United Airlines CEO Scott Kirby Talks Safety and Demand

If you look at the IR for data, what it'll tell you is that a lot of the profitability in this sector is coming from the United States, and within the United States, it's coming from the big carriers. As you say, we're joined by one of those now, the CEO of United Scott Kirby. Nice Cae, sir, thanks for eving. We saw a little hiccup a few days back. American comes out, it changes its guidance, the industry reacts, share

You know, it's demand for us is steady as she goes in a way kind of boring over the last couple of years. I think boring is good, but it really is not getting a lot stronger, but not getting weaker.

It really is pretty steady.

And what changes that? Does anything change that? Does the fact that the labor market maybe started to show a few little cracks, the fact that maybe rates stay higher for longer. Do any of these factors impact that strong consumer that we're saying to you.

It could, but we spent the last two years talking about the risk of recession, and the consumer just keeps plowing ahead and keeps going, and so I think that's likely going to continue. The bigger thing, the more likely change for aviation, I think, is on the supply side. We're at a peak and where the number of seats is growing a whole lot faster than the demand in the United States. But as we move into the third and fourth quarter, those numbers are scheduled to come.

Back down life.

So I think the supply balance will counteract even if there was.

It's going through because is it with you guys at the upper end, the full service carriositing really.

Across the board, right, you know, Southwest is probably the biggest thrower of seats, but it's really it really is across the board. We're growing, others will growing kind of across the board.

Just the peak.

This is a lot of still recovery from COVID, and this was the time that people were getting all their ability to grow back in place.

So second quarter's peak.

I can see that capacity in some ways making sense that you're end of the market. Does it make sense of the bottom end of the market. Do you think all of those low cost carriers survive.

No, it doesn't make sense.

And we can look, we do do the route p and ls really accurately for everyone, and you know everyone that's you know, as Margins Lord of us as a big chunk of their route network that loses money. The low cost and ultra low cost carriage in particular lose.

An awful lot of money. It's just it's a fatally flawed business model.

So some of them are going to go.

I think that they're going to struggle to survive.

Okay, that's about as far as I think I'm going to get used to say. That just makes the American issue. They pushed the corporate market very hard. Did you benefit from them?

You know, there's a probably a small benefit in market share that we watched the data pretty closely, and while they we got a little bit of market share from them, we thought that they were making up close to one hundred percent of their revenue change in terms of distribution expenses. And so I think it's gotten a lot of press, but we certainly thought it was a marginal issue both for them and for US.

Util supply side, the industry though, is supply constrained right now. You've got an issue with the prime, with the enginestead of going on three twenties, you've always the issues with the Max and the White of Boeing issues right now is your sense that we are past the worst of that there's worse still to come. Come and just give us to say.

To something, you know, I think we are past the worst. I think we've acknowledged the problems by and large. You know, you talked about two of the big manufacturers that are issues, Pratt and Boeing. I think that we're we're probably moving up from here. It's not going to be overnight. They're not going to get back to one hundred percent, you know quickly. But that's okay, Like you know, particular when I took them Boeing, you know, like I'm not worried

So when you thought that would be five years a Boeing, yeah, I think that's a realistic number.

I think it'll be faster than five years.

But it depends on them really making the kinds of cultural changes that they need to make. If they make the cultural changes, I think Boeing gets fixed or gets back, gets their mojo back quicker. If they don't make cultural changes, they're not going to get their mojo back.

If you were to give advice to the chair on what kind of a person needs to sit in that cease of CEO, what kind of advice would you give?

So you know, what I hope they do is somebody that focuses on the culture of Boeing and letting the one hundred and forty thousand only has one hundred and forty thousand great people, engineers, mechanics. Let them go build, design great products, build great technology, and focus on that and not focus on the short term financials.

That's the biggest issue. Focus on the upfront.

Build great airplanes, great products, and the financials will take care of themselves.

Don't try to manage the back end. Manage it upfront.

Start from that. Let's stay with the FAA. You've been under review by the FA. Any indication kind of how on that process is going to last? Where are we?

Yeah, everything in that process is as has gone well, so far, no major findings.

I think the FA would tell you that. I know the FA would tell you the same thing if the answer the question, you know, we forgot we think it. Actually we've taken this as an opportunity.

Really we had a great safety foundation, but we did have a number of events that happened. But take that as an opportunity to make not just safety number one, but top of mind awareness all the time. And you know, I for the rest of my career, for example, every time I talk to employees, you know, I'm going to

What do you want to see from the next administration, What do you want to see from the next incomings of the White House?

What helps this industry?

What helps America?

Well, it's more about help America and help the world. You know, I think the United States is I think it's it's the greatest country in the history of the planet. But what makes great is positivity, optimism, vision for the future.

And I want us to get back to.

Being positive, being optimistic, looking to the future and how to make things better and focusing on that. And I think we need that in the United States. I think people would respond positively to that. The world needs it, and we can make the country in the world a better place.

You are, by far and away the most international of the US major carriers. Do you think a Trump administration makes your job harder being an international carrier? Do you think we're going to see more fragmentation? I guess the question that I'm really.

Asking you know, I don't think it really affects demand or our ability to fly around the world in any measurable way, one way or another.

Great to see you, Thanks very much to see Thank you, Scott, Thank you very much. Indeed, Scott Kirby, the CEO of United here at the IFFA AGM in Divine