United Airlines Holdings, Inc. (NASDAQ:UAL) Q4 2022 Earnings Call Transcript

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Trying to close clubs when they’re full in a constrained airport environment, it’s always tough on customers, like the pandemic was once in history, not once in a generation, once in history, a chance to do that with minimal impact because we didn’t have nearly as many customers flying in 2020 and 2021. And we’re the only ones that did it. And like there’s just stuff like that everywhere that United did differently. So to be clear, while I don’t think the industry can grow, I think we think United can. My guess is because of the our full target because those will be behind. We’re going to be filing a lower utilization than we were before, and there’s going to be less regional. So, we probably won’t be all the way to our target. But I think we can uniquely grow and expand margins in this environment when everyone else can’t, and it’s because of all the investments we made to set up for this.

Duane Pfennigwerth: Thanks for that, Scott. And obviously, hindsight is 2020. It’s been a unique set of circumstances. But I guess the question is, had you invested at a rate more aligned with your DNA where there’s real free cash flow to point to here, how much higher with this CASM outcome have been? In other words, if we’re up mid-teens relative to 2019, could you have invested at a much more modest rate and gotten to the same outcome? And I appreciate your thoughts on it.

Scott Kirby: I think if we — I mean, look, if we’d invested — if we had done the same thing everyone else did, we’d have the same problems they have right now. Instead of canceling 1% of our flights today in Denver, we would be cancelling 33%. That’s higher cost. Our costs would be higher. This isn’t just investment, like . Anyway, I think when you get to the end of the year, add dollars to donut, we have the lowest CASM, the best CASM performance. I recognize other people have better guidance and then maybe they will have better guidance. But I think in the real world, we’ve come to grips with what the real world means and how — which you have to do to operate it. And you can see it in the data, you can see it in the operating stats, you can see it in the financial stats.

And it’s a new world. You can’t run the airline like you did in 2019. I remember — I read all the transcripts. And I read one of the transcripts, and Jamie asked someone, I don’t remember which airline it was, but asked someone when are we going to get back to pre-pandemic normal. And I don’t remember who it was or even what they said because I immediately thought the answer to that question is never. And I don’t think anyone else just figured that out yet. The answer to that question is never. It isn’t a new environment, it’s a new industry. And that creates higher costs. It does, but it’s also creating higher revenues. And I think it’s going to lead to across the board higher margins, but particularly for United.

Operator: Our next question is from Dave Vernon from Bernstein.

Dave Vernon: Hey. Andrew, I just wondered if you could sort of about what’s embedded in the TRASM guide for being flat? I know you mentioned PRASM was up 2 to 3 cargo down. What are you expecting out of the card program and the other revenue line as we think about €˜22 to €˜23?

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