United Airlines Holdings, Inc. (UAL) Earnings Call Transcript & Summary

All right, folks, moving right along. This should be an interesting presentation as always. I hate to break it to the audience, but the industry really does have a CASM problem. And the CASM that I'm referring to is that, on one side, you have companies that make money; and on the other side of the CASM, you don't. Thankfully, we have a company that makes money here. So with that, let me turn it over to Scott Kirby, CEO of United Airlines. Scott, I'm sure you're bringing us...

All right. Thank you, Jamie. Thank you. All right. Welcome, everyone. So obviously, I'll take a couple of minutes today and then we'll get to Q&A. But I'm going to once again try to start with perhaps a different way of explaining you -- or kind of a big-picture overview of where I think the industry and United within the industry is headed and how it is evolving. And one way I'll start it is the last 4 years have been quite a tumultuous time. It was 4 years ago at this conference where you switched to virtual at the last minute. And I can remember getting on the call and talking about revenue being down 70%, which turned out to be wildly optimistic. But no one else believed that anything like that could happen and being amazed that our stock price went up. And I think Mike told me that happened because you just took the absolute worst case off the table, and I mean I wish you hadn't said that because I think this might be really bad. But it's amazing to be standing here 4 years ago today. And I started that story because it's really relevant to where I think we are going. And I think this is a structurally different industry in a lot of ways. And so what I think is important from a structural perspective is there's 2 things that happened. One, primarily driven by cost convergence, the whole industry has moved to a higher level. The tide has risen. The bar has moved and it's going to continue to move to a higher level, and margin will expand across the whole industry in the years to come. But the other thing that's happening, which creates a lot of angst in the stock market over the near term is, I'll call it, a seesaw. The margins has flipped. The seesaw has rotated the other way. It used to be the ULCCs were at the highest, then the low-cost carriers and then the network carriers. That's a broad generalization, not exactly everyone fits. But in a broad term, that would have been a seesaw if you just plotted out the margins. And it's completely flipped with the network carriers at the top and the ULCCs now at the bottom. And it's completely flipped for structural reasons, and I think that's the important point. And I'm going to try to talk about today, in a little different way, what has changed structurally and why even today's updates make sense in the light of a structural change in the industry. And for me, I want to think about this and talk about this. I have thought of the world for a long time from a customer perspective in kind of 3 broad segments of customers. These are -- this is a little bit of an oversimplification because they're blending between them. But think of it as premium travel, the kinds of customers that buy premium products, they also typically fly globally and using their miles globally and travel more frequently, but pay more. Domestic road warriors, whose travel is mostly domestic, but they do a lot of traveling. They fly from Phoenix to Los Angeles back and forth. They're on the road all the time. I call those domestic road warriors. And then the third is price-sensitive customers. And pre-pandemic United Airlines was good in all of those categories, but there was either one airline or some section of -- some subset of airlines that was better. So we're sort of second tier in each one of those categories. And what's really changed during the pandemic is we took steps to move to the top tier in all of those. And I might think we're the best in each of those categories, and I do think we are the best in those categories, but it doesn't even matter. What seems to me almost inarguable is, and I'll walk through each one of them, that we have moved into a competitive set with the top tier. And because of that, we're outperforming. That's what's really driving our outperformance. If you look at the premium, there was one airline that spent a lot of time investing in the premium product and investing in the customer service. We have done that at United now. I think the biggest change that's unappreciated is the change in customer service, how our people interact, behave, treat customers. You can feel it when you fly. We hear it from customers. I hear it anecdotally every time I'm out and around. I see it in our NPS scores. You can just see it across the board. I see it in our revenue data, what is happening with customers and the investment in the product that we've made to really target premium customers. And the fact is that we have the hubs in the biggest and best markets. And so we have the most untapped opportunity of anyone in that segment because of where -- simply because we were born on third base when it came to where our hubs are located. And that second one, the domestic road warriors, this has always been Southwest's strength and their bread and butter. And they've built a great airline -- the best airline in the 50 years, the best model in aviation history, but they had 2 things that were always a big advantage over United Airlines. One was the customer service. I talked about that. I think we have caught up to them on the customer service. But the second one that we were never going to be able to win against them was change fees. For those domestic road warriors, not having a change fee -- if you're flying to Phoenix to Los Angeles back and forth, not having change fees was an insurmountable advantage for Southwest. I have spent 25 years of my career at the beginning when I figured this out trying to create products around the edges without getting rid of change fees to compete with Southwest and realized eventually that you had to get rid of change fees. Because it's a $1 billion decision, the only person that can make that decision is the CEO. And I was committed to -- for a long time, once I became the CEO of any airline, we were going to get rid of change fees. But we have -- and that now means in competitive -- particularly in our hubs, in competitive markets, we've taken away, we've gotten competitive with their biggest advantage. That's not a knock on them. They do a great job. But we now -- all of the other things that we have, the lounges, the frequent flyer programs, the international service, the bigger networks, all of those things can come to the fore for those customers. And you can see it in our revenue data that we are winning in that segment. I'm not saying we're even more better, but we have gotten competitive in that domestic road warrior segment. And then the third is the price-sensitive. And here, the ULCCs did something that the rest of us hadn't yet. They figured out that customers wanted a disaggregated price. And it took us time, but we've now finally got Basic Economy working and working really well. The other thing we had to do to make that effective for price-sensitive customers is we had to get bigger airplanes in the market. We couldn't fly a 50-seat regional jet up against a 200-seat airplane and expect to succeed. We needed to have a lower CASM airplane, but also a plane that we could afford to sell the seats at the Basic Economy prices. And so now we've created an environment where we went from being good, but not the best in all 3 of those product categories to being in the top tier, either the best or tied with the best in all 3 of those categories. And what that's meant is that our margins have improved faster than anyone else. When you look deeper into the margins, this isn't about international or some of the things people talk about, if what I said was true, if my hypothesis was true, then we should be outperforming on domestic PRASM, and that is what we are doing consistently. That's what's setting our margin performance versus the industry apart is really about our domestic PRASM and how that's increasing. And that's increasing because we've now gotten competitive in all 3 of those categories. So this is structural to me. It's sustainable. It's why we have such confidence in where we are today and where we're moving for the future because we just -- we have the winning hand in each of those places, particularly in our hubs. We don't have the winning hand everywhere, but we're not going to try to compete in places where we don't have the high ground. And so we feel really, really good about where we are, what the future looks like at United, recognize that that's not in the stock price for us or others yet. But we think that, that ultimately will be because this is structural, this is sustainable. It is a different industry than it was before. And while I do think that cost convergence is going to cause the entire industry's margins to continue moving up, that seesaw has flipped, and the network carriers are going to be at the top. I think we're going to be in top within that group because we just have more untapped potential than the others, but we feel really good about where we are and where we're headed. So thanks for coming out and listening to us. And I guess we're going to turn to Q&A now, Jamie? All right. Do I sit down?

Yes, please. And apologies, I think I omitted introducing [ the team ] and Mike Leskinen and anyone on this stage.

Well, I probably should have done that, too.

So yes, let me kick off. So I found your change fees commentary really interesting. You've obviously been in the CEO spot now for several years, but it begs the question, at least to me, if that was a predetermined goal to get rid of those. Was there anything else on your, if I remember, an airline CEO list of things that you wanted to change?

Yes. Look, I just talked about it today, the 3 things. This has been in my mind for a couple of decades. And I'll take another step back...

I'm from the America West days.

Well, not all of them, but I'll kind of give you the evolution. But going through my career kind of in my mind building the dream airline. What would I do? And we've done that now at United. And you can see like -- by the way, everything I talked about there, that's not like a projection of, oh, here's the future story. That's what's happened. It isn't just happening; it's what has already happened. And I -- first one was the Southwest, competing for those domestic road warriors. And my story was I had a friend that I played golf with in Arizona. And back in the '90s, he owned used car lots and he told -- I was trying to convince him to fly America West. And he's like -- and he says, I go over to Southern California every week. Sometimes I buy between 0 and 10 cars at auction. If I buy 0, I want to go back right away. If I buy 10, that paperwork takes me 9 to 10 hours. I don't know when I'm coming back. And you have change fees. And that was a lightbulb moment. And we tried at America West a whole bunch of different like tactical things to not have change fees to Southern California, and none of them worked. And so 20 years ago, I concluded like you -- we had to get rid of change fees to ever be competitive with Southwest. And by the way, that's a -- imitation is the sincerest form of flattery. They did it really well. And one of the other things that I -- probably I'm the only airline CEO who's done this, I've read every single transcript of every single earnings call of all of my competitors for the last 2 decades. And a lot of times, I criticize them for what they do, but I also learn from them when they do something and do something well. So I wanted to change that one for a long time. The second one was really watching Delta prove, to give them credit, Delta prove that air travel is not a commodity. I've been at America West, so I kind of come from that view. But watching them succeed, I became convinced that the product mattered and service mattered, and we have done that at United now. And the third one was really watching what Spirit did to American in Dallas while American was in bankruptcy, started the bankruptcy with 2 flights a day, 2 markets, ended it with 25, like just ate their lunch and realized that, that was existential risk for American Airlines, and we were going in there. And we had to find a way to compete for the price-sensitive. And so that's been the time line of them. And the pandemic was just this incredible opportunity to vault to a leadership position because everything was thrown up in the air. You can make the kinds of changes that were impossible outside of it, including the United Next order, but to come out where we could be, and that was the goal, be in the top tier of choice in each 1 of those 3 segments. And that's what we've done, and you can see it in our results. And that's why it's structural, too. I mean it's just really hard if you're -- in any of those case, it's not a criticism on them. We just have natural advantages that once we got competitive on the places they had advantages, our natural advantages win.

On the topic of the low-margin airlines, should they be rejoicing at your inability -- well, everybody's inability, but United's inability, in particular, to source MAX 10s? Because I've always viewed that aircraft as sort of a category killer. You put 30, 40 seats out at Basic Economy, you still have 160, 170, I don't recall the precise load, but you still have a lot of capacity in that plane to sell premium. And you rob a Spirit A320 of any chance of making a profit. So should they be celebrating the MAX debacle?

I'm going to try to not talk about the LMAs too much, but I can think of plenty of things to worry about. And for us, like a MAX 9 has 179 seats; the MAX 10, out in the current configuration, has 185. So I don't think it's that big a deal.

Scott, just on that last point with the MAX 10, we didn't talk about it with Ed, but he made headlines earlier this week talking about maybe a 2-year delay from his scheduled 2025 deliveries to maybe as late as 2027. Just what's the latest with your conversations with Boeing on the MAX 10? And would love to hear what your conversations are with Airbus about an alternative product to the extent that you can source those because you're taking them out of the fleet plan and so forth, sort of rip the band-aid off there. Maybe you can just talk about where we stand with all that.

Sure. I am encouraged with the following at Boeing. I think they have accepted that there are larger changes that they need to make, and it's probably an overused term, but they need to go slow to go fast. And I think they're doing that. I think that means, this year, deliveries are going to be way behind what they expected -- originally forecast and expected. And I am glad that that's the case. As much as I would like those deliveries, this is not a 12-month issue. This is a 2-decade issue. And I'd rather Boeing do what they need to do, and I think they are now. I think they believe they need to, and they're going through that. So I'm encouraged at least at the first step. It's a long journey. It's one step, but I'm encouraged with that important step at Boeing. That said, we are in the market, we've been pretty public in the market for A321s. And if we get a deal that the economics work, then we'll do something. And if we don't, then we won't. And we'll have -- wind up having more MAX 9s. For us, from a scheduling perspective, what we're doing is -- I think it's impossible to say when the MAX 10 is going to get certified. And we've asked Boeing to start building us -- it's stopped building MAX 10s, which they've done for us, build MAX 9s. And if and when the MAX 10 gets certified, we'll convert them back to -- we'll convert forward-looking to MAX 10s. But MAX 10 is out for us until it's certified.

With the Airbus conversations on the 321s, in regular way course of business, is there enough opportunity for you to get the planes that you need? Or do you need something to -- another competitor to give up slots? How should we think about that?

Need is not the word I would use. We have a lot of flexibility. And we don't have -- we're not going to hit an artificial growth rate. We're not going to have an artificial number of airplanes. We're not going to target an artificial growth rate. These are 30-year assets. We're not -- we wouldn't, for example, overpay so that we could hit next year's growth or hit 2026 growth. And we have time, we have flexibility. We -- Boeing will be able to deliver us a lot of airplanes on the MAX 9, maybe not in the next 1.5 years, but they will. And so I'm comfortable that whether we get more Airbus aircraft or not, we are going to get the amount of lift that we think is right for the market. In the next 2 years, it's going to be a little lower than it would have otherwise been this year or next year. And then I think we'll also get on a steady cadence. We were -- what we had happening is because Boeing had been behind, we were building up even more and more deliveries. So I think we're going to get to a steadier cadence that looks a lot like kind of what we did last year in terms of narrow-body deliveries. And it will either be -- it will be a mix probably of Boeing and Airbus. But we have flexibility, I think, to get to the number of airplanes without feeling under the gun or need is not the word I would ever use.

Okay. That's fair. Mike, 2 years ago, certainly, United wasn't selling a free cash flow story. You had -- the order book was in the process of growing to where it is right now, operations weren't fully recovered and so forth. Now when we think about 2024, it seems like there has been a shift. Not only have cash flow forecast improved, but you also now have a little bit of order book or delivery relaxation because of what we're just talking about here. Is that -- should we -- are we sensing that there's been sort of a permanent shift towards more of a focus on free cash flow generation at United? Is that a more important part of the narrative going forward?

Thanks, Mark. I think maybe where we started was a misperception versus where we are now. This business is always based upon -- we've always managed it to maximize returns, maximize profitability. And in the long term, as you reach -- as you have maximized your hubs and the connectivity in those hubs and grown the airline to its natural state, you get to a point where you have free cash conversion. And that free cash conversion is used to deleverage the balance sheet and to return value to shareholders, both. And so I think what has happened is we were on a accelerated path with United Next to get to that end state. And now with the OEM delays, we have an opportunity to create some more balance. So we will be able to accelerate some of that deleveraging and potentially accelerate some returns to shareholders, and we'll get to the same level of capacity just a few years later. And so I think what has been thrown at us is lemons, and we're going to have the opportunity to turn it to lemonade. And I think shareholders have looked at the growth trajectory and said, well, geez, United is never going to return cash to us, and that just was a misconception.

As a follow-up to that, Mike, you're the industry's newest CFO, and I was certainly a fan -- what, that's not correct?

I think Devon is newer.

Oh, darn it. Okay, good -- fair point.

Ask somebody that actually reads the transcripts. Anyway, meanwhile, beyond those transcripts, you got it wrong. I'm already out of the...

You're the second youngest or newest CFO in the sector. And I certainly -- I was a big fan of Gerry Laderman, but he came from a different discipline, a different background. You have spent more time in this physical room thus far as a JPMorgan employee than as a United employee. So what should we be expecting? And perhaps this is also a question for Scott, how should we be thinking about capital stewardship at United now that you are in this seat? What lessons can you provide to Devon, who's the newest CFO in the industry?

I've said this before and I'll say it again, this industry attracts a lot of talent, a lot of talent that loves airplanes and would might refer to themselves as aerosexuals. And I like airplanes, too, a lot, and it's what the business we're in. But it is critical that the airplanes we buy return a level of profits that exceeds our cost of capital. And so I'll be very focused on that. I think that, that, coupled with more communication, more highlighting of some of the values, some of the crown jewels we have at this airline and maybe a general gentrification of the neighborhood. Now there's going to be winners and losers, and there are some real losers for sure. But I think that combination of idiosyncratic opportunity at United, an improving neighborhood and being very clear around return hurdles is going to drive a lot of value for our shareholders. And I think given the 20 years I spent on Wall Street, that's something that I bring that is unique to the seat.

Scott and Mike, let me just follow up on what Jamie is saying, which is, Scott, you mentioned sort of the seesaw and the fact that it's swung the other way towards the big 3. And if you look at international, your international probably is at or near peak profitability or heading there. Paid load factor upfront, right, just the swing in margins and so forth, loyalty, the importance of loyalty and how important that is to United and some of your peers like Delta before you, yet here we are, and you might have missed Jamie's opening comments, we're sitting there with one of the biggest disconnects ever really in normal times between where the S&P 500 is trading and where big 3 airline stocks are trading, including you. So what does it take to unlock a better multiple? And I want to layer in loyalty into this discussion and whether or not, you have an Investor Day coming up on May 1, should we expect -- is there a skunkworks team behind the scenes in Chicago working on some sort of fantastic loyalty technology that's going to be unveiled at some point this year to sort of prove valuation?

So I'll try and Mike can add on. I'll start with loyalty. We're going to spend a lot of time talking about that at Investor Day. I think there -- by the way, one of the other things I didn't say at my opening, as we've moved to the top tier in all 3 of those categories, the opportunity for the loyalty program is magnified. And there are opportunities for lines of business that haven't even existed amongst airlines. We've spent the last year working on those. They're already in market. We're already doing things. We haven't publicized them yet, but we're already doing things and generating revenue from one particular line of business that I think is going to grow substantially in the loyalty side. And we'll spend more time talking about that. Also talking about a commitment which Mike and I share that, that value is ultimately realized by shareholders in one way, form or another. I'm not going to say what that is, we're not going to say on Investor Day what that will be, but we are committed to making sure that, that happens. We also don't like trading at a 4x multiple as we are, especially in a world where the future looks so bright. Like we're pretty confident that our margins are going to expand going forward. It's not peak margins. Our margins are going to expand going forward, and it's the structural reasons I talked about. Just we have a strong hand to play. And we've been playing it, and it's been working almost exactly like we thought it would. And that's going to be the case going forward. So I don't think we know why margins -- or why multiples are so low. I try not to be frustrated with it as opposed to figuring out what we should do about it. I'll let Mike talk about his views. I have a view, too, that one of the things that holds back our -- it's not just us, Delta is trading at low multiples as well. I think those are 2 really good businesses that are going to grow margins in the years to come. And I think there's a view that that's just so different than what had happened in the past. There's skepticism. There's -- this must be peak earnings, there's skepticism. There's what is different this time. And I think what we have to -- I, my own view is we're going to have to, and I don't know what the triggering event or time is, convince the market what I believe is what we try and do today that this is structurally different. This is a structurally changed -- certainly for United Airlines, this is a structurally different industry. And instead of focusing on what is RASM in every entity this quarter, that we're structurally marching to higher margins every year. And as long as we are doing that, that eventually the results will matter. Mike?

Thanks, Scott. I'll pile on with 3 points, and I'm going to put them in priority order. Number one, you all don't believe that our level of earnings today is sustainable. You think it's cyclical high and it's coming down. We think that it's not only not cyclical anymore, structurally in the zone, but that we are marching a few points higher in profitability. So we have to demonstrate -- I can talk about on blue in the face, but we have to demonstrate that our business is less cyclical than it's ever been before because the premium revenue, because of the barriers to entry that didn't exist before, because of the quality of some of our ancillary business. We will do that. We'll talk about that a lot at Investor Day. It's not just a rising tide of the industry, it's some idiosyncratic opportunities that United has. So that's the #1, and that's going to drive the majority of value. Number two, we have elements of this business, particularly United, that are growth. We still have an opportunity to grow our mid-continent hubs to drive connectivity that nobody else has. We still have opportunity to drive relative CASM performance because of the gauge growth that we still have. We have an incredible opportunity in loyalty program. We were the first to use it for debt monetization during the crisis. We will continue to be a leader in shining a spotlight on that. So sustainability, number one; number two, proving to all of you that we're an earnings growth story. Number three, there's a misperception that whenever we have operating cash, we're going to always use it to buy airplanes. We need to demonstrate that the quality of our earnings is also higher. And by quality, in the long term, we need to demonstrate that we convert net income into free cash flow. And as long as we have great opportunities to grow this business with returns that are -- that greatly exceed our cost of capital, you're going to see us do that. We're also going to progressively signal that the quality of earnings is improving in that if you think about maintenance CapEx and where we're headed once we reach maturity, that there'll be a lot of value to share in the form of cash with shareholders as well. So 3 components in those order.

Questions from the room?

So a question on premium. And personally, I'm a fan of the Polaris product, but it's not your product. It was a [ SpineDeck ] product, if memory serves. Does it allow you to do everything that you want to do in terms of penetrating and capitalizing on the premium trend?

It's a great product and -- but like all business class, kind of every 10 to 15 years, you refresh it. So we are working on a new one. That's a constantly improving product. But the Polaris product itself is a great product, and it's a lot more than just the seat. Seat matters a lot, but everything about the service, the experience onboard the airplane, the app, how easy it is to get through and like everything about the experience matters to clubs. One of the things that we did that I thought was -- that I'm proud of during the pandemic that apparently we're the only ones that did it, like one time in history, if you close a club to expand it, the clubs are always undersized everywhere because it's based at a premium airport. And if you close them to expand, it takes a couple of years to refurb and redo them, and your customers are understandably unhappy while their clubs are closed. The pandemic was the one time in history that we did 49% more club space, more square footage of club space coming out of the pandemic than we did going in because we thought this is the one time -- one shot where you can do it without having a big penalty and could get it done during the downtime. But there's a lot that goes into the product, but we are working on the next-generation seat.

Mike, you mentioned the mid-continent hubs and further optimizing those. But wondering if you can talk about, you and Scott, balancing the opportunity you have domestically with the network versus internationally because I know you just announced 4 new routes and so forth. International has been such a focus for United. So how should we think about when we think about further upside for the margin accretion, et cetera, the opportunity domestic versus international?

I think it's going to be both, actually. The great thing about United, the reason I think we're going to continue to outperform, I talked about the 3 areas where we've moved up, that we'll continue to outperform, is that we're the only one of those of the network carriers that has untapped growth opportunities. On international, we really were born on third base. And Newark, Dallas, San Francisco, just great international hubs, geography, local traffic and it's -- we're going to continue to grow them. Everything we're doing is working really well. So those are going to grow at a pretty steady pace. We start taking wide-body deliveries again at the end of this year. And so you'll see us continue to grow there. The international market is really strong, and it's going to be as far out as I can see, the retirements, what people did during the pandemic internationally, retiring wide-body airplanes and downgrading pilots, that's a best decade-long recovery. I mean there's still airplanes around the world that are grounded today from the pandemic, 380s grounded, that airlines would like to fly, but they can't. And so that's a structurally changed environment, also going to be in the capacity constrained markets with slots in most of these international destinations. So we feel really good about the international network. And domestically, we really just had an opportunity to update. So what we're doing is we're getting rid of 350 regional jets, and we're going to replace them with mainline airplanes. So it's not that the flight frequencies are really going up, but we're flying with a better product for customers, a better CASM for us, an airplane that has enough seats that we can sell -- we can afford that we have seats available to sell Basic Economy that we can compete. We drive higher effective connectivity. And what we're really doing is all the things we're talking about in mid-con, the simplest way to think about it is replacing 350 regional jets with mainline aircraft. And that is a massive opportunity that's ongoing that's been happening. It's working. I mean look at -- I don't know, you guys can go do the analysis. I don't remember in my career an airline that was growing as much faster as we have been than the rest of the industry and outperforming on RASM. That's not normally what happens because it's just a unique opportunity at United, both domestically and internationally.

Okay. I just want to pile on one point that Scott made. We talked about international domestic all the time, and is international stronger than domestic? But what's happening over the last 6, 9 months is also a bifurcation of the industry domestically. And you're seeing customers choosing to fly on United Airlines. And so what you're seeing is improved profitability for us at the expense of some other carriers that are losing those customers because they're choosing to fly on us. And so it's easy to just put us in a box and say, well, international is strong, domestic is weak, and that is cyclical. That is not what is happening. And you can dig into -- if you dig into the domestic profitability by carrier, you'll see that. I think that's something that is lost on the investor space right now.

Mike, United is the largest airline this morning to not provide a quarterly update. I'll assume that, that implies that the quarter is tracking with your expectations. And I realize you're trying to focus on the long game, so I wasn't expecting an update from you. However, it was announced that pilot training was going to take a breather. I think that came out earlier this week or last week, sorry, I haven't read a lot. Should we assume that, that is incrementally positive to your current CASM aspirations for the year? Or was that already envisioned when you gave us cost color for 2024?

Yes. Thank you, Jamie, for the question because guidance is almost something that it's philosophical to me, right? The best industrial companies out there that do trade at better multiples set guidance. They stand by that guidance and they hit it, except for when there are 2 acts of God in a quarter. And occasionally, you want to set it so that you'd be setting it too conservatively if you don't ever miss it when there's 2 acts of God. But when we get -- when we think about, okay -- and Delta just did a great job this morning with their presentation. But when you think, okay, fuel is up, so RASM is up. Okay, great. That's going to happen time and again sometimes, and I'm still going to hit my EPS range. And sometimes, capacity, we're not going to be able to grab all the capacity because constraints with OEMs. But I'll get some other benefits to the P&L because of that, and I'm still going to hit my EPS. And so part of demonstrating that first component that the earnings are structural and less cyclical is setting guidance and sticking to it and not updating with little nits and gnats but, at the end of the quarter, delivering on it; at the end of the year, delivering on it, giving you a multiyear path and delivering on EPS and free cash. And so that's what we're doing. So you guys deliberately did not see an 8-K from us this morning because we're going to build on that track record of making that promise upfront and delivering on it even when there are little wins one direction or another.

I'll squeeze in one last question, then we'll wrap up. Complicated topic, maybe we can make it quick. But we have American up next. They've obviously been most aggressive in pushing into new distribution channels with corporate. So just wondering, we talked about this a little bit with Delta last night, but have you seen any corporate share shift given American strategy for United? And can you just talk a little bit about corporate?

Well, look, I'll answer it even a little more broadly. I think one of the other things that's happening is that there's starting to be a divergence in how each of the network carriers are behaving and I think, by the way, in a way that makes an awful lot of sense for each of them, depending on what our networks are. So American, they are -- or American is small city-focused. They have great hubs in Dallas and Charlotte. That's where they make the majority of their money in Dallas and Charlotte. Those are markets that need -- I mean I helped build those hubs. They need a lot of regional jet service. And the distribution model is different for those hubs than it is if your hubs are in Newark and San Francisco. And so I think that's a strength where they're going -- industry strength where instead of just copycatting each other on everything, that we're each pursuing strategies that are best aligned to where our network is. And my guess is that's a reflection of what's -- that's probably their distribution. It's certainly their network strategy on aircraft versus ours and probably something that makes sense for them and makes sense for us at the same time.

Are you picking up corporate share?

Look, we're -- I don't know if we're picking up versus them. It's hard to see the data because we don't have it. We're much more picking up, I think, corporate share from not having change fees. And American didn't have change fees either, so that's sort of neutral. But I think the bigger place where we've picked up corporate share is, is it where we were competing with airlines that -- where we're not competitive on the change fees.

Let's end with that. Thank you very much.

Thanks.