Tag Archives: LAX

Delta, AeroMexico announce nonstop service between Atlanta and Queretaro

Delta and its partner AeroMexico, launched their new nonstop service between Atlanta and Queretaro, Mexico, on November 1.

The Atlanta-Queretaro route will be operated using Embraer 190 aircraft with 99 passenger seats, including 11 in Clase Premier—AeroMexico’s Business Class cabin—with the following schedules:

	Departure	Arrival	Frequency
Atlanta-Queretaro* AM 2711	8:36 p.m.	11:23 p.m.	Daily
Queretaro-Atlanta* AM 2710:	6:30 a.m.	10:53 a.m.	Daily

In the framework of this celebration, AeroMexico also announced the beginning of its new Monterrey-Atlanta service uniting two of the leading hubs in North America.

*Times published are local to each country and are subject to changes without notice.

AeroMexico Connect:

Singapore Airlines’ unveils the new cabin product, will be rolled out to the entire Airbus A380s fleet

Singapore Airlines announced on November 2, 2017 that its eagerly awaited new cabin products will be fitted to its entire Airbus A380 fleet, including retrofit work on 14 aircraft that are already in service.

The announcement was made in Singapore at the global launch of the airline’s new cabin products, which will start entering service next month on the first of five new A380s on order with Airbus. Retrofit work will start in late 2018 on the 14 existing A380s¹ that will be fitted with the new products, with all targeted for completion in 2020.

Singapore Airlines was the launch operator of the A380 when it took delivery of the world’s first superjumbo in 2007. The new aircraft configuration will carry up to 471 customers in four classes of travel, with six Singapore Airlines Suites, 78 Business Class seats, 44 Premium Economy Class seats and 343 Economy Class seats.

“Singapore Airlines set new industry benchmarks for premium full-service travel when we introduced our first A380s in October 2007. A decade later we continue to receive highly positive feedback about the travel experience on the aircraft,” said Senior Vice President Product & Services, Mr Marvin Tan.

“The introduction of our all-new cabin products is intended to ensure we retain our product leadership position. The significant investment in the new product and service offerings demonstrates that we are always listening to our customers, and ensuring that we continue to deliver the world’s best travel experience.”

Above Copyright Photo: Singapore Airlines Airbus A380-841 9V-SKN (msn 071) LAX (Michael B. Ing). Image: 926240.

Singapore Airlines’ A380s currently serve Auckland, Beijing, Frankfurt, Hong Kong, London, Melbourne, Mumbai, New Delhi, New York, Paris, Shanghai, Sydney, and Zurich.

¹SIA currently has 18 A380s in its fleet, having recently returned one to the lessor. Four more will be returned to lessors progressively in 2018.

Sam Chui reports on the unveiling:

Spirit Airlines reports its third quarter 2017 results

Spirit Airlines, Inc. has reported its third quarter 2017 financial results.

GAAP net income for the third quarter 2017 was $60.2 million ($0.87 per diluted share), or $65.5 million ($0.94 per diluted share)¹ excluding special items.
GAAP operating margin for the third quarter 2017 was 15.1 percent, or 16.4 percent excluding special items¹.
Spirit ended the third quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $964.4 million.
Spirit’s return on invested capital (non-GAAP, before taxes and excluding special items) for the twelve months ended September 30, 2017 was 18.1 percent².

“Multiple hurricanes during the third quarter 2017 caused us to cancel over 1,650 flights. In preparation for Irma, we relocated our Systems Operations Control Center and over 305 team members and their families to our backup facility in Detroit where we ran our operations for about a week. I am very proud of how the Spirit team pulled together to assist our guests and employees in the regions affected by the storms while keeping the rest of the network running smoothly and still delivering solid financial results. Excluding the impact of these storms, we estimate our third quarter on-time performance would have been 78.5 percent, a 2.2 percentage point improvement year over year,” said Robert Fornaro, Spirit’s President and Chief Executive Officer. “It was a challenging quarter on many fronts and I want to thank our entire team for their dedication in going the extra mile to care for our guests and volunteering to assist with the relief efforts.”

Spirit carried over 3,000 guests and more than 800 team members and their families to safety, many of whom were elderly or at risk. We have transported over a 100,000 pounds of relief supplies in joint efforts with the American Red Cross, Airlink Operation, Puerto Rico Care Lift and many others, have pledged to match donations up to $150,000 to the American Red Cross, and are committed to assist with ongoing relief efforts throughout the Caribbean.

Revenue Performance
For the third quarter 2017, Spirit’s total operating revenue was $687.2 million, an increase of 10.6 percent compared to the third quarter 2016, driven by an 11.2 percent increase in flight volume. During the third quarter 2017, Spirit canceled over 1,650 flights related to Hurricanes Harvey, Irma, and Maria. Spirit estimates these hurricanes, together with the revenue overhang from the pilot work action earlier in the year, negatively impacted third quarter 2017 revenue by approximately $40 million and operating income by approximately $39 million.

Total revenue per available seat mile (TRASM) for the third quarter 2017 decreased 6.3 percent compared to the same period last year, primarily driven by lower passenger yields as a result of aggressive competitive pricing action in many of our markets.

On a per passenger flight segment basis, total revenue for the third quarter 2017 decreased 0.5 percent year over year to $108.96 due to ticket revenue per passenger flight segment decreasing 3.2 percent to $56.48, partially offset by non-ticket revenue per passenger flight segment increasing 2.6 percent to $52.48.

Cost Performance
For the third quarter 2017, total GAAP operating expense, including special items of $8.4 million³, increased 20.0 percent, or $97.0 million, year over year to $583.1 million. Adjusted operating expense for the third quarter 2017 increased 20.2 percent, or $96.4 million to $574.8 million⁴. The year-over-year increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume, higher passenger re-accommodation expense (recorded within other operating expenses), and higher fuel rates.

Aircraft fuel expense increased in the third quarter 2017 by 29.9 percent, or $36.5 million, compared to the same period last year, due to a 12.2 percent increase in the cost of fuel per gallon and a 15.3 percent increase in fuel gallons consumed.

Spirit reported third quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.42 cents⁴, a decrease of 1.1 percent compared to the same period last year. The decrease year over year was primarily driven by lower maintenance and salaries, wages, and benefits per ASM, partially offset by higher passenger re-accommodation expense and depreciation and amortization per ASM.

Labor
Spirit and its pilots, represented by the Air Line Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.

Fleet
Spirit took delivery of three new Airbus A321ceo aircraft and one new A320ceo aircraft and returned one leased A321ceo aircraft during the third quarter 2017, ending the quarter with 107 aircraft in its fleet.

Spirit Airlines is likely to replace its Airbus A319 fleet with newer A320neos by around 2023 (see fleet plan below).

Share Repurchase Authorization
On October 25, 2017, Spirit’s Board of Directors authorized a repurchase program of up to $100 million in aggregate value of shares of Common Stock, par value $0.0001 per share, from time to time in open market or privately negotiated transactions. The authorization will expire on October 25, 2018. The timing and amount of any stock repurchases are subject to prevailing market conditions and other considerations.

Recent New Service Announcements
Boston – New Orleans (11/09/17)
Minneapolis-St. Paul – New Orleans (11/09/17)
Newark – New Orleans (11/09/17)
Tampa – New Orleans (11/09/17)
Newark – Las Vegas (11/09/17)
Chicago – West Palm Beach (11/09/17)*

* Seasonal Service Operates 11/9/17- 4/11/18

American Airlines Group reports its third quarter 2017 results

American Airlines Group Inc. on October 26, 2017 reported its third quarter 2017 results, including these highlights:

Recorded a third-quarter 2017 pre-tax profit of $1.0 billion, or $1.1 billion excluding net special items,¹ and net profit of $624 million, or $692 million excluding net special items
Reported third-quarter earnings of $1.28 per diluted share, or $1.42 per diluted share excluding net special items
Reported a 2.7 percent increase in total revenue, to $10.9 billion, and a 1.1 percent increase in total revenue per available seat mile (TRASM) for the third quarter
Returned $411 million to stockholders in the third quarter through the repurchase of 7.7 million shares for $362 million and dividend payments of $49 million

Pre-tax earnings excluding net special items for the third quarter of 2017 were $1.1 billion, a $369 million decrease from the third quarter of 2016. During the third quarter, the company’s operations were affected by Hurricanes Harvey, Irma and Maria, causing more than 8,000 flight cancellations, and reducing pre-tax earnings by an estimated $75 million.

“Despite the significant operational challenges posed by three hurricanes, our team delivered solid financial results,” said Chairman and CEO Doug Parker. “The hurricane response highlighted the humanity and professionalism of the American team, and our industry as a whole.”

“We especially want to acknowledge the burden placed on our team members in Puerto Rico and throughout the Caribbean. The generous spirit of the American Airlines team was on full display as team members in Miami, Chicago and elsewhere packed meals and care packages for our colleagues and our customers in Puerto Rico. We also capped fares for customers traveling to and from the regions hit by these storms,” Parker said.

Revenue and Expenses

	GAAP						Non-GAAP¹
	3Q17			3Q16			3Q17			3Q16

Total operating revenues ($ mil)	$	10,878		$	10,594		$	10,878		$	10,594
Total operating expenses ($ mil)		9,646			9,163			9,539			8,869
Operating income ($ mil)		1,232			1,431			1,339			1,725

Pre-tax income ($ mil)		1,004			1,189			1,114			1,483
Pre-tax margin		9.2	%		11.2	%		10.2	%		14.0	%

Net income ($ mil)		624			737			692			933

Earnings per diluted share	$	1.28		$	1.40		$	1.42		$	1.76

Continued strong demand for air travel and improving yields drove a 2.7 percent year-over-year increase in total revenue, to $10.9 billion. For the first time since the second quarter of 2014, yield grew in every geographic region, with notable strength in Latin America. Cargo revenue was up 17.0 percent to $200 million due to a 19.2 percent increase in cargo ton miles. Other revenue was up 2.2 percent to $1.3 billion. Third-quarter TRASM increased by 1.1 percent on a 1.6 percent increase in total available seat miles.

Total third-quarter operating expenses were $9.6 billion, up 5.3 percent year-over-year due primarily to a 13.3 percent increase in consolidated fuel expense and an 8.0 percent increase in salaries and benefits resulting from the company’s investments in its team members. Total third-quarter cost per available seat mile (CASM) was 13.20 cents, up 3.6 percent. Excluding fuel and special items, total CASM was 10.43 cents, up 4.5 percent.

“We are playing the long game at American to create value in an industry that has been fundamentally transformed,” said Parker.

Strategic Objectives

At American’s Media & Investor Day last month, the company laid out four long-term strategic objectives: Build a World-Class Product, Drive Efficiencies, Make Culture a Competitive Advantage, and Think Forward, Lead Forward.

Build a World-Class Product

American continues to make significant investments in the premium travel experience. In August, the company opened a new Admirals Club lounge in Terminal 5 at Los Angeles International Airport, and in September, the company opened a new Flagship Lounge at Chicago O’Hare International Airport. American plans to open new Flagship Lounges with Flagship First Dining in Miami and Los Angeles later this quarter.

Demand for American’s highly-differentiated Premium Economy travel experience remains high. Offered on international flights, Premium Economy comes with a wider seat, more legroom, an amenity kit, and enhanced meal choices. American is pleased with the customer adoption of this product as it generates an average premium of more than $400 each way over Main Cabin fares. The company’s fleet now has Premium Economy seats on 27 of its widebody aircraft, with plans to retrofit most of its remaining widebodies by the end of 2018.

In early September, American expanded its Basic Economy product throughout the continental United States. Basic Economy allows American to compete with ultra-low cost carriers while still offering a better product. Initial results of this new product’s rollout continue to be consistent with management’s expectations, with approximately half of American Airlines customers buying up to Main Cabin when given the option between that and Basic Economy.

“Continued product differentiation and a comprehensive network are just two of the ways American is setting itself apart. And we know we can do more. We have identified nearly $3 billion of revenue opportunities through 2021, including product segmentation, co-branded partnerships, and harmonizing our seating configurations across the fleet,” said American Airlines President Robert Isom.

Drive Efficiencies

As part of the company’s ongoing fleet renewal program, during the third quarter, American invested more than $900 million in 13 new mainline aircraft and three regional aircraft, including taking delivery of its first Boeing 737 MAX aircraft. These new, larger and more fuel efficient aircraft continue American’s fleet transformation and will replace aircraft that are expected to leave the fleet. In total, the company has invested more than $18 billion in new aircraft since the merger, giving it the youngest fleet of its network peers.

“We are focused on driving efficiencies and maximizing value for our investors. As we plan for the future, we have identified more than 400 efficiency-related projects which we estimate will provide $1 billion of benefit over the next four years. Examples include fuel initiatives, flight and route planning, improved schedule seasonality, and using our airport assets more productively,” said Chief Financial Officer Derek Kerr.

Make Culture a Competitive Advantage

Making culture a competitive advantage starts with leadership that cares for frontline team members. During the quarter, American expanded its Lead the Experience leadership training beyond corporate officers, and will expand this training further next year. In addition, American continues to roll out service training to frontline team members and anticipates 35,000 airport and reservation team members will have received this training by the end of this year, with plans to roll this training out further in 2018. Earlier this week, the company launched its first employee survey in well over a decade, which will provide more information to support frontline team members.

“We are building an environment where our leaders enthusiastically embrace the responsibility of caring for and inspiring our frontline team members. This environment includes a new technology platform for all team member data, development and training for our leaders, and investments in our team,” said Elise Eberwein, Executive Vice President of People and Communications.

Think Forward, Lead Forward

American has expanded the use of self-service technology during irregular operations, which enables customers to rebook on alternative flights and arrange for delivery of delayed bags from the convenience of a mobile device. This new technology gives customers more accurate, real-time information and options that work for them during difficult weather situations. This automation also frees up time for the company’s customer service team members to solve more complex issues.

“With the pace at which the world moves today, we know our technology solutions have to come faster, and they have to be adaptable across a variety of devices, including on-board handhelds, tablets, desktops and personal mobile devices. We are bringing more of our systems into the cloud environment, which enables us to deliver more, and finish projects faster,” said Maya Leibman, Chief Information Officer. “All of our work comes back to making it easier for our team members to do their jobs, and making it easier for our customers to fly with American, and we are making significant improvements in both of these areas.”

Hurricane Response

American Airlines team members have worked together to help the people of San Juan, Puerto Rico and other affected parts of the Caribbean. American was the first commercial airline to restore service to San Juan after Hurricane Maria. American and its team members have delivered more than 2.5 million pounds of relief supplies and raised almost $2 million for the American Red Cross. In addition, team members in Chicago, New York, Fort Worth and Miami volunteered to pack more than 100,000 meals for hurricane victims, as well as 2,000 kits for military men and women currently serving in San Juan.

Over recent weeks, Tech Ops team members sent and served 600 hot meals for colleagues in San Juan. American Airlines team members have contributed more than $350,000, which American has matched, to the American Airlines Family Fund during the recent hurricane season. The Family Fund provides monetary relief to team members facing catastrophic and life-altering emergencies.

Capital Investments and Shareholder Returns

Since mid-2014, American has returned more than $11.1 billion to stockholders primarily through share repurchases and dividends, and reduced its share count by 37 percent to 480.0 million shares. As of September 30, 2017, the company had approximately $677 million remaining of its $2.0 billion share repurchase authority.²

The company declared a dividend of $0.10 per share, to be paid on November 27, 2017, to stockholders of record as of November 13, 2017.

Guidance and Investor Update

American expects its fourth-quarter TRASM to increase approximately 2.5 to 4.5 percent year-over-year, which reflects continued improvement in demand for both business and leisure travel. The company also expects its fourth-quarter pre-tax margin excluding special items to be between 4.5 and 6.5 percent.³

Notes

In the third quarter, the company recognized $110 million in net special items before the effect of income taxes, principally consisting of merger integration expenses and fleet restructuring expenses, offset in part by a net credit resulting from fair value adjustments to bankruptcy obligations. See the accompanying notes in the Financial Tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.
Share repurchases under the buyback program may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors. The program does not obligate the company to repurchase any specific number of shares or continue a dividend for any fixed period, and may be suspended at any time at the company’s discretion.
American is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be determined at this time.

Southwest reports a third quarter net profit

Southwest Airlines Company on October 26, 2017 reported its third quarter 2017 results:

Net income of $503 million, diluted earnings per share of $.84, operating income of $834 million, and operating margin¹ of 15.8 percent
Excluding special items², net income of $528 million, diluted earnings per share of $.88, operating income of $871 million, and operating margin³ of 16.5 percent
Third quarter operating cash flow of $996 million and third quarter free cash flow² of $358 million
Returned $375 million to Shareholders through a combination of dividends and share repurchases
Return on invested capital (ROIC)²for 12 months ended September 30, 2017, of 26.8 percent

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated, “We are very pleased to report another quarter of strong profits and margins, particularly considering the impact of the unprecedented natural disasters. As a result of Hurricanes Harvey and Irma and the earthquakes, we canceled 5,000 flights which reduced revenues by approximately $100 million in third quarter 2017. Our People’s efforts to provide humanitarian flights, supplies, and financial assistance to Coworkers, Customers, and the communities impacted were truly heroic. Our hearts continue to go out to those impacted. During the quarter, our Employees also managed the retirement of the remaining Boeing 737-300 (Classic) fleet and simultaneous introduction of the Boeing 737 MAX 8 into our fleet. With the launch of the MAX, we were excited to announce our intention to serve Hawaii, which is another exciting milestone for Southwest. I am grateful to our Employees for these significant accomplishments and their extraordinary efforts during these operational challenges.”

Revenue Results and Outlook

The Company’s third quarter 2017 total operating revenues increased 2.6 percent, year-over-year, to $5.3 billion, driven largely by third quarter record passenger revenues of $4.7 billion despite an approximate $100 million reduction as a result of the natural disasters. Third quarter 2017 passenger revenue yield decreased 0.9 percent, year-over-year, due to the competitive yield environment. Third quarter 2017 operating unit revenues (RASM) decreased 0.5 percent, year-over-year. Third quarter 2017 unit revenue results included headwinds of less than a point from the Company’s new reservation system that is not expected to continue in fourth quarter 2017. The Company continues to expect the benefits from the new reservation system capabilities to produce incremental improvements in pre-tax results of approximately $200 million in 2018. Thus far in fourth quarter, overall revenue trends remain stable, and the Company is encouraged by the rebound in passenger booking trends in Houston and Florida. While the revenue yield environment remains competitive, passenger revenue yields thus far in October, on a year-over-year basis, have improved sequentially from August and September year-over-year trends, and travel demand remains solid. Based on these trends and current bookings, the Company expects fourth quarter 2017 RASM to increase in the range of up slightly to up 1.5 percent, as compared with fourth quarter 2016.

Cost Performance and Outlook

Third quarter 2017 total operating expenses decreased 0.2 percent to $4.4 billion, or 3.2 percent on a unit basis, as compared with third quarter 2016. As expected, the Company recorded aircraft grounding and lease termination charges of $83 million (before profitsharing and taxes) as a special item associated with the Classic fleet retirements during third quarter 2017. Third quarter 2016 included $356 million of accrued ratification bonuses (before profitsharing and taxes) as a special item associated with tentative collective-bargaining agreements reached with multiple unionized workgroups, as well as lease termination charges totaling $18 million as a special item. Excluding special items in both periods, total third quarter 2017 operating expenses increased 5.6 percent to $4.4 billion, or 2.5 percent on a unit basis, year-over-year.

Third quarter 2017 economic fuel costs² were $2.00 per gallon, including $.31 per gallon in unfavorable cash settlements from fuel derivative contracts, compared with $2.02 per gallon in third quarter 2016, which included $.56 per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company’s existing fuel derivative contracts and market prices as of October 20, 2017, fourth quarter 2017 economic fuel costs are estimated to be approximately $2.10 per gallon⁴. As of October 20, 2017, the fair market value of the Company’s fuel derivative contracts settling during fourth quarter 2017 was a net liability of approximately $129 million, and the fair market value of the hedge portfolio settling in 2018 and beyond was a net asset of approximately $126 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.

Excluding fuel and oil expense and special items in both periods, third quarter 2017 operating expenses increased 7.1 percent, as compared with third quarter 2016. Third quarter 2017 profitsharing expense was $127 million, as compared with $101 million for third quarter 2016. Excluding fuel and oil expense, special items, and profitsharing expense, third quarter 2017 operating expenses increased 6.5 percent, or 3.3 percent on a unit basis, year-over-year. The primary drivers of this year-over-year unit cost increase in third quarter 2017 were the impacts from the natural disasters and the significant snap-up in wage rates due to Flight Attendant and Pilot amended collective-bargaining agreements that became effective in fourth quarter 2016, partially offset by benefits from the Company’s fleet modernization efforts.

Based on current cost trends, the Company estimates fourth quarter 2017 unit costs, excluding fuel and oil expense, special items, and profitsharing expense, to be in the range of flat to up 1.5 percent, year-over-year⁵. This continued sequential improvement in unit cost trends is aided by the retirement of the Classic fleet, the lapse of the step-up in wage rates from labor collective-bargaining agreements ratified in fourth quarter 2016, and the wind-down of temporary costs associated with the May 2017 implementation of the new reservation system. The Company’s year-over-year estimate of fourth quarter 2017 unit costs, excluding fuel and oil expense, special items, and profitsharing expense, is higher than previously expected due largely to a shift in advertising spend from third quarter 2017 to fourth quarter 2017 and incremental costs associated with technology investments including the Company’s Extended Operations (ETOPS) authorization in preparation for Hawaii service.

Third Quarter Results

Third quarter 2017 operating income was $834 million, compared with $695 million in third quarter 2016. Excluding special items, third quarter 2017 operating income was $871 million, compared with $972 million in third quarter 2016.

Other expenses in third quarter 2017 were $43 million, compared with $77 million in third quarter 2016. The $34 million difference resulted primarily from $39 million in other losses recognized in third quarter 2017, compared with $64 million in third quarter 2016. In both periods, these losses included ineffectiveness and unrealized mark-to-market amounts associated with a portion of the Company’s fuel hedging portfolio, which are special items. Excluding these special items, other losses were $35 million in third quarter 2017, compared with $33 million in third quarter 2016, primarily attributable to the premium costs associated with the Company’s fuel derivative contracts. Fourth quarter 2017 premium costs related to fuel derivative contracts are currently estimated to be approximately $34 million, compared with $36 million in fourth quarter 2016. Net interest expense in third quarter 2017 was $4 million, compared with $13 million in third quarter 2016.

Third quarter 2017 net income was $503 million, or $.84 per diluted share, compared with third quarter 2016 net income of $388 million, or $.62 per diluted share. Excluding special items, third quarter 2017 net income was $528 million, or $.88 per diluted share, compared with third quarter 2016 net income of $582 million, or $.93 per diluted share, and compared with First Call third quarter 2017 consensus estimate of $.87 per diluted share.

Liquidity and Capital Deployment

As of September 30, 2017, the Company had approximately $3.0 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. During third quarter, Standard & Poor’s upgraded the Company’s investment grade credit ratings to “BBB+” from “BBB.” Net cash provided by operations during third quarter 2017 was $996 million, capital expenditures were $638 million, and free cash flow was $358 million². The Company repaid $106 million in debt and capital lease obligations during third quarter 2017, and expects to repay approximately $57 million in debt and capital lease obligations during fourth quarter 2017.

During third quarter 2017, the Company returned $375 million to its Shareholders through the payment of $75 million in dividends and the repurchase of $300 million in common stock. The Company repurchased $300 million in common stock pursuant to an accelerated share repurchase (ASR) program launched during the quarter and received approximately 4.1 million shares, representing an estimated 75 percent of the shares expected to be repurchased under that ASR program. During third quarter 2017, the Company also received approximately 1.6 million shares, which remained pursuant to a $400 millionsecond quarter 2017 ASR program, bringing the total shares repurchased under that ASR program to approximately 6.6 million. The Company has $1.7 billionremaining under its May 2017 share repurchase authorization.

For the nine months ended September 30, 2017, net cash provided by operations was approximately $3.4 billion, capital expenditures were approximately $1.6 billion, and free cash flow was a strong $1.8 billion². This enabled the Company to return approximately $1.5 billion to Shareholders through the payment of $274 million in dividends and the repurchase of approximately $1.25 billion in common stock.

Fleet and Capacity

The Company ended third quarter 2017 with 687 aircraft in its fleet. This reflects the third quarter 2017 delivery of six new Boeing 737-800s, six pre-owned Boeing 737-700s, and nine new Boeing 737 MAX 8 aircraft, as well as the retirement of the Boeing 737-300 Classic fleet, which was completed on September 29, 2017. The Company continues to expect to end 2017 with 707 aircraft and 2018 with 750 aircraft in its fleet. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables. The Company currently expects its fourth quarter 2017 available seat miles to increase in the one to two percent range, compared with the same year-ago period.

During third quarter 2017, the Company continued its investment in California by adding nearly 20 new nonstop routes, increasing frequency to 27 existing routes, and opening new international gateways, in each case beginning in 2018. The Company also recently announced plans to begin selling tickets in 2018 for service to Hawaii and announced its intention to launch an application process for Federal Aviation Administration authorization for ETOPS. The Company continues to expect its 2018 available seat mile year-over-year growth to be less than 5.7 percent, with first half 2018 year-over-year growth in the range of three to four percent.

737 Delivery Schedule
As of September 30, 2017

	The Boeing Company
	-800 Firm Orders	MAX 7 Firm Orders	MAX 8 Firm Orders		MAX 8 Options	Additional -700s	Total
2017	39	—	14		—	18	71	(b)
2018	26	—	13		—	4	43
2019	—	15	—		5	—	20
2020	—	14	—		8	—	22
2021	—	1	13		20	—	34
2022	—	—	15		21	—	36
2023	—	—	34		23	—	57
2024	—	—	41		23	—	64
2025	—	—	40		36	—	76
2026	—	—	—		36	—	36
2027	—	—	—		23	—	23
	65	30	170	(a)	195	22	482

(a) The Company has flexibility to substitute 737 MAX 7 in lieu of 737 MAX 8 aircraft beginning in 2019.

(b) Includes 28 737-800s, 14 737-700s, and 9 737 MAX 8s delivered as of September 30, 2017.

The Company’s GAAP results in the applicable periods include other charges or benefits that are also deemed “special items,” that the Company believes make its results difficult to compare to prior periods, anticipated future periods, or industry trends. Financial measures identified as non-GAAP (or as excluding special items) have been adjusted to exclude special items. Special items include:

Union contract bonuses recorded for certain workgroups. As the bonuses would only be paid at ratification of the associated tentative agreement and would not represent an ongoing expense to the Company, management believes its results for the associated periods are more usefully compared if the impacts of ratification bonus amounts are excluded from results. Generally, union contract agreements cover a specified three- to five- year period, although such contracts officially never expire, and the agreed upon terms remain in place until a revised agreement is reached, which can be several years following the amendable date;
Expenses associated with the Company’s acquisition and integration of AirTran Holdings, LLC, the parent company of AirTran Airways, Inc. (“AirTran”). Such expenses were primarily incurred during the acquisition and integration period of the two companies from 2011 through 2015 as a result of the Company’s acquisition of AirTran, which closed on May 2, 2011. The exclusion of these expenses provides investors with a more applicable basis with which to compare results in future periods now that the integration process has been completed;
A noncash impairment charge related to leased slots at Newark Liberty International Airport as a result of the Federal Aviation Administration announcement in April 2016 that this airport was being changed to a Level 2 schedule-facilitated airport from its previous designation as Level 3 (a “slot” is the right of an air carrier, pursuant to regulations of the Federal Aviation Administration, to operate a takeoff or landing at a specific time at certain airports);
Lease termination costs recorded as a result of the Company acquiring 13 of its Boeing 737-300 aircraft off operating leases as part of the Company’s strategic effort to remove its Classic aircraft from operations on or before September 29, 2017, in the most economically advantageous manner possible. The Company had not budgeted for these early lease termination costs, as they were subject to negotiations being concluded with the third party lessors. The Company recorded the fair value of the aircraft acquired off operating leases, as well as any associated remaining obligations to the balance sheet as debt; and
An aircraft grounding charge recorded in third quarter 2017, as a result of the Company grounding its remaining Boeing 737-300 aircraft on September 29, 2017. The loss was a result of the remaining lease payments due and certain lease return requirements that may have to be performed on these leased aircraft prior to their return to the lessors as of the cease-use date. The Company had not budgeted for the lease return requirements, as they are subject to negotiation with third party lessors.

Air China to fly nonstop Shenzhen – Los Angeles

Air China is altering its current Shenzhen – Beijing – Los Angeles route to nostop Shenzhen – Los Angeles service effective December 7, 2017.

The new nonstop route will be flown with Boeing 787-9 Dreamliners three days a week.

Air Canada reports record 3Q financial results

Air Canada reported record third quarter 2017 EBITDAR (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $1.388 billion compared to the previous record third quarter 2016 EBITDAR of $1.248 billion, an increase of $140 million. The airline recorded a record third quarter EBITDAR margin of 28.4 per cent. On a GAAP basis, Air Canada reported record third quarter operating income of $1.004 billion compared to the previous record third quarter 2016 operating income of $896 million.

Air Canada reported record adjusted net income of $950 million or $3.43 per diluted share in the third quarter of 2017 compared to adjusted net income of $821 million or $2.93 per diluted share in the third quarter of 2016. The airline reported record third quarter net income of $1.786 billion or $6.44 per diluted share compared to net income of $768 million or $2.74 per diluted share in the previous year’s quarter. In the third quarter of 2017, Air Canada recorded a net income tax recovery of $793 million on its consolidated statement of operations. This amount is excluded from Air Canada’s reported adjusted net income.

“I am pleased to report that Air Canada delivered its best ever third quarter financial performance,” said Calin Rovinescu, President and Chief Executive Officer. “These record results underscore the success of the multi-year transformation of our business model. This follows our September 19^th Investor Day when we outlined in further detail our accomplishments and the opportunities that lie ahead which, together with more ambitious financial targets for the next three years, have been well received by the investor community.

“In the quarter, Air Canada’s financial performance was strong in all key financial measures, including margins and free cash flow, and we continued to reduce our financial leverage, further lowering the airline’s risk profile.

“Reflecting Air Canada’s on-going growth, in the quarter we increased passenger revenue by 9.1 per cent to a record $4.478 billion, including strong gains in the business cabin. Traffic increased 8.8 per cent while yield improved 0.4 per cent. This yield growth was achieved despite an increase in average stage length of 3.9 per cent versus last year’s quarter, driven by a robust revenue environment and effective revenue management. On a stage length adjusted basis, yield improved 2.6 per cent year-over-year. We also achieved a solid cost performance in the quarter with an adjusted CASM decrease of 2.1 per cent from the previous year’s quarter.

“I would like to thank Air Canada’s 30,000 employees for their unwavering focus on taking care of our customers in our busiest quarter ever during which we served a record 14 million passengers. And they did so with care and professionalism during a quarter marked by significant disruptions to communities and airports in Western Canada, Southern United States, Caribbean, Mexico and Central America affecting customers and employees alike. The spirit, dedication and compassion of the Air Canada team responding to these situations and making a difference to the lives of so many was a moment of pride for all,” concluded Mr. Rovinescu.

Interjet to add new flights from Los Angeles

Interjet is bolstering its service to Los Angeles adding new, nonstop flights between Los Angeles and Los Cabos, Puerto Vallarta and El Bajío, Mexico. Interjet already serves Los Angeles with nonstop flights to Cancun, Mexico City and Guadalajara, Mexico. This new service is scheduled to start on November 23, 2017.

Interjet’s new Los Angeles service will be operated using Airbus A320 aircraft with 150 seats. The initial schedule from Los Angeles will be for three frequencies per week to Los Cabos, four flights a week to Puerto Vallarta and daily service to El Bajio, all at convenient departure times.

Interjet aircraft photo gallery:

Hainan Airlines launches first nonstop service between New York (JFK) and Chengdu and Chongqing in western China

Hainan Airlines, a unit of HNA Group and mainland China’s only Skytrax Five-Star airline, this week begins two new routes between New York’s John F. Kennedy International Airport (JFK) and the Chinese cities of Chengdu and Chongqing.

Services to Chongqing commenced on October 21 and to Chengdu on October 27 from JFK’s Terminal 4. Each route will operate twice weekly on Hainan Airline’s fleet of Boeing 787 Dreamliner aircraft. With a capacity for over 60,000 passengers per year, it is the only nonstop service offered between New York City and China’s rapidly growing Sichuan province. Chongqing to New York will be Hainan Airlines’ longest flight route—nearly 7573 miles.

These new services represent the 13^th and 14^th nonstop trans-Pacific routes, following the West Coast launch earlier in the year.

Chengdu, the capital of Sichuan province, is widely recognized for its Giant Panda Breeding Center. But this traditional home of Sichuanese cooking city is fast-becoming the latest stop on the global food trail, as Chengdu is Asia’s first UNESCO City of Gastronomy. Chengdu also strikes the perfect balance of traditional Chinese customs and modern cultural elements, from the many traditional tea houses to the 150 museums it boasts.

Chongqing is a major commercial center of 30 million people, renowned for its distinctive spicy cuisine, and its busy port along the Yangtze River. Chongqing is the home of the UNESCO World Heritage site of The Dazu Rock Carvings and Chinese religious sculptures and carvings that date back to the 7^th Century. As the provisional capital of China from 1937 – 1945, Chongqing also has a rich wartime history.

Hainan Airline New Route Information

Through its partner, JetBlue, Hainan Airlines will offer connections to its network of over 70 destinations to passengers arriving from JFK.

Flight Route	Departure Time	Landing Time	Schedule	Type
Chongqing-New York HU415	22:00	00:50+1	Weds/Fri	B787
New York-Chongqing HU416	02:50	05:55+1	Thurs/Sat	B787
Chengdu-New York HU7915	22:00	00:50+1	Thurs/Sat	B787
New York-Chengdu HU7916	02:50	05:55+1	Fri/Sun	B787

United reports its third quarter results

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United Airlines (UAL) has announced its third-quarter 2017 financial results.

UAL reported third-quarter net income of $637 million, diluted earnings per share of $2.12, pre-tax earnings of approximately $1.0 billion and pre-tax margin of 9.9 percent.
Excluding special charges, UAL reported third-quarter net income of $669 million, diluted earnings per share of $2.22, pre-tax earnings of $1.0 billion and pre-tax margin of 10.4 percent.
UAL repurchased $556 million of its common shares in the third quarter, bringing the year-to-date share repurchases to $1.3 billion.
UAL delivered the best-ever third-quarter consolidated on-time departures in the history of the company, and employees earned $11 million in bonuses for operational performance.

“I could not be prouder of how our employees are raising the bar both in terms of serving our customers, as well as delivering record-setting operational performance. Not only did they manage to keep our operation moving through back-to-back natural disasters, but the United family banded together to help one another take part in one of the largest relief efforts in our airline’s history,” said Oscar Munoz, chief executive officer of United Airlines. “Even with the challenging environment in the third quarter, we continue to set the stage for United’s long-term success and investing in the right strategy for our future.”

During the quarter, the company cancelled approximately 8,300 flights as a result of severe weather in southeast Texas, Florida and parts of the Caribbean. The operational disruption reduced third-quarter pre-tax income by an estimated $185 million.

Third-Quarter Revenue

For the third quarter of 2017, revenue was $9.9 billion, roughly flat year-over-year including an estimated $210 millionloss of revenue from severe weather during the quarter. Third-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was down 3.7 percent compared to the third quarter of 2016. Cargo revenue was $257 million in the third quarter of 2017, an increase of 14.7 percent year-over-year primarily due to higher international freight volume.

Third-Quarter Costs

Operating expense was $8.8 billion in the third quarter, up 6.0 percent year-over-year. Consolidated unit cost per available seat mile (CASM) increased 3.0 percent compared to the third quarter of 2016 due largely to higher fuel and labor expense. Third-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 2.6 percent year-over-year, driven mainly by higher labor expense.

Liquidity and Capital Allocation

UAL generated $577 million in operating cash flow and ended the quarter with $6.3 billion in unrestricted liquidity, including $2.0 billion of undrawn commitments under its revolving credit facility. Capital expenditures were $1.1 billion in the third quarter.

In the third quarter of 2017, UAL raised $400 million of unsecured debt with an interest rate of 4.25 percent. The company contributed $160 million to its pension plans and made debt and capital lease principal payments of $222 million. In the quarter, UAL purchased $556 million of its common shares at an average price of $67.08 per share. As of Sept. 30, 2017, the company had approximately $553 million remaining under its existing share repurchase authority.

For the 12 months ended Sept. 30, 2017, the company’s pre-tax income was $3.3 billion and return on invested capital (ROIC) was 14.9 percent.

“As we balance United’s customer, employee and shareholder priorities going forward, a key focus remains returning cash to shareholders and we continued this during the third quarter, repurchasing $556 million of stock, which brings our year-to-date repurchase total to $1.3 billion,” said Andrew Levy, executive vice president and chief financial officer of United Airlines. “Our balance sheet remains strong as evidenced by the 4.25 interest percent rate on the $400 million of unsecured debt raised during the quarter.”

For more information on UAL’s fourth-quarter 2017 guidance, please visit ir.united.com for the company’s investor update.

Third-Quarter Highlights
Customer Experience

New Customer Solutions Desk rolled out system-wide with a dedicated team to develop creative solutions to ensure customers reach their final destinations when their travel plans don’t go as expected.
Named the 2017 Airline of the Year in recognition of United Polaris business class experience at the International Flight Services Association (IFSA) Compass Awards.
Unveiled a bag tracking feature in the United mobile app which allows customers to track their checked bags from check-in to arrival.
Retrofitted the first Boeing 767-300ER aircraft with the United Polaris business class.
United Polaris earned Global Traveler magazine’s “Outstanding Innovations” award at the Global Traveler’s fifth annual Leisure Lifestyle Awards.
Became the first U.S.-based airline to offer a new option to check in and learn about flights without the touch of a finger through a new United skill for Amazon Echo and Amazon Echo Dot.
Officially announced the final flight of the Boeing 747-400 as it retires, with the final voyage on Nov. 7, 2017 from San Francisco to Honolulu.

Network and Fleet

Announced several new routes:
- New international nonstop service between Houston and Sydney, nonstop seasonal service to Mazatlan, Mexico, increased seasonal service to popular ski destinations and more options for Seattle-area customers with daily service between Paine Field and Denver and San Francisco.
- Announced new seasonal service between Denver and London; Newark, New Jersey, and Porto, Portugal and Reykjavik, Iceland; San Francisco and Zurich; and Washington Dulles and Edinburgh, Scotland. Additionally, announced expanded year-round service between Newark and Rome.
Announced an agreement with Airbus to modify its A350 order resulting in a conversion of the model type from the A350-1000 to the A350-900, an increase in the order size from 35 to 45 aircraft and a deferral of the first delivery to late 2022.
Took delivery of one Boeing 787-9 aircraft, four Boeing 737-800 aircraft and nine Embraer E175 aircraft.
Finalized agreements to take delivery of two additional used Airbus A320 aircraft by the end of 2017.

Operations and Employees

In response to the recent catastrophic weather events Harvey, Irma and Maria, United and its employees came together to keep the operation moving and take part in relief efforts:
- Operated 84 additional flights to provide additional seats and deliver needed relief supplies to impacted areas.
- Operated 46 relief flights, flying more than 2,000 evacuees out of impacted areas.
- Flew 767 flights with larger aircraft in order to carry more people and supplies. The combination resulted in over 13,600 additional seats to impacted areas.
- Delivered over 1.7 million pounds of relief supplies to aid the recovery in Texas, Florida, Puerto Rico and the Caribbean.
- Customers and employees, with supporting funds from the company, raised and contributed more than $9 million to community and employee assistance.
Continued to improve the mobile tools used by employees, including the first release of the “in the moment” care app, and new functionality in flight attendant tools to better serve customers. These tools were the basis for the company receiving the CIO 100 award.
Announced partnerships with three world-class design and apparel companies – Brooks Brothers, Tracy Reeseand Carhartt – to inspire and create a new line of uniforms for the carrier’s more than 70,000 front-line employees.