All right, moving right along. We will shift gears to United Airlines at this point. It's my pleasure to introduce Scott Kirby. We also have Andrew Nocella and Gerry Laderman on stage, along with Kristina Munoz. Scott, like I mentioned this to Gerry at ISTAT, but I had drinks recently with the relevant Jamie Dimon, from JPMorgan rather. We haven't renamed the firm after him yet. As near as I could tell. He did speak very enthusiastically about the relationship and also mentioned that, you know, United has its best CEO ever, which I thought was pretty interesting considering we have a former CEO, or at least we did, on payroll here. Jamie did give me his permission to pass that along.
I did want to share that with you. Let me turn the podium over to Scott Kirby or over to Kristina for the safe harbor stuff.
Definitely.
It's good to see you. Thanks.
We'll be making forward-looking statements are based on our best expectations and views today and may differ from our actual results. Please refer to our SEC filing date, March 15th, for a complete description of our non-GAAP measures and outlook. All right, Scott.
Okay. Thanks, Kristina. Well, we're not actually doing a presentation today. We're mostly doing Q&A, which felt like the right thing to do since we lowered our guidance yesterday afternoon. I'll at least start and address that issue head on, which I hate, hate to ever miss guidance. We have a pretty good track record of not doing it. Really, I think what happened in the first quarter is we set a bad forecast for RASM in the first quarter. You know, whether it's seasonality has changed, you know, it is a different environment. We had a bad forecast and we own it. We missed it. We sure don't want to do that ever again.
I think the bigger picture, while I hate that we missed it, everyone up here hates that we missed a forecast. It's not something we do often. The bigger picture is the outlook looks really strong. If we look, we didn't share first half versus full year in our earnings call. Had we shared first half, RASM is actually a little bit above where it would have been. You know, just I recognize that, you know, given that we missed the first quarter, how can we demonstrate that credibly? I'll just give you a little more facts than I normally would on revenue guidance, which is by far, the best quarter in the month was March RASM.
April is currently for yield and RASM, essentially right on track with where March was at the same point in time. May and June are well above in terms of both yield. Yield is important because you can only run a certain load factor. Yield and RASM are both well ahead of where March is at this point in time. That would make you think that RASM was going to be better in 2Q. For what it's worth, our mid-teen guidance is hopefully winds up being... Well, we don't want to miss again. Without whether saying there's conservative or aggressive, if we just hit March, we would have been up 18% in revenue. We've got it to lower than that. We want to make sure we hit the number.
I really do think that the outlook is strong. Our confidence on the revenue environment hasn't changed. Our forecast was off for the first quarter, our confidence hasn't changed. The long term, I'll wait for Q&A. Instead of doing the long term, had we not been lowering guidance, I would have done a four or five-page deck that said everything we said in January feels even better now. The pieces keep falling. Cost convergence is starting to happen, whether it's through guidance updates or capacity cuts keep happening. The operation's getting more challenged as we start to move into the peaker parts of the schedule. Like, I would have had a four or five deck that said everything we said in January, like the pieces just keep coming together on that.
I think our long-term thesis remains intact. We feel really good about where we are. Apologize for missing guidance. We don't want to guide so conservatively that we never miss. Was disappointed that we and recognize that you're disappointed that we missed. I do feel confident about 2 Q and beyond. With that, hope it open it up to comments, questions, whatever you guys want to talk about.
Well, hopefully, we'll have some spirited, engagement-.
From the audience, I'll kick off. Something that I occasionally do is look back at some of my old research. You know, it's just kinda like. You know, it's like finding a diary or something.
Yeah.
You're like, "Oh, yeah, it's embarrassing."
I can't even read what I published in 2020 because essentially everything we, and in fairness, others thought was wrong. You know, we thought Southwest and other discounters were going to inherit the Earth.
Yeah.
You know, there was, you know, speculation that, you know, Apple would never recover past half of its. Basically, we got everything wrong, the full-service carriers are the ones that appear to have come out of the downturn structurally stronger. Well, what did I get wrong?
Well, I think, look, most people got it wrong. I think it's relevant for going forward. A number of things that became challenging. One, the environment was already getting tough for people to grow in places that had historically been easy. You know, if you looked at 2019, there's one large airline, without naming a name, like
I went back for I had over a decade of data. Five of their worst 10 months for completion factor were in 2019. They were already struggling with the growth. The truth is the system had just become saturated, and we were at the very beginning of seeing other constraints on capacity, like pilots starting to happen. What happened as we went through the pandemic is most people believed, as you did, that the pandemic was gonna be permanent structural change. Importantly, they also built... This-- Look, I think if you listen to what people will get up here and say in this conference today, they are still building their airline with the presumption that they can get back to 2019. They want-- Their models are all 2019.
They're running their airlines as if it's 2019. It just doesn't work today. I think it is a simpler way of saying it is it's been hard for everyone, sell side, buy side, airline management teams, to figure out that the world is different now. The world is different now. All the constraints we talked about on earnings call, where there's pilots, I mean, you keep seeing that be a challenge. OEM, keep seeing that be a challenge. Air traffic control. Air traffic control, for what it's worth, and capacity. You know, the first 10 weeks of the year. Well, last weekend is sort of when spring break really starts. Last week, airline schedules started going up by 10%-12%, and they increase as we head into the summer.
Now is when the test is happening, and the first weekend was pretty bad. There were, you know, a lot of issues in the air traffic control system over this past weekend. Yesterday, you know, two of the ultra-low-cost carriers canceled 5% of their flights when the rest of the industry was under 1%. I mean, the system is full. I think people failed to recognize that it's different now, and you have to run the airline different than you did before. That does mean higher cost. You know, our CASM is quite a bit higher than we originally expected. Now, it's gone up less than everyone else's. That's the cost convergence point that I think is really relevant for the industry.
As long as everyone's costs are going up, it winds up being like fuel, and effectively a pass-through. That cost convergence, and that, you know, limit on supply, which are they're related, but not entirely the same, those are the things that people didn't figure out. I mean, historically, before 2020, everyone could grow as much as they wanted with no constraints. There's now constraints, but maybe a better way to say it. There are now constraints, and your models need to include the constraints, and that's not something people in the airline aviation that have followed have ever done. It, it's, I think, the most significant point. Well, like, look, I hate to stand up here and talking about it today, on a day that we lowered guidance.
You know, I look back 30 years of the aviation industry was about revenue yields declining 50% in real terms. All the bad stuff that happened at airlines, bankruptcies, all that stuff, was driven by costs coming down at some places, and prices coming down, and that's drove all the bad stuff. I think the most important thing that's happened in 30 years from a financial perspective was we hit the bottom of that coming out of COVID. It's hard for me to see that ever coming back. We're gonna have cost convergence, and we're gonna have higher RASM. We're gonna get back to, you know, Ed, I think, had a slide that showed it. You know, we used a little different data.
We're gonna get back to higher revenue in the industry, both in the near term, in the second quarter, but also in the long term.
Scott, maybe I can ask you the same question I asked Ed, which is, can you take us around the world a little bit and talk about where we are in the recovery in your different regions with your different partners? You know, what the margin outlook is internationally versus domestic? What are the structural impediments there? Can you get to parity? Just what's your outlook there?
I could, but you'll get a much better answer from Andrew, who, good to have him talk, so.
I'm not sure our answer will be dramatically different, to be frank. You know, going around the world, I would also say that if you exclude China, that Asia is basically fully back up. Japan has a little bit of a twist, that there's a lot more U.S. citizens going to Japan than Japanese citizens leaving Japan, but the numbers are balanced in total, and I think it looked really good. I think we're in really good shape. And I'll also point out that a combination of Narita and San Francisco is just the powerhouse combination to get across the Atlantic, and as a result, United is the number one airline or sorry, across Pacific, and United is the number one airline there. We feel really good about margins there.
You know, maybe to reverse, I talk about margins international versus domestic a lot. Jamie's asked me that question many times. I think I actually shocked Jamie on one of my answers.
A couple years ago, pre-pandemic. We always believed all throughout the pandemic that international margins would come back, that there were structural changes that occurred. In fact, international is now more profitable than domestic for us. I expect that to continue into 2023 as well. The Pacific is actually leading the way with not only great passenger revenue, but great cargo revenue. Just a fantastic environment across the Pacific. We signed up new partnerships in Australia with Virgin Australia, which has been very effective, and believe we just have the leading set of network and partnerships across that region of the world far, you know, by an enormous amount. Across the Atlantic, you know, we are in great shape with our partners with the Lufthansa Group.
I also expect to see record margins across the Atlantic as we head into this spring and summer. The tee up is just amazingly good across the Atlantic, and you know, the hub system we have when you combine Newark and Dulles with the Lufthansa Group hubs, is just amazing and also leads in that region of the world. Latin America, near Latin America has been very strong. We have some great partnerships there. Far South America has been a little bit slower to recover, as others have indicated, but it's well on its way, too. The international environment is fully up, running, excluding China, and doing incredibly well.
Is there more upside then for United in domestic margins then versus international margins, given that they're lagging right now?
Well, first, I think there's upside in both. You know, we've been working hard. You know, I think not only United, but legacy carriers in general have a connectivity issue domestically. All of our hubs are dramatically smaller than they used to be, therefore the number of connections we build are dramatically smaller. I think you're gonna see, particularly at United, where our fleet plan allows us to rebuild that connectivity over the next few years, that's gonna be a really, I think a positive for our RASM and are positive for our P&L. Across the global network, while it is recovered and we're doing well and the margins are great, the Polaris cabin is actually trailing.
The Polaris cabin has room and it has yield upside, that's getting business travel from the eight real big business, not SME, the big business that bought those seats to Singapore or London Heathrow or Frankfurt to get back into that business. We've recovered a lot. The economy is dramatically bigger than it was in 2019, we're at 80% in terms of that category. When that category gets back to 100 or that category actually matches GDP at 120 or something like that is a tremendous amount of upside to our international division. I expect our international division could continue to lead our margin growth over the next few years because of that structural shift as that rebound occurs.
I want to pile on to one of the things that we don't talk about much, but Andrew talks about it a lot internally, which is important, which is connectivity. If you look at number of flights we have, while our capacity is back to 2019 levels, our flights are down dramatically. That's because we've got effectively 300 regional jets that we aren't flying anymore. You know, we had a choice to make during the pandemic. Do we, you know, ultimately bet on replacing those with bigger airplanes and sacrifice connectivity in the short term, but get the connectivity back with much more cost-efficient and profit-efficient airplanes in the long term? That's the choice we made. Connectivity domestically is lower. That impacts domestic RASM. As airplanes are coming in, that connectivity is building back up.
Doesn't happen overnight. To the margin point domestically, I mean, you hear all the network carriers. We talk about connectivity and how important that is. You know, you heard Delta talk. I don't know if they talked about it today, but they've talked before about putting capacity back into Atlanta, and that's all really about connectivity. That's something that we took conscious hit on connectivity 'cause we didn't want that many regional jets for the long term. It's building back now as we take deliveries from Boeing Airbus.
It's worth noting that point-to-point carriers didn't take that same hit, right? This is further upside to at least the United business model, and I think actually the legacy business model that many people aren't counting on.
You referenced when corporate gets back to 100%, what is that date in your model?
I don't know what that date is.
Okay.
I wish it was sooner. We'll just look at the financials, you know, putting aside where we are in Q1, the financials and the outlook are really great. You know, we're on target for everything we said we'd be on target for the year. It's a different mix. What I'm pointing out is when that traditional corporate comes back over top everything else that's happened in this business, that provides our business model just an incredible tailwind that pushes us further and further towards our, you know, higher margin targets.
Another question for you, Andrew. This morning on CNBC, Delta cited that it has had a number of record sales days because consumers that were lethargic last year or, you know, homesick, you know, and waited too late to plan their vacations ended up, you know, contributing to pretty healthy yields. The question that I've been getting from investors this morning is, isn't an elongated booking curve problematic because the airlines are gonna pre-sell too much capacity at lower fares? I don't have a background in pricing, but I would think you'd want the elongated curve rather than the steeper environment that we saw last year. How should investors be thinking about this?
Well, you know, if Dave Bartel's here, was here, he's our head of revenue management, he would tell you, we watch this day by day. You know, yield is a key number. We'll often talk about what are bookings like, but what are our bookings like and what are our yields like? As Scott indicated earlier, our yields are really excellent going into Q2, which is why we are really bullish on this. We could sell out really early with low yields and say, "Oh, we're booked ahead," but we're booked ahead from a RASM. Yeah, we're booked ahead. Well, we don't do that. In fact, our revenue management systems, other than for a few really softer weeks in January and early February, our revenue management systems and people are running these systems really tight.
I would urge you to tell all your neighbors if they're trying to go to Rome this summer, they better book early, you know, 'cause the prices are only going higher, and the prices are already very high. Quite frankly, we're selling the seats. 'Cause there's always this, will you push it to a point where you aren't selling the seats? Look, we have to be careful in weak January, and January, you know, is not what we'd like it to be before, you know, without the corporate traffic where it used to be. The rest of the year looks fantastic, and the RM systems are working, and the yield numbers look really good. We've pushed it, and we pushed it for the last two years.
I think our yield numbers across the board quarter after quarter and our TRASM and our RASM numbers have led the industry the entire way. We wanna make sure we do the same going forward.
Gerry, maybe I can ask you about the, you know, largest ever order book that you have this year coming. You know, the 787 was recently shut down production for a couple weeks. Is that gonna impact you further? You've already reduced your, you know, CapEx guidance this year, I think at least once. Wondering if there's a further reduction that could be happening.
Well, Mark, none of those 787s that we ordered were scheduled to come this year.
Okay.
That's not relevant. I understand they announced they were restarting that delivery. We do have one aircraft from the order we placed a couple of years ago that got trapped in that, so I would expect that aircraft to deliver sometime soon. It is the case however, as you know, that both manufacturers have been sliding aircraft a little to the right. We'll give updates every quarter on what we think we are going to actually receive this year. We'll do the same next year. It's fair to say that one of the issues that we and other airlines are dealing with is trying to plan for when these aircraft are coming in. We know they're not delivering all the aircraft we had on firm order this year.
What we don't know is when they might catch up over the next two years, three years, whatever. We'll give those updates each quarter.
Without getting too much into the weeds, you know, with this, call it $8 billion + order book for this year, one thing I've noticed is that at least year-to-date, and I was talking about this with your team in San Diego, you've been doing more operating leases, but they have purchase options. I'm just sort of wondering, is there a philosophical difference in terms of how you're financing the fleet going forward? Traditionally, you know, you at old Continental and old current United and so forth, you'd buy airplanes, you'd finance them. You know, now you seem to be doing more leases. I'm just wondering, has something structurally changed?
No, you sort of answered your own question. Those operating leases we've been doing with these fixed price purchase options, we treat those actually as debt. The expectation is we exercise those options. I wouldn't view them as traditional operating leases in the old sense. We will always remain opportunistic. Right now, those opportunities are in the sort of leasing environment with these purchase options. Given the size of the order book, I think you can expect us to, over time, go to a variety of markets.
Excellent. Questions from the room. Else Jamie's gonna ask more.
There's one back here.
Oh, we've got one over here.
Yeah. Good.
We've got one over there.
There's both near term and medium term targets out there. No one seems to believe them except for the ultimate confidence you have internally with your team. Maybe talk about what gives you the confidence as we look out for the balance of this year in your margin goal and how we think about the medium-term target, if you're able to hit that goal.
Look, I'd start by saying, if you went back and looked at the track record of meeting our targets, we're pretty high on meeting. Higher, I think, than most. Well, we did miss this quarter. You know, I think we tried to explain it. We do understand, we think we at least understand what happened. We just read an overly aggressive forecast. If we'd have started the year and said, "We're gonna have, you know, 22%-23% RASM, in this quarter, and we think we're gonna make $10-$12," like, we wouldn't be having this conversation. That's what we should have done because that was right.
The reason we feel confident about 2Q, we don't have tons of visibility to 3Q and 4Q. The reason we have confidence about 2Q, which informs our views on 3Q and 4Q is that, you know, is what I said earlier, which is it's booked well ahead of where it was at this point in time. We kinda started this hypothesis of seasonality is different, you know, last year. We haven't pegged it exactly. I mean, it's the first time we've gone through January and February, since COVID, and so we got it wrong. You know, our March numbers are good. Our April, May, June all look better.
You know, we certainly expect to be back on the track record of not missing guidance, which we have a good track record of. I get the credibility point, when you miss, and then you're saying we have confidence about the next quarter. You can, you know, think whatever you want, whatever you should think. That's why we're trying to give you a lot more detail. I believe we will, I hope that the second quarter number certainly sounds to me like it is achievable, more than achievable. It's well within the zone, where, you know, as long as something bad in the economy doesn't happen, we ought to beat it. I think we will beat it. That's really what gives us confidence.
We, you know, we have a sort of fundamental understanding, internally, of our numbers, and we could see this happening and, you know, it was a bad forecast, for one quarter. You know, if we were doing the full year, and for what it's worth, we had aspired back in, 2019 to get to giving less detailed guidance, get to EPS. Man, I wish we'd have done that. We were gonna do it this year, too. We can't do it, obviously, when we've missed. At some point in time, I hope we will get to it. You know, we would have been right on track. Look, just internally, like, our numbers, they've shifted in timing, but they haven't really changed.
There's a lot of data that says the second quarter in particular, the revenue number looks really solid.
Sorry, quick follow-up. I was actually not referencing the second quarter, more so the full year 9% margin number, and then the 14% margin guide-
Yeah.
in terms of the confidence on the-
All right. The 9%, as we look back into the back half of the year, the peak for us in our internal forecast, I mean, look, the irony of all this is we started this year and the full year we were doing the forecast before the earnings call, like, we were kind of pulling down the full year to try to be more conservative, partly because we said, "Well, look at the forward curve of fuel and, you know, like, let's be conservative on revenue." We didn't do it for the first quarter, we did it for the full year. The peak RASM by a wide margin in our internal forecast is second quarter. Third and fourth quarter get a lot more conservative.
I think there's upside in the third and fourth quarter too. I hope there's upside to our internal forecasts, because I think capacity is likely at an industry level to be lower than what is in even our internal models. The second thing is for this year, but also for 14, is we just have this huge tailwind on costs, because of gauge growth. You know, what is it, Andrew? What's our gauge growth to 2026?
It's probably gonna be another 22%, 25%.
From here, another 20%-something, on gauge growth, that is coming. So we are just going to have a real tailwind, on costs. I think we have uniquely figured out this operating environment, ahead of others. While we haven't really talked about it today, it is what gives me confidence for the future. I mean, if you look year to date, the lowest mainline cancellation rate and lowest seat cancellation rate, we also track seat cancellation, which includes regionals, in the industry is United Airlines. That's never been true. We went all the way back to merger. Never been true. At United, it's because of weather. Like, our weather is worse than everyone else, with where our hubs are. We have more air traffic control delays than everyone else, in the industry. That's always true.
We're running the best, and I think we have figured this environment out, which is gonna help us with cost, I think, relative to everyone else. Like, I have confidence in the revenue environment this year, and I have real confidence in the structural changes that are driving CASM at United all the way out through 2026.
Can you discuss-.
Yeah.
your, in your previous guidance, your, fuel forecast, what it is now? Where do you see crack spreads going out through the end of the year? Are there any, areas where the spreads are very wide, where it's an issue?
Um-
I guess nowhere, but there may be others worldwide.
Yeah. We don't pretend to be fuel experts. If we just use the forward curve at whatever point. Like, we, I mean, we generally set it a few days before earnings, so we can get everything, you know, together, and it usually doesn't really matter and happen to be a low point this quarter. That's, that's all we do. Like, if we, if we had a better view on what's gonna happen with the price of fuel, man, we'd stop being an airline, and we'd just invest our money in oil futures, and then we'd retire at the end of the year because we'd make so much money if we knew oil was gonna be different than the market. We just use the forward curve.
One thing that is different now is that there is far more because the market's tight for product, diesel and jet. The market is so tight, there are and it's inelastic, there are huge spikes. Now we haven't been building the... I don't know if we should, but we haven't been building those into the forecast. Sometimes it comes down as well. We were using the differential. I'll just give you the numbers. In January, if you take fuel, we call regional differences in price over Gulf Coast plus taxes and into-plane, that was $0.11 in January. That was sort of implicit in our forecast, like, it was buried in the model. In February, it was $0.33 because of what happened in New York Harbor.
Those things are gonna happen that it, you know, is back down, comes back down. We're not pretending that we're experts on fuel. What does happen is that winds up showing up in RASM. It doesn't show up immediately, but, like, look at what's happened this quarter. Look at what our yields and, you know. I'm not gonna tell you the numbers. Yields are well above, you know, for May and June, where they were at this point in March, and you can see where March came in on RASM. It winds up being reflected in the price. It doesn't immediately, but you know, with the kind of three to six-month lag, it winds up reflecting the price that's really high, I think that is.
Got one back here.
Going back to the domestic and international margin questions from earlier. If you have a domestic traveler connecting through a hub and doing international, how is that accounted for on the domestic side, and how does that impact that margin calculation?
Well, Andrew can, it's prorated to the domestic. Somebody connecting takes their. It's not exact. It's more complicated, but think of it as a percentage of miles that get flown, get allocated to the domestic segment.
Are those more profitable domestic routes then?
I don't know if I'd say it that way. I mean, you know, the domestic portion of an international journey is really high for United Airlines within our global network. Those yields tend to be pretty good. I, you know, because of the stage length is really far, relative to the shorter stage length on board the aircraft, the yields look similar on board. When you stage length adjust them, they would be really good. Clearly, we're looking at this from a system profitability point of view. Overall, I'd say that the economics and the equation work really well. Pretty happy with it. It depends on how you, how you measure it and how you analyze it. 'Cause we don't get that question very often, right?
you know, a material percentage of our domestic flying is international connections.
I mean, the way I'm not sure where you're trying to go with the question, so it's hard to really answer. 'Cause it's kind of in the weeds. The way if international is weak, it's a reasonably big portion of our domestic. When international is weak, it shows up in domestic that feels different than others. When international is strong, it shows up in domestic in a good way, which feels different than others. We under or outperform on domestic because of the domestic portion of international journey based on what's happening in international. Yeah. The question is, if international outgrows, will that drag along, bring domestic up with it? The answer is yes.
Quite often, people underestimate our international revenue because they just look at the different entities and how we report it. The international revenue is materially higher as a percentage of total when you look at it exactly the way you asked the question.
More from the room. Up front here.
While we're going to the next one, I should have introduced my almost nine-year-old son, Sean, who's bored to tears sitting in here. He turns nine tomorrow. He joined me on this trip. Now he's smiling.
Just on corporate travel. We haven't really seen this, but from an ESG perspective, do you think a lot of corporations are gonna start cutting corporate travel to reduce their carbon footprint?
I think it's a factor for them. It's one that I also think that we're not doing it for this reason. We're trying to do the right thing for climate change. We're leading the world in terms of aviation industry on what we're doing for climate change, you know. Our commitment to SAF is about equal to all the rest of the world airlines combined. Mike Leskinen, who's here running our newly launched fund, which customers and partners can join to help invest in the future. We got to build the supply for SAF and invest in that future.
We've made our first investment in the fund yesterday for algae technology, which would be really cool because if you'd used an algae technology to produce. The issue for sustainable aviation fuels, what's the feedstock? Finding a sustainable feedstock to use that is not oil. If you could use algae, it's essentially infinitely scalable, doesn't have bad land use. You know, you can put it out in the desert with saltwater. It's not impacting arable land and, you know, it's a lot of good things.
We're focused on trying to build that industry and because we're the leader, I think those that care about I know that those that care about the issue, whether they're in the government or in corporations, believe they know, people that know that United is the leader, and that we're sincere, and that what we're doing is not greenwashing, it's not marketing, it's real. I think that for those segment that segment of customers probably helps us in that regard.
Gerry, just one more for you from me. You're still sitting on far too much cash than what you'd need, what anyone would consider your minimums and so forth. Any update on how you're thinking about the excess cash, just using it to buy airplanes, liability management? Just how are you thinking about it, you know, given the second quarter outlook, which still seems robust? Doesn't seem like you need to sit on that much.
That's a pretty bold statement, actually, that we have way too much cash.
For an airline.
You can never have too much cash. Particularly in an uncertain environment. I mean, look at what happened over the last five days. We are very comfortable with where our liquidity is today, given the uncertainties. You know, we are gonna continue to manage it, based on a conservative view. It gives us tremendous flexibility on timing of when we would seek additional aircraft financing because we can simply pay cash for aircraft, in times when there are disruptions in the capital markets, such Mark, as you know, right now. This would not be the week to go, you know, into the market with a EETC. Having some additional liquidity is very helpful, and we'll manage it that way going forward.
Have you thought about what a new minimum is going forward or a target?
The minimum is different from the target because the target will change over time. In any case, the minimum will be substantially higher by a multiple to what the old minimum was, pre-COVID.
Just to be clear, Mark is training for his next marathon, which is why we've made him the microphone runner. Oh, it's the United Half Marathon.
That's good. Gotta get your steps in.
During Delta's presentation, Scott, they leaned heavily into the topic of culture and had said that, you know, it's really the people that set airlines apart. I, I guess, you know, for folks here that just, you know, live in spreadsheets, I mean directionally, that sounds right. I really think about airlining as a lot more to do with real estate than people, but maybe that's just me. You have said on several occasions you think there's room for a second premium airline here in the U.S. Do you have the culture to achieve that?
Yeah. Well, I think one of the reasons That was very nice. Thank you, Jamie Dimon, and Jamie Baker for repeating it. What he said, he said it to me privately several times. He's heard me say at events, and I think he agrees, that as the CEO, you really only have one job, which is the culture of the airline. I know that's not what people, you know, people that worry about what this quarter is gonna be, think about a lot of times, it is true. The culture is everything. I describe the culture that I want to have at United as our employees are proud of the airline because if they're proud, they take care of everything else.
This is the difference in customer service. We say we're about connecting people and uniting the world. It's people. you get on a United airplane now, and I hear it all the time from customers, all the time, both flying my airline and flying on other airlines, as a contrast. you have two flight attendants that are excited, smiling, happy to be there that love the company, you know, feel good about the company. you have a captain that often comes out of the cockpit and gets on the PA and talks to people. Like, those may seem like little things, but they make the experience so much different. that has been the key to our success. you know, we're coming out of COVID, you know, I think leading in the industry.
Certainly our relative positioning has improved the most, and that's why, because we built the culture. I mean, I, you know, when I did my write-up for the board last year, like the truth is, the decisions, certainly as a CEO, the kind of things we were doing are not about this quarter, they're about next year and the next three or four years beyond that. It's all, it is all about the culture. Because if you get the culture right. Look, you're gonna have some ups and downs along the way, stuff that'll happen. If you get the culture right, everything else is going to take care of itself. I 100% think that that is the job of the CEO at every company.
The more consumer-facing you are, which we are obviously, the more important that is in the service industry.
Scott, you never shy away from questions, so I'm gonna throw this out. We'll see if you answer. Is the NEA fair, and should Spirit and JetBlue happen?
geez. I probably shouldn't, but I will. you guys at JP Morgan know that I'm willing to take debate, so you throw it out there.
There's only two minutes left.
I will say Ponzi scheme.
You only have two minutes.
I just did. Look, I'm not the lawyer. We don't have a dog in the hunt on either one of those. I like our competitive position. We're winning market share. I like our competitive position either way 'cause doing deals is hard and complicated. That helps us. Not doing deals, you know... Look, what I would say, like, to say that an airline can't combine to be the fifth largest in a world where scale matters, like, if I was Robin, I'd be spitting angry. That just doesn't seem fair. I don't really care if they get the deal done or not, it does not seem fair or right to me. Just one guy's opinion, though. I'm not a lawyer.
You left us one minute. Any last questions, anyone?
I'll throw one out if there's not. Just a follow-up to the, you know, the 9% $10-$12, you know, target. I'm looking at Kristina and Kristina and Gerry in particular, have the luxury of seeing my competitor models. The street has not embraced the $10-$12 9% pre-tax margin guide. What's the largest delta, for lack of a better term between your model and the sell side collectively? What don't people really believe? I don't think there's there might be one or two estimates up there. You know, as a follow-up to the earlier question, it's not been embraced by the market, at least not on the sell side.
I think the disagreement's over revenue, simple as that.
Okay.
Yeah.
All right. I said it would be an easy one.
Okay. With that, on-time landing here. Thanks very much.
Thanks for having us.