Catie O’Brien

Catie O'Brien asked for specifics on American Airlines' premium growth rate for 2026, including the contribution of premium seats and lie-flat seats, and how this factors into the full-year revenue outlook and any mixed-shift benefits. She also followed up on the accelerated debt reduction target, asking about the company's long-term leverage goals and when shareholder remuneration, such as buybacks, might be considered.

Answer

Chief Commercial Officer Nat Pieper highlighted strong premium RASM performance in Q4 2025 and anticipated continued richness in 2026 due to new aircraft deliveries and premium product evolution. CFO Devon May expressed satisfaction with debt reduction progress, reiterating that the focus remains on reaching a net debt to EBITDA ratio below 3x and a BB flat credit rating before considering shareholder remuneration.

Catie O'Brien from Goldman Sachs inquired about the 2026 cost outlook, specifically the most exciting opportunities for cost efficiency and the potential for these efforts to extend beyond 2026.

Answer

EVP and CFO Mike Leskinen highlighted continued strong operations, ongoing improvements in global procurement, and significant multi-hundred-million-dollar opportunities with the technology team. He emphasized that this is a permanent cultural shift at United to drive efficiency.

Catie O'Brien asked for insights into the sequential revenue trends by region underpinning United's Q1 EPS guidance, specifically whether the $250 million pre-tax impact in Q4 was primarily domestic and the expected relative improvement across regions.

Answer

Andrew Nocella, Executive Vice President and Chief Commercial Officer, confirmed that the larger Q4 impact was domestic, with some international effect. He noted the Caribbean situation is affecting Q1 but expects sequential improvement across all regions, with the Atlantic leading, the Pacific performing well, and domestic improving, driven by premium cabins. O'Brien also questioned the 2026 cost outlook, asking about key opportunities and the long-term significance of cost efficiency. Mike Leskinen, Executive Vice President and Chief Financial Officer, highlighted continued strong operations, ongoing procurement savings, and multi-hundred-million-dollar opportunities from technology, emphasizing a permanent cultural shift towards efficiency and future gauge benefits.

Catie O’Brien asked CFO Dan Janki about Delta's unit cost performance, specifically the efficiency gains from growing into its workforce, fleet, and airport assets, and what stage of efficiency growth the company is in. She also followed up on the domestic main cabin turning positive, asking for more color, the year-over-year change in domestic main cabin seats, and how retrofits for Delta Comfort seats contribute to the premium seat mix into next year.

Answer

CFO Dan Janki stated that Delta is in the early to middle innings of efficiency growth, with long-term potential from growing into its workforce, generational airports, fleet renewal, and technology. President Glen Hauenstein explained that premiumization is driven by both retrofits (accounting for 25-30% of incremental premium seats) and new aircraft deliveries. He noted that domestic main cabin seats are relatively flat year-over-year, and the positive inflection is supported by capacity rationalization in many of Delta's hubs.

Catie O’Brien questioned Delta's unit cost performance and efficiency gains from growing into its workforce, fleet, and airport assets, asking what stage of efficiency growth the company is in. She also sought more color on domestic main cabin turning positive, including the year-over-year change in domestic main cabin seats and the contribution of retrofits to premium seat mix into next year.

Answer

CFO Dan Janki indicated that Delta is in the early to middle innings of efficiency growth, with long-term opportunities from workforce, generational airports, fleet renewal, and technology. President Glen Hauenstein confirmed an inflection in main cabin demand, noting that main cabin seats are relatively flat year-over-year, and retrofits account for 25-30% of incremental premium seats, contributing to the premiumization of the Delta ecosystem.