Thank you, United Airlines, for joining us at the conference today. Scott Kirby, Chief Executive Officer, Kristina Munoz for IR. Michael Leskinen is also with us today. I'm dropping everything off the stage. We are going to do a fireside chat format today. If you have questions, you want to put them in through the Pigeonhole. I have that device up here, and I can try to work those into the conversation. Before we begin, Kristina is going to give us a few required disclaimers, and then I'll hand the mic over to Scott. First of all, thank you guys for joining us, and then I'll hand the mic over to Scott to talk a little bit about the state of the state, and then we'll dig into the Q&A. Yeah. Awesome. Thanks, Dave. The remarks made during this fireside chat may contain forward-looking statements which represent the company's current expectations 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 from our current expectations. Please refer to our most recent filings for further information. Additionally, today's remarks may include Non-GAAP financial measures. Please refer to our most recent earnings release for those Non-GAAP and GAAP measures. Thank you. All right. Now that you've been properly disclaimed. That was the highlight of the day. I'm not sure if you want to actually say anything given the stock performance today. Yeah, I'll start. Yeah, no kidding. I don't want to screw it up. Well, thanks, everyone, for joining us and to everyone listening online. I'll be brief. I'm sure we'll talk in Q&A about the more near term. Near term, though, is developing much like we thought. Oil prices have been high, as everyone knows. Demand has remained strong, as is well-publicized. We feel pretty good about moving it as oil prices come down, moving to 100% revenue, 100% recovery, probably even sooner than we otherwise would have as oil prices start to come down. We feel good about the near term. More importantly, we feel great about the strategy and the execution that we have had at United. We've been on a long-term journey to build a brand loyal airline that was durable, that had resilience in the revenue, that had diversity in the revenue, multiple revenue streams, not just concentrated in one area. We thought that that would lead to higher margins in good times and provide a lot more resilience when times were more difficult. I think both last year and this year, there's been a lot of curve balls thrown last year and then oil prices this year. Pretty remarkable compared to the history that I've been in in the airline industry to see how resilient our results have been even in that environment. It really is because we've won brand loyal customers, and when you get the customers wanting to go with you, it leads to much better financial results. Financially, as we look forward, this year is, oil prices aside, we remain solidly on pace to have 50% conversion, free cash flow conversion moving towards 75% as we start to taper off the number of aircraft deliveries that we'll take towards the end of the decade. We'll be moving from 50%- 75%. We feel good about that. We think that there's an awful lot of upside for us. Not uniquely, but us, the biggest upside in the loyalty program. We've got a great partnership with Chase, but it's a decade old. The other deals have been modernized. We're just in the opening innings, so it's starting to modernize our deal. You can see it through the disclosed financials that there's opportunity for us there compared to some of our peers, and we look forward to that. We do expect to double the EBITDA in that particular business. Double the EBITDA in that particular business provides further upside. We look forward. We had a really good strategy. The team has done a great job executing, whether it was the commercial initiatives, the operation, financials. We've done a great job of executing, even though we've been growing a lot, generating significant free cash flow, expect those numbers to go up more as we aren't spending as much on CapEx in the years to come. Committed to getting to investment grade, hope to do that soon, those are the things that we are focused on at United. We feel good. All right. You've described United as a decommoditized brand loyal airline. Called the changes at United and in the industry structural, permanent, and irreversible, which if you need a second career after this one, the marketing and the tagline here is great. For investors and generalists who've maybe heard that pitch before from this industry in particular, what do you think is fundamentally different about the market and about United today that would make somebody who's not as familiar with the story, that you'd want to kind of emphasize to- I got asked by a reporter, they didn't publish it, but a reporter at an interview recently, "What's the biggest change in the last 10 years or 1 5 years in the aviation industry?" I said, "It is the emergence for the first time of true brand loyal airlines." There's two of us. For most of history, brand loyal meant your schedule. That's the commodity part of the business. If you live in Dallas, you're probably an American Airlines frequent flyer. If you live in Houston, you're probably a United frequent flyer. If you live in Atlanta, you're probably a Delta frequent flyer. If you live in Nashville, you're probably a Southwest frequent flyer because of the schedule. There are a lot of customers who the schedule drives it. Most people in the country live in markets where there's multiple airlines that have similar schedule utility. You live in smaller cities, you live in Chicago, live in New York, live in Los Angeles. Multiple airlines have schedule utility is equal. That commodity part of the business is a toss-up. It's the first time that airlines have differentiated themselves on everything else that matters to customers. I list four things in that bucket. Technology, Product, reliability, and service. You look at it like technology at United is, we're a clear leader in, look across the board, and around the globe. You could see it in the app, but the app is the tip of the iceberg for everything else that comes underneath it. We can just do things. We are doing things now that we're working on, that no other airline is even thinking about yet. We're way ahead on technology and reliability. I think we, in about November of last year, moved into the point where we're the best operator, certainly in the country. I don't track every airline around the globe, but Newark, for those of you here in New York, Newark is now the most reliable of the three New York airports. A remarkable change. Thank you to the FAA for helping us get there. On product, we're doing more to invest nose to tail, in the cabins, than anyone, and you could feel it and see it when you get on airplanes, whether it's seat back entertainment. We're going to have Starlink on our whole fleet by next year. We're already close to 500 aircraft with Starlink today, just across the board on product. When you do all that, your people feel great. They're proud of the airline, and they deliver great customer service. Because of that, we've just won overwhelming market share. You look at competitive market share, I'm not picking on any one airline, but three big hubs where we had a big, or have a big competitor. In all three of those hubs in the last five or six years, we've won about 20 points of local market share. Normally, one to two points is a big move in airlines. When I say it's structural, permanent, and irreversible, what I mean is those customers have switched to United in all of those markets, not just one, in all of those markets. For someone to switch back, because the schedule utility's, let's call it equal. Ours actually is better in all of them, but let's just call it approximately equal. To switch back, those other airlines have to be better than us. If you're on a scale of one to 100% and we're 100% and they're a 50%, getting to 75%, they don't get 50% of the benefit. They get zero, because they still aren't as good. They got to get to 110% before they can switch, and that's a decade long process, and assumes we sit still. It's tens of billions of dollars in investment. That's why I say it's structural, permanent, and irreversible. Because you get in a business like this, you get a big enough lead, the others can't catch up. They just can't. In those competitive markets, they're forced to be what we call spill carrier. When we sell out of seats, they sell tickets. When we're not sold out, they don't sell tickets. I do believe it is structural, it is permanent, it is irreversible. You can see it in the financial results. I realize other airlines might disagree with it, but it is structural, permanent, and irreversible. All right. Thank you for that. You have talked about this path to double-digit pre-tax margin in 2027 and getting free cash flow going from 50%-75%. Doubling the contribution of the loyalty program gets a long way there. But as you think about the rest of the levers that you have to play with, premium mix, change to the network, efficiencies, investments in technology, what are the other two or three things that really move the needle that investors should be paying attention to? It's going to may be a boring answer. It's continuing to do what we're doing. If you'd have asked me to make a bet on February 26th, will we be at double-digit pre-tax margins in 2026 or not, I would have bet an awful lot of money that we would. Two days later, the war in Ukraine started, and that upended the fuel prices. We were almost certainly going to be double-digit margins this year. A lot of it is just letting that play out. I think you just look at where we are right now, nothing special needs to happen. It's early to give 2027 guidance and stuff can change, but I'm increasingly confident that 2027 will be double-digit pre-tax margins. All that has to happen is the current environment plays out. You don't need anything special for us to be at double-digit margins. I think we will be moving into double-digit margins next year, and then I think the path, I think call that getting to 12% with no other structural changes in the industry. Other structural changes, I think is what get us to mid double-digit margins. One of those has already happened, obviously, with one airline. There is still an awful lot of airlines that are break-even or worse. If you are break-even or worse as an airline, that means you got a bunch of flying that loses money. It is just simple math. It is what is happening, and look, I do not know when that is going to get fixed, but that is upside for us. I think with current steady state pace, we are at double-digit margins. The current performance of the business is double-digit margins. Just all the core things that we are doing drive more next year. I really don't even include the upside from the loyalty program explicitly in that. I think that's the core airline. I think the double in the EBITDA and the loyalty program probably comes on top of that. Okay. If you think about that projection into 2027, I'm assuming you're assuming some normalization of the crisis in the Middle East. It feels to me like when I look at consensus, and this is my read, investors have taken the targets we had for 2026 and just pushed them into 2027. Is that the right way to think about it or is there more? No. Well. Just looking optically at those. Certainly if oil prices are normalized for 2027, our goal internally will be to make up for 2025 and 2026. I would want us to have margins, and our goal has been a point a year. I would want us to have margins that are 3 point higher than 2024. If I looked out today and we had a forecast that was less than 3 points of margin growth compared to 2025 or 2024, sorry, because a lot happened in 2025, a lot's happened this year. I'd be pushing hard to figure out how we get to. That's about 11%. Okay. upside to that, it's not just going to be a push from 2026 to 2027. Correct. It's going to be something. Well, I don't think it will be. Yeah. Just, I watch the dynamics in the market of what's happening. I feel more confident. You know, it can't be 100%, but I feel more confident about that path than I would've even a few months ago. I'm assuming some of that confidence comes from what you're seeing in terms of the consumer and the demand environment in relation to the fare increases that the industry's pushing. Yeah. I have expected more of a elasticity effect, and I still think there still will be. We all took economics. You can't expect Q to not change. The demand environment is pretty strong. Sort of a lot of pricing cleanup, I guess, has happened. We're starting from a structurally better or tactically better base. Okay as oil prices start to come down. Have you seen anywhere in the portfolio, leisure, regional, domestic, international, main cabin, whatever, however you want to slice it, where you've seen some demand response in response to higher fuel? Not really. You know, you always have some markets that are stronger and some that are weaker, but nothing that I think is structural. I think it's just normal noise. Okay. I think earlier this year you started out saying you'd be at 100% fuel recapture by Q4. That pace that you laid out pre the start of the year, is it kind of like similar, or are you feeling a little bit more optimistic, less optimistic? Well, I think the demand and the revenue environment has been spot on with what we were thinking. Oil prices have come down, and so the fuel price. The hurdle to get to 100% is lower. I think the 100% ought to be moving closer, moving forward, just because oil prices have come down. The demand environment is very much like we thought it would be. Right. One of the $65,000 questions that I continue to get asked is, fares are going up, unit revenue's fantastic right now, but at some point it'll come down, fares will then come down with it. How much of this can you keep? Well, look, we're going to be a little below 50% in this quarter. We haven't recovered 100% yet. I'll look forward to getting to 100%. As I said earlier, I'm feeling really good about double-digit margins. Next year, I'm not going to talk about the specifics of pricing, but I'm feeling really good about double-digit margins next year. You can interpret that as you will. As you think about the market normalizing for fuel, what are the things that have changed in the business that should allow you to keep some of that as price? Well, like I said earlier, I think we were going to be at double-digit margins this year. Not a lot has had to change. Okay. Tactically at United, we've pulled some capacity. There's no point in flying flights that are going to burn cash just because fuel prices have come up. We really haven't changed much of anything at United. We've always had confident the strategy's been working. Everything we see, the strategy's working. Really we've stuck to the strategy, and I think we would've been at double digits this year, so it's pretty easy to think you're going to get that plus a little bit next year. Oh, okay. You just got to keep executing. All right. On that topic of the strategy and product innovation, you guys have done a lot of product announcements in the last sort of 12 months. The Coastliners, the XLRs, Lie Flat Polaris Studio. Of everything in the pipeline, what are the two or three things that you're kind of most excited about bringing to customers and think have the most potential to move the earnings needle? Well, Starlink on 100% of the fleet's going to be the biggest. That is going to be a differentiator versus every other airline. We're going to be the first to get there. Southwest is going to get there, too. Alaska's going to get there. Everyone else is going to be miles behind. That by far is going to be the biggest. Then all the other stuff. It's the hundreds of little things that we're doing to invest for the customer that make the difference. It's not one or two things. It's a culture of investing for the customer, and the hundreds of other things. I was going to say a second one. It's one we already have, but we got some cool stuff coming and we got some really cool ideas. It's the technology that customers experience using our app. Anybody that's flown another, it's the most universal comment I get from people that have flown United and have flown other airlines is how much better the app is than anything that they've ever seen anywhere else. It's not just the app that really is the tip of the iceberg. It's all the other things that go under the app that make it. We built data. We started 10 years ago, getting off of mainframes. Spending money to get on modern technology, not just in the cloud, but getting on modern technology platforms. Organizing our data in ways that you could use it. Those are the kind of projects that are hard for airlines to do because there's no immediate ROI. We probably spent close to $1 billion just taking our existing systems, putting them in modern systems that did exactly the same thing as they did before. Once you get it in there, it just opens up all kinds of possibilities. I really think we're the only ones that have done that. We got some really cool stuff that we're going to do. Anything you want to kind of- No, not yet. share, tease out a little bit? Not yet. All right. I guess as you think about that level of investment going in to support premium, I'd be curious to hear how you think about measuring that pace of investment. Yeah a bunch of stuff we haven't done, and if we do it, we can get customers to pay us more." How do you think about prioritizing innovation? You're getting this from a guy who likes math and is good at math and understands math, but this part is an art, not a science. Because this is a challenge every airline has, building a brand loyal airline. Every single individual decision, you say, "If I make the decision to spend more on meals, spend more on wine, whatever. Hundreds of decisions like that. Every single one of those, if you look at it and say, "Well, really? We spend an extra $5 million on wine, and you think we're going to get enough people switching airlines because of the wine?" And the answer is no. It's always no. And it's correct that the answer is no. Any one decision saying no, letting the finance department say, "No, sorry, Mike." Letting the finance department say no, which they always want to do, is the right short-term tactical answer. You string several hundred of those decisions together, and all of a sudden the brand is different. This is about building a brand. I don't have a perfect formula for it. I think of this as we have this vision of a brand loyal airline. It's a mountain off in the distance, and we're driving towards it. As long as our results, absolute and relative results, they're mile markers along the way to that mountain. As long as they're good, I feel like we're on the right path. If they start to get bad in one way or another, then you've got to question what you're doing. We just keep putting a little bit more in every year. We watch what's happening with market, not just financials. We watch that as in market share, which then leads to financials, of course. We watch what's happening with different class of traffic. We use all that data to try to do a little more art than science on what it means. We also have all kinds of great anecdotal data that supports. Starlink is a 90+ NPS for in-flight service, and the rest of our Wi-Fi, I assure you, is not a 90+ NPS. Somebody told me earlier today that just in the past weekend for Memorial Day, as load factors picked up, somebody just went and ran the analysis because it's heavy load factors, that flights with seat back entertainment had a 15-point higher NPS than not. Normally it's five or six points, but it's 15 points when flights are full because that amps up the stress and just all those little. We do a lot of time going through data like that. Lots of anecdotal data that informs the judgment of how much is the right amount. How does this affect the cost profile of the business, right? Obviously, running an airline is an inflationary endeavor. We spend more. Yeah. We've been on a path, really for at least seven or eight years, to add about a point of CASM-ex to our expense base for investing in the customer. That's in the CASM-ex. We've done a pretty good job on cost compared to everyone else. That's core efficiency. I'd much rather drive real core efficiency in the business, and not cut the customer expense. The challenge in an airline is it's a lot like the U.S. government budget and entitlements. 90% of our expenses are fixed. Maybe it's not 90%. 80% of our expenses are fixed. Fuel, labor contracts, airport landing fees, all those kinds of things are largely fixed. If you've got 20% of your budget to play with and you want to cut CASM-ex by 10%, you've got to take 10% out of the customer. You do that 10 years in a row, and holy cow, you're way behind. That's what's happened to some airlines. They've been great at CASM-ex and terrible at earnings profile because customers care about that stuff. We've been investing about a point of CASM-ex, and we don't do it all at once. We do kind of a point every year embedded within the CASM-ex that we've got at the company. I know the answer to this, but I'm going to ask it anyway because I get asked it by investors. In a time like this when your budget's been blown by a factor out of your control with oil, is there any temptation from the Department of No to pull back on some of those investments? No are you just going full board? No. We prepared for times like this. We prepared by having the best balance sheet we've had in over 30 years. We prepared by being on top of the industry in profit margins. We are confident that this, one way or another, will be temporal, that either oil prices will come back down and/or capacity will come out of the industry. We have not pulled back at all. As you think about then the outlook for the next level of efficiency coming out of the network, where does it come from? You've gauged up quite a bit. I think you've got a little bit more work to do in the mid-continent hubs. Gauge, because Boeing and Airbus have both been behind on aircraft deliveries, gauge hasn't happened yet. Okay. Gauge is yet to come. Gauge is coming. We continue to use technology to just get more and more efficient with, whether it's utilizing crews, running the operation better, just across the board how we schedule and manage maintenance. As good as the app is that you people, that customers can see or investors could go see, our underlying technology for how we run the airline. We should do a tour someday and let people come out and see what the technology our maintenance technicians work with, and you could do a tour at another airline, what their maintenance technicians works with. Technology is embedded so deeply in United. I think that's an unheralded, unappreciated advantage that we have compared. I listed it first in those things about brand loyal, was technology, those four items. I think it's probably an underappreciated advantage that we have at United. Do you think there's still quite a bit of runway for you in that? I absolutely do. I think a bunch of the AI, I am now a believer. A bunch of the stuff that people do with AI I think is ridiculous, like summarize your email. Good grief, I want to read my email. Its ability to code and take your own data and just go experiment. Like the revenue management guys, there's things that I wanted to do for 20 years, but to experiment with it would've taken a year. Each one of those experiments, I had like 10 experiments. Each one of them would've taken a year of programming before you could even try and run it, and then it might not work. Like, an analyst can do it in a week now. Yeah. Can write those, literally, a good analyst can do it in a week and just run experiments and see which works. It's got some really good potential. How are you adapting that and rolling it out in the organization? Are you changing or are you just training the existing people, changing the way you're programming this? I was talking to another company I cover. They've kind of gone away from this old idea of having a team of developers to come in and think about stuff. Yeah and just moving it to a much more- We're not doing that either. It started with me. I hired an AI tutor for programming. I want to tell you, it turned me around with a few hours of lessons. It's amazing what you can do totally on your own. We're going into the business units, and we're creating our own training programs to make people go be coders and experiment and try in a bunch of parts of the company. That's exciting. All right. Let's see here. Obviously, you guys have been doing great on on-time departures. Cancel rates very, very low. Operational discipline is a part of that, but also obviously some of the changes at Newark. Yeah potential changes in Chicago. How much of the differential step up in performance is just because you're swimming in a less crowded stream versus you guys are really getting better at doing what you want to get done? Newark's a big deal. Chicago never went up, so that's not anything. Newark's a big deal that the FAA finally, after for 10 years of me banging, or nine years of me banging my head against that wall, is managing the airport to equal the capacity. It's just crazy that we schedule more flights than the airport can handle. This is like when the FIFA World Cup comes here. I don't know, how many seats does that stadium sit? 80,000 seats? Let's say 80,000 seats. Something like that. If it seats 80,000, would you sell 100,000 tickets to the game? It's just dumb. That's what we used to do with scheduling at Newark. That's been a really big deal for Newark. I also think, we're a technology focused airline. Partly I have it in my blood. The technology that we have to run our airline, we watch what happens with our competitors when their storms come through, and like, good grief, the next day, sometimes two days later, what the hell's going on there? We know, and we used to have that. We had a hell week three years ago at Newark that was really, really bad. We thought we had pretty good systems and technology, but that was a pivotal wake-up moment for us. Crew is where this happens at airlines. Anytime airlines are canceling after the weather's gone through, it's crew issues. There's been some other airlines that have had it recently, but crew issues that can linger in some places for days. We can now, same person can process over 10x as much crew cancellation issues when there's events, so that we can just stay ahead of it. We're literally 10x what we could do. We thought we were the best before. We're 10x what we could do three years ago, and that means we just have automated. When weather comes through, push the button, let the system run. It's harder than that, but we're pretty much always the next day up and running, and we cancel less during the day of the event. Because we have so much confidence about the next day, we don't have to cancel as much. Everywhere we fly, anytime there's an irregular operation, we come through it the best of every airline. Okay in our cities. I think when we've had this conversation the last couple of years, we've, at some point in the conversation, always talked about constraints, whether it's pilot constraints or airspace constraints, controller constraints. That's a little bit moved out of focus given the conflict in the Gulf. I'm assuming they've not moved out of focus for you. What are you worried about in terms of your ability to meet your financial objectives for the airline from an input constraint perspective? Well, I'm not the worrying type. What are you monitoring? The constraint that is real, and it's not something to worry about, especially if you're an investor, that is real, is engines and components of engines, forging and castings in engines. Look, I'm sorry, there's still 800 or 900 aircraft around the globe that are grounded for engines, and that is not getting fixed this decade. As rates go up at Boeing and Airbus, they're producing gliders, and they're both fighting with the engine manufacturers. There's just not enough engines. Supply is going to be constrained around the globe because there are not enough engines. It's not about how many Boeing can produce. It's not about how many Airbus can produce. It is about the engines, and there are not enough engines, and there's not going to be for many, many years. What about air traffic and controllers and that kind of issue? Yes. I think that under this administration and Secretary Duffy and Administrator Bedford, they're going to work to improve I think we're going to get more capacity into the system, but most of that'll just be to run better. That'll be much better. If we do that, block times will come down. There's a bunch of routes that you can go look at that it takes longer today than it did 50 years ago to fly the route, even though the planes fly a lot faster. It's all because of the air traffic control. I think we'll be able to save time. We'll burn less gas. We'll use the aircraft more efficiently, employees more efficiently. Customers will be better. It's less a constraint mostly on growth. It's going to be more about using the aircraft. It's going to be more about efficiency across the board. We'll burn less fuel, need less employee time, less customer time sitting on airplanes. I think that we're on a good trajectory to finally make that happen. I think that- With the FAA. I've been doing more research on the FAA component of the airspace management part of it. It seems like there would be some opportunity to optimize the allocation of space, which would then allow you to run faster. Yeah. Is that a real opportunity? They're working on it, but it's an easy problem to describe. In the real world, solving it is not as easy. Sure because the world doesn't work as clean as if it was deterministic, it'd be an easy problem for math minds to solve. Yeah. The world is stochastic. You can plan great for exactly where every airplane is going to be six hours from now, to within 100 feet. The chances that they're all going to be within 100 feet of where you thought they were six hours earlier is pretty small. Do you think? That complicates it. It's going to take a long time to come up with. I think there's tons of opportunity. We've got to probably experiment with it, take it a step at a time. Over the horizon still? It depends on where you think the horizon is. It's close enough to the horizon that we're working on it, working on it with the FAA. Right. They're actively working on it. Cool. Let's talk a little bit about structure and sort of the structural change in the industry. Obviously, we've gone through the bankruptcy of Spirit, which is something that you would've seen in the cards, and commented as much. Southwest changing its business model. Obviously, there's been a pretty significant change in the discount space. How is that affecting your business? How is that changing your opportunity set? How is that changing how you're thinking about? The discount set, particularly the ULCCs, truth is it's no longer that dramatic. One of the things that happened to the ULCCs is the big airports priced them out of the market. When the New York airports are charging $52 per enplanement, and Spirit and Frontier's average fare is $58, you don't have to be a rocket scientist to know that flying to the New York area airport doesn't work. You're spending $ 52 before you've paid for your gas or your employees or your airplanes or anything else. It just doesn't work. I think that that portion of the market is, one way or another, going to retreat to the niche that works. The niche that works is leisure markets that don't have competition from big airlines. The Allegiant model works, and there's markets to Orlando and sort of Orlando, Vegas, maybe a few other beaches. Trying to fly into Atlanta is not going to work for any ULCC. What about Chicago, Vegas? Does that work at all or no? No. It's too expensive. Yeah? It's too expensive for them to fly. We are now price competitive because we've upgauged and we've got Basic Economy. It doesn't work. I look at the P&Ls of every airline, I bet that I know the P&Ls of my competitors better than most of their Chief Executive Officers know their route by route P&Ls. Those routes don't work. I know they love them. Look, there's a golden rule for airlines. Every airline in the world could earn its cost of capital if they would just follow the golden rule. Don't fly places that lose money. Have the discipline to stop flying places that lose money. I, by the way, have closed three hubs in my career. As much as I like to be aggressive, I have closed three hubs in my career. Delta, by the way, closed three hubs. You cannot be successful if you're dragging around an anchor. You cannot be successful if you're not willing to pull the losses on places that lose money. Most airlines aren't. It's hard on your ego. For some people, at least, it's hard on the ego. Most airlines aren't. That's the golden rule of investing, and Spirit didn't learn it in time, and I don't know if Frontier's going to either. What do you think happens prospectively then? I think they're going to be materially smaller. I don't know if they go bankrupt and shrink or they just shrink or somebody goes away or they're going to be materially smaller because they've got to shrink down to the niche that works. Eventually, they're going to be in a niche that works that's solidly profitable for them. There's a good profitable model there. Spirit used to be solidly profitable. When they started to grow outside of their niche, you get out of your niche, you're in trouble. They got out of their niche. Chicago, Vegas is out of their niche. Is this more organic consolidation, or do you think there's going to be opportunities? I don't know. larger scale consolidation? Are you asking me about consolidation? Yeah. I've been waiting for you to get there. Well, yes. Well, look, I'll just speak for United instead of others. I, for many years, have thought that only the kind of big transaction that we tried was the only one that made economic sense. None of the other deals made sense. Also knew, though, that the big transaction required a willing partner, which we clearly don't have. I don't think that United, at least, is going to participate in any consolidation for any time I can see in the foreseeable future. This thesis is out there that was swing big for American and then maybe it's easier to do a smaller deal? It's just idiotic. Yeah. Sorry. For anybody that had it. I just don't understand that at all. You're not going to offend me. I don't understand that at all. That was definitely not the plan. Okay. Do you think, though, that there would've been room to get that deal done? It's not about room to get the deal done. I have immense respect for Joanna and her team and what they're trying to do, and I wish them luck. By the way, we're going to try to help them be successful. I already talked about discipline. I've been disciplined enough to close three hubs. The last thing I'm going to do is buy a route network that loses money. I think for us, I look at that, you can do the math too. We got to somehow think we can improve JetBlue's margin by 25 points to make it work. That seems mathematically close to impossible to me. I never understood why everyone thought we were going to do it. I never said it, never hinted at it. I never understood why everyone thought we were going to do it. It just seems mathematically not doable and I'm pretty good at math. I never understood it. All right. You guys have obviously also made a lot of progress on the balance sheet, kind of improving the quality of, getting closer, I guess, to investment grade rating. When you get there, what changes? Anything besides cost of debt, or is there going to be a more formal change in capital return priorities from the board? I'm sure there will be. We're going to get there first and then we'll have a good, robust discussion with our- It's my confidence in your ability. it's a robust discussion with our board, who will appropriately want to be involved in that. Let's get there first and look, 50% free cash flow now and then moving to 75%. By the time we're moving towards the end of the decade, we're going to have a lot of free cash flow, I think we'll be solidly investment grade. A big chunk of that will be some form of capital return to shareholders, assuming we progress the way we think. Conversation with the board at a later date. Yeah. Okay. CapEx, less than $8 billion in 2026. It's kind of inside of your multi-year band that you guys- have laid out around $7 billion- $9 billion. The capital hierarchy for within that $8 billion, right? Obviously, you've got some aircraft delivery. Beyond the aircraft delivery, where are you spending the reinvestment? What's the priorities? Technology. Technology? Okay. Customer-facing, internally-facing? Both. Like the app, the connected media? But it- As far as we know. I mean, it's sort of all the above. Okay. We're spending on the app. We are spending more on AI now. We're running experiments. We're spending money in revenue management. We're spending money in the operation, sort of across the board. I already said, we spent close to now about eight years, getting our platforms largely modernized and getting them in data lakes where we have easy access to the data. They're not in some of the old systems that are a lot of places. We also, by the way, we're sort of in this unique, it used to be an advantage, we got lucky on this one. We're the only airline, I think, in the world that owns our own reservation system. We run on SHARES. We don't have to go through Sabre, we don't have to go through Apollo. They're so difficult to deal with for others. I've talked to other airline Chief Executive Officers to try to do stuff. Your data's all there. You're kind of stuck. We're just in a better place because we did that. Now it's doing things to use all that data. We're kind of growing across the board. Our goal is within a year to be also to be twice as productive, 100% increase in productivity for our DT team. As measured by? It's hard to measure for sure. Yeah. You could measure it by lines, I don't know if you'd measure it by lines of code. I'm not sure. Yeah that's the right metric, but to double the amount that they do. Okay. As you think about, maybe if we drill into the revenue management system component of that, right? There's been some talk about whether it's AI within the revenue management process or supporting the revenue management process. Your experience with coding and getting large series of regressions done sort of very quickly- Yeah Being able to kind of do that stuff. As you roll that into the system, should we be expecting that to show up in a better unit revenue outcome, lower cost? That's a better unit revenue outcome. Okay, what about the extra time that the analysts that would have spent a year building a model, they can get it done in a week then? Well, they didn't spend the year before. To me, the promise of AI is much less what everyone else is talking about doing things that people already do faster, efficiency. The promise of AI, and by the way, I don't think you could justify the trillions of investment if all you're going to do is read your email a little bit faster and do that kind of stuff. I think you can justify the trillions of dollars of investment if you're going to do things that nobody thought were possible before, and do new things. I'll give you one good example. Every Flight's a Story at United, for customers. The goal is to get to a point where anytime there's a flight delay, we tell customers in clear, plain English that we send them text messages. We're going to start to send them videos, like maintenance videos and cool stuff about exactly what's going on with their airplane and why, and try to give them really good information. Generally, I mean, most people in here fly, and if you know, it's the uncertainty that's a killer. You walk up to a gate and it says your flight's on time, and you're supposed to be boarding, and there's no airplane at the gate. I don't think that happens at United, but that does happen at some airlines. It infuriates you. Giving people good information. The goal I've set for the team is pretend I'm on the flight, and I've asked what's going on with my flight. What would you tell me? I want to tell all of our customers that. We've been doing that. We call it Every Flight's a Story. Some of the results, I got some phenomenal statistics when we do it and do it well, but it's really hard to do for 6,000 flights a day, especially when there's weather and it's uncertain. Thunderstorms. Maybe the airport's closing, maybe it's not. You don't know. It's really hard to do. I think we're probably two to three times better than any other airline in the world, just because we're the only airline that's really worked on it and tried to do it. We've decided that the current path that we're on is never going to get to the nirvana that we want. We've started a brand new work path that's built native AI, building the right data so that it doesn't require any human intervention. The AI will be able to tell you about every flight, and what's going on with every flight with no human intervention, just from all the other data that we have and everything else that it can see about the system. I think that'll be great for customers. It won't only help with customers, it'll cause more brand loyal customers to fly United. It'll be unique. It'll feel different than any other airline in the world when we're able to do that. I'm convinced we're going to find all kinds of ways to run our operation more efficiently when we've built that. That to me is what AI can do. When we're building that, we're going to be able to run the airline better, a lot better than we could before, because we've built that infrastructure for Every Flight's a Story. That's one of my favorite examples of what we're trying to do. Thank you for sharing that. Question from the audience. If you disaggregate the customer reviews into areas where you are performing and areas where you can still improve, what are the things you're doing to improve those areas where you need to get better from a customer experience standpoint? Look, we're trying to improve across the board. The nearest term thing that we can do applies to every customer, which is Wi-Fi. I already told you, 90+ NPS when we have Starlink on the airplane. Now the most common complaint, I'm not counting my flight got delayed for whatever reason, the most common structural complaint that I now get is about Wi-Fi. Partly it's because we've raised the bar on Wi-Fi by getting Starlink on, the legacy providers that we have just aren't. It's dramatically different. Getting that done as fast as possible is probably number one on my list for customers. Anywhere else that you are thinking about. Look, we're doing it across the board. It's not like there's some one magic bullet. This is about running the airline, running the airline well, doing all the hundreds of things well. We have a great team that's doing it. There's not some magic bullet. It's about executing, and executing on everything. Okay. A part of that execution obviously is cultural transformation. We talked about this, I think, the last time you were with us. You've gotten the flight attendant agreement done. How's the level of satisfaction, buy-in? How are you thinking about the team? Our people are great. They're doing a great job. Our flight attendants, by the way, did a great job as we were going through negotiations. A lot of times you've heard airlines, if people that have followed along, bleed through and lead to bad customer service. It did not happen at United. Our flight attendants were awesome. They're the best in the world. I'm glad they got the industry-leading contract that they deserve. You guys go fly, and you decide. I think the culture at United is great. Our people are proud. I tell our team that I have the easiest job of anyone at United because I really only have one responsibility, create an airline that they're proud of, because if they're proud, they're going to take care of everything else. Importantly, they're going to want you, the customers, to feel the same way. I hear that from them all the time. I had someone stop me walking through the hotel here today, just in their civilian clothes, and he's all excited. He's a United pilot. He wanted to stop and take a picture and just excited. I hear it from them all the time. I was at my daughter's wedding this weekend, which was pretty cool. Congrats. Yeah, thank you. I had to get that in somewhere. It's called she betting market. No, I'm not. Just kidding. There was a retired United pilot that retired two years ago. He was there. He was just bragging to everyone like, "Oh, United is the greatest," and like, "It's the best. I hate that I had to retire." He's married to a captain for another airline. Anyway, Well, you'll know who it was if I tell you everything. Anyway, she was wishing it was like that at her airline. It's just great, and I hear it from them all the time. I see it in the customer satisfaction score. I see it in our NPS scores across the board. They're doing a great job. Momentum is great. You get momentum. That's another reason, by the way, to make the kind of product investments. I literally look at the product investments through the lens of how are our employees going to feel about this? I don't want our employees in a position where they have to apologize. If they're having to apologize for something, they're behind the eight ball. Wi-Fi was the last structural thing that people had to apologize for. God, it can't get fixed fast enough. All right. Can't get Starlink 100% fast enough. Sounds like the employee buy-in is there. The product innovation- Yeah is rolling. You got a group of generous investors, and obviously investors on the webcast listening today. What's the bull case? Why is United the right place to put an incremental dollar or capital to work? What's the one thing you think the market doesn't understand about the story? I think we had a great strategy, we've executed it really well, we're going to continue. We have a no excuses mantra at United. We got all kinds of stuff happen that we come, make excuses, our Chief Operating Officer, I use no excuses because I went to the Air Force Academy. Our Chief Operating Officer, Toby Enqvist, says, especially talking about the weather, "It may not be our fault, but it is our responsibility." That matters to how you behave on everything, it also matters how you take care of customers. Winning brand loyal customers, really, we've proven the last two years. This was close to a recessionary environment for many airlines. You can look across the results that we have resilience, when times are good, we do even better. We outperform when times are good even more, and we retain more of the revenue when times are bad. We've been investing a lot, growing and buying aircraft. As we've said all along, that starts to taper towards the end of the decade. If you care about free cash flow, which we do, that number is starting to go up, and you're getting it at just a remarkable multiple. I do not think that airlines like United Airlines or Delta Air Lines, by the way, are going to trade at eight, nine multiples once we've proven durability, sustainability of earnings, high free cash flow conversion, in the years to come. I think you're getting a pretty screaming bargain. I don't know what's going to happen with stock tomorrow. I don't know what's going to happen with straight to our moves tomorrow. There's a lot of volatility. I wish there was less volatility. If you're a long-term investor, it's hard to come up with much better to me. All right. With that, I think we're going to close it down. Thank you, Scott. Thank you to the United team for coming out and joining us. Thanks, everybody. Thank you all for supporting the SDC. Enjoy the rest of the conference.