United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Cowen and Company Global Transportation Conference 2017
18 slides from United Airlines's conference presentation, Sep 6, 2017
Slide 1: Cowen and Company Global Transportation Conference
Exhibit 99.1 Cowen and Company Global Transportation Conference September 6, 2017 Andrew Levy Executive Vice President and Chief Financial Officer
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements included in this presentation are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subj
Slide 3: Agenda
Agenda 1 Revenue and guidance update 2 Fleet update 3 Looking forward 3
Slide 4: Challenging third quarter
Challenging third quarter Unprecedented storm in second largest hub Geopolitical tensions in Korean Peninsula Pricing issues Higher fuel costs 4
Slide 5: 3Q17 guidance update
3Q17 guidance update Prior Update Pre-tax margin 1 12.5% - 14.5% 8.0% - 10.0% Capacity ~4.0% 3.0% - 3.5% PRASM (1.0%) – 1.0% (3.0%) - (5.0%) CASM ex1,2 2.0% - 3.0% 2.5% - 3.5% Fuel price 3 $1.56 - $1.61 $1.72 - $1.77 Fuel consumption (M gals) 1,085 – 1,095 1,070 – 1,080 Harvey impact still a prelimi
Slide 6: 3Q17 revenue headwinds
3Q17 revenue headwinds Unit revenue now expected to be down (3.0%) to (5.0%) (1.0%) – 1.0% ~1.5 pts ~1 pt ~1 pt ~0.5 pts (3.0%) – (5.0%) July 3Q Harvey impact Uncompetitive ULCC pricing Incremental Revised 3Q guidance Basic Economy Pacific guidance pricing weakness 6
Slide 7: Harvey impact
Harvey impact Operations at IAH were suspended for over four days with over 7,400 flights cancelled All facilities at IAH are open and we anticipate operating at full schedule by the end of the week Our employees are rallying to restore service faster than originally anticipated Local demand will be
Slide 8: Uncompetitive Basic Economy pricing
Uncompetitive Basic Economy pricing Basic Economy improves ability to optimize revenue through customer choice and is a tool to more effectively compete for price sensitive customers New product was rolled out broadly in domestic system at the end of May However, we underappreciated that incremental
Slide 9: ULCC pricing
ULCC pricing Basic Economy is a powerful tool to compete with unbundled offerings on price and product Rollout of Basic Economy has put pressure on ULCCs seeking a price advantage Since late July, ULCCs have reduced fares substantially in our hub markets and United has continued to match lower fares
Slide 10: Agenda
Agenda 1 Revenue and guidance update 2 Fleet update 3 Looking forward 10
Slide 11: Update on Airbus A350 order
Update on Airbus A350 order Changed model variant to A350-900 Order increases by 10 aircraft to 45 aircraft A350-900 better fit and size for the United network Deferred deliveries until late 2022 through 2027 Aligning delivery of aircraft to potential retirements A350-900 is a good replacement aircr
Slide 12: Agenda
Agenda 1 Revenue and guidance update 2 Fleet update 3 Looking forward 12
Slide 13: Key investment highlights
Key investment highlights Managing business to Defined strategy to close maximize margin and ROIC margin gap to peers by 2020 Will continue to return excess cash to shareholders Managing costs and Strong liquidity levels and disciplined capital investment healthy balance sheet 13
Slide 14: Looking forward
Looking forward Executing on strategic initiatives outlined at last year’s Investor Day Making progress on all fronts with some initiatives ahead of plan and some slightly behind versus initial expectations Feel good about United’s progress despite near-term challenges Will provide a quantitative up
Slide 15: Looking forward
Looking forward Building on operational momentum from first half of the year Revenue management (Gemini) enhancements showing positive results in early stage roll out Network changes will drive better hub connectivity and improved product: Houston (IAH) re-bank in 4Q 2017; Chicago (ORD) & Denver (DE
Slide 16: Top priorities for 2018
Top priorities for 2018 Network optimization Drive better hub connectivity through re-banking and expanding catchment area flying Capture unique opportunities and reallocate aircraft where necessary Focus on eliminating costs and improving efficiency Bottoms-up budgeting Continue focus on customer a
Slide 17: UNITED
UNITED
Slide 18: Appendix A: reconciliation of non-GAAP financial measures
Appendix A: reconciliation of non-GAAP financial measures CASM is a common metric used in the airline industry to measure an airline’s cost structure and efficiency. UAL reports CASM excluding profit sharing, third-party business expenses, fuel, and special charges. UAL believes that adjusting for s
United Continental Holdings — Cowen and Company Global Transportation Conference 2017 on 6ix