Helane Becker: And then just for my follow-up. I think, United Next targets, and obviously, you’ll update them again, I suppose, $25 billion of adjusted net debt as of the end of last year, less than $18 billion for 2026. But the other thing is, how should we think about financing, let’s just say, $9 billion is off the table for this year, let’s bring it down to $6 billion or $7 billion plus debt paydown. How should we think about you getting to your target leverage over the next one to three years given the CapEx program, which might be $7 billion this year, but it might be $9 billion or $8 billion or $10 billion, ’25 or ’26?
Mike Leskinen: Let me try to give you a high level view, Helane, and we can dig into more details in the near future. But as I sit here today and I think about the changes in CapEx related to the delay in deliveries, I expect free cash to cover our CapEx in most years, if not all years. And as far as additional paydown of the balance sheet, we would expect that as our margins grow into that low double digit low-teen area that free cash flow will be quite positive, allowing us to pay down that debt. Now the pacing will be dependent on how much that CapEx profile changes and how quickly we get to what we think is that on long run, higher level of margin.
Operator: Duane Pfennigwerth from Evercore.
Duane Pfennigwerth: Just a couple for me. On international inbound, so basically international point available to the US. As you look across your network, how recovered is international inbound, how do you think about that growth of that demand set in 2024? And are there any markets that stick out from a recovery headroom potential?
Andrew Nocella: What I would say is during the entire recovery, US outbound has been a stronger component of the traffic, really across the board, across the entire globe, and that continues today, I think, origin Europe, particularly core Europe, Germany continues to trail as well as Japan and Australia, and so we’ll continue to monitor that. But the US consumer has made up the difference in most regions of the world quite effectively and has resulted in very strong results over the last year. So I think the outlook is strong but when the inbound customer profile starts to rebound, I think that’s just further upside in the future. It hasn’t happened consistently across the globe yet but we’ll see what 2024 brings.
Duane Pfennigwerth: Just following up there. Any specific markets, maybe San Francisco, Asia inbound, any more kind of bullish recovery thoughts there?
Andrew Nocella: San Francisco is going to be very unique over the next six to nine months. There is a significant amount of runway construction going on in San Francisco that has dramatically limited our ability to fly there. It’s also consistent with a slower recovery in that city. So I think that is actually probably okay, but you will see us fly a much reduced domestic schedule in San Francisco. The international flying continues to be very strong. But the smaller domestic schedule, combined with where we are in the recovery, I think, it’s going to be just fine for San Francisco in terms of our profit contribution. And San Francisco, Asia continues to perform exceedingly well.
Operator: Andrew Didora from Bank of America.
Andrew Didora: So Andrew, I guess you mentioned this a little bit in your prepared remarks, but we’ve been hearing and seeing some data on corporate travel getting a bit better as well. Could you maybe dig in and speak to maybe any particular markets or verticals where you see any sort of outsized corporate growth? And have you seen this corporate growth sort of broadening out to make it maybe at a more sustainable level today than at other points in the recovery?
Andrew Nocella: We’ve all sat on calls and predicted the recovery of business graphic more times than I can count over the last few years. And I will say, Q4 was okay. It wasn’t spectacular in any way. But as we started January in the new budget season for all of our big corporate clients, we did notice a significant step-up. So it’s really early. It’s only been a few weeks, and I hesitate to say, oh my gosh, it’s fixed, because it’s still well behind where it should be relative to GDP growth, of course. But look, it’s a really nice step up. We’re seeing close-in yield gains as well that result from that. And I think that’s one of the reasons our domestic RASM outlook is as strong as it is. And so hopefully, that continues. At the end of the quarter, of course, we’ll report on that and let you know how it looks.
But at least for the first two weeks of January, we’ve gotten off to a really strong start and it gives us increasing signs that this is going to be, I think, a very good year.
Andrew Didora: And then for my second question, Mike, you have obviously a lot of talk on the call just on your future free cash flow potential. Just when you’re looking at your free cash flow, when do you anticipate you will become a cash taxpayer?
Mike Leskinen: Andrew, I think it’s a few years off still, let me get with my treasurer, Pam Hendry, and follow up with you on the precise year. It does depend on how CapEx moderates and it depends on that profitability, but it’s still a few years off.
Operator: Brandon Oglenski from Barclays.
Brandon Oglenski: I’ll just keep it to one here at the end of the call. But maybe Scott or Mike, I mean coming back to the context that your stock is trading like 3 times or 4 times P/E probably for the second year here, and also giving you guys credit, because I know a lot of us didn’t think you could hit those United Next targets so many years out. But you are guiding to roughly flat margins at the midpoint this year. And I think what investors are worried about is things you can control or at least perceived control like costs that are going up for the industry here. Is this just a continued view that United is going to decouple from industry trends where you’re going to be able to drive margin premium? And I guess what can you give investors confidence that, that is the path forward here?
Mike Leskinen: I think that it’s a structural change in the industry, and we see a ton of evidence in this year and I think eventually the investment community will see it as well. But there is an industry that has operated as a commodity industry and United and one of our legacy peers have clearly differentiated ourselves from the path. And that’s leading customers to choose to fly our airlines, it’s leading to the majority, if not all, of the revenue growth in the industry accruing to those two airlines, and that is happening simultaneous with cost convergence. That cost convergence, the whole reason that the low cost carriers existed was for — is because they had lower costs. Those lower costs no longer exist. And so that creates, I think, a permanence to the higher margin, a sustainability to that higher margin.
