• The company had record-setting profits in both the Atlantic and Pacific regions
  • Pre-tax income increased 29% y-o-y; on an adjusted basis1 increased 37%
  • Delivered strong operational performance, with September being best on-time performance of the year
  • Increasingly powerful segmentation strategy proving to be a competitive advantage

United Airlines (UAL) today reported third-quarter 2023 financial results. The company reported quarterly pre-tax income of $1.5 billion, pre-tax margin of 10.3 % and diluted earnings per share of $3.42 and; on an adjusted1 basis, pre-tax income of $1.6 billion, pre-tax margin of 10.8% and diluted earnings per share of $3.65.

Total third-quarter top line revenue was up 12.5% year-over-year, a record revenue quarter and near the high end of guidance. United experienced a strong and steady domestic demand environment in the quarter, with 9% revenue growth year-over-year, outpacing second quarter results. The company saw strength in close-in bookings in August and September with both months well ahead of year-over-year demand.

In the international space, profits were at record highs in both the Atlantic and Pacific regions. Revenue in the Atlantic region was up 15% versus the same quarter in 2022, and 70% versus the same quarter in 2019. Pacific revenue exceeded third-quarter 2019 levels despite capacity remaining 24% below third-quarter 2019. Domestic revenues in the quarter were second highest all-time and the domestic system remains solidly profitable.

The company has built a winning strategy around giving customers choice when it comes to the level of service they want. Demand for premium products remains high, with great success in the premium economy cabin where revenue has outpaced capacity growth since its introduction in 2019. In total, revenue from premium products was up 20% year-over-year in the quarter and accounts for more than half of all passenger revenue. Basic Economy has also provided another popular option for customers and has been a great competitive offering with revenue for that product in the quarter up 50% year-over-year.

United continues to see the benefits of having an award winning airline loyalty program. The third quarter showed a continued multi-year new MileagePlus® member trend, setting a record for third quarter enrollments and nearly doubling the number of new members versus the third quarter just five years ago. Spending across the U.S. card portfolio year-to-date is up double-digits over the first three quarters of 2022 and this third quarter saw more miles redeemed across the program than any third quarter in history for award travel.

"Thank you to our extraordinary United team who delivered a record-setting operational performance for our customers in August and September," said United Airlines CEO Scott Kirby. "Our strategy to diversify our revenue streams, capitalize on growth opportunities and constantly innovate to enhance our products for our customers is paying off. Our United Next strategy is working and we remain on track to hit our financial targets."

Third-Quarter Financial Results

Capacity up 15.7% compared to third-quarter 2022.
Total operating revenue of $14.5 billion, up 12.5% compared to third-quarter 2022.
TRASM down 2.8% compared to third-quarter 2022.
CASM down 3.6%, and CASM-ex1 up 2.6%, compared to third-quarter 2022.
Pre-tax income of $1.5 billion, with a pre-tax margin of 10.3%; adjusted pre-tax income1 of $1.6 billion, with an adjusted pre-tax margin1 of 10.8%.
Net income of $1.1 billion, adjusted net income1 of $1.2 billion.
Diluted earnings per share of $3.42, adjusted diluted earnings per share1 of $3.65.
Average fuel price per gallon of $2.95.
Trailing twelve months adjusted net debt1 to adjusted EBITDAR1 of 2.5x.
Key Highlights

United pilots, represented by the Air Line Pilots Association International (ALPA), ratified a new four-year contract with the company.
Announced promotions of Michael Leskinen to Executive Vice President and Chief Financial Officer, Josh Earnest to Executive Vice President of Communications and Advertising, and Terri Fariello to Executive Vice President of Government Affairs and Global Public Policy.
Introduced a new United First® seat that includes a wireless charging station in every arm rest and 13-inch seatback screens for domestic aircraft.
Opened two new United Club℠ locations in Denver, including the airline's largest club – a 35,000 sq. ft. club with a modern take on the United Club experience.
Announced the United Airlines Ventures Sustainable Flight Fund℠ increased its investment power to nearly $200 million and added eight new corporate partners, five months after its initial launch.
Launched the industry-leading United Military Pilot Program giving full-time, active-duty U.S. military pilots access to conditional job offers as a First Officer with the airline.
Customer Experience

Became the first U.S. airline to add braille to aircraft interiors.
Onboarded new amenity kits for premium passengers in international, transcontinental, and Hawaii markets. In addition, introduced upgraded Saks Fifth Avenue bedding for United Polaris customers.
Was awarded the World's Best Airline App by the World Aviation Festival for the airline's industry leading capabilities on making the day of travel easier.
Named Favorite International Airline for the fourth year in a row and Favorite Frequent-Flyer Program for our MileagePlus program for the sixth year in a row by Trazee Travel.
Partnered with Sesame Workshop, the nonprofit educational organization behind Sesame Street, to create a brand-new Children's Travel Kit.
Operations

Set the company's record for the highest daily average of revenue passengers ever carried in a quarter at more than 482,000 passengers.
Achieved the most ever quarterly mainline (2,621) and widebody (324) daily departures in United's history.
United Express achieved 30 days of 100% completion – the highest number ever for any quarter in history.
Held the second highest third quarter seat factor in history behind third-quarter 2022.
Network

Flew over 436 domestic markets on mainline aircraft this quarter – up from 367 in the third quarter of 2019.
Made significant growth in the Denver market, reaching the most mainline departures in over 20 years at 300 daily departures, a 10% year-over-year seat capacity growth for the quarter, and daily departure increases on over 20 routes year-over-year.
Announced a major international expansion to Asia, including the first nonstop service from the continental U.S. to Manila by a U.S. airline and the introduction of daily flights from the continental U.S. to Hong Kong and Tokyo-Narita, and a second daily flight to Taipei.
Announced United's return to Beijing with daily nonstop service from San Francisco.
Introduced 127 new, nonstop flights to select cities this fall to help college football fans travel to games.
Communities

Announced an investment in Electric Power Systems, a company producing battery technology that can potentially be used for a broad suite of aerospace applications.
Transported more than 110,000 lbs. of relief supplies in support of Maui Disaster Relief efforts. Through Miles on a Mission, United and MileagePlus members donated 55 million miles to relief efforts in Maui.
Hosted over 100 volunteer events for United's 3rd Annual September of Service with more than 2,200 United employees volunteering more than 7,300 hours – the equivalent of over $232,000 in impact served. Throughout the month, United employees packed 304,000 meals, upcycled 12,000 amenity kits, collected nearly 350 lbs. of trash, and installed 6.24 kW of solar energy in communities across the globe.
In partnership with DonorsChoose.org – pledged $1.25 million in support of aviation and STEM projects in classrooms across our seven hub markets and more.
Partnered with Sesame Workshop during National Preparedness Month to reach children in need around the world, matching up to one million miles raised for the global impact nonprofit behind Sesame Street.
Earnings Call

UAL will hold a conference call to discuss third-quarter 2023 financial results, as well as its financial and operational outlook for fourth-quarter 2023 and beyond, on Wednesday, Oct. 18, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.

Outlook

This press release should be read in conjunction with the company's Investor Update issued in connection with this quarterly earnings announcement, which provides additional information on the company's business outlook (including certain financial and operational guidance) and is furnished with this press release with the U.S. Securities and Exchange Commission on a Current Report on Form 8-K. The Investor Update is also available at ir.united.com. Management will also discuss certain business outlook items, including providing an update of full year 2023 financial targets, during the quarterly earnings conference call.

The company's business outlook is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release. Please see the section entitled "Cautionary Statement Regarding Forward-Looking Statements."


UNITED AIRLINES HOLDINGS, INC.

NON-GAAP FINANCIAL INFORMATION

UAL evaluates its financial performance utilizing various accounting principles generally accepted in the United States of America (GAAP) and non-GAAP financial measures, including adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), adjusted EBITDA margin, adjusted EBITDA excluding aircraft rent (adjusted EBITDAR), adjusted operating income (loss), adjusted operating margin, adjusted pre-tax income (loss), adjusted pre-tax margin, adjusted net income (loss), adjusted diluted earnings (loss) per share, CASM-ex, adjusted capital expenditures, adjusted net debt, free cash flow, and free cash flow, net of financings, among others. The non-GAAP financial measures are provided as supplemental information to the financial measures presented in this press release that are calculated and presented in accordance with GAAP and are presented because management believes that they supplement or enhance management's, analysts' and investors' overall understanding of the company's underlying financial performance and trends and facilitate comparisons among current, past and future periods.

Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The company does not provide a reconciliation of forward-looking measures where the company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and is unable to reasonably predict certain items contained in the GAAP measures without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the company's control or cannot be reasonably predicted. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. See "Cautionary Statement Regarding Forward-Looking Statements" above. The information below provides an explanation of certain adjustments reflected in the non-GAAP financial measures and shows a reconciliation of non-GAAP financial measures reported in this press release to the most directly comparable GAAP financial measures. Within the financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying amounts.

CASM: CASM is a common metric used in the airline industry to measure an airline's cost structure and efficiency. UAL reports CASM excluding special charges, third-party business expenses, fuel expense, and profit sharing. UAL believes that adjusting for special charges is useful to investors because those items are not indicative of UAL's ongoing performance. UAL also believes that excluding third-party business expenses, such as maintenance, flight academy, ground handling and catering services for third parties, provides more meaningful disclosure because these expenses are not directly related to UAL's core business. UAL also believes that excluding fuel expense from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence. UAL excludes profit sharing because it believes that this exclusion allows investors to better understand and analyze UAL's operating cost performance and provides a more meaningful comparison of our core operating costs to the airline industry.

Adjusted EBITDA and EBITDAR: UAL also reports EBITDA and EBITDAR excluding special charges, nonoperating unrealized (gains) losses on investments, net, nonoperating debt extinguishment and modification fees and nonoperating special termination benefits. UAL believes that adjusting for these items is useful to investors because they are not indicative of UAL's ongoing performance.

Adjusted Capital Expenditures and Free Cash Flow: UAL believes that adjusting capital expenditures for assets acquired through the issuance of debt, finance leases and other financial liabilities is useful to investors in order to appropriately reflect the total amounts spent on capital expenditures. UAL also believes that adjusting net cash provided by (used in) operating activities for capital expenditures, net of flight equipment purchase deposit returns, adjusted capital expenditures, and aircraft operating lease additions is useful to allow investors to evaluate the company's ability to generate cash that is available for debt service or general corporate initiatives.

Adjusted Total Debt and Adjusted Net Debt: Adjusted total debt is a non-GAAP financial measure that includes current and long-term debt, operating lease obligations and finance lease obligations, current and noncurrent other financial liabilities and non-current pension and post-retirement obligations. Adjusted net debt is adjusted total debt minus cash, cash equivalents and short-term investments. UAL provides adjusted total debt and adjusted net debt because we believe these measures provide useful supplemental information for assessing the company's debt and debt-like obligation profile.