United Airlines (UAL) Q3 2026 Earnings Call: Q&A Summary

Q: Mike Linenberg with Deutsche Bank asked why the company upsized its revolving credit facility despite already having high liquidity.

A: Mike Leskinen, CFO, explained that the move creates optionality and serves as low-cost insurance against industry shocks, though they plan to reduce liquidity to $18 billion by year-end to save over $70 million in interest and fees. Scott Kirby, CEO, added that the decision was not related to potential M&A activity.

Q: Tom Fitzgerald with TD Cowen asked if loyalty revenue could accelerate into the low teens next year given the momentum in new co-brand accounts and Starlink.

A: Andrew Nocella, CCO, confirmed they expect loyalty revenue to grow in the mid-teens, driven by the 1 million new accounts generated this year and the maturation of those accounts as they upgrade to higher-tier cards.

Q: Tom Fitzgerald with TD Cowen asked about early learnings from the tiered fare category and potential tailwinds for next year.

A: Andrew Nocella, CCO, stated they are pleased with the launch, noting high buy-up rates and that the strategy provides more options for customers while benefiting the airline.

Q: Sheila Kahyaoglu with Jefferies asked about 2027 fleet delivery plans and retirements given the current fuel and capacity environment.

A: Scott Kirby, CEO, noted they expect to take about two wide-body aircraft per month and over 100 narrow-body aircraft in 2027, allowing them to modernize the fleet and upgauge for better economics.

Q: Conor Cunningham with Melius Research questioned if supply tweaks are sufficient to reach double-digit margins given the current high fuel and capacity environment.

A: Scott Kirby, CEO, argued that while Starlink is a significant tailwind, reaching double-digit margins in 2027 likely requires lower fuel, lower industry capacity, or a continued industry willingness to trade load factor for yield. He added that he expects structural changes to occur as airlines face the reality of high fuel costs.

Q: Conor Cunningham with Melius Research asked for color on 2027 cost expectations.

A: Mike Leskinen, CFO, stated they are targeting 2% to 3% CASM ex growth in 2027, noting that while they face inflationary pressures like airport costs and distribution fees, they are focused on managing margins rather than just CASM ex.

Q: Andrew Didora with Bank of America asked about the outlook for industry capacity in 2027 and how United's growth fits into that.

A: Andrew Nocella, CCO, noted that United remains nimble and will make the right capacity decisions for 2027, while Scott Kirby, CEO, reiterated that he expects industry capacity plans to change as airlines face financial pressure.

Q: Andrew Didora with Bank of America asked if the company has new thoughts on providing more disclosure regarding the loyalty business following recent industry transactions.

A: Mike Leskinen, CFO, said they are in a holding pattern until they finalize the new contract with their partner, at which point they will reevaluate disclosure.

Q: Jamie Baker with JPMorgan asked why United should not be a potential solution for JetBlue given its recent market performance.

A: Scott Kirby, CEO, declined to comment on specific M&A, stating he had nothing new to add and that the company is focused on its standalone strategy and the competitive advantage provided by Starlink.

Q: Jamie Baker with JPMorgan asked about the evolution of Chicago hub margins and the impact of the April capacity caps.

A: Andrew Nocella, CCO, stated that Chicago is currently a minor headwind but will become a tailwind after April due to FAA capacity constraints, noting that United's RASM premium in Chicago is about 14 points.

Q: Ravi Shanker with Morgan Stanley asked about the implications of deseasonalization efforts on the Q4 to Q1 transition.

A: Andrew Nocella, CCO, explained that their goal is for RASM performance to be similar across quarters, excluding Q3, which has less business traffic, and that this deseasonalization creates cost efficiencies.

Q: Brandon Oglenski with Barclays asked if United is considering trading load factor for yield in 2027.

A: Andrew Nocella, CCO, confirmed they are taking actions to recover 100% of fuel costs, which may result in slightly lower load factors, but emphasized they manage to maximize RASM and margins rather than a fixed load factor target.

Q: Brandon Oglenski with Barclays asked about the sustainability of the current competitive environment given high domestic capacity growth.

A: Andrew Nocella, CCO, stated that United is winning share in all its hubs and that Starlink provides a unique advantage, while noting that FAA conditions in Chicago will change the competitive landscape there in 2027.

Q: John Godyn with Citigroup asked for a reaction to other airlines attempting to replicate United's turnaround with limited changes.

A: Scott Kirby, CEO, dismissed these attempts as hope is our strategy, explaining that United's success is built on a comprehensive package of product, technology, reliability, and service that is difficult for competitors to replicate.

Q: John Godyn with Citigroup asked about the importance of international networks in the current competitive environment.

A: Scott Kirby, CEO, noted that while international networks are important for frequent flyer programs, the real differentiators are service, product, technology, and reliability, adding that United has a natural advantage with its coastal hubs.

Q: Scott Group with Wolfe Research asked if pricing can continue to rise even if fuel costs decrease.

A: Scott Kirby, CEO, suggested that pricing is likely to hold because industry costs have harmonized at a higher level, and airlines must achieve profitability to survive, making it unlikely they will take steps backward in pricing.

Q: Scott Group with Wolfe Research asked what fuel price is needed to achieve 100% recapture in 2027.

A: Mike Leskinen, CFO, stated they use the forward curve for Brent, which implies fuel prices over $4 for the full year 2027, drifting down to $3.70 by Q4.

Q: Duane Pfennigwerth with Evercore ISI asked where the company is seeing the most sequential yield improvement into Q4.

A: Andrew Nocella, CCO, noted that while leisure yields are higher, momentum is stronger in international markets, specifically Latin America, the Atlantic, and the Pacific.

Q: Duane Pfennigwerth with Evercore ISI asked what is driving the continued strength in cargo revenue.

A: Andrew Nocella, CCO, attributed the strength to high yields in the bellies, particularly in Asia, and noted that cargo remains an important part of United's business.

Q: Catherine O'Brien with Goldman Sachs asked about corporate volume recovery and its impact on premium cabin pricing.

A: Andrew Nocella, CCO, noted that corporate volume is still 4 to 5 load factor points behind 2019 levels and that Q4 trends look identical to Q3, representing a meaningful tailwind for premium business.

Q: Catherine O'Brien with Goldman Sachs asked if overall industry capacity growth figures into United's plans.

A: Andrew Nocella, CCO, reiterated that industry capacity plans for 2027 are likely not firm and that United has a strong track record of making the right capacity decisions.

Q: Leslie Josephs with CNBC asked if management worries about customers being priced out of air travel.

A: Andrew Nocella, CCO, responded that they must charge prices that recover the total cost of flying, but they are aiming to elevate the experience for all passengers, with Starlink being a key driver of future customer choice.

Q: Leslie Josephs with CNBC asked for Scott Kirby's thoughts on Ed Bastian and the competition with Delta.

A: Scott Kirby, CEO, expressed respect for Ed Bastian and Delta, noting that he took inspiration from them but believes United has now passed them as the industry innovator.

Q: John Pletz with Cranes Chicago Business asked why capacity at O'Hare will be lower for longer.

A: Andrew Nocella, CCO, explained that the airport is a construction zone that will continue through the early 2030s, and the taxiway and airfield issues will take years to resolve, necessitating the current capacity restrictions.