UAL
#We take delivery of the first planes at the end of 2016.
With respect to the 74s there are a couple in our fleet that we will take out, but we'll make a decision about whether the 777 or for that matter the A350S replace the 74s a little bit later.
We are going to hit a period at the late sort of 2019 time period where a lot of those 74s that we have in our fleet come due for a more expensive maintenance visit and that might be a good opportunity to sit them down at that point in time.
There might be a couple that come out in the earlier years, yes.
This is <UNK>.
On the slots in Newark we are in discussions with the, they have trust authorities that relate to that.
They have the opportunity to review that and we're in discussions with them but we are highly confident we will consummate that transaction.
There are two things I would point out there, <UNK>.
One is profit sharing and because of our higher pretax margin in the second quarter we trigger a higher profit sharing ratio and so that is probably higher than what you may have modeled.
The other thing we continue to see pressure both with respect to pensions as well as medical and dental.
We saw a lot of pressure last year and we are seeing a lot of cost increase in those areas this year as well.
There's a lot of reasons that go into that, and certainly the tenure of your workforce is one of them.
If we were to look at our contributions to date without making adjustments for any actuarial assumptions or anything like that which need to be done, we are actually at about $1 billion of an unfunded liability.
Now that is obviously subject to change when we measure that at year end, but it puts us in a very good position over the next several years as we think about that like any debt obligation.
We've said before we want to get to a point where if we were to get in an interest rate environment where rates are higher than they are today we can get close to fully funded and we are effectively in that position right now.
You're welcome.
Let me first take the return on invested capital piece.
As you can appreciate we have bunchable assets and it is pretty difficult to take a 777 that may fly domestically and also fly internationally and allocate that capital base between the two.
So we don't look at return on an invested capital on an International versus domestic basis.
If you were to look at just no path, the numerator certainly we have seen a better balance today than what we've seen historically where a lot of the profitability from airlines at least from the airlines that I have been associated with came from the International portion.
The domestic enviroment is a very good one right now and happens to be a very profitable one as well.
I would say <UNK>, we're probably a little bit more than halfway through it if you include all the various initiatives we've outlined.
Certainly we have had a little quicker pace with respect to our cost achievement, but we recognize that we still have a lot of work to do here and we're pleased with the progress.
A lot is made of core earnings improvement versus last year, and it is certainly very difficult to strip out oil without acknowledging there is some effect on revenue as well.
So we tend to focus on the things that we can measure.
The fact that we've improved productivity for eight quarters.
The fact that we've canceled 24,000 fewer flights for the first part of this year.
That we have one of the highest completion factors of the major carriers coming out of Newark.
The fact that our cost performance continues to improve quarter after quarter.
And all those are good indications of the progress that we were making.
And we feel like we have a good plan that we're executing on and we will continue to demonstrate that performance.
I would describe it less as a cost tailwind and more of a cash flow tailwind.
So year-to-date we've funded $800 million.
Going forward, this would probably be a rounding error in your model.
You could see us fund somewhere between $50 million to $150 million a year.
But there's not a need to have a big catch-up contribution like what we have this year.
Again, everything else being equal, given what we know today.
I would say one of our main focuses that we've had for a number of years right now is to preserve fleet flexibility to be able to respond to any type of economic environment.
And if you look at the composition of our fleet today of roughly 700, 710 mainline planes, 22% of that fleet is free and clear of debt unencumbered.
We could sit down in any type of economic environment and we want to continue to preserve that going forward.
In fact, as you see us finance less of new aircraft and in some cases buy aircraft entirely for cash, that preserves that flexibility, because what we don't want is to be in an environment where we want to adjust capacity but we're still have to cover the cash cost of those planes.
We have in our cost guidance this year, we've provided for 2015, there is an assumption about getting agreements with the last two remaining groups out of the 30 collectively bargain agreements completed, and I think importantly for us, but that goes both ways.
So there's also a cost benefit to the company of getting those collective bargaining agreements, but more importantly, we want to get everybody under a joint contract and moving forward.
There's a big sort of cultural morale piece to that as well that we're very focused on.
So hopefully, we'll complete those agreements in the near future.
We've said consistently that we need to run this business where we can keep our unit cost growth at something less than inflation, and that includes all of the cost inputs including labor.
We certainly want to pay our employees competitive wages that are market-based and that goes into that assumption, but to the extent that we've got inflation pressure in certain areas, like that perhaps, we're going to offset it in other ways by becoming more efficient and more productive.
This is <UNK>, <UNK>.
The one thing I would add to what <UNK> said is, as you know, China is not open skies.
But there will come a day when China is open skies and when that day comes, we would be keenly interested in exploring a joint venture similar to the type of joint venture that we enjoy with ANA today across the Pacific and that we enjoy with Lufthansa and other of our partners, Air Canada and others, across the Atlantic.
First of all, I disagree with the way you characterize that slightly because to say that - to just look at the impact of fuel and not understand that fuel also impacts the revenue environment I think only looks at one side of the equation there.
A lot of the headwinds that <UNK> talked about earlier are certainly very related to fuel.
Even if we take the foreign exchange headwind that we've seen, that's due to a stronger dollar.
A stronger dollar has in part influenced the price of fuel.
So we're seeing a lot of pressure year over year.
As we move long term though and we look at an environment that potentially could have lower fuel inputs than what we've seen, we're going to update United Airlines.
We're going to focus on what we can control and that's balancing the right amount of capacity for the demand in our markets.
Sure, <UNK>rey.
This is <UNK>.
I'm glad we enjoy the same first name.
First of all we had an item that was disruptive that lasted about two hours that was a network connectivity issue.
We recognize the inconvenience to our customers and the inconvenience to our employees.
Our employees responded very well.
Our IT people responded very well, got the system back up.
In fact a lot of the tools that <UNK> talked about that we've invested in also the many of which are technology tools, decision-making tools actually permitted us to have a really good operations start-up the next day despite that disruption.
I will tell you that the technology is our single largest area of non-aircraft CapEx.
A lot of that goes to the operation itself, providing better tools and better decision-making tools as well.
We're investing in hardware.
We're investing in software.
We're investing in the people and the processes to recover from irregular operations, because those are always going to occur because of weather or, for example, some kind of a maintenance issue with an airplane.
We're focused very heavily on investing in the reliability of our systems and I can assure our customers that that investment will continue and that we're very focused on not only improving the stability, but actually offering additional technology to our customers to permit them to have better information, better choices better control of their travel, and for our employees that will permit them to do their jobs better.
For example we're issuing 2,200 iPhone 6 Pluses to our flight attendants and over time as we add to those iPhones, our flight attendants will have vastly better information than they've had before and better interaction with their customers and can be better opportunity to serve our customers.
So we're keenly focused.
No one likes to have a technology outage.
It can happen at any company.
It happened to happen to us on a day that, of course, there was a lot of media excitement around the New York Stock Exchange.
But I can tell you we are keenly focused on improving our technology, improving the stability of our technology, and more importantly, as you obviously have to have stability.
Stability, to me, is like safety in an airline.
You have to have this job, one, but improving the quality of our technology for our customers and the quality of our technology for our employees.
And both those things are really important.
And we are keenly focused on it, and we are spending a significant amount of both time and money and bandwidth to get that accomplished.
Well, no.
Not necessarily.
We know areas, for example, where we can beef up systems or beef up backups.
And so we know where to look.
We also obviously do invest in significant amount, a significant amount of time and attention to the network itself and all the connectivity of the network, and of course, as all companies do today.
We have very sophisticated investments in cyber security as well.
So I think we know exactly where we're going and what we need to invest in.
You bet.
Okay.
With that, we're out of time.
So we'll conclude.
Thanks to all of you on the call for joining us today.
Please call media relations if you have any further questions.
We look forward to talking to you next quarter.
Goodbye.
