Atul Maheshwari

Atul Maheshwari asked if United anticipates any meaningful tailwind from the soccer World Cup this year, whether it's assumed in the guidance, and its potential magnitude.

Answer

Brett Hart, President, expects some upside from the World Cup, noting it creates counter-cyclical inbound U.S. demand in June. He believes it will be positive for United, unlike other sporting events that primarily drive leisure traffic, but cautioned that its overall impact might not be 'all that meaningful' given United's size. Maheshwari also raised concerns from investors about how industry capacity discipline can persist with Boeing and Airbus ramping up deliveries. Scott Kirby, CEO, clarified that the primary constraint on capacity is not aircraft but engines, noting that approximately 800 aircraft globally are grounded due to engine issues, and engine manufacturers are not expected to catch up until next decade.

Atul Maheshwari from UBS inquired about how industry capacity discipline can persist as Boeing and Airbus ramp up deliveries, seeking comfort for investors concerned about headline capacity growth numbers.

Answer

CEO Scott Kirby clarified that the primary constraint on capacity is not aircraft deliveries but engines, with approximately 800 aircraft globally grounded due to engine issues. He believes engine manufacturers will not catch up with MRO and new aircraft delivery needs until sometime next decade.

Atul Maheshwari of UBS Group sought confirmation on the timeline for a full recovery in indirect channel market share and asked what American must do to close the widening profit margin gap with its network peers.

Answer

CEO Robert Isom confirmed they are on track to restore historical indirect channel share as they exit 2025, which will benefit 2026 results. CFO Devon May stated there are no structural impediments to closing the margin gap over time. He explained the 2025 gap is influenced by different labor contract cycles and American's higher domestic exposure, and he expects the gap to close with tailwinds from the indirect channel recovery and the new Citi agreement.

Atul Maheshwari, on for Tom Wadewitz, asked what levers Allegiant could pull to protect its guidance if fuel prices rise significantly and if the 'CASM down more than RASM' dynamic would hold true in every quarter.

Answer

CCO Drew Wells stated they would cut capacity in shoulder periods, rely on fare increases, and could increase fixed-fee flying. CFO Robert Neal added they could accelerate A320 retirements. The growing MAX fleet also provides a natural hedge. Management declined to provide quarterly margin spread guidance but reiterated confidence in the full-year outlook.