Thank you, Krista. Good morning, everyone, and welcome to United's Second Quarter 2025 Earnings Conference Call. Yesterday, we issued our earnings release, which is available on our website at ir.united.com. Information in yesterday's release and the remarks made during this conference call may contain forward-looking statements, which represent the company's current expectations, which are based upon information currently available to the company. A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release, Form 10-K and 10-Q and other reports filed with the SEC by United Airlines Holdings and United Airlines for a more thorough description of these factors. Unless otherwise noted, we will be discussing our financial metrics on a non-GAAP basis on this call. Please refer to the related definitions and reconciliations in our press release. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables at the end of our earnings release. Joining us on the call today to discuss our results and outlook are Chief Executive Officer, Scott Kirby; Executive Vice President and Chief Operations Officer, Toby Enqvist; Executive Vice President and Chief Commercial Officer, Andrew Nocella; and Executive Vice President and Chief Financial Officer, Mike Leskinen. In addition, we have other members of the executive team on the line available for Q&A. And now I'd like to kick the call over to Scott.

Thanks, Kristina, and good morning, everyone. The second quarter was yet another proof point that the United Next strategy continues to work and that the two brand-loyal, revenue-diverse airlines continue to generate the bulk of industry profit. I'm extremely proud of the team for executing a strong operation and navigating through a volatile macro period and the unique short-term issues that impacted United and Newark while still managing to grow earnings and margins for the first half of the year. Newark faced unique challenges this quarter. But with the help in partnership with the FAA and DOT, it has rebounded stronger and has been the best performing airport in the New York City area. But I know that everyone, including us, cares more about the future than the past. So I'm going to start today with the two macro drivers of our industry: supply and demand. From a supply perspective, it's deja vu all over again. This is almost the exact same setup that we had a year ago at this time with weak RASM results across the industry, leading to supply cuts starting in mid-August, leading to better margin results, which then led to strong stock price performance. But demand also matters in this equation and demand, while it's stabilized, was about 5 points weaker in the first half of the year than we were expecting at the start of the year. As we look closely at the data, we've had a hypothesis that seems increasingly correct. Demand was weak for the last five months due to high levels of uncertainty for both businesses and consumers. I'm sure that's not a shocking thesis, but in the past few weeks, the level of uncertainty has declined. The tax situation is settled after the reconciliation bill passed. The geopolitical situation in the Middle East appears to have stabilized. And while tariffs are not yet certain, I think the market and most businesses have a much better read on how they'll manage in a narrower range of outcomes. And encouragingly, that higher level of certainty has translated into a meaningful inflection point in demand. It's only three weeks' worth of data. Andrew will give you more detail. But as uncertainty has declined, we've seen an improvement in booked revenue, including a double-digit acceleration in business demand. So to summarize the macro, supply is adjusting once again just like it did last year, and demand feels to us like it has inflected upward and is returning toward the normal trend line we expected at the start of the year. And bigger picture for United, the industry and United's industry-specific transformation we've been discussing over the last few years continues to play out. One, revenue diversity, and that includes basic economy just as well as premium, is the only formula that works in the U.S. to have industry-leading margins. Two, the two brand-loyal airlines continue to just gradually win share quarter-over-quarter and the advantages that we have are structural, permanent, irreversible and they're growing and it's simply not practical to copy them. Three, cost convergence, specifically at the high-cost airports is making the economics of flying at those airports for low-cost carriers very challenging. For what it's worth, the only remaining successful LCC around the globe in my view, is Ryanair. And guess what? That's because they're the only LCC that stayed true to their founding principles and don't fly to high-cost airports like London Heathrow or Charles de Gaulle. Four, and all of that is gradually leading airlines to focus on their comparative advantages. It's often two steps forward and one step back, but the trend continues to be towards each airline flying more and more in places where they have relative strength and shrinking in places where they're at a disadvantage. That, of course, is just basic economics, but it's happening. And because it's just basic economics, that trend is going to continue for years to come. So to conclude, I'm proud of the team for overcoming the macro and Newark environment in the first half of the year. We had high confidence that the supply changes were coming, but it's good to actually see them. But I'm also encouraged that the demand environment appears to have inflected back towards the trend line we were expecting to start the year. Typically, I would now leave it to Brett to speak next, but he's not able to join us for the call today. He recently had a preplanned surgery and is on the road to recovery. We're looking forward to having him back soon. So for today's call, I'll hand it off to Chief Operations Officer, Toby Enqvist.

Thank you, Scott. I'm really proud of our United team and our operational performance in the second quarter. Before I detail our top-tier system-wide results, I'm going to start with the hub that got the most attention this quarter, Newark. Located in the largest media market in America and the most crowded airspace in the world, Newark will always get outside attention. Even this past week when all the New York City airports were hit with severe weather, it disrupted a lot of travel plans and got a lot of airtime. Thunderstorms are going to happen, especially in the summer. That's why cementing the progress we have made over the last couple of months to improve the resilience of our Newark operation is a huge priority for United. At the start of the second quarter, our Newark team was thrust into the middle of a perfect storm. A string of FAA technology outages, combined with Newark's ongoing runway construction and the FAA staffing shortage drove cancellations and delays impacting customers' perception of the reliability of the airport. Those perceptions and the extensive negative news coverage of the situation at Newark Airport drove meaningful book away and load factors dropped 15 points following the event. As a result of the book away and capacity reduction, Q2 margins were impacted by approximately 1.2 points. We expect that the impact will linger into Q3 with an approximately 1 point margin impact. But here's the key takeaway, and it's really good news. We have already seen a dramatic turnaround in Newark. Bookings have largely recovered, and we don't expect any impact in Q4 because Newark isn't just back to normal, it's running better than ever. In fact, United's operation at Newark had the fewest cancellations and most on-time flights of any airport in the New York area in the month of June. The airport now is actually operating within its capability, and our team is back to running an operation that delivers a great experience for our customers. These are the changes that made it possible. Thanks to the great work of the Port Authority, Newark runway construction was completed two weeks early and the runway reopened on June 2. The FAA was able to upgrade their fiber optic technology. And perhaps the most importantly, the FAA implemented badly needed hourly flight caps to prevent the airport schedule from exceeding its capacity. Newark has had a schedule and capacity problem that we have been urging the FAA to fix for more than a decade. And thanks to the leadership shown by Secretary Duffy, we now have the line of sight to a longer-term solution to this problem. It's likely we'll look back and find that this long-term capacity fix is the most important and positive outcome for the traveling public. What happened in Newark in April and May is also evidence of the broader need to improve our nation's ATC infrastructure. United was deeply engaged with Secretary Duffy and the FAA, who successfully advocated for the $12.5 billion in funding that Congress just passed earlier this month to begin the long overdue process of rebuilding our outdated ATC infrastructure. Much of this funding will go towards upgrading copper wire to modern fiber optic cables to help reduce the hundreds of outages that FAA experienced across the ATC system. We look forward to working with Secretary Duffy and leaders in Congress for the additional funding needed to fully update our ATC technology. I actually ran Newark Airport for United from 2011 to 2014. So I know the airport really well, and I'm more optimistic about United's future there than I've ever been because Newark has never been better positioned to operate reliably and profitability than there is right now. From the FAA to Secretary Duffy, to Governor Murphy to the New Jersey Congressional delegation to the Port Authority of New York, New Jersey, lots of people deserve credit for this turnaround. But our team on the ground at Newark to serve the most. They are professional, resilient, focused and committed. Despite challenges that were out of their control, they showed up day after day and delivered for our customers and one another. All across the system, United operation continues to fire on all cylinders and continues to be a big reason why our airline is thriving. We ranked number two in an on-time departure among the top eight U.S. carriers even though we operate in the toughest markets in the world, all while managing record high customer volumes, including the busiest travel day in United's history with over 611,000 passengers on June 22. We also had one of the lowest second quarter seat cancellation rates in our history. This operational strength played a key role in supporting our strong NPS performance in the quarter, our highest Q2 NPS since the pandemic. Thank you to the entire United team for delivering a fantastic second quarter result. I will now hand it over to Andrew to talk about the revenue environment.

Thanks, Toby. United's top line revenue increased 1.7% to a record $15.2 billion in the quarter. Consolidated TRASM for the quarter was down 4% on a 5.9% increase in capacity. Adjusted for events at Newark, we believe United TRASM would have been down 2% to 3% and our EPS would have been at the high end of our guide. This outcome for Q2 comes during the highest level of geopolitical and macroeconomic uncertainty we have seen in years. International flying outperformed domestic yet again with a RASM decrease of 1% compared to a domestic decrease of 7%. United Pacific operations continued their impressive results with positive RASM growth in Q2 across most destinations. We look forward to new service to Thailand, Vietnam and the Philippines starting later this year, subject to government approval. The Atlantic, which had an incredible run of 23% RASM growth since the pandemic, did have negative RASMs year-over-year. Unlike in off-peak quarters, pushing Atlantic RASMs higher in peak periods has proved more difficult in part due to the spread of leisure demand to usually lower demand periods. Margins in these historically off-peak periods are up, while margins in peak months, which are still high, are down. Premium cabin revenues were again strong in Q2, increasing 5.6% year-over-year, while the economy cabin was negative. Overall, premium RASMs were 6 points better than non-premium. It's nice to see once again that the premium capacity remains resilient. Given the consistency of these results, we plan to further lean into premium products and capacity in the coming years. Cargo performance was strong with revenue up 4% year-over-year on record volumes and loyalty revenues had another strong quarter with revenues up 9%. Now turning to our outlook for Q3 and the rest of the year. Newark's negative impact on bookings in Q2 for future travel are expected to have a temporary impact on revenue results in Q3 of about 1 point. The good news is Newark's share of New York City sales has now largely recovered in July, along with the reliability of our flight operations. Passengers can now book with confidence. Newark sales returning to normal for United are critical to our revenue performance. However, in addition to normal Newark sales volumes, we are seeing a step down in published industry capacity later this summer that we believe will be a positive for United. Published industry domestic capacity for August and September indicates slightly less capacity year-over-year when just a few months ago, it was published at up almost 4%. Low-margin airlines without strong brand loyalty and diversified revenue streams are cutting unprofitable flying. We believe this is always an inevitable outcome, an outcome that we expect will be uniquely beneficial to brand-loyal airlines with much higher margins and well-defined diversified networks and products. The great reset we see from the low-margin airlines today makes sense for them, but in no way do we expect them to match what we offer consumers today plus what we have planned in the future. We have a large lead, and we intend to maintain that with further innovation. Combining normalized Newark sales, along with less overall industry capacity sets up an improved revenue backdrop. However, the most important development for revenues is that the overall demand environment. Recent United and industry sales data confirms a demand environment that has inflected positively in recent weeks due to this less macroeconomic uncertainty. Just as quickly as demand stepped down in early February due to this uncertainty, it appears that demand is now stepping up. This step-up is a 6-point positive swing in sales to date in July versus the second quarter, but even more importantly, a double-digit swing in higher-yielding business revenues in the same period. Domestic ticket sales are now also showing positive year-over-year yields, reflecting this improved demand environment for the first time since February. For us, we believe these four factors of Newark performance, industry capacity, demand improvements and positive domestic yields make the setup for post-summer 2025 very similar to the period in 2024. As you will recall, the second half of 2024 setup created a very good outcome for Q4 and a nice run-up in our stock price. This significant positive momentum in sales in recent weeks is nice to see, but it is really important to draw a distinction between bookings and flown revenue as we look at Q3. Recent booking strength does not change the fact that 50% of third-quarter sales were sold as of July 1, prior to the change in sentiment, along with the unique impact of temporary lower demand for Newark on United sales. The setup for Global Flying also looks much better as we head into Q4. For United, Q3 relies the most on the segments of the business that have been the weakest in 2025, offshore sales and main cabin sales. As we head into Q4, we historically rely more on onshore business and premium demand, which makes Q4 have a better outlook in the current environment. Our early look at Q4 global yields and bookings supports our view, but we still have a long way to go and Q3 RASMs will likely be negative year-over-year. In summary, booking strength now translates into stronger flown revenues and RASMs later in Q3 and Q4. This recent sales momentum, along with about 1 point of negative impact on Newark on Q3 RASM gives us confidence that the implied RASM step-up from Q3 to Q4 we have in our internal outlook is quite achievable and maybe even conservative. We're hopeful that cooled Middle East tensions will allow a full schedule to Tel Aviv soon. We plan to resume Tel Aviv service initially just from Newark on July 21 and hope to include other gateways later this year. Building domestic connectivity at our hubs continues to be one of our largest focuses for 2025 and 2026 as we create winning schedules and ultimately larger RASM premiums versus others in the process. We believe this connectivity effort, combined with larger gauge narrow-body jets with more premium seats will narrow significantly the margin gap between our domestic and international flying. United has grown its relative TRASM by seven points more than the industry since 2019 and faster than any other carrier since the pandemic as evidence that our plan is working and not all capacity is created equally. Brand loyalty for United is increasing with documented share gains in Q1 in each of our hubs. United's revenues are more diverse than ever. And in the process, our product choice range gives customers more choices for the experience they desire. United plans to introduce the Polaris Studio Suite later this year, another step in increase in our premium capacity and revenue diversity. We also look forward to building our Blue Sky collaboration with JetBlue later this year to help create a more competitive alternative for United customers and MileagePlus members in New York City along with Boston. We also look forward to returning to JFK in 2027 after a long absence with a competitive schedule and a built-in frequent flyer base. In summary, we remain bullish about the future given less macroeconomic uncertainty we are seeing, plus scheduled capacity changes by the low-margin airlines later this summer. The inflection in bookings and yields we've recently seen gives us great confidence. With that, I want to say thanks to the entire United team for running a great airline in Q2, and I will hand it off to Mike to discuss our financial results.

Thanks, Andrew. I'm very proud of the United team this quarter. We faced several geopolitical challenges that impacted both fuel prices and customer demand while also managing through the Newark difficulties Toby discussed earlier. And despite all of this, we delivered earnings per share of $3.87, well within our guidance range and ahead of Wall Street expectations of $3.81. I'm very pleased with these results and want to highlight that if we excluded the financial impact of the Newark disruption, we would have been above the high end of our range. This is another proof point that our United Next plan is working. In fact, I go as far as to say that our plan has worked. The industry has transformed into a healthier industry where customers are brand loyal and increasingly choose to fly not just based on the schedule, but also based on their preferences for reliability, for clubs, for technology and for loyalty programs. The industry now has two brand-loyal, structurally profitable and revenue-diverse airlines, which has driven much of the rest of the industry to cut money-losing capacity to return to profitability. This is irreversible and will lead to stable double-digit margins for United Airlines. Turning to costs. We continue to run better than planned, and I'm pleased with the 2.2% CASM-ex growth we delivered in the second quarter. You've heard me say that the best way to manage cost is to run a reliable airline, and this team continues to deliver. I expect similar cost performance for the remainder of the year. As we look to the third quarter, we expect continued stabilization in the geopolitical environment. This is already driving stronger bookings. And as Andrew discussed, we're optimistic those trends will continue. Taking that into account, along with the continued strong cost performance, we expect third quarter EPS to be between $2.25 and $2.75. Consistent with what happened last year, we also expect the industry to continue to reduce money-losing capacity in domestic markets beyond September. This adds to our confidence in the fourth quarter and may even lead to upside as we continue to believe in our path to double-digit pretax margins longer term. For now, we expect full year EPS to be between $9 and $11. Turning to the balance sheet. We ended the second quarter with $18.6 billion in liquidity, including our $3 billion undrawn revolver. We generated over $1.1 billion of free cash flow. And importantly, on July 7, we paid down the remaining $1.5 billion balance of our MileagePlus bonds two years early. This was our most expensive remaining fixed-rate debt. This prepayment, along with the prepayment of the MileagePlus term loan a year ago, fully unencumbers the MileagePlus business, a crown jewel asset of United. With this prepayment, we have unencumbered assets that exceed $40 billion. Strengthening the balance sheet remains a top priority, and we target net leverage below 2x and continue to work towards investment grade. With this prepayment, we've now reduced our gross debt by almost $11 billion since the peak debt level of COVID. Our average cost of debt is now 4.7%. On the buyback, we repurchased $235 million worth of shares at an average price of $66 during the quarter, leaving $829 million in authorization. We will continue to take a balanced approach to our capital allocation strategy. Our shares continue to trade below our view of intrinsic value. Therefore, we are balancing the level of buyback while also pursuing our leverage target. We ended the second quarter at 2x net leverage. Free cash flow generation also remains a priority, and we now expect to generate over $2 billion in free cash flow for the year. In conclusion, I remain excited about the future of United Airlines, and we will continue to work to deliver on our financial commitments. Despite the headwinds we faced in the first half of the year, we delivered significant growth in EPS, and we feel very good about the core fundamentals of our airline in the second half of 2025 and beyond. Now back to Kristina to start the Q&A.

Thanks, Mike. I echo that excitement. We will now take questions from the analyst community. Please limit yourself to one question and if needed, one follow-up question. Krista, please describe the procedure to ask a question.

And your first question comes from Tom Wadewitz with UBS.

It's Tom Wadewitz from UBS. So I wanted to ask you a bit on the cost side performance. Mike, I think your comments were pretty favorable. Obviously, the 2.2% CASM-ex in Q2 is very good. How do we think about that going forward? And then I think there was one particular expense item that seemed a bit lower than kind of normal. The distribution expense was down quite a bit year-over-year and sequential, which seems different than normal. So I don't know if there's something that's kind of one-off helping you there or just more on the cost side and how you keep the strong performance going on that.

Tom, I appreciate the question. I am really proud of the cost performance better than I certainly expected back in January. I want to be clear, we expect similar cost performance to Q2 in both Q3 and Q4. For '26 and beyond, you'll have to wait as we continue to work on budgets. Distribution expense does continue to come down as more customers are choosing to go through the direct channel. So I do expect that long-term trend. We did get some benefit this quarter that had some puts and takes that brought that down even more in the second quarter. But longer term, distribution costs are headed lower, and we're really proud of that result as well.

Okay. Yes, that's great. And then for the follow-up, just on demand, you had some really helpful commentary. Are we back to January levels on demand or we're kind of on the way back there? Or how do we kind of reset to say, okay, in July, with Newark recovery and a little bit of stabilization, kind of just where are we at?

It's Andrew. Look, what we said is there's been a 6-point inflection versus Q2 and an even stronger inflection for business traffic during that time period. There's a lot of machinations with the numbers prior to that. But I just think from where we are standing today, we're really pleased by that change in direction of bookings, combined with less capacity starting in August and September and then just some more favorable Q4 environment. So we do think it's a nice step up and hopefully conservative based on where the bookings have recently been, but it's a good change in direction.

Your next question comes from the line of David Vernon with Bernstein.

So Mike, the last time we spoke, you put out kind of two guidance ranges, one that would be intact as things are stable. Now we're coming down to kind of a little new lower midpoint. Can you kind of walk us through kind of where we're settling in or what's changed from stability to where we are now? And then talk about kind of what's baked into that second half guidance, particularly around the acceleration of demand? Are we baking that kind of into the guidance range? Or is there an ability to kind of maybe do better than what we're laying out here in the second half?

Thanks, Dave. Really appreciate the question. Look, we've had a philosophy here at United to guide conservatively to build in one active guide because this industry, things happen. Fuel prices spike, there's an ebb and flow in tariffs. There's lots of things that change. And so it is important to us we deliver on our commitments. And so as you look at that 9% to 11% for the full year and what's implied by the second half, we are consistent with our philosophy of building in that active guide. If you go back to the end of the first quarter and the call, we talked about the two ranges. The world was highly uncertain at that time. And I was very clear at that time that the higher range, the $1,150 to $1,350 that there was no contingency left that, that piece of the guide was not consistent with any more acts of God that would impact us. But I'm very excited. The bookings over the last three weeks have been very strong. And if everything continues on that trajectory, I think the 9% to 11% will prove conservative.

That's helpful. Andrew, you mentioned that the implied RASM step-up from the third quarter to the fourth quarter might be somewhat conservative. Can you outline the factors that could lead to better performance than what we are currently observing? Is it related to the main cabin or potentially an acceleration in business? Please help us understand the drivers of this step-up from the third quarter to the fourth quarter and where you feel more or less certain.

Well, the most certain thing is what the other airlines have published for schedules in August and September, which now just a few weeks ago, we're showing plus 4 and now show negative for domestic. And so I think the demand environment I just talked about, the ability for business traffic to rebound, which kind of changes the yield profile, I said we were booking negative yields for a majority of the year, and those have now flipped positive for domestic. So when you take lower demand, positive yields and this pretty strong inflection in business demand for United, that's the reason I feel really great about the setup for Q4. As we said earlier, it's very deja vu in some of these circumstances to what we saw last year, which was a pretty significant step-up. So we anticipate the same based on what we see in published schedules, based on demand, based on yields and based on business traffic.

Your next question comes from the line of Jamie Baker with JPMorgan.

This one is probably for Scott. Your primary U.S. competitor has a significant nonunion labor construct. It's got one of the most efficient hubs in the country. It's got a sizable MRO. It's got perhaps the most evolved relationship with its loyalty partner. And to your credit, Scott, I mean, you've spoken publicly about holding Delta in high regard. So my question is, what are the catalysts that potentially allow United to overtake Delta margins in coming years? Is it structural? Is it simply brand preference or perhaps you reject the premise that you can have the industry's highest margins, but I doubt that that's going to be your answer.

I appreciate the question, Jamie. I have a lot of respect for Delta. Over the past 15 years in the airline industry, my focus has been on attracting brand-loyal customers, and Delta was one of the first airlines in the U.S. to successfully demonstrate that winning brand loyalty is key to success. My primary goal is to return United Airlines to consistent double-digit margins and improve our absolute margins, rather than comparing ourselves directly to Delta. We are one of only two airlines, along with Delta, that have a structure built on brand loyalty and diverse revenue streams. This is a permanent advantage that cannot be replicated by others, and we currently account for most of the industry's profits. When earnings results are released next week, despite the challenges faced by Delta last year compared to our own, I expect our margin gap will continue to widen. I believe our margins will ultimately be comparable. While Delta has its strengths, we also have advantages. Our hubs are larger cities, and we have better international gateways, especially in San Francisco, Newark, and Dulles. I expect this will balance out, leading to similar margins. I would prefer to have 13% margins while Delta has 13.5% than for us to have 10% and Delta to have 9.5%. Our efforts are fully concentrated on gaining brand-loyal customers and building an airline that customers prefer to fly, as this maximizes our margins. This quarter, as with the first half of the year, has been impressive as we have been able to grow our earnings and margins. Our forecast for this year indicates a slight decline in earnings due to various challenges, but there is a strong possibility we could see growth in earnings this year, which would be an amazing achievement and confirmation that our strategy to win brand-loyal customers is effective. We began this journey quite some time ago, and it's not something that can change quickly. Both Delta and we have the right strategies, and together we will generate most of the industry’s profits.

Excellent. And then quickly for Mike, on the loyalty paydown, Streeter and I certainly get that it was your highest cost prepayable debt, makes total sense from a financial perspective. But we keep circling back and asking ourselves if we should be thinking about that recent transaction through more of a strategic lens. Can you afford any perspective on that?

Thanks for the question, Jamie. MileagePlus is a key asset for us, and we are focused on understanding its value. The earnings resilience of our loyalty business is significantly better than the historical average for the airline industry, which I fully recognize. My current priority is to improve segment disclosures to enhance transparency regarding earnings and their growth. We are working diligently to provide this information to the market next year. If the value isn’t recognized, we may consider more significant actions, but for now, our focus remains on segment reporting. The flexibility of the business also gives us options.

Your next question comes from the line of Conor Cunningham with Melius Research.

Maybe to build on what Jamie said, Scott, during last year's third quarter, you emphasized that the industry was following a trend similar to the cycle from 2012 to 2014, with margins expected to double. This year, however, the environment has started off more challenging, and some investors have moved away from that narrative. I'm interested in your current perspective on your thesis and what might have changed since the beginning of the year, as well as any insights you've gained that could apply to that thesis overall.

I believe the core idea remains valid. The main difference this year has been the shift in demand. The original premise centered around supply, which is controllable, and that was evident from 2012 to 2014 when demand was stronger. However, this year, demand has taken a downward turn, especially in the first half of the year due to global uncertainties. I think that trend is now starting to reverse positively, although it hasn't fully returned to previous levels. Business demand has improved, and while it's not back to where it was, there is a noticeable positive shift. My observations and conversations with other CEOs, along with economic data, suggest that we reached a pivotal moment in the economy at the end of June, and I anticipate that momentum will continue. The supply dynamics from 2012 are still firmly in place. Demand will naturally fluctuate, but it is on a recovery path. It's increasingly evident that there is a significant disparity in performance within the industry, with two well-established airlines thriving while others struggle. In reviewing the performance of airlines other than United or Delta, I've found that each has routes within their network that are losing money by double-digit percentages. The only way for these airlines to achieve margins close to their cost of capital is to eliminate unprofitable routes, and that shift will inevitably occur. While I don't expect immediate changes, the losses on these routes signal that economic realities will prevail. Overall, I believe that while the industry trends in supply will remain similar, the financial outcomes for the top-performing airlines will be significantly better in that scenario.

Awesome. Appreciate that. And then maybe, Andrew, last quarter, you talked a little bit about taking the reins on industry spill traffic. Obviously, just given the changes in opened up basic economy a little bit sooner. But you're being pretty clear about what you're seeing in July. So I'm just trying to understand how you're managing basic economy versus other products out there from a couple of months ago.

Sure. I think the demand environment is what we said it was over the last 90 days, but it's inflected much more positive today. But that did create a setup for Q3, which means more open RM systems. I don't think that's going to be unique to United, particularly in the domestic environment. And that has created some more lower yields and has created, I think, ultimately, when we report more penetration of basic economy passengers in our numbers for the next 90 days this quarter. So expect a higher percentage of basic is my take as we go through the next 90 days.

Your next question comes from the line of Andrew Didora with Bank of America.

I guess my first question probably for Andrew. I never think of summer as being the time for corporate demand to meaningfully accelerate. So any kind of color you can provide on what you're seeing there? Any specific geographies or industry verticals driving this? And are you seeing the level of corporate bookings return to the levels seen at end of 2024, early 2025 right now?

We're looking at year-over-year comparisons, specifically summer to summer, and we're observing strong numbers, which is encouraging. This aligns with typical summer trends. Importantly, the strength we're witnessing is present in all our hubs and various sectors, demonstrating a broad rebound that ties back to earlier comments about decreasing macroeconomic uncertainty. In New York, we're experiencing a significant recovery, though we haven't fully returned to pre-business levels. However, the performance of our non-New York operations in recent weeks has been nearly on par with New York, which is exciting. This suggests an increase in customer preferences, corporate choices, and our growing partnerships with travel agencies. What's crucial to note is that the increase in business travel is widespread, not limited to any one hub.

Great. That's helpful. And then my second question for either you, Andrew or Scott, if you want to chime in. Just on this whole industry capacity dynamic, why do you think we've been in this position a lot over the last few years, basically sitting here in the peak summer and seeing the need for capacity cuts coming in sort of the off-peak once we hit post August into Labor Day. Why do we not see more of this capacity, call it, discipline more in the first half of the year or in other off-peak periods? Just curious your thoughts on that.

Sure. I'll give it a try. As we've mentioned before, there are clearly different carriers with varying demand conditions. For leisure-oriented carriers that also handle spill traffic, it's become clear that during lower demand off-peak periods, it's not practical to heavily utilize aircraft. Many airlines are operating with lower utilization rates. Consequently, there is a tendency to compensate for that, as it's common in our industry to push aircraft harder in the second and third quarters when demand typically increases seasonally. That's the trend we've seen, and we'll see where it goes next year. During off-peak periods, pushing aircraft is challenging, especially with red-eye flights or early morning and late evening departures. It's evident that we at United engage with this issue. I've mentioned the golden hour flying, which occurs between 7:00 a.m. and 8:00 p.m., and I believe our percentage during this time is the highest among U.S. carriers over the past year. There are variations from month to month, and I encourage you to look into that number, as each airline has a different strategy, and we'll observe the industry's situation a year from now.

Your next question comes from the line of Scott Group with Wolfe Research.

So I'm just wondering, is there any way to quantify maybe how much of the 6-point improvement you're talking about is tied to Newark and how much is just broadly? And then the implied improvement in fourth quarter RASM, is that more of a domestic or international? Just any color there?

Definitely, I think, a domestic improvement as we move forward given the capacity environment. Six percent is broad-based. So Newark is better, obviously, in that number and then the rest of the network is below six.

Okay. And then maybe, Scott, I didn't hear anything today about JetBlue and Blue Sky. Maybe just how you view that sort of driving your longer-term views around where margins and everything can go.

Andrew mentioned it in his script, but I believe it's crucial for us to highlight that we have become the leading flag carrier of the United States, and being present at JFK is essential to that goal. Many of our customers, like your neighbors, travel from both sides of the Hudson River, so it is vital for us to be represented on both sides. Our partnership with JetBlue is a fantastic way to achieve this. They are a customer-centric airline, sharing a similar philosophy on customer care, even if they are not as large as we are. This partnership will help us establish a solid frequent flyer base on both sides of the Hudson and reintroduce our brand at JFK, which is significant for us.

Your next question comes from the line of Tom Fitzgerald with TD Cowen.

Would you mind providing us an update on Connected Media? It's been a little over a year since the launch and Richard's comments publicly have seemed pretty positive. So I'd love to hear how you're thinking about that maybe being a contributor for 2026.

Things are progressing well. We are dedicating significant effort to developing our technology and expanding our client base as we promote our services. Our goal is to double our revenues in 2025 compared to 2024 in the media revenue channel. While it's a substantial challenge, we are making strides. A key factor in our success is the seatback screens that we installed years ago, along with the launch of Starlink. We are making excellent progress with the seatback screens, already having installed the new technology on more than half of our aircraft. We have just begun implementing Starlink, but the combination of Starlink and the seatback screens will truly create a significant impact. This will unlock considerable value for Connected Media in late 2026 and 2027 as we integrate all the necessary components, including our internal technology. We remain optimistic and look forward to rapid growth as we bring these elements together.

That's really helpful context. I would like to hear about your observations regarding deliveries and your thoughts on the timing of the gauge benefit over the next couple of years.

Tom, thanks for the question. This is Mike. Boeing is doing a great job on narrow-bodies. So we're seeing MAX deliveries actually slightly ahead of the schedule we were planning on. So really pleased with that and all evidence suggests that they're going to maintain that trajectory. On the wide-body front, 787s, they haven't got to plan yet. We're hearing good things, but there's also some engine constraint wide-body longer term. So the jury is still out on wide-body, but Boeing is doing a great job on the narrow side. And minimal delays, but some still delays with 321s. Overall, the supply chain is healing itself, but I think probably engine remains constrained for some time to come. I'm sorry, the second part of your question?

Just how we should think about the cadence for the gauge benefit that you guys are going to see over the next kind of in '26 and '27?

As we move into 2026, current plan has gauge up 2%. And I think gauge growth will accelerate from there in '27. So that's where we are.

Your next question comes from the line of Catherine O'Brien with Goldman Sachs.

Maybe the first one for Mike. You noted that costs have continued to go better than planned. Can you just dig in a little on what went better in 2Q? And then what are the cost tailwinds you have in the back half to offset the flight attendant ratification headwind that you end up with similar performance in back half versus 2Q that I don't believe had the flight attendant contract? Or maybe that 2 half comment doesn't include the impact of the new flight attendant contract? Any help there would be helpful.

Thanks, Catie. I mentioned in my script, and I'll repeat that we are running a strong and reliable operation, which has exceeded our initial aggressive goals thanks to Toby and the team. Additionally, we have implemented significant changes in our procurement department that are yielding real savings in our supply chain. We're also improving our inventory management of parts, which has been very beneficial. This progress will continue, and we expect to benefit from gauge as it begins to accelerate. Overall, I feel positive about this. When I mentioned CASM in Q3 and Q4, that included the AFA deal.

Okay, that's great. Maybe one for Andrew. You mentioned that this year has boosted your confidence in premium products, and you plan to increase the premium offerings going forward. I assume this means you'll be raising the percentage of premium seats per departure, but please correct me if I'm mistaken. Do you have any thoughts on where that percentage might go over the next 5 to 10 years? Additionally, within the premium cabins, is there a specific segment such as Economy Plus, international Premium Plus, or Polaris where we might see most of the growth, or will it be more balanced across the different premium cabins?

Yes. Thanks for the question. It's a really good question. I won't give every detail. We'll save that for a more detailed type structured meeting. But we announced our United Elevated interior onboard, the 787-9 in Brooklyn just a few weeks ago, and that particular aircraft will now have 99 premium seats on it, which is Polaris plus Premium Plus. Not every aircraft United flies, by the way, that we take delivery in the future will have that same 99 seats. But that's a good reflection of an aircraft that we already said we will be flying to Singapore. We think that's the right aircraft for Singapore and many other markets at United, where we have this really high level of premium demand. Probably the biggest expansion though, that I think is an opportunity is we undersized the Premium Plus cabin, the cabin between main cabin and Polaris on our wide-body jets. And that's the cabin, I think, that's generating very good returns and the one that we'll probably lean more into going forward. But we'll leave all the details for a later date. But Premium Plus is, I think, a really very exciting opportunity as a midrange product between the front of the aircraft and the back. And then last but least, the gauge benefit that Mike talked about, as we bring on these MAX 9s and A321neos, we definitely bring on many more premium seats than the aircraft we ultimately replace the A319 or the A320. And so our premium mix just shifts as we upgauge the fleet and retire older ones and bring in these new ones that are just performing really well for us.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.

As you think about your aspirational longer-term margin targets, maybe pretax margins in the low teens from 7 or 8 today, I wonder which geography you expect to be the biggest contributor to that expansion?

Well, look, I think I've said this a number of times, and it's true. Our international margins are doing really well. And I think they're going to do better in the future with, for example, the Elevated 787 aircraft is going to push our margins even higher. But our international margins are pretty strong. The domestic margins, which are positive, to be clear, and not only are they positive, they're positive in each and every one of our hubs, by the way, in the last 12 months. But the opportunity there is to lower the gap between the domestic margins and international ones. If there, I don't expect our domestic margins to really ever completely close that gap. But I do think there's a lot of upside as we build connectivity. Our hubs are in big cities and they're undersized. We have the wrong gauge still. We simply do not have nearly as many 321s as we hope to have at this point in time. And of course, Boeing is yet to deliver a MAX 10 as we've talked about quite frequently. And so we're well behind on the premium seat and the connectivity and the gauge that we intended to employ in our domestic system. And then the other thing, as Scott said over and over again, there is a factor that there's a lot of uneconomic capacity offered by other airlines. We've already seen that start to leave the system, and I expect we'll see more of that in the future, which will definitely help. But we have a core plan with premium seats, gauge, connectivity. And we've had that same plan, by the way, for a long time period now. We continue to execute against it. And when we get to the bigger aircraft, I think you're going to see the margin gap close.

Regarding pilot hiring, given the increase in deliveries, would it be accurate to say that there was an overstaffing issue with pilots? Now that deliveries have picked up, is the staffing more in line with the needs, or is that not the case? I'm curious about the alignment between staffing levels and the capacity to effectively deploy them as the deliveries increase.

Duane, I think you think it a little bit when it was coming out of COVID, we've been pretty balanced. We have a really good relationship with Boeing. There's not really any surprises. Like what Mike was saying is that we've built in like a couple of shells each year that we may or may not move for fact that we're getting. So it's so small. I mean we're hiring 3,000 pilots a year. So we've been balanced for quite some time now. So I think the answer to your question is no. We're not overstaffed and we're not understaffed. We're just pretty much perfect when it comes to the pilots.

Duane, I think what you're seeing partially in CASM-ex when I talk about running a great operation is that we are at the right staffing levels.

Your next question comes from the line of Michael Linenberg with Deutsche Bank.

Yes. This is just a question for Scott about Newark and the fact that your caps, I guess, it's 68 at the airport run through the end of October. And I think what we've seen is the caps at Newark have clearly helped New York Airspace. And I guess, by extension, it's really helped the national airspace. What are the considerations that are out there right now that are, I guess, being debated with respect to returning Newark to a Level 3 airport?

I am incredibly grateful and pleased with Secretary Duffy, Administrator Bedford, DOT, and the FAA for finally putting Newark on the same playing field as LaGuardia and JFK. I've been advocating for this since I joined United. It's straightforward; when you schedule more flights than the airport can accommodate under ideal conditions, it won't work well. Regardless of what it's labeled, I believe Newark will have capacity control. The current team understands the numbers, and I'm confident that the capacity will increase from current levels, ultimately reaching a manageable point that allows Newark to remain competitive. It has performed the best among the three New York airports in the past month, and I believe it will maintain that competitiveness. The key has always been to unlock Newark's full potential, which is already a prized asset for us, while ensuring it remains a great airport for customers. Although this has been challenging for us in the short term, it will lead to improvements for years ahead as we finally address the crucial issue of aligning airport capacity with scheduled flights.

Great. And just a quick one to Mike. In your fleet plan, you're showing the 321 XLR. So how many are you getting this year? And then how soon do they find their way into international service?

Mike, none this year.

It will be the summer of 2026.

Your next question comes from the line of Stephen Trent with Citi.

The first, I was just curious, I appreciate the comments about Europe and sort of the summer travel season extending. There's been stuff in the news about anti-tourism incidents in some cities. And are you guys seeing anything at all there in terms of what the flow looks like? Or it's not really an issue at this juncture?

I would just add, United disproportionately boards U.S. citizens out of the United States. And so any changes in demand from outside of the United States into the United States is the brunt of that change is more felt by foreign flags. So you should ask them that question. But our demand to Europe. We're having a very strong summer. I'm really happy with the results. It could always be better, but it's another strong summer to Europe, particularly to Southern Europe. So get out there and have a great vacation.

Thank you. We will now switch to the media portion of the call. Your first question comes from Brandon Oglenski with Barclays.

I'm not sure I'm media, but...

Your lucky day, Brandon.

Mike, I'll just keep it to one. But the commentary and outlook for $2 billion of free cash flow this year, it's pretty impressive just given all the challenges you guys have had. But your CapEx is a little bit low. I mean you talked about the 787 delivery delays. So assuming Boeing gets back on plan for next year or into the out years, you're back into that $7 billion to $9 billion of CapEx range. Should we be thinking FCF at these levels is still a sustainable outlook?

Brandon, thank you very much for the question. Let me point out that, that $6.5 billion this year, there's some downside to that based on continued delays on the wide-body side. So I think we're going to come in inside of that this year. And as we roll to '26 and '27, I fully expect free cash flow to expand. I think operating cash flow is going to expand faster than CapEx. We'll see. There may be some puts and takes in an individual year, but I expect free cash flow to expand and free cash flow conversion to expand both.

Your next question comes from Mary Schlangenstein with Bloomberg.

I wanted to see if you could provide an update on the status of the static interference and Starlink issues on United's planes and whether the service and the regional jets are up and running now? If not, what's the issue? And how long will it take to get it resolved?

Mary, that's a great question. This is Toby. I believe the issue has mostly been addressed, and it's particularly related to the first aircraft we tested, the E175. It's a smaller plane, and the main problem with the interference was due to the two antennas being positioned too closely together. They have found a solution for this. We currently have 60 airplanes in operation, and we think the problem is behind us. Additionally, for the other airplane types we plan to use, which are larger, we aim to avoid this issue altogether.

Your next question comes from the line of Leslie Josephs with CNBC.

Just curious if you could give us an update on when you expect to get the MAX 10 and how once you get that, that's going to increase your premium capacity. And Scott, I know you were talking about Delta and United kind of in their own category and then everybody else. How do you feel about Delta starting LAX to Hong Kong and to O'Hare?

Leslie, regarding the MAX 10, we're still hopeful that we can have some deliveries in 2027. But we right now have a contingency plan to be able to take MAX 9s and continue our upgauging strategy with MAX 9s. So either way, it won't be disruptive to our longer-term strategy. I would like to take the 10s and 2027 is my best guess right now.

And on Delta?

We fly 6,000 flights a day. So a couple of new routes aren't that big of an issue for us. But I guess I feel complemented when other airlines feel like they're worried about us getting ahead and have to fly routes you're going to lose money for them.

Your next question comes from the line of Dawn Gilbertson with The Wall Street Journal.

My question is for Andrew. I'm wondering, you guys talked a lot recently about making Polaris even more premium. Are you weighing like your new favorite brand loyal competitor, are you also weighing barebones business class tickets? And if so, can you walk us through that and talk about any time line? If not, why not?

Thanks, Dawn. Look, what I would say is over time, over the last seven or eight years, we've leaned heavily into segmentation of our revenues, which is really in our articulate way of saying, providing more and more choices to our customers so they can pick the experience they would like from premium to basic economy. And we have learned through that time period that our customers really appreciate this. Not everybody wants the full experience. Some people want other experiences. And so the value to United as an airline and to that of our customers has been proven by the segmentation of revenues that we've done. And we look forward to continuing to diversify our revenue base and segment it in the appropriate way, and I'll leave it at that.

Thanks for joining the call today. Please contact Investor or Media Relations if you have any further questions, and we look forward to talking to you next quarter as the industry transformation continues.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.