Chapter 1: What is the main topic discussed in this episode?
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Bloomberg Audio Studios. Podcasts. Radio. News. Yesterday, after the bell, United Airlines reported earnings. This follows Delta reporting earnings. United beat expectations across the board. Joining us now to discuss is the Chief Executive Officer, Scott Kirby, right before that earnings call with investors. Scott, thank you so much for being with us.
I want to start on the transformation in the airline industry. Just this incredible focus on revenues coming from premium and loyalty. Really, they doubled relative to the pace that you're seeing in the main cabin. Can you give us some more color about why that is?
Well, you know, we've spent a decade at United trying to build what we call a brand loyal airline to get customers, but really all customers, to choose to fly United, to get out of the commodity cycle of the business. And 2025 is a great year for that. Despite all the headwinds, United Airlines was the only airline to grow EPS last year. We've started with a really strong booking environment.
in 2025 it really is the culmination of this brand loyal strategy and yes that's over indexes to the premium those are the customers that fly the most and have the most loyalty and that part of the business has done the best but you know we've seen pretty significant strength in the in the back of the airplane as well we had seven percent growth in basic economy last year and we've been investing there you know i think one of the cool things we recently announced is we're the only airline in the country that has ovens in coach
And so we're going to be serving hot meals in coach for customers that pre-order, give the customers the ability to pre-order hot meals. And that applies obviously to the entire cabin and is not just focused on premium. Premium has over-indexed, but really we're seeing strength across the board.
That strength across the board, and this is what I was trying to get into, and I'd love your color on this. How much are the main cabin customers increasingly cost conscious, even as the more premium and loyalty customers seem willing to pay for quality, for the perks that come along with some of your new offerings?
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Chapter 2: What insights does Scott Kirby share about United Airlines' earnings report?
Well, I wasn't talking about them, but JetBlue is a great partner for us. We love their focus on customers. Really, it's more cultural than anything. It's the reason we wanted to partner with JetBlue, because we both believe in doing the right thing for customers, that the industry is not a commodity. And the partnership is great so far.
If there are opportunities to expand in the future, we'd certainly look at that. JetBlue is trying to turn the corner. Much of the industry's had challenges, but they have the right strategy, the right vision, and we have a lot of hope for them in the future, and we appreciate the partnership with them.
The first two weeks of January have been tremendous. They broke records when it comes to revenues and ticketing, both in consumers and also business travel. What does that say for the setup for the remainder of 2026? Do you expect this to be an incredibly active year?
You know, we have come in pretty hot to start the year. I think that's indicative of an underlying economy that has more underlying strength, I think, than most appreciate. We saw that all through last year, see it continuing into this year.
Chapter 3: How is United Airlines transforming its business model?
And people getting back to travel, I'm sure that applies in other industries as well. We're not sure if it'll last for the whole year. I think our base case probably is that it will. We haven't built that into our guidance. We've been more conservative in our guidance. But if it continues like this, it's going to be a really good year for United Airlines.
Where specifically is it good? Is it on domestic? Is it international? We saw international really strong, although inbound traffic to the United States fell off from a couple of different countries. We saw that with Canada. We saw that with China. I mean, where do you see the growth really coming from?
You know, the rising tide is lifting all of those boats. So everything is better across the board, but the best remains international, remains premium, remains business travel.
Chapter 4: What strategies is United Airlines implementing to enhance customer loyalty?
And, you know, speaking to international, about 80% of the customers on United Airlines international flights are U.S. citizens. And we really never saw much slowdown there, even though we did see some, you know, some slow down from some parts of geography. Those mostly bottomed out and have started to recover.
But really, we see the most strength in international and premium, but everything is getting better across the board, at least in the first few weeks of January as we come into the new year.
We're here in Davos, and there's a lot of discussion about geopolitical tensions. There's a lot of discussion about the dispute over Greenland and tariffs and treaties. And it feels as though some people are saying that the world order is changing. We heard that from Mark Carney of Canada. I just wonder how you plan for the year ahead with some of these geopolitical tensions.
Do you feel it when you are transporting people between places and seeing some of the barriers maybe get a little bit higher?
So we've spent a decade with a strategy to build a brand loyal airline that would have resilience in the face of all the kind of issues that affect aviation that happen all the time. And last year had more than its fair share of surprises that impacted demand and it impacted travel and yet,
You know, we have a no excuses culture here at United, and we just overcame obstacles and were the only airline in the country that grew EPS last year. And it's really that brand loyal strategy gives us a resilience in the face of what there are going to always be geopolitical issues. We're the largest global airline from the U.S. We're exposed to all levels or all around the globe.
And so we deal with stuff all the time. And, you know, while it has short term impact, staying focused on the long term and that brand strategy has been really successful for us. I think it will be this year. You know, we enter this year with a strong booking environment, feeling like a pretty good economy, really more U.S. focused on our customer base.
And, you know, as we've said in this interview, like our bookings are just we're setting one record after another as we come into the year. So we feel pretty good that our guidance is solid. And as long as things stay like they are, we're going to wind up being conservative as we get through the full year.
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