Good morning. And welcome to United Airlines Holdings Earnings Conference Call for the Fourth Quarter 2023 and Full Year 2023. My name is Tegan and I will be your conference facilitator today. Following the initial remarks from management, we will open the line for questions [Operator Instructions]. This call is being recorded and is copyrighted. Please note that no portion of the call may be recorded, transcribed or rebroadcast without the Company’s permission. Your participation implies your consent to our recording of the call. If you do not agree with these terms, simply drop off the line. I will now turn the presentation over to your host for today’s call, Kristina Edwards, Managing Director of Investor Relations. Please go ahead.

Thank you, Tegan. Good morning, everyone. And welcome to United’s fourth quarter and full year 2023 earnings conference call. Yesterday, we issued our earnings release, which is available on our Web site 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 or beliefs concerning future events and financial performance. All forward-looking statements 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 the 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 our Chief Executive Officer, Scott Kirby; President, Brett Hart; 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 to assist with the Q&A. And now, I’d like to turn the call over to Scott.

Thank you, Christina, and good morning to everyone on the call today. Despite numerous geopolitical and other headwinds around the globe, 2023 really was the year that our plan for United Next came together. Our thesis at this time last year was that operational constraints, other factors were leading to cost convergence and those cost pressures in turn would lead to higher revenues. That is certainly true for United because our diversified revenue streams continue to differentiate us from other airlines. Another way of saying that is that we believe that a new link between United's CASM and RASM was being solidified. And while it might be hard to get either a CASM or RASM forecast exactly correct, we can have higher confidence in forecasting the relationships between the two, and therefore, have higher confidence in our earnings [Indiscernible] margin forecast. And despite a year filled with events that we could have never predicted, that's exactly what happened in 2023. And so, I'd like to thank the 100,000 United team members around the world who worked so hard to make that happen. And those same 100,000 people continue to deliver in the face of a huge impact on our employees and customers from the MAX 9 grounding. I'm proud of our tech ops team who's taken the lead and has been working 18 hour days nonstop since January 6th to ensure that the MAX 9 is a 100% safe before we return it to service. I'd also like to thank the FAA for their professional leadership in this situation and also acknowledge that they too are also working long hours and weekends with us in an effort to ensure that we know for sure what happened so we’d be confident that the remediation prevents it from ever happening again. 2023…

Thank you, Scott, and good morning. As of Saturday, January 6th, Boeing 737 MAX 9 aircraft has been grounded. We are currently the largest operator of the Boeing [Technical Difficulty] fleet type, the aircraft representing approximately 8% of our capacity in the first quarter. Our financial guidance assumes that United’s 79 MAX 9 aircraft is grounded [Indiscernible] January. I echo Scott's gratitude for all at United who worked so hard [Technical Difficulty] travel plans were affected by the grounding of our MAX 9 fleet. I'm also extremely proud of our tech ops team who’ve been working carefully to ensure the safety of our MAX 9 aircraft before we start flying them again. 2023 was a year of growth and restoration. And we closed out the year with strong record breaking operational results, carrying a record 171 million customers. The fourth quarter consolidated customer D0, A0 and misconnect rate were the best for any quarter in our history. Not only did we set company records for the quarter but we also ran record setting operations during our busiest time of the year over Thanksgiving and Christmas. Thanksgiving and the entire fourth quarter had the highest NPS scores in our post pandemic history. We wrapped up the year with our lowest ever cancel rate for the month of December. One of the largest challenges United and all airlines flying to and from New York have historically faced more flights than the air traffic system can handle is now being addressed, thanks to proactive intervention by the FAA. Newark, United's largest hub has been operating with the best reliability on record since the FAA mandated that flight activity to be consistent with the airspace and runway limitations of no more 77 operations per hour this fall. For United, that meant we reduced flight…

Thanks, Brett. As Scott mentioned, cost pressures led to healthy revenue trends in the quarter with stellar performance over the holidays. Total revenues in the fourth quarter increased 9.9% on a 14.7% increase in capacity. Consolidated TRASM was down 4.2% and PRASM was down 3.3% for the quarter. Domestic demand was strong in the quarter and PRASM results were slightly negative year-over-year, a nice improvement from the third quarter. Atlantic PRASM growth in Q4 of positive 3.8% was consistent with Q3 year-over-year growth of 4%. We also experienced a small but measurable demand weakness period across for Europe in Q4 triggered by the conflict in Israel but that has now moderated. United increased Asia Pacific flying by 82% in the quarter. PRASM was down 11.6% year-over-year. In the quarter, we increased flying to China from four weekly flights to twice daily, amongst many other changes we've now fully restored our capacity to pre-voted levels across the Pacific. Latin American unit revenues decreased by 11.6% in the quarter, pressured by record industry capacity levels and heavy fare discounting. Cargo revenues continue to adjust to their new city state post pandemic state. For 2023, cargo revenues were $1.5 billion, 31% lower than 2022, [amongst] all the revenue changes due to yields, not volumes. MileagePlus [Technical Difficulty]. Turning to our outlook for the first quarter. We expect TRASM in Q1 to be approximately flat year-over-year, which is a nice sequential improvement versus the past few quarters. Domestic demand remains strong with increases in business traffic volumes year-over-year in addition to stronger pricing thus far this year, and we expect domestic year-over-year PRASM to be positive for the quarter. We see the best yield growth occurring on tickets purchased within a week of departure. Bookings and yields for Atlantic fly in early 2024 are…

Thanks, Andrew, and thank you to the whole United team for closing up the year on a high note, both operationally and financially. I'm proud to report that in 2023 we delivered pretax income of $4.3 billion, a more than $3.2 billion improvement over 2022. We delivered earnings per share of $10.05 within our initial guidance range of $10 to $12, and well ahead of consensus expectations of about $6 at the beginning of the year. We achieved this despite significant industry headwinds and operational constraints that led to lower capacity. For the fourth quarter, we delivered pretax income of $845 million and earnings per share of $2, ahead of consensus and above the high end of our guidance range. Strong operational performance, robust revenue trends and a decrease in fuel prices supported these results. Fourth quarter CASM-ex was up 4.9% as we did not operate flight to Tel Aviv for the full quarter. Additionally, effective with the fourth quarter, we are now classifying certain commissions that has been classified as contra-revenue and distribution expense. This has no impact on net income or cash flow. This change added 1 point to our year-on-year fourth quarter CASM-ex and increased fourth quarter year-on-year unit revenue by 0.6 points. The change will also result in an approximate 1 point headwind to year-on-year CASM-ex and an approximate 0.6 point increase in RASM through the end of the third quarter of this year. Underlying unit costs trended favorably during the quarter as the completion factor came in better than planned due to our strong operational performance. Compared to 2019, our relative performance on CASM-ex was near the top of the industry. As Scott outlined, delivering strong relative cost performance remains critical to the successful execution of United Next. We have always ascertained the costs that…

Thanks, Mike. We will now take questions from the analyst community. Please limit yourself to one question and if needed, one follow question. Tegan, please describe the procedure to ask the questions.

[Operator Instructions] All right, we will go to the first caller in queue, Ravi Shanker from Morgan Stanley.

So maybe Scott, you said at the start that you saw pressure on your 2023 capacity and I think you kind of went through your order book and said there's downward pressure there expected as well. Does this want to make you look at the long term United Next growth plans and kind of what can be practically achieved in the coming years, is that something you can expect to do in the Investor Day?

Look, the reality is that with the MAX grounding, this is the kind of straw that broke the camel’s back with believing that the MAX 10 will deliver on the schedule we had hoped for. And so we're working through an alternate plan. We do expect our growth rate to slow in coming years. Though United Next plan is firmly on track it will take a little longer to get there. And we're working on alternate plans to see how much higher we can elevate the growth with the MAX 10. Now we're still counting on Boeing and we're monitoring the MAX 10 closely and we're rooting and we'll do everything we can to help that aircraft get certified. It's a great aircraft. But we can't count on it and so we're working on alternate plans. The details we'll share when we have them. I hope we'll have more by the first quarter conference call, and we'll certainly have a fulsome update for you by our May 1st Investor Day.

And maybe as a quick follow-up. I think you guys have said Asia can be pretty decent kind of as it comes back. I think you guys were profitable on the China routes prior to the pandemic. Correct me if I'm wrong. Do you think Asia margins can be better than before and is that a temporary demand catch up, or do you think that's sustainable kind of in the new normal?

As we rebuilt Asia, we definitely wanted to rebuild it. So it has sustainably higher margins than it did pre-pandemic. And we've gone about that, I think, very carefully. We're back to our pre-pandemic size, which is nice at this point. And China was profitable for us pre-pandemic, although, it was not our highest margin climb to be fair. As we bring it all back, our goal is to make sure that the Asia Pacific entity produces margins that are similar to that across the rest of our global network. And I think that at least in 2023, Asia Pacific is well ahead. I do expect things to move around a bit, particularly as more China flights come back online. But I think we're particularly bullish about what Asia looks like going forward. We added a lot of capacity in the quarter, we are absorbing it, and we expect in Q2 and Q3 that capacity is going to do very well. So very bullish about the long term prospects in Asia post pandemic.

All right. We’ll go to the next caller in queue. Jamie Baker from J.P. Morgan.

First one for Andrew. So you said the 20% revenue increase for Basic Economy, what can you tell us about the composition of that growth? Is some percentage MileagePlus members trading down? Is some percentage stimulation of brand new demand from scratch, is some percentage of share shift from LMAs? I guess the simpler question is who's driving the growth?

I think it's largely a share shift, Jamie. We developed Basic Economy numerous years ago now and have been refining how we sell it, how we distribute it, and that product. And it's an important product in our lineup. We do focus a lot on premium. But we know we need to be competitive across the whole range of needs that our customers have in our hubs and that required a competitive basic economy product that we could do profitably. And as we look at the data, we think the biggest change here is as we've increased our gauge, we've been able to attract more and more market share across the board, but in particular, we've been able to attract more of it from some of the low cost carriers out there. So we're really pleased with this development. And it's given us every indication that we should continue to push forward as our gauge increases and we'll be able to more effectively take on that traffic and grow our share base even more.

And then for Mike, it was a couple of years ago, in fact, it might have been, like, almost two years to the day that there were press reports that United was looking at monetizing a portion of MileagePlus and then things subsequently went pretty quiet on that front. So a couple of questions. First is, is loyalty as important to United as it is to Delta? Delta's leading so hard into this topic on its calls. And second, any thoughts on how United or the broader industry might get investors to value this cash flow at a higher multiple? And if the answer is no, I'm happy to cede the floor.

I appreciate the question. This is something I'm very passionate about. MileagePlus is a crown jewel in the businesses we have here at United Airlines. We've made some significant progress towards growing that business. We have a new leader in Richard Nunn. We have significant projects underway around data and how we can create a better customer experience and monetize that data, simultaneous. And you can expect a very fulsome update on the May 1st Investor Day. We do have ideas on how to bring the market attention to the value and the higher premium multiple that those earnings should trade at. And we have several options, and we'll share more when we're ready to share more. But we've discussed some of those, some of those have been written about in the analyst reports. And if the value is not recognized in our fares, we will take action to highlight that value in the near future.

We’ll go to the next caller in queue, Michael Linenberg from Deutsche Bank.

Just getting back to, I guess, Scott, on the issue with the MAX 10, at least, fortunately, in the case of United, you do have a choice. You're a very large operator of the Airbus product as well as the Boeing narrow-body product. As we think about the issues with supply chain and constraints across the OEM space, is there at some point where you're thinking that given the size of United that it would be prudent to consider a wide-body from another OEM? Right now, it looks like the 787 is the future for United from a wide-body perspective, but you still have that A350 order out there. Has your thinking on that changed?

The A350 is a incredible aircraft. We have a significant order book for 787s right now and we have a mix of 777 aircraft, some are relatively older and a sub fleet is quite young. As we look into the 2030's, the A350 is an aircraft that we are looking at. We don't have any new news to share with you today but the timing will be that early part of the next decade.

And then just a quick follow-up back to what Jamie brought up on Basic Economy, the 20% increase is obviously pretty significant. But last quarter, you were up 50%. And the question is, is that just a function of a more difficult comp or did you actively pull back on inventory of Basic Economy just given the surge that we've seen on the cost side, and back to your point about sort of trying to maintain that gap between CASM and RASM?

No, we didn't pull back on it for that reason. And remember, these are year-over-year comps but you have to consider the math of what we did last year. We're very bullish about Basic. We're also very bullish about the premium. And the point is, we have a really great diversified revenue stream across all of our cabins as we try to de-commoditize our product. We are really hopeful that we'll continue to drive increasing volumes in basic. It seems to be having the appropriate P&L effect at United and competitive effect across the industry. So it's something we want to do more of, not less of. And so you should expect that.

Conor Cunningham from Melius Research.

I'm a little confused on the comment between -- on the link between CASM and RASM. I would have thought that would have been the case before. So I'm just trying to understand what's changed. Is it that you're being -- like just better at predicting outcomes or is it really more of an industry comment that you're trying to drive home here?

It's really an industry comment. In the past, if United had -- if an airline, including United, had CASM going up, while others had CASM going down, the price is the lowest common denominator. So it's an industry comment. As industry -- just like fuel. Anything that affects the whole industry is a pass through. If it affects one airline, it's not, but if it affects all airlines, it's a pass through, that was -- we were sitting in this room a year ago, and maybe we didn't do it articulately, but that was the point we were trying to make, and that is exactly what happened. And it is what's going to happen going forward.

And then it was a little unclear in the prepared remarks. I'm just trying -- does your outlook for costs include accruals for open labor contracts, and just what are the risks that you see for the cost plan in 2024?

We include our expectations for all labor agreements in our base.

Catherine O'Brien from Goldman Sachs.

I might stick with the cost side, just following on Conor's quickly here, versus your low single-digit ex-MAX impact CASM-ex guide for the first quarter. How do we think about the puts and takes through year-end versus that level of CASM-ex inflation? Before today, I was originally assuming growth would decelerate over the year, but CASM-ex comp fees, so each quarter in my model ended up looking pretty similar on a year-over-year basis, ex-MAX impacting the 1Q. Is that a fair way to think about it or is there more lumpiness than that, that I'm missing? And then I guess, just to put a finer point on one question, does 1Q and full year EPS include any flight and tenant accrual?

So Catie, let me take the last question first. We include our expectations for labor agreements in our guidance. Regarding CASM trends in Q2 and Q3 and Q4, you would expect the MAX headwind to go away. We do think we're getting closer to seeing that aircraft fly again. You would see some United-specific tailwinds with some gauge increase. Although, with slowing deliveries, that gauge increase in '24 will be less than we would have expected. You will see continued pressure from labor of about 3 to 4 points, that's an industry headwind for CASM-ex, not unique to United. We expect it will lead to higher TRASM to offset. But you should continue to see that we will lap the majority of that as we enter into the fourth quarter. And then maintenance headwind of about 1 point, that's going to be lumpy quarter-to-quarter. As I sit here today, I think it's about 1 point in each of the quarters. this year. At some point, the supply chain will fix itself in aerospace, but we don't see that today and I think it probably takes well beyond 2024. So you should think about -- to summarize, you should think about the labor and maintenance headwinds as being persistent.

And maybe just sticking with you, Mike, the $9 billion CapEx figure that's tied to your contractual commitments, unless I've got that wrong. Even as of your last 10-Q before the MAX grounding, you were expecting 17% less aircraft than the contractual amount. I guess there's probably more downside reset today, given what's going on with the MAX. But in order of magnitude, does that delta between expected and contractual deliveries largely flipped how we should think about downside risk on a dollar basis versus that $9 billion?

The delta in between contractual and expected is growing. And we don't know exactly where it settled yet, that's what we're working through now. And we are working on an alternate strategy to mitigate some of the loss in growth. But yes, as you're thinking about CapEx coming below $9 billion this year and the trajectory for maybe lower than what you would expect CapEx in '25 and beyond, that's how you should think about it.

Scott Group from Wolfe Research.

So Mike, I totally get your message that the plan is fluid and flexible. But as it stands today, I'm just wondering, do you think RASM is going to be positive this year? And then maybe just, can you help us just think about shaping the year a little bit? So if I look at last year, had a pretty massive second quarter and then moderation in the second half of the year. Are you thinking a similar shape or maybe more back half weighted? Any color there would be helpful.

Scott, I'll kick it off and say, yes, we think TRASM for the year will be positive, but the details will come from Andrew.

Well, we're not giving exact guidance here other than, yes, we're very bullish on the year. I think I laid out a business case where domestic is starting the year incredibly strong. I think we've laid out a business case for where we're going to do with trans-Atlantic capacity. And I do expect Asia capacity to step down materially as we head into Q2 and then Q3, which is obviously going to bolster those numbers, too. So I remain bullish on the year.

Mike, I don't know if you had any thoughts on shaping the year for us, if you have any color. And then maybe just my other follow-up just for Andrew. Just on the point about domestic and international margins converging a little bit this year. Maybe I just want to make sure I'm understanding it. Is this domestic getting better in international a little less good or is it they're both improving, but domestic is improving more? Just any additional color there would be great.

Look, I think we're seeing -- I hate to say the word exceptional, but we're seeing really good strength in domestic right now, and I expect that's going to narrow the gap. International margins are well ahead of domestic margins in 2023, and they'll continue to be well ahead of domestic margins in 2024. But I do think that gap will narrow a bit based on the RASM outlook that I'm looking at, again, which is pretty darn good for domestic. Maybe I'll take the seasonal shape in as well. We're working very diligently to make Q1 a more profitable quarter for United. I think we are well on our way prior to the MAX grounding. And obviously, if you take that out, you can use that to update the estimates as to where we would have been in Q1. We made a lot of changes to how we fly in Q1, and we didn't talk about all those details. But when I look at our RASM trends, particularly in domestic, I am now confident that all those changes had the desired effect. As we continue to build and make sure that in the future, Q1 can -- well, it won't ever be our best quarter to be blunt that it will be a much better relative quarter. But our global network, I have to say in Q2 and Q3 really stands out, and we expect it to be stellar again over those six months in 2024.

Scott, just specifically asked about the shape of our quarterly earnings through the year. It's going to look like a normal seasonal pattern, albeit with a slightly bigger loss in the first quarter due to MAX 9 grounding.

Helane Becker of Cowen.

So here's my two questions. The first question is, as you think about 2026 margins and maybe you'll update us on May 1st, how do we bridge from the roughly 8% at year end '23 to say 12% to 14% in 2026?

We will update our longer term margin targets at Investor Day. But the tailwinds that we expect from the United Next strategy from engage, from the connectivity, from the preference to fly United, we have proven, it used to be -- it was a strategy on a piece of paper. We have proven that it's working. And so as we think about '24, deliveries being a little less than '25 and '26, of reaccelerating into that United Next strategy, we see just continued momentum. And so as for the specific level of 12% to 14% pacing, we're going to have to update you on May 1st. But the strategy is working and we're very confident in an upward trajectory to both earnings and margin.

And then just for my follow-up. I think, United Next targets, and obviously, you'll update them again, I suppose, $25 billion of adjusted net debt as of the end of last year, less than $18 billion for 2026. But the other thing is, how should we think about financing, let's just say, $9 billion is off the table for this year, let's bring it down to $6 billion or $7 billion plus debt paydown. How should we think about you getting to your target leverage over the next one to three years given the CapEx program, which might be $7 billion this year, but it might be $9 billion or $8 billion or $10 billion, '25 or '26?

Let me try to give you a high level view, Helane, and we can dig into more details in the near future. But as I sit here today and I think about the changes in CapEx related to the delay in deliveries, I expect free cash to cover our CapEx in most years, if not all years. And as far as additional paydown of the balance sheet, we would expect that as our margins grow into that low double digit low-teen area that free cash flow will be quite positive, allowing us to pay down that debt. Now the pacing will be dependent on how much that CapEx profile changes and how quickly we get to what we think is that on long run, higher level of margin.

Duane Pfennigwerth from Evercore.

Just a couple for me. On international inbound, so basically international point available to the US. As you look across your network, how recovered is international inbound, how do you think about that growth of that demand set in 2024? And are there any markets that stick out from a recovery headroom potential?

What I would say is during the entire recovery, US outbound has been a stronger component of the traffic, really across the board, across the entire globe, and that continues today, I think, origin Europe, particularly core Europe, Germany continues to trail as well as Japan and Australia, and so we'll continue to monitor that. But the US consumer has made up the difference in most regions of the world quite effectively and has resulted in very strong results over the last year. So I think the outlook is strong but when the inbound customer profile starts to rebound, I think that's just further upside in the future. It hasn't happened consistently across the globe yet but we'll see what 2024 brings.

Just following up there. Any specific markets, maybe San Francisco, Asia inbound, any more kind of bullish recovery thoughts there?

San Francisco is going to be very unique over the next six to nine months. There is a significant amount of runway construction going on in San Francisco that has dramatically limited our ability to fly there. It's also consistent with a slower recovery in that city. So I think that is actually probably okay, but you will see us fly a much reduced domestic schedule in San Francisco. The international flying continues to be very strong. But the smaller domestic schedule, combined with where we are in the recovery, I think, it's going to be just fine for San Francisco in terms of our profit contribution. And San Francisco, Asia continues to perform exceedingly well.

Andrew Didora from Bank of America.

So Andrew, I guess you mentioned this a little bit in your prepared remarks, but we've been hearing and seeing some data on corporate travel getting a bit better as well. Could you maybe dig in and speak to maybe any particular markets or verticals where you see any sort of outsized corporate growth? And have you seen this corporate growth sort of broadening out to make it maybe at a more sustainable level today than at other points in the recovery?

We've all sat on calls and predicted the recovery of business graphic more times than I can count over the last few years. And I will say, Q4 was okay. It wasn't spectacular in any way. But as we started January in the new budget season for all of our big corporate clients, we did notice a significant step-up. So it's really early. It's only been a few weeks, and I hesitate to say, oh my gosh, it's fixed, because it's still well behind where it should be relative to GDP growth, of course. But look, it's a really nice step up. We're seeing close-in yield gains as well that result from that. And I think that's one of the reasons our domestic RASM outlook is as strong as it is. And so hopefully, that continues. At the end of the quarter, of course, we'll report on that and let you know how it looks. But at least for the first two weeks of January, we've gotten off to a really strong start and it gives us increasing signs that this is going to be, I think, a very good year.

And then for my second question, Mike, you have obviously a lot of talk on the call just on your future free cash flow potential. Just when you're looking at your free cash flow, when do you anticipate you will become a cash taxpayer?

Andrew, I think it's a few years off still, let me get with my treasurer, Pam Hendry, and follow up with you on the precise year. It does depend on how CapEx moderates and it depends on that profitability, but it's still a few years off.

Brandon Oglenski from Barclays.

I'll just keep it to one here at the end of the call. But maybe Scott or Mike, I mean coming back to the context that your stock is trading like 3 times or 4 times P/E probably for the second year here, and also giving you guys credit, because I know a lot of us didn't think you could hit those United Next targets so many years out. But you are guiding to roughly flat margins at the midpoint this year. And I think what investors are worried about is things you can control or at least perceived control like costs that are going up for the industry here. Is this just a continued view that United is going to decouple from industry trends where you're going to be able to drive margin premium? And I guess what can you give investors confidence that, that is the path forward here?

I think that it's a structural change in the industry, and we see a ton of evidence in this year and I think eventually the investment community will see it as well. But there is an industry that has operated as a commodity industry and United and one of our legacy peers have clearly differentiated ourselves from the path. And that's leading customers to choose to fly our airlines, it's leading to the majority, if not all, of the revenue growth in the industry accruing to those two airlines, and that is happening simultaneous with cost convergence. That cost convergence, the whole reason that the low cost carriers existed was for -- is because they had lower costs. Those lower costs no longer exist. And so that creates, I think, a permanence to the higher margin, a sustainability to that higher margin. And where that settles, we still -- the jury is still out exactly where that’s up, but it is higher and more stable and more resilient and that is not recognized by the capital markets today.

David Vernon from Bernstein.

So Andrew, I'd like to get some help from you if you can, in terms of helping to think through how some of the negative margin capacity that's going to be forced out of the industry is going to impact your fare ladder. Beyond the upward pressure sort of general maintenance, I'm just trying to like understand if we see a bunch of basic capacity rationalized, because some of these negative margin unbundled carriers have to take capacity out. How is that going to impact sort of basic fares versus economy fares? Anything you could give us to help translate that impact of capacity shift into what sort of impact it's going to have on your fare ladder would be really helpful.

I mean I think that's probably a lot more detail than I can do on a conference call, to be honest. But just generally, unproductive capacity has been leaving the system. I think that's been good for the system and good for United. And so we'll manage our RM like we normally do to take advantage of all of the opportunities. But I just want to reiterate that our choice to diversify our revenues at the top of Polaris and at the bottom of Basic Economy is not something we're going to be giving up on. The Basic Economy is an important part of the airline, it is what our customers want, we will continue to provide choice. And we expect to provide more and more of it as our gauge increases. The competitive dynamics are what they are, I can't predict them. I only really can talk for United, and we'll obviously maximize our returns and do the right thing. But again, the diversified revenue streams that we're putting out there are really working for us across not only the fare ladder but our geographic dispersion of our flying. And so we couldn't be more pleased with our revenue results quarter-after-quarter, by the way, not just in Q4 and not just last year, and the outlook we have. If the industry is dynamic, it's always changing, we'll change with it. But it is, I think, a good time to be at United Airlines and be an investor in United Airlines.

And are you seeing any sort of benefit yet from some of that capacity rationalization as you look forward into to forward bookings, or do you think that's something that's going to develop as we get through the year?

I think our outlook for Q1 for domestic PRASM says it all.

We will now switch to the media portion of the call [Operator Instructions]. David Slotnick of The Points Guy.

I know you talked about London and about slower growth across the Atlantic. I was wondering if you could talk a bit more from a consumer perspective. There's been some talk just about all the capacity across the Atlantic next summer. Do you see any impact on ticket prices, do you see them going down or up, just given all that?

David, what I would tell you is that we're prepared for an incredibly strong summer. As I've said numerous times, we decided to go slow this year. We've tilted more of our capacity, particularly in Q1 to Southern Europe. And that's probably what I would say the biggest change is what we see with the consumer is that destinations in Spain and Italy have become more year round destinations than seasonal. And that is new post pandemic and we're reacting to it and moving more and more capacity out of Northern Europe, out of London Heathrow or Germany and into Southern Europe, and we'll probably do more of that again next year. In terms of the price points, I'm not going to exactly predict that at this point. We don't really talk about pricing. But I would just say, we expect a really strong summer across the Atlantic. Our capacity is not growing materially. And we think that's going to really allow us to get all of the capacity we've added over the last few years to be mature and incredibly and solidly profitable in 2024.

Rajesh Singh from Reuters.

Scott, you made some comments on CNBC this morning that MAX grounding broke the camel's back. Do you have confidence in Boeing's current playership that it will be able to fix its problems that some people will have called the leadership into question and have faltered it for all the quality problems. So do you have confidence in the current leadership?

Boeing has a storied history and thousands of great people. They're one of the best engineering, they're one of the best technology companies in history, they've been a great American company, their biggest exporter. I have -- they're going through a rough patch right now, but I believe that Boeing is across the board from top to bottom is committed to changing and fixing it. I'm encouraging them to do it even faster. And it is going to impact United in the near term because of some of the challenges they've had, but there are great people there and they will get it together. And we are their biggest -- at critical times, we're also their biggest cheerleader. There's no one that's a bigger supporter that wants Boeing to succeed outside of Boeing than me, and I'll do everything I can to help.

Just one clarification, Scott, about your comments about MAX and some people are misconstruing it that you are planning to cancel the order. Can you clarify your comments about MAX 10?

We are not canceling the order. We are taking it out of our internal plans. And so we're taking out of our internal plans and we'll be working on what that means exactly with Boeing. But Boeing is not going to be able to meet their contractual deliveries on at least many of those airplanes. And I’ll just leave it at that.

And that is all the time we have for questions today. I will now turn the call back over to Kristina Edwards for closing remarks.

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.