United Airlines Holdings, Inc. · NASDAQ:UAL
United Airlines — United Continental Holdings — Investor Presentation (May 2014)
16 slides from United Airlines's investor presentation, May 7, 2014
Slide 1: Jim Compton and John Gebo
Exhibit 99.1 Jim Compton Vice Chairman & Chief Revenue Officer John Gebo Senior Vice President Financial Planning & Analysis
Slide 2: Committed to running a great airline and improving returns
Deliver reliability Expand revenue Improve efficiency and quality Strengthen balance sheet Committed to running a great airline and improving returns
Slide 3: Operational investments have paid off
Operational investments have paid off +6% Apr. 2014 Apr. 2013 Mainline on-time arrival On-time boarding Maintenance cancellations (%) On-time departures (D:0) +5% Apr. 2014 Apr. 2013 +3% Apr. 2014 Apr. 2013 -56% Apr. 2014 Apr. 2013 Implemented new arrival and departure procedures to reduce aircraft
Slide 4: Efficient capacity growth in 2014
Efficient capacity growth in 2014 Capacity discipline is central to our strategy United’s capacity vs. U.S. GDP growth (year-over-year) Installing slimline economy seats 10 – 15% lighter than seats they’re replacing Expect to install on ~350 aircraft by YE 2014 Up-gauging regional fleet Adding 27 76
Slide 5: Taking near-term actions to improve our revenue
Improve value of network Optimize revenue management practices 2Q End of Year 2Q End of Year Taking near-term actions to improve our revenue Restructuring Pacific network Optimizing 747 deployment after improving reliability Re-banking schedules at DEN and IAH De-hubbing CLE Made phased recalibratio
Slide 6: Enhancing our Pacific network
Optimizing B747 deployment Restructuring Pacific network Improving joint venture coordination Enhancing our Pacific network Launching non-stop service to Taipei and Chengdu, China Moving Seattle to Tokyo service to second daily Houston-Tokyo Reducing UA intra-Asia service and increasing connectivity
Slide 7: Strengthening our powerful digital tools
Strengthening our powerful digital tools
Slide 8: Ancillary revenue goal of $3.5 billion
Comprehensive and relevant portfolio Powerful and nimble technology platforms Dynamic pricing capabilities Expand availability through other channels $3.0 $2.8 $2.5 $2.4 $2.2 2014E $3.5+ 2017E +7% CAGR Expect to make meaningful progress in 2014 toward $3.5 billion ancillary revenue goal Ancillary re
Slide 9: Expect to achieve $2 billion in annual cost savings by 2017
Maintenance ~$100M Fuel consumption ~$1B Productivity ~$500M Distribution ~$100M Sourcing ~$150M Expect to achieve $2 billion in annual cost savings by 2017 Efficiency benefit from new aircraft, engineering upgrades and efficient operating processes Realign work with our strengths and implement lean
Slide 10: Productivity and sourcing savings in 2014
Productivity Sourcing Expect to achieve $250 - $300 million in non-fuel cost savings in 2014 across every aspect of our business Bring engine contracts in line with market rates Implement best sourcing initiatives Restructure airport rental agreements Redesign airports to improve passenger flows and
Slide 11: Fuel efficiency to drive $1 billion in annual savings by 2017
9 6 2 14 23 10 29 6 Fuel efficiency to drive $1 billion in annual savings by 2017 Firm aircraft deliveries Average: 25 mainline AC per year 2017E 2016E 2015E 2014E B737 B787 E175 Expect to achieve nearly $200M in fuel efficiency savings in 2014
Slide 12: Expect 2015 – 2017 non-fuel unit costs to grow less than inflation
Expect 2015 – 2017 non-fuel unit costs to grow less than inflation Expect 2014 CASM ex-fuel to grow between 1 and 2% YOY 3.1% 0.0% 2.0% 4.0% FY 2014E 1% – 2% 2H 2014E ~ 1.0% 2Q 2014E 1.25% - 2.25% 1Q 2014 YOY CASM ex-fuel 1: CASM ex-fuel numbers also exclude profit sharing, third party business expe
Slide 13: Debt payments since 2009 and upcoming scheduled payments
1.2 0.8 0.8 1.2 0.8 2Q - 4Q 0.8 2.0 0.8 1.2 Notes: - Convertible notes with maturity or put/call date through not shown as payments, assumed to be settled in stock 1 - Includes capital lease payments; scheduled payments include all commitments for which company has secured financing 2 – data is pro
Slide 14: Improving balance sheet
Improving balance sheet Total debt outstanding ¹ ($B) 1: Includes annualized aircraft rent capitalized at 7x 2: 2009 and 2010 data is pro forma 1Q 2014 $1.6 $2.4 $1.8 $1.5 Unfunded pension liability ($B) 1Q 2014 $18.9 $20.1 $23.8
Slide 15: Improving long-term shareholder value
Balance free cash flow allocation Increase earnings by 2-4x Improve capital structure Generate ROIC greater than 10% Improving long-term shareholder value
Slide 16: Slide 16
United Continental Holdings — Investor Presentation (May 2014) on 6ix