United Airlines Holdings, Inc.: Vicious Circle Turns Virtuous

Research evidence excerpt

United Airlines Holdings, Inc.: Vicious Circle Turns Virtuous

IdeaM(Starlink Wi-Fi, seatback IFE, larger overhead bins, refreshed interiors),

expanding premium capacity and customer choice.

4. On capacity restriction, mgmt. noted that although the FAA extended the

flight cap at ORD for another year, their current plan remains to fly 650

flights per day. Mgmt doesn't expect the flight cap extension to hurt

profitability, as they plan to adapt and "facilitate growth" through "creative

measures". The FAA has also made changes to the approach into San

Francisco which lowered rates, but mgmt. ultimately expects land rates to

improve but are unsure if they will fully recover. Additionally, mgmt. noted

that 80+ aircraft will be retired in 2027, a step up from prior years,

which largely aligns with UAL's strategy of adjusting capacity "when

necessary" to maximize long-term profits and cash flow. On competitive

landscape developments, mgmt. noted that brand loyalty has been

especially beneficial for market resilience and in gaining market share, most

notably at ORD, with UAL having a 16pt premium in market share relative to

their biggest competitor.

5. Mgmt. expects international growth rates to exceed domestic growth in

future years, supported by the domestic market being "far more mature"

than international markets and appetite of consumers to travel overseas.

International flying remained strong in 2Q, with international TRASM up

+12%, and mgmt. expects Latin America to be a standout segment y/y in 3Q

on easier comps and strong profit growth. Overall, mgmt. remains focused

on capitalizing on international demand, supported by differentiated

offerings like its “Relax Row” and Starlink technology, aimed at enhancing

the long-haul customer experience.

6.