United Airlines Holdings, Inc. (NASDAQ:UAL) Q2 2023 Earnings Call Transcript

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And the best stat to me is, this past weekend, our team would tell you that the weather in Newark was worse than it was that last week of June. But because we were closely coordinated with the FAA, we had advanced planning. We had to cancel a lot of flights while the weather was over Newark but we were able to immediately start the recovery as soon as the weather was passed. And in total, we canceled 77% fewer flights. And so Newark is going to always be a difficult airport. It’s got two parallel runways, 40 departures on one runway, 40 arrivals per hour on another. That’s a flight every 1.5 minutes. It’s about the most we can do. And it’s in the most crowded airspace in the world. But I feel really good about where we are and where the FAA is with us on getting the most out of Newark when those events do happen.

Ravi Shanker : Understood. And then maybe as a follow-up, I think it was mentioned earlier, and I agree that your comment on 3Q PRASM domestic being flat to up slightly is a pretty differentiated message from your peers. Do you have enough visibility into what 4Q might look like relative to 2Q?

Andrew Nocella : We’re not going to give guidance for Q4 today. And look, what I’ll tell you is that and I already hinted, October, I think, is seasonally strong relative to 2019. We spent a lot of time refining our third quarter forecast. We’re obviously already at the top half of the range, and we look forward to refining our Q4 forecast, but we’re not going to do that today.

Operator: Our next question comes from Jamie Baker from JP Morgan.

Jamie Baker : Thorough conference call thus far, just a couple of quick ones for Gerry. The comment on free cash flow for the year being inclusive of the AIP. Just to be clear, you’re including retropay not merely wages and work rules?

Gerry Laderman: We’re including all cash going out the door, Jamie.

Jamie Baker : And second, your profit-sharing formula isn’t harmonized across working groups, at least not yet. If we think about the third quarter earnings guideposts or goalposts, excuse me, can you give us the approximate blended rate that you are using?

Gerry Laderman : No, Jamie, that’s — we can’t right now because it really depends on the forecast. We can help you and anyone else offline with your spreadsheets on how to think about how profit sharing might best be sort of incorporated if you want.

Operator: Our next question comes from Scott Group from Wolfe Research

Scott Group : Sorry about my voice. Hopefully, you guys can hear me okay. Just to clarify just that last question. Is it — I know you’re not giving a number, but is it right that there’s a pretty meaningful step-up in profit share from Q2 to Q3?

Gerry Laderman : Scott, all we can tell you is that all profit sharing that we expect are incorporated in our full year numbers. That’s the best way to look at it.

Kristina Munoz : I’ll follow up with you offline, Scott…

Scott Group : Fair enough. And then — just — I know it’s early, but how are you thinking about overall capacity growth for next year, domestic versus international? And then is there any way to just think about some of the puts and takes for CASM for next year?

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