-administer a rapid antigen test and use the verified negative test result to board an international flight to the United States. As borders continue to open, we're working to make the return to international travel as convenient as possible for our customers. These initiatives make us uniquely ready to facilitate international travel and further position us as the leading international airline in the U.S. In addition, we recently launched our Your Shot to Fly sweepstakes, working effectively with the federal government to creatively encourage people to get vaccinated and ultimately get back on planes again. We feel optimistic from the recent progress among European countries allowing U.S. tourists to enter with various vaccine and testing requirements. Countries such as Iceland, Croatia, Greece, Italy, France, and Spain have all begun accepting U.S. travelers for the summer tourist season, and we look forward to more destination options for our customers in the coming months. We continue to encourage the Biden administration to open up international travel and appreciate the bipartisan as well as industry support to ease international travel restrictions. As Andrew will detail further, the demand surges we've seen to countries once restrictions are loosened gives us even greater confidence regarding the long-term outlook for international travel. On the domestic side, nearly all states have reopened local economies and removed travel restrictions, enabling the surge in domestic leisure travel we're currently seeing. We remain focused on United's transformation to be the airline customers choose to fly. We have already eliminated change fees, and with our new aircraft order, we will improve the customer experience. We're adding seat back entertainment to all of our aircraft, improving Wi-Fi, and innovating with customer-friendly technology like ConnectionSaver. We've saved over 140,000 connections in the second quarter. News from Washington, D.C. continues to be a focal point for United. We are encouraged by the bipartisan efforts to make needed investments in our nation's infrastructure. Infrastructure is the backbone of our economy, and it must be robust, sustainable, and resilient to meet the needs of today and tomorrow. We support modernizing our nation's air traffic control system and advancing sustainable aviation fuel as important aviation infrastructure investments that also reduce industry emissions. Moving on to other highlights within our global network. At United, we continue to be a proud partner for our communities. Throughout the quarter, we expanded efforts to support those impacted by COVID-19 crisis in India. United remained the only U.S. carrier to serve India, a distinction we hold today, and helped transport more than 300,000 pounds of critical medical supplies to the region. We additionally launched a fundraising effort to enable our customers to donate to relief partners. In the quarter, we announced new initiatives with multiple partners to advance our sustainable goals across the United States. These partnerships cover a range of sustainable initiatives, including decarbonization, sustainable aviation fuel, and sustainable agriculture. During the quarter, we also announced a new order with Boom Supersonic for the Overture, the first large commercial aircraft optimized to run on 100% sustainable aviation fuel. We also announced our latest investment under United Airlines Ventures in Heart Aerospace, an electric aircraft startup developing an aircraft that has the potential to fly customers up to 250 miles before the end of this decade. United continues to lead the industry with a multi-pronged approach to our commitment to reducing our greenhouse gas emissions by 100% by 2050 without relying on traditional offsets. We look forward to more to come on this front. With that, I will turn it over to Andrew. Thanks, Brett. I'm going to start off today by thanking the best commercial team in the business. Our combined efforts and agility over the last 18 months led us to this moment today, announcing the generally positive TRASM, PRASM, and yield outlook for the second half of 2021. Something hard to imagine just 12 months ago. The revenue outlook is allowing for a much improved and profitable financial results on an adjusted pre-tax basis for the second half of the year. Gerry will talk about that in just a bit. Our realistic view of the pandemic's impact on our business and industry was sometimes questioned. A realistic assessment from day one, combined with capacity corresponding to real demand, not what we hoped demand would be, were the keys and prepared us for what comes next. We'll let facts guide us the entire way, and I'm pleased to report today the facts point to a strong recovery of our business across all segments. As Scott said, we're coming out of the tunnel. We now have a clearer path not only to profitability in the near term, but a path to higher long-term margins, even in an environment with elevated industry domestic capacity. During the crisis, we were pleased with our TRASM performance, and in the second quarter, our TRASM was down 11% versus 2019. Our performance in Q2 is well ahead of our original guidance, but largely consistent with our updated mid-quarter expectations. International long-haul demand, business demand, and yields just improved faster than expected three months ago. We still face significant headwinds for the second half, with borders being closed and business traffic not fully back. Ultimately, we expect these headwinds will transition to tail. Our ability to adjust our global network to transport record amounts of cargo is one of our proudest accomplishments and a clear differentiator versus others. In fact, during the quarter, United generated $606 million in cargo revenues, our highest cargo revenue quarter ever, up 105% from 2Q 2019. With long-haul passenger demand now increasing, we will cease most of these cargo-only flights for the remainder of 2021, although we continue to predict strong cargo yields for the remainder of this year. During the crisis, we also carefully planned and collaborated across divisions to execute a bounce-back plan for the second half of 2021. Our summer capacity plan continued a measured phase-in of that capacity. For Q3, we expect system capacity to be down 26% versus Q3 of 2019, or up about 39% versus capacity flown in Q2. We expect domestic capacity to be down about 20% versus Q3 2019 and up 43% versus Q2. Business travel, which was down over 90% versus 2019 for most of Q2, has inflected sharply in June and is currently down about 60% versus pre-pandemic levels. We expect two more inflection points for business demand, first at the end of the summer and second, the new budget cycle beginning in January. We expect business demand to improve by the end of the third quarter to be down about 40%-45% versus 2019. Our recent survey of business customers now indicate over 90% plan to return to travel, including international travel, in the second half of 2021. That is up from around 55% earlier this year. On our last conference call, we talked about the fact that domestic yields for United would be positive this summer, and that we still expect that to be the case. Overall, domestic yields are still likely to be slightly negative in the quarter due to business traffic's slower recovery. To give you some color on yields, Q3 right now, booked domestic yields today are running ahead of 2019. That higher yield is also matched with higher booked load factors relative to 2019. We really have set ourselves up from an RM perspective very well. International demand is also recovering, but as we anticipated, at a slower rate. For Q3, we expect international capacity to be down 36% versus 2019, relative to down 53% in Q2. The demand bounce back does differ considerably by cabin and by region, and even within the region, depending on travel restrictions. While business demand is down, we've used special incentives to get our MileagePlus members back on board with better access to Polaris seats via awards and upgrades. Asia was the first region to be impacted by COVID and continues to be the slowest to recover with the largest number of border restrictions. It will likely be 2023 at least until we see a normal schedule to Asia. In the meantime, our global network already includes new service to India and Africa to compensate for reduced Asian flying. Our European schedule this summer is quickly ramping back up. However, with continued restrictions on Europeans from entering the U.S. and on U.S. travelers from entering key countries in Europe, including the U.K., we anticipate that it'll be the spring of 2022 prior to resuming a normal schedule. We expect our summer Atlantic load factors to be around 70% in 2021, 16 points lower than 2019. I have to add that we think the summer of 2022 across the Atlantic has the potential to be our best season ever with pent-up demand and easing border restrictions. We continue to see structural changes in global long-haul flying that we believe will create tailwinds for United as borders continue to open. We expect to have 30 incremental wide-body jets available to schedule in the summer of 2022 versus 2019, which is why our recent aircraft order is focused on narrow-body aircraft only. We continue to operate our 767 fleet, which we used just a few weeks ago to begin service to Croatia, the optimal plane for this type of mission. Overall, we expect that our TRASM for Q3 will be positive. Premier members of the MileagePlus program are rapidly returning to flying on United, a great sign for 2022 business demand. Year-to-date, three-quarters of our top Premier members have already flown with us or have booked a flight. Of the Premier members that have not planned a flight yet, our research shows that they tend to be flyers focused largely on global long-haul markets that simply haven't opened up yet. Many of our Premier members also maintain an active spend on one of our credit cards, increasing the level of program engagement in 2021 among our top members to more than 90%. Our Chase co-brand card programs are thriving. Our June 2021 new accounts, domestic sales, and account retention metrics all exceed June 2019 figures. I just want to also spend a few moments today talking about United Next. United Next is simply our acceleration of many of our pre-pandemic strategies. It's a plan to close historic gaps in our commercial strategies, customer focus, and passenger amenities. Most importantly, our plan is for gauge to increase by 30% by 2026. 50-seat RJs allow United Airlines to grow schedule depth as we built our mid-con hubs, but it's now time to replace many of these jets with modern, more fuel-efficient 737s and A321s, lowering our unit costs and increasing profits, while at the same time increasing our product quality with amenities such as seat back entertainment at every seat and larger overhead bins. Most importantly, United Next is not about increasing seat density in planes, reducing comfort, lowering onboard amenities, or reducing the number of first class or Economy Plus extra legroom seats, as others have done. In fact, our premium seat counts will increase by 75% in North America per departure by 2026 versus 2019. Of course, that's aligned with the revenue potential of our United hubs. United Next will allow us to differentiate and de-commoditize our network, segment our products, and put customers first, but also maintain fair competitiveness with low-cost competitors while offering a superior product. We're excited to come out the other side of this tunnel and plan for an amazing and bright future. I'd like to thank the entire United team for their efforts as well. Together, we've made an amazing difference. With that, I'll turn it over to Gerry, and he'll talk about our financial results for Q2 and the outlook for Q3. Gerry? Thanks, Andrew. Good morning, everyone. For the second quarter of 2021, we reported a pre-tax loss of $600 million and an adjusted pre-tax loss of $1.6 billion. Our adjusted EBITDA margin for the second quarter ended down 10.7%, in line with our prior guidance, with our adjusted EBITDA margin a positive 9% for the month of June. Our adjusted operating expenses for the second quarter ended down 32% versus the second quarter of 2019, which was slightly worse than prior guidance of down 33%. The entire difference, though, is attributable to greater fuel consumption and higher fuel prices as compared to what we anticipated when we provided second quarter guidance. All of our other costs came in as we expected, giving us continuing confidence in our ability to achieve our near-term and long-term cost targets. As previously noted, as the demand environment continues to improve, we expect to generate positive adjusted pre-tax income in the month of July. In fact, as we have said, we expect to generate positive adjusted pre-tax income for both the third quarter and fourth quarter this year. Despite business and long-haul international demand not being fully recovered, we are pleased that our return to profitability is expected to occur well before prior expectations, and we anticipate another step function improvement once business and international demand fully return. Turning to our outlook on costs, we expect our third quarter CASM-ex to be up approximately 17% versus the same period in 2019, with capacity down 26% versus 2019. To put the CASM-ex number in perspective, while capacity may be down 26%, we are not simply flying 26% less of the same network. Given our current international-domestic mix, where we are currently flying more short-haul domestic flights, and combined with the temporary grounding of our fleet of Pratt-powered 777 wide-body aircraft, this has created an incremental 6-point headwind to our CASM-ex because of lower stage length and lower gauge versus 2019. Our cost outlook additionally includes investments necessary for future flying, such as training and maintenance costs. On the positive side, embedded in this outlook is also the early success from our $2 billion structural cost savings plan. We expect CASM-ex will better represent our true cost performance once our capacity reverts back to 2019 levels and when the network begins to be reshaped with our United Next plan and we achieve the full implementation of our cost initiatives. We are currently in our 2022 planning process, though we won't share details today, we feel confident that our 2022 CASM-ex will be lower than 2019. We expect that our 2022 outlook demonstrates substantial progress towards hitting our long-term CASM-ex targets of down 4% in 2023 and down 8% in 2026 versus 2019. In addition to the structural cost reductions, our United Next targets are enabled by our recent announced order for 270 new narrow-body aircraft. Which when added to our existing order book, provide almost 500 narrow-body aircraft on firm order. We expect 191 of these aircraft to be delivered through the end of 2023. For those of you in the aircraft financing community, this includes 13 737 MAX 8s through the remainder of this year, 20 MAX 8s and 20 MAX 9s in 2022, and 56 MAX 8s, 16 MAX 9s, 50 MAX 10s, and 16 A321neos in 2023. Regarding capital expenditures this year, we currently expect adjusted CapEx for the full year to run about $4.5 billion. This assumes we take delivery of all 8 787-10 aircraft scheduled for later this year. With Boeing's recent announcement regarding delays in delivering 787s, it is possible that some of these aircraft and the related CapEx may slip into next year. In closing, our expectation for adjusted pre-tax profitability in both the third and fourth quarters represent a milestone that the entire United family has worked towards since the beginning of the pandemic. Gone are the days of talking about empty aircraft, cash burn, and job losses. We have now shifted our focus fully towards the long-term path for United Airlines and the United Next plan. We believe our achievements throughout the crisis fully prepared us to execute on our plan to both maximize earnings power and be the airline that customers choose to fly. With that, I'll hand it over to Kristina to start the Q&A. Thank you, Gerry. We will now take analyst questions. Please limit yourself to one question, and if needed, one follow-up question. Brandon, please describe the procedure to ask a question. Thanks, Kristina. The question and answer session will be conducted electronically. If you'd like to ask a question, please press star followed by one on you touch-tone phone. If you'd like to to be removed from the queue, please press the pound sign or the hash key. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, if you'd like to ask a question, please press star one on your telephone keypad. Please hold for a moment while we assemble your queue. From Raymond James, we have Savanthi Syth. Please go ahead. Hey, good morning, everyone. Your 3Q revenue guide is very strong in both relative to 2Q and compared to one of your peers. I was wondering, what factors are driving that strength, and what assumptions you're building in for that business demand recovery? Yeah. Thanks. Hi, Savi. It's Andrew. Good morning. What I'd say about our guide is that, I've said this, I think, over the last few conference calls, that in particular, our coastal hubs have really suffered during the pandemic. Traffic was down in those hubs, a lot more than mid-con hubs and small communities around the country. We really see an acceleration in demand now out of those hubs, including leisure and business for domestic in particular, which is really great to see. It goes to say, again, that those headwinds, which were so significant during the crisis, are going to flip to tailwinds for United and provide us, I think, a lot of opportunity going forward. A little more color, for example, Newark in Q2 of this year, it was really our worst-performing revenue hub. We expect Newark in Q3 to be one of our best, to give you a little bit more color on what we're seeing there. There's a lot more to come, I think. I'm really excited about this because these headwinds were just so significant during the crisis, and I think there'll be tailwinds as we come out of the crisis. Andrew, just a follow-up, too. It seems like you did a lot better job of also kind of tilting towards leisure VFR lately. Maybe not similarly at some other airlines, but just wondering, what mix of those new markets or capacity remain on as things normalize and just really trying to understand if there's an opportunity here to change the seasonality of the network? Excellent question, and thank you for the vote of confidence there. I'm sure our scheduling folks really appreciate it. We did, as I would say, tilt our capacity towards more leisure-oriented markets during the crisis, and we continue to do so. We'll do so for at least the rest of this year. Tilting of those ASMs towards more leisure-oriented markets, I think, has helped us during this recovery. To the extent we did that better than others, I think our revenue forecast will be better than others. We're pretty proud of that. We do intend to keep a bigger footprint in these leisure markets going forward, in particular Florida, where United was undersized, and that undersizing had led to Q1 results for United that could seasonally trail others. We're hopeful that on the other side of this crisis, as we rebuild the airline and we rebuild the network, we're going to build it better. We're going to be a bigger player in these leisure-oriented markets in the Q1 time period than we have historically been. From Bank of America, we have Andrew Didora. Please go ahead. Hi. Good morning, everyone. Just really kind of a follow on to Savi's question on revenues. Maybe, Andrew, can you maybe talk about how the booking curve has sort of changed over the course of 2Q now into 3Q? I would assume you have a lot more visibility today in terms of your 3Q revenue outlook as compared to back in April. Is there any color you can maybe give us in terms of what percentage of your anticipated 3Q revenues are already booked right now, and how that compares to normal periods? Sure. Everything is starting to return to normal, which is great to see. Right now, about 60% of our revenue for Q3 is on the books. We have, obviously, I think, really good visibility in July and August. In particular, I'd say August looks really quite good. September, we have less visibility into, but we still feel very bullish about that as business traffic returns. Overall, things are returning to normal. The booking curve isn't exactly normal yet, but it is quickly getting there, particularly from the domestic point of view. Hopefully that takes care of your question. Again, about 60% is booked. I'll also add that we do expect positive PRASM in all three months for the domestic entity for the quarter. Got it. That's helpful. Gerry, you called out the CASM impact from the stage and gauge differential here in 3Q of the six points. Should we think about that as a similar impact on TRASM as well? Yeah. Stage and gauge obviously impact all those stats. There is going to be some impact as well on TRASM. I'll add, there is. The dilemma we face from a capacity point of view is the 777 aircraft that are grounded are our large capacity domestic movers, and we use those for Hawaii and hub to hub. Right now, we're flying well below where we'd like to be in Hawaii, and it goes without saying that Hawaii is an incredibly strong part of our network. We would've absorbed that, and I think we would've still done very well in Hawaii, even with those extra seats. We're really disappointed they are missing. Domestically, within the continental United States, on the hub to hub missions, where our load factors are just off the charts, the simple way to describe it is clogging the system because we don't have enough gauge between our hubs to flow the appropriate number of passengers over them. We really want those aircraft back, and we think those aircraft are really important to our CASM, but they also unlock, at least right now in Hawaii, better results, and they unlock a lot more connecting traffic through our domestic system. Hopefully that gives you color as to how we think it impacts CASM as well as TRASM. From JP Morgan, we have Jamie Baker. Please go ahead. Good morning, everybody. Scott, kind of a follow-up to a question I asked you in New York at the event a couple of weeks ago. I noted that bad things seem to happen to the industry every 10 years or so. As it relates to the 2026 guide, it looks like we're probably in the clear. That's a definitely glass half-full perspective. You have these financial targets, you have your largest aircraft order in history. If we do hit some sort of a speed bump, do you sacrifice the targets, or do you adjust the CapEx and the delivery schedule? Basically, is the order book sacred, or is it a lever you can pull to protect the financial targets? Just trying to better understand the priority there. Well, I'll actually let Gerry start. Okay. Jamie, as we said at that event, certainly starting in 2024, we have enough flexibility in the order book to be able to adjust based on what the macro environment would dictate. That's a decision we can make as we approach the later years of this. I just would add also that I think we've created a track record, and it is certainly true, that we are committed to targets. When we put targets out there, we're committed to achieving those targets. We're going to achieve our 2023 and 2026 targets. If that requires adjustments in the plan one way or another, we'll make adjustments to make sure that we achieve those targets. Yeah. Jamie, one of the nice things about this order as well as our fleet that has some aircraft, as you know, that are aging, simply replacing those aircraft and not doing anything else helps us with gauge, which helps us with those targets. Okay. That's helpful. Thank you both. Then, just a bit of a modeling question. There wasn't a huge change in fuel efficiency, just looking at ASMs per gallon from the first quarter to the second quarter. A little bit of an improvement, but with more international turning on in the current quarter, can you give us some consumption guidance, fourth quarter as well, if you happen to have it? Jamie, I'm not sure I can give you a precise number right now, but keep in mind, just given the mix with a higher proportion of regional flying, by definition, as the wide bodies come back and revert back to normal, that will help with fuel efficiency. From Goldman Sachs, we have Catherine O'Brien. Please go ahead. Good morning, everyone. Thanks for the time. Maybe one more on cost. As we move to unit cost being down from 2019 levels next year, outside of capacity, what are the other tailwinds we should be thinking about? I know you called out the six-point impact from gauge and the 777 grounding. Outside of that, are there some ramp-up headwinds today that we should think about abating as we move into the fourth quarter and in 2022, and just any color on the size of that impact. Thanks. I think the most significant tailwind actually, aside from gauge and stage length kind of reverting back, is the ramp-up of the structural cost saving. If you want to model something right now, we'll give you some more color as we finalize 2022. Right now, you could model that about half of those savings are in our numbers for the rest of this year. Then starting in 2022, early in the year, first quarter, let's say that's 80% ramping up to 100% by mid-year. That's probably the most significant tailwind I can think of as we normalize the business. Okay, great. That's really helpful. One maybe for Andrew. Throwing it back to 2020, in February 2020 when you got the Chase extension you entered into, I believe at the time of the announcement, you noted a drive $400 million increase in annual cash. We were about to get some more details on that and then COVID hit, I don't remember getting a timeframe for when you'd hit that. I'm guessing the pandemic maybe hit pause on the ramp-up. Can you just give us some color on what portion of that uplift you've seen flow through your P&L to date, and how you expect that to trend over the next year or two? Thanks. Yeah. Definitely everything's been interrupted by the pandemic. Although, we have seen recently where our numbers are now equal to or greater than 2019. We're pretty excited about that. Our new agreement with Chase, it was effective then, and it's impacted in everything we do here in our financials already. I think the real value in this is our working relationship with Chase is just incredibly good right now, and we're coming up with all creative ideas, new products, and that's fueling the card growth and the new number of cards we're putting out there and spend on the historic cards. That's maybe not every answer to the question you would like here, but what I would say is that the relationship is going well, which gives me great faith that we're going to hit the targets we put out there. I don't have the exact timeline as to when that'll happen. It was clearly interrupted by the pandemic, but we're back on course. From Jefferies, we have Sheila Kahyaoglu. Please go ahead. Hey. Good morning, everyone. Thank you. Maybe it seems like capacity additions are coming back at a faster rate, and I appreciate the coastal hub. Can you maybe provide a little bit more color around CASM-ex below 2019 and 2022? What are your assumptions around capacity and maybe mix of international and domestic? It's still a little early to give you the capacity guidance. We'll do that in a normal course. I can tell you, just given the size of the fleet, as it stands today, we expect 2022 capacity to be higher than 2019. We'll give you more precise numbers in the normal course. Okay. Gerry, I was going to add, I think, with the incremental wide-body jets that we have available, along with our expectation about what the transatlantic market is going to look like next year, it wouldn't shock me that we see international growth faster than domestic growth for next summer. Yeah. I guess on that note, somewhat related to that big picture, you mentioned in your prepared remarks on the international side, you're one of the carriers that have kept your wide-bodies going. So that supply-demand picture might look more attractive as international comes back, but domestically, what we're seeing is low-cost carriers are doubling their fleet or expanding their fleet substantially as you guys are, too, and increasing gauge. How do you think the supply-demand picture plays out through 2026? How do you think United is positioned with that? Well, I'll just go back to our United Next plan, where I think we thoughtfully talked about all the details there. We are working to make sure that we build our connectivity, our schedule depth, and most importantly, our gauge. We think those factors along, of course, with our customer focus, are really going to drive our profitability in really unique ways relative to many of our competitors over the next few years in an industry where we absolutely expect elevated domestic capacity growth for everybody over the next few years. We feel really good that we've identified this. We've articulated a way to manage it here at United together from a revenue and a cost perspective, and a customer perspective, to make sure that we can meet the targets that Scott laid out in New York a few weeks ago, and he laid out just a few minutes ago here. From Wolfe Research, we have Hunter Keay. Please go ahead. Hey, good morning. Do you think that investors, Scott, should just ratchet down our permanent expectations for pricing power for this industry? No. Well, why not? It's so clear that the market puts multiples on industries that can price. The decision to deflate pricing and outrun it with lower CASM, it's hard to see why that makes sense when it's such a clear track record for when this industry works is when they're pushing price. Look at what you just did right now with the yield performance. I'm not suggesting you're going to be down 25% forever, but I'm sure it was pretty satisfying to be able to push that price. Well, first, I disagree with the premise of the question. Okay. Look, Hunter, I recognize that you've got a perspective. Respect that. We had a pretty good track record in 2018, 2019. I think it was your research report that pointed out we grew EPS by 74%. This is, in a large degree, a continuation of the strategy that is working well with the improvement, I think, that we're really focused on de-commoditizing air travel and getting customer choice. It's about far more than growth. Even the 2018, 2019 plan was working. It's in your research report. It seems like the best evidence that we can do this without disinflating, I think was the term you used. I'm confident that we're going to do that. I'm particularly confident that when you take the mix of what the international market is going to look like and the percentage of our revenues, combined with, I think, our ability to de-commoditize travel domestically, that our targets for 2023, 2026 are arguably conservative. That's going to ultimately be good for our shareholders. Okay. Yeah, look, thanks for the time, Scott. I don't want to be disrespectful here. I appreciate the conversation. A quick modeling question for you, too, while I have you, Gerry. Should we assume that the SWB CASM is going to be, in 2022 and 2023, above or below 2019? Are you willing to help us out with that? I'll follow up with you offline, Hunter. Okay. Yeah. All right. Thanks. Sorry. No, we'll get you those numbers. From Cowen and Company, we have Helane Becker. Please go ahead. Thanks very much, operator. Hi, everybody, and thank you very much for your time. Kind of a different question. You have an open contract with your pilots, and I know you have the letter agreement to agree to the differential so that you are able to ramp up as the recovery occurs. Can you just talk about how you're thinking about entering those negotiations again in, I don't know whether it's 2021 or 2022, but when should we think about that contract again? Hi, Helane. This is Brett Hart. How are you doing? Hi, Brett. Look, I think part of the underlying premise of your question also points out that we obviously have had a really good working relationship with our pilots throughout the pandemic. Worked hand-in-hand with them. At the end of the day, we are confident that when we do get to an agreement, that it'll be one that works for our pilots and for the overall company. As you can, I'm sure, appreciate, we don't get into discussing the specifics of either discussions or negotiations or the timeframe for reaching agreements in public or on earnings calls. I appreciate the question. Okay. Well, that's helpful. Thank you. Just the other question is, as we think about the improvements that you're talking about in efficiency, I don't know, Andrew or Gerry, how should we think about it working through the next two and a half years? Are you just going to give us guidance every quarter for how we should think about those efficiencies, or is there some number beyond minus 4% in 2023 that we'll be able to mark to? Helane, that's really the heart of the $2 billion of structural cost savings. As I said earlier, by next summer, I would expect 100% of those in the numbers. Then we will continue and we'll continue to provide guidance. Keep in mind, those structural savings include savings that will continue to grow as we grow the airline. It'll come out through our continuing CASM guidance over the next few years. From Evercore ISI, we have Duane Pfennigwerth. Please go ahead. Hey, thanks. I really appreciate the time. Just a couple from me. On cargo, Andrew, I think you said no more dedicated freighters. I assume this is just a function of passenger demand coming back, but maybe you could just expand on that. If we think about your cargo capacity in total, maybe no more freighters, but more longer-haul flights coming back. How do you think about your cargo capacity in total? Sure. Correct. We are not going to be able to do more cargo-only flights. We're obviously disappointed by that given where yields currently stand. The reason for that is the aircraft can be better deployed in passenger markets. Many of those passenger markets are also not exactly optimal cargo markets. They do have cargo, but they're not optimal cargo markets. The 52 777s that are grounded means we just have less flexibility on this front than we would otherwise had. If those aircraft were flying, we clearly would continue our cargo missions because we'd have the ability to do both. When we look at capacity available to fly, it's still really significant as we put all these passenger planes back in the air, and we think we've got this properly accounted for in our forecast, and we think we're going to have another great cargo quarter in Q3, and it's already gotten off to a really good start. That being said, it's going to be different in the amount of all cargo flights. What I tell you is we don't release those details, but all the numbers are in there. Hopefully we can do a little better on cargo than we are currently planning. There is a marked change in our cargo footprint starting today, or really starting a few weeks ago, obviously. We'll see where it goes. We're still very bullish on cargo for the remaining half of this year. That's super helpful. Just for my follow-up on scope. Scope is something that United talked a lot about in the past. Obviously, in the recent investor update, you talked about big upgauge from 50-seaters. I have to think, just thinking about high frequency with 50-seaters going fully to mainline, maybe that implies less frequency. I have to think there are many markets where a 70-seater or 76-seater would be optimal. How should we be interpreting a kind of lack of commentary around scope? Is it something maybe longer term, maybe beyond the forecast period that you offered that you think still makes sense? Well, to be clear, when we induct a MAX 10 or an A321neo, it's not replacing the 50-seat RJ route for route. There's a cascade that starts at the top that goes all the way down. 50-seater routes today will often go to a 76-seater route in the new United Next vision. Just the economics of that are a little bit different than maybe you described. I'm not 100% sure. We still will do that. As we look at our fleet counts and hubs and schedule depth, it is not our intention to reduce service to smaller communities in the United Next plan, and we've laid this out in great detail. That being said, it's also really not going to increase our schedule depth or size in smaller communities either. We're going to grow via gauge, which we think is the right way to do it given where our hubs stand, particularly our mid-continent hubs, where, again, most of the growth is gauge. There is a little bit of frequency, but most of the growth is gauge. Hopefully that helps answer the question. From UBS, we have Myles Walton. Please go ahead. Thanks. Good morning. It's a bit of a follow-up to Hunter's question, I guess, but I'm curious, Scott, if you've thought about perhaps using a return on invested capital or an efficiency metric to go alongside your pre-tax margin, your pre-tax income financial metrics which govern your long-term incentive schemes as a way to sort of answer the question around the efficiency of assets being put under utilization. Hey, it's Gerry. We actually always look at the return on investments we want to make, and kind of our rule of thumb is kind of mid-teens to justify making those investments. That's always part of the equation. I do think, at the end of the day, pre-tax ultimately is the best way to look at things. The other components of it just all go into that. We do look at returns on investments we're making. Okay, not in the formal incentive scheme, just pre-tax income as the governing metric. I think it's just the one that best reflects how well we expect to do. Hey, Myles. This is Mike Leskinen, and I would just add that even if you think about replacing some of the older aircraft with new technology, you look at the 737 MAX aircraft. Even in that scenario, you're getting a mid-teen return on invested capital. The return on invested capital is a gating item. We're driving pre-tax margin, but ROICs are well ahead of our weighted average cost of capital, and it is a hurdle. From Bernstein, we have David Vernon. Please go ahead. Hey. Good morning, guys. Thanks for taking the time. Scott, I wanted to talk kind of at a high level here about how investors should think about the upside you see in de-commoditizing travel. We get a little pushback that this is just a buzzword, if you will. I'm just wondering if you can talk about whether this is just about a revenue premium that you can earn for having higher priced seats on a departure, and if so, if there's a way to think about that relative to kind of maybe the revenue you might have earned without the strategy? Also, if you could talk a little bit about whether this is also about limiting how much of the inventory that you put out in the market is actually exposed to low-cost competition on a day-to-day basis, and how that might be changing over the next couple years as you implement this United Next strategy. Well, I'll start, and Andrew can add on if you want. On the point about de-commoditizing air travel, it's hard to put a precise quantification on it today. I think customers do care about quality and do care about product. If you get on airplanes and talk to customers or just watch airplanes and people flying, I think that is an inescapable conclusion. There's at least one airline in the U.S. that embarked on this a decade ago, and it was quite successful. There's certainly room for two of us in the United States. It's the largest travel market in the country for two of us to pursue that strategy. Frankly, United has, I think, the most opportunity because our hubs happen to be in the biggest premium markets, where our seven hubs are. I think there's more upside for us than there is for anyone to pursue this strategy. I don't k now for sure how much that turns into in terms of a revenue premium or growth in RASM that's faster than the rest of the industry because it's not as easy to quantify as some of the work that we do, but confident that it will lead to strong results for United. Yeah. The only thing I would add is that flying approximately 300 single class 50-seaters with no premium product on board at all up against competitors that had premium products is just a step change function for United as we take that number down. We already saw with the introduction of the CRJ-550, which is our 50-seat dual-class aircraft, really great progress prior to the pandemic on being able to monetize those premium seats. We see our competitors do it all day long, and we were simply underrepresented in this category, and flying the wrong aircraft into big cities with no premium seats. By the way, our hubs have a lot of premium demand. We just under-indexed to it, and that was wrong, and we're going to correct it, and we're going to correct it really quickly. From Stifel, we have Joseph DeNardi. Please go ahead. Oh, thanks. Good morning. Scott or Gerry, can you talk about CapEx needs on the wide body side? When do you need to address that with an order? When does the delivery start, do you think? Based on that, in what year do you see yourselves getting below $7 billion in CapEx? Actually, I'm looking at Andrew, who's always one to ask me for aircraft. Keep in mind, over the last few years, we've taken 20-some odd wide-body aircraft. We haven't retired any. We have a lot of wide-body aircraft. Andrew's talked about that. The focus right now is really on the narrow-bodies. Andrew can provide some color, but I can tell you that it really depends on both the speed of recovery throughout the world and then the opportunities that Andrew and his team come up with. Gerry, I'll just add what I think I've said, but I just reiterate it, that because we took delivery of a large number of wide body aircraft, or we ordered some right prior to the pandemic, those aircraft are coming online over the next 12 months. We'll have available to schedule up to 30 incremental wide body jets for the summer of 2022. That really does provide a lot of growth and possibly for a number of years, depending on market conditions. We'll watch this carefully. The second thing that I said a few weeks ago that I'll say again is we're carefully looking at the economic lifespan of these wide body jets. I can tell you, prior to the pandemic, we were thinking many of them, particularly the 777 fleet and 767 fleet, could go 30 years or more. I'll give kudos to our maintenance team for keeping these aircraft in great shape to allow us to have that optionality. We do have optionality to fly these aircraft longer than I think people automatically assume. The last thing I'll add is the interiors on all these aircraft, including the older ones we've just been describing, have been recently retrofitted. We've completed our entire 777 fleet, and we're close to completing the 767 fleet with brand-new interiors from nose to tail to give a great customer experience on board. With that, we have a lot of incremental wide bodies that have just arrived, and we have a lot of brand-new aircraft on the inside that have a long lifespan left. We have a lot of optionality. To the extent we want to grow, it'll be because we have growth opportunities. We'll monitor that over the next few years. That's a lot more details than you probably wanted, but that kind of explains where we are from a wide body point of view. I'll just add, it's a fairly straightforward analysis to justify that growth. It goes back to the financial targets that we just talked about, that they need to demonstrate that we can hit those returns, which they do- Okay. Okay. I'll add one more because I feel so passionate about this point. The retention of the 767-300s, I think gives us and any other airline that has done that a structural competitive advantage. These aircraft, between their size and trip cost CASM and passenger comfort, are really amazing machines. They enabled, as I said earlier, this new route to Croatia and many new routes that we're talking about that could otherwise, I don't think, be flown over the next few years profitably. Okay. Does 2025 CapEx come back down to the $3 billion-$4 billion range, or is it still elevated? Then Scott, you talked, I think, last call or the call before about doubling loyalty EBITDA and haven't heard much on that. Is that an aspirational goal that we should kind of discount significantly? What are the drivers behind being able to do that? Thank you. Well, it's our goal. I wouldn't discount it because I think we're going to do it, but you can choose to if you want. This is one of those that until we have something to announce, it's another one of those that we're not going to have something to announce until we have something to announce. Though I saw the team meeting earlier this morning on it, and they're looking for me later today to get an update. There's a lot of activity on it, but we're not going to have anything to say publicly until we're ready to make probably a big announcement. Hey, on CapEx, it's too early to really give CapEx projections beyond 2023. Okay. Thank you. We will now take questions from the media at this time. Again, if you have a question, please press star one on your touch-tone phone. Standing by for questions from the media. And please hold for a moment while we assemble our queue. From Wall Street Journal, we have Alison Sider. Please go ahead. Hi. Regarding your conversations with the government about lifting travel restrictions, is there anything that the administration is asking for from airlines, in terms of contact tracing or extending the mask mandate or checking vaccine status? Is there anything that you will have to do as part of an agreement to lift those restrictions eventually? Hey, Allie. We are working closely with the government, and it's a two-way conversation where they're getting input from us, input for them. All of us want to make sure we do this safely and confidently, that when people get back to flying, it's not only safe, that people feel confident in the safety. We certainly haven't advocated for any of those specific policies, but if the government brought those things forward, we've indicated a willingness. For example, with vaccine requirements, which are happening in much of the world already, United, uniquely, our digital team has done a pretty amazing job of creating an automated way for customers to upload that information. I think it's easier on United to deal with vaccine requirements around the world than any airline in the world. We're doing those kinds of things, and we're very open to any requirements that they have. Look forward to working with the administration to get it back open. Got it. Thanks. From Bloomberg, we have Justin Bachman. Please go ahead. Hi. Thanks for the time today. This question is maybe for Andrew or Scott, but it goes back to Scott's comment at the top of the call on the Delta variant, any impact probably being short, and people are confident in the rebound. I'm curious, as far as your business today, is this a lot of people who are repeat customers and flying quite a bit compared to during the pandemic? Or are you seeing people come back who may not have flown since 2018 or 2019? I'm just curious about the mix of who's flying today and your confidence about those habits continuing, even if the pandemic takes another turn. Thanks. Sure. Good morning, Justin. We track this pretty carefully, particularly from a MileagePlus point of view, and particularly from the Premier population of MileagePlus. What we can tell you is that while the penetration of MileagePlus on the aircraft is still below our historic norms by about seven points or eight points, we see that number gaining strength each month. More and more customers are coming back, and our Premier members are back to flying again and using our credit card. The ones that aren't are because they only generally fly global long haul, and those particular borders are closed or are difficult to get into. We do see this returning to normal from all the things we look at. The other thing I would tell you is, as we've kind of gone through this crisis, headlines have driven cancellation and no-show factors higher. I can assure you right now, our no-show and cancellation factors are completely normal. We've seen no change in them over the last few weeks. They're basically slightly above 2019 levels, which they have been for quite some time. We don't see any change. Of course, I'm not saying exactly what's going to happen in the future, but I can just tell you right now, things look good, and we do look like demand is recovering, and maintaining a strong recovery even with the negative headlines. Great. Thanks for the help. From Reuters, we have Tracy Rucinski. Please go ahead. Hi. I also wanted to go back to Scott's comments at the top of the call. Scott, you mentioned a potential temporary reopening pullback. Can you be more specific on what that pullback could look like and where and what kinds of scenarios you're preparing for from a demand perspective? Well, I don't know what it would look like. I think it would be something government-related, that there were some new rules or recommendations, which I think is unlikely. I think the most logical and likely outcome is that we largely continue unabated. If something did happen, we've had a history going really all the way back to the last weekend of February of 2020 of reacting quickly, realistically, nimbly. We put a team together last year to deal with the shutdown in March of last year. That team has not been disbanded. That team continues to exist for managing the vagaries and the ups and downs because we've known all along that there's going to be ups and downs, and there's going to be ups and downs between now and the time that enough of the world is vaccinated that this really recedes into the background, which we look forward to. There will be ups and downs, and we're prepared to deal with whatever those are, knowing that we can't precisely forecast exactly what the ups and downs are going to be. Hey, Tracy, let me just add. Sure. One of the things we learned in the pandemic was the need to be able to be flexible financially. As we've begun to invest money, we also build in off-ramps in case we have to bank in one direction or the other. What are you hearing from corporations in terms of their reopening plans? There were reports yesterday, for example, that Apple is delaying its return to office by a month. Hi, it's Andrew. I did read that in the newspaper. We're hearing a return to this new normal as the end of the summer occurs in September. Some may come back in October or even November. We're anticipating a return to normalcy. Therefore, we're also anticipating a step-up in business travel in September. Once again in January when the new budget seasons start. We've already seen, for example, our advanced business bookings for September are now only down, I think, about 50%, and we expect that number to continue to get better and finish the month at around 40%-45% down based on where we are right now. Thank you. We'll now turn it back to Kristina Munoz for closing remarks. From everyone here in Chicago, thanks for joining the call today. Please contact investor relations or media relations if you have any further questions. We look forward to talking to you in the next one. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.