Q3 Results and Investing in our Future

We announced another strong quarter today which is the result of your great work over the past four years and a strategy to bet on the post-COVID recovery that was different than any other airline in the world. Our long track record of success leads to another announcement, and I wanted to take the time to explain it to you.

I’ll start the way I usually do, with a little history. You’ve heard me talk a lot about how United went into the pandemic with a very different perspective and a more aggressive plan than any other airline (and most other businesses).

But a happy ending wasn’t always guaranteed and one day in particular really stands out in my mind as one of the most difficult in my, and many of your, careers: October 1, 2020.

That’s the day that our first round of CARES Act funding expired and because the pandemic was still raging, it also meant that if we wanted to stay in business and preserve your careers for the long-term, we would have to resort to short-term furloughs.

It was a stressful time for many of you and I don’t discount the impact that it had on you and your families.

That was also the day that I made a commitment to myself (which I’ve since repeated to you) that post-COVID, we would do everything possible to position the airline to never again have system-wide furloughs in the future. And to do that, we would have to pay down our debt, keep almost three times as much cash in the bank as we did pre-COVID, and surge to the top of the industry from a profit margin perspective.

No easy task. But in 2020, together we carved out a plan to do it.

In the summer of 2020, even during the worst months of the crisis, we were one of the only airlines around the world to expect a full recovery from COVID. So while we were weathering the worst of the pandemic, our teams were also planning for the future. This came at a time when all of our competitors were planning to run smaller operations for years to come.

Specifically, our teams got to work thinking about and planning critical investments in our future. Most importantly, we negotiated and signed multiple, industry-leading labor contracts that included more than $3 billion in well-deserved pay raises for our frontline employees. We also made a big investment in our fleet, announcing some of the largest aircraft orders in commercial aviation history. We invested in technology and infrastructure that our employees need, and our customers love: like new gates, baggage systems, concourses and clubs; new simulator bays for pilots; the world’s largest inflight training center and even our own pilot academy.

In fact, you can see a more detailed breakdown of our more than $32 billion in employee, customer, infrastructure and technology investments since 2021 below. And while we were making all those investments in our people and our business, we were also paying back all our high-cost debt.

As a result of our aggressive, five-year plan, we’re now the world’s largest airline, we’re a leader in the global aviation industry and among Fortune 500 companies, we’re at the top of the industry from a profit margins perspective, and we have a better balance sheet than we did pre-COVID.

But all our success leads us to a consideration called capital allocation in the markets. That’s a fancy way of asking what should we do with our profits?

At United, our #1 priority is to invest in the business (people, aircraft and infrastructure). Our second priority is to pay down high-cost debt and strengthen the balance sheet. And only after we’ve done those two things, our third priority is shareholder returns.

Shareholder returns are something that most leading, large, successful companies do. In fact, 485 out of 500 companies in the S&P 500 have announced some form of shareholder return. Other leading U.S. airlines including Delta, Alaska, and Southwest have either completed or announced shareholder return programs while the other airlines do not.

Which leads us to our announcement today.

Like other leading airlines and companies, we are initiating a measured, strategic share repurchase program. You can read about all the details of that offering in our Q3 news release.

Importantly, my commitment to you is that investing in our people and our business will always be my top priority even while we institute this share repurchase program.

I am personally committed to setting United up for the long haul - not only building the biggest and the best airline in the history of aviation but also a brand that’s growing, that’s creating more and more opportunity for each of you, that does everything possible to never again have a system wide furloughs, and a place where you can always count on a secure long-term career.

After all, you and your teams are at the center of what makes United a success.

Thank you for all you do for one another and to make United the biggest and best airline in the history of aviation.