United Airlines Holdings (UAL) 10-K risk factor changes: FY2019 vs FY2018

[removed: The] [added: *The] following risk factors should be read carefully when evaluating the Company's business and the forward-looking statements contained in this report and other statements the Company or its representatives make from time to time.

Any of the following risks could materially and adversely affect the Company's business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in this [removed: report.][added: report.*]

[removed: If] [added: If] we do not successfully execute our strategic operating plan, or if our strategic operating plan is unsuccessful, our business, operating results and financial condition could be materially and adversely [removed: affected.][added: affected.]

In developing our strategic operating plan, we make certain [removed: assumptions] [added: assumptions,] including, but not limited to, those related to customer demand, competition, market [removed: consolidation] [added: consolidation, the availability of aircraft] and the global economy.

Actual economic, market and other conditions may be different from our [removed: assumptions and we may not be able to successfully execute our strategic operating plan.][added: assumptions.]

[removed: Unfavorable] [added: Unfavorable] economic and political conditions, in the United States and globally, may have a material adverse effect on our business, operating results and financial [removed: condition.][added: condition.]

[removed: The] [added: The] global airline industry is highly competitive and susceptible to price discounting and changes in capacity, which could have a material adverse effect on our business, operating results and financial [removed: condition.][added: condition.]

Several of the Company's domestic and international competitors have increased their international capacity by including service to some destinations that the Company currently serves, causing overlap in destinations [removed: served] [added: served,] and [removed: therefore] [added: therefore,] increasing competition for those destinations.

[removed: This increased competition in both domestic and international markets may have] a material adverse effect on the Company's business, operating results and financial condition.

The significant presence of low-cost [added: carriers and ultra-low-cost] carriers, which engage in substantial price discounting, may diminish our ability to achieve sustained profitability on domestic and international routes.

If we cannot maintain our costs at a competitive level, then our business, [removed: financial condition and] operating results [added: and financial condition] could be materially and adversely affected.

Through alliance and other marketing and codesharing agreements with foreign carriers, U.S. carriers have increased their ability to sell international transportation, such as services to and beyond traditional [removed: European and Asian] [added: global] gateway cities.

If we are not able to continue participating in these types of alliance and other marketing and codesharing agreements in the future, our business, [removed: financial condition and] operating results [added: and financial condition] could be materially and adversely affected.

[removed: High] [added: High] and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel could have a material adverse impact on the Company's strategic plans, operating results, financial condition and [removed: liquidity.][added: liquidity.]

Aircraft fuel is critical to the Company's operations and is [added: one of] our [removed: single] largest operating [removed: expense.][added: expenses.]

During the year ended December 31, [removed: 2018,] [added: 2019,] the Company's fuel expense was [removed: $9.3] [added: approximately $9.0] billion.

Both actual changes in these factors, as well as changes in [added: related] market [removed: expectations of these factors,] [added: expectations,] can potentially drive rapid changes in fuel [removed: price levels] [added: prices] in short periods of time.

In addition, decreases in fuel prices for an extended period of time may result in increased industry capacity, increased competitive actions for market share and lower fares or [removed: surcharges in general.][added: surcharges.]

However, to the extent the Company decides to start a hedging program, such hedging program may not be successful in mitigating higher fuel costs, and any price protection provided may be limited due to [added: the] choice of hedging instruments and market conditions, including breakdown of correlation between hedging instrument and market price of aircraft fuel and failure of hedge counterparties.

[removed: To the extent that the Company decides] to [removed: hedge a portion of its future fuel requirements and uses hedge contracts that have the potential to create an obligation to] pay upon settlement if fuel prices decline significantly, such hedge contracts may limit the Company's ability to benefit fully from lower fuel [removed: costs] [added: prices] in the future.

[removed: The] [added: The] Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of the technology or these systems could materially harm its [removed: business.][added: business.]

These systems could suffer substantial or repeated disruptions due to various events, some of which are beyond the Company's control, including natural disasters, power failures, terrorist attacks, equipment or software [removed: failures, computer viruses] [added: failures] or cyber security attacks.

[removed: The] [added: The] Company's business relies extensively on third-party service providers, including certain technology providers.

Failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their provision of services to the Company, could have [removed: an] [added: a material] adverse effect on the Company's business, operating results and financial [removed: condition.][added: condition.]

The Company does not directly control these third-party service providers, although [added: generally] it does enter into agreements that define expected service [removed: performance.][added: performance and compliance requirements, such as compliance with legal requirements, including anti-corruption laws; however, there can be no assurance that our third-party service providers will adhere to these requirements.]

The failure of any of the Company's third-party service providers to perform its service obligations adequately, or other interruptions of services, may reduce the Company's revenues and increase its expenses, prevent the Company from operating its flights and providing other services to its customers or result in adverse publicity or harm to [removed: its] [added: our] brand.

[removed: The] [added: The] Company could experience adverse publicity, harm to its brand, reduced travel demand and potential tort liability as a result of an accident, catastrophe or incident involving its aircraft or its operations, the aircraft or operations of its regional carriers, the aircraft or operations of its codeshare partners, or the aircraft or operations of another airline, which may result in a material adverse effect on the Company's business, operating results and financial [removed: condition.][added: condition.]

[removed: Terrorist] [added: Terrorist] attacks, international hostilities or other security events, or the fear of terrorist attacks or hostilities, even if not made directly on the airline industry, could negatively affect the Company and the airline [removed: industry.][added: industry.]

The Company's financial resources may not be sufficient to absorb the [added: adverse effects of any future terrorist attacks, international hostilities or other security events.]

[removed: Increasing] [added: Increasing] privacy and data security obligations or a significant data breach may adversely affect the Company's [removed: business.][added: business.]

The Company [removed: is subject to] [added: must manage] increasing legislative, regulatory and [removed: customer] [added: consumer] focus on privacy issues and data security.

Also, [removed: a number] [added: some] of the Company's commercial partners, [removed: including] [added: such as] credit card companies, have imposed data security standards that the Company must meet.

The Company will continue its efforts to meet its privacy and data security obligations; however, it is possible that certain new obligations [added: or customer expectations] may be difficult to meet and could increase the Company's costs.

While we continually work to safeguard our internal network [removed: systems and validate the security of our third-party providers,] [added: systems,] including through [added: risk assessments, system monitoring,] information security policies and employee awareness and training, [added: and review and validate our third-party security standards,] there is no assurance that such actions will be sufficient to prevent cyber-attacks or [removed: security] [added: data] breaches.

[removed: A] significant data breach or the Company's failure to meet its obligations may adversely affect the Company's reputation, [added: relationships with our business partners,] business, operating results and financial condition.

[removed: Disruptions] [added: Disruptions] to our regional network and United Express flights provided by third-party regional carriers could adversely affect our business, operating results and financial [removed: condition.][added: condition.]

The Company's business and operations are dependent on its regional flight network, with regional capacity accounting for approximately 11% of the Company's total capacity for the year ended December 31, [removed: 2018.][added: 2019.]

If a significant disruption occurs to the Company's regional network or flights or if one or more of the regional carriers with which the Company has relationships is unable to perform their obligations over an extended period of time, there could be a material adverse effect on the Company's business, [removed: financial condition and] operating [removed: results.][added: results and financial condition.]

[removed: Current] [added: Current] or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions, could have a material adverse impact on the [removed: Company.][added: Company.]

[removed: Defending ourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may] result in significant expense and a diversion of management's time and attention from the operation of our business, which could impede our ability to achieve our business objectives.

In 2019, our capacity growth was lower than planned due to the grounding of Boeing 737 MAX aircraft, among other factors, which adversely impacted our ability to execute our strategic operating plans.

Additionally, any deterioration in global trade relations, such as increased tariffs or other trade barriers, could result in a decrease in the demand for international air travel.

This increased competition in both domestic and international markets may have

We also face competition from foreign carriers operating under "fifth freedom" rights permitted under international treaties that allow certain carriers to provide service to and from stopover points between their home country and ultimate destination, including points in the United States, in competition with service provided by us.

To the extent that the Company decides to hedge a portion of its future fuel requirements and uses hedge contracts that have the potential to create an obligation

We have initiatives in place to prevent disruptions and disaster recovery plans, and we continue to invest in improvements to these initiatives and plans; however, these measures may not be adequate to prevent or mitigate disruptions.

We may also be subject to consequences from any illegal conduct of our third-party service providers, including for their failure to comply with anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act.

Additionally, any accident, catastrophe or incident involving an aircraft type that is operated by the Company, its codeshare partners or regional carriers could have a material adverse effect on the Company if such accident, catastrophe or incident creates a public perception that such aircraft type was not safe or reliable.

In our regular business operations, we collect, transmit, process and store sensitive data, including personal information of our customers and employees such as payment processing information and information of our business partners.

The Company depends on the ability to use information we collect to provide our services and operate our business.

For example, in May 2018, the EU's General Data Protection Regulation became effective, which imposes significant privacy and data security requirements, as well as potential for substantial penalties for non-compliance.

Recent penalties imposed by regulators have resulted in substantial adverse financial consequences to those companies.

In addition, as attacks by cybercriminals become more sophisticated, frequent and intense, the costs of proactive defense measures may increase.

The mandatory grounding of our Boeing 737 MAX 9 aircraft may have a material adverse effect on our business, operating results and financial condition.

On March 13, 2019, the Federal Aviation Administration issued an emergency order prohibiting the operation of Boeing 737 MAX series aircraft by U.S. certificated operators (the "FAA Order").

As a result, the Company grounded all 14 Boeing 737 MAX 9 aircraft in its fleet and Boeing also suspended deliveries of new Boeing 737 MAX series aircraft.

The Company does not know whether, on what conditions or when the MAX grounding will end.

The long-term operational and financial impact of this grounding is uncertain and could negatively affect the Company based on a number of factors, including, among others, the period of time the aircraft are unavailable, the availability of replacement aircraft, to the extent needed, and the circumstances of any reintroduction of the grounded aircraft to service.

In 2019, the grounding affected the delivery of 16 Boeing 737 MAX aircraft that were scheduled for delivery and were not delivered, and it is also expected to affect the timing of future Boeing 737 MAX aircraft deliveries, including the 28 Boeing 737 MAX aircraft that the Company planned to take delivery in 2020.

The extent of the delay of future deliveries is expected to be impacted by the length of time the FAA Order remains in place, Boeing's production rate and the pace at which Boeing can deliver aircraft following the lifting of the FAA Order, among other factors.

The Company continues to make adjustments to its flight schedule and operations, including substituting replacement aircraft on routes originally intended to be flown by Boeing 737 MAX aircraft.

The grounding has impacted the Company's ability to implement its strategic growth strategy, reducing the Company's scheduled capacity from its planned capacity, and has resulted in increased costs as well as lower operating revenue.

The Company has had discussions with Boeing regarding compensation from Boeing for the Company's financial damages related to the grounding of the airline's Boeing 737 MAX aircraft; however, the parties have not agreed to any settlement, and the amount, nature and timing of any settlement with Boeing remains uncertain.

Defending ourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may

We also have significant investments in Latin American airlines, including significant investments in Avianca Holdings, S.A. ("AVH") and BRW Aviation LLC ("BRW"), an affiliate of Synergy Aerospace Corporation and the majority shareholder of AVH, and an equity investment in Azul.

See also the additional risks with respect to our investment in AVH described in this Part I, Item 1A.

Risk Factors.

These transactions and relationships involve significant challenges and risks, and we face competition in forming and maintaining these relationships, since there are a limited number of potential arrangements and other airlines are looking to enter into similar relationships.

And not only are these airlines subject to a number of the same risks as our business, which are described elsewhere in this Part I, Item 1A.

Risk Factors, including competitive pressures on pricing, demand and capacity, changes in aircraft fuel pricing, and the impact of global and local political and economic conditions on operations and customer travel patterns, among others, they are also subject to their own distinct financial and operational risks.

Our significant investments in AVH and its affiliates, and the commercial relationships that we have with Avianca may not produce the returns or results we expect.

Concurrently with this transaction, United, as lender, entered into a Term Loan Agreement (the "BRW Term Loan Agreement") with, among others, BRW Aviation Holding LLC ("BRW Holding") and BRW, as guarantor and borrower, respectively.

Pursuant to the BRW Term Loan Agreement, United provided to BRW a $456 million term loan (the "BRW Term Loan"), secured by a pledge of BRW's equity, as well as BRW's 516 million common shares of AVH (which are eligible to be converted into the same number of

preferred shares, which maybe be deposited with the depositary for AVH's American Depositary Receipts ("ADRs"), the class of AVH securities that trades on the New York Stock Exchange (the "NYSE"), in exchange for 64.5 million ADRs) (such shares and equity, collectively, the "BRW Loan Collateral").

BRW is currently in default under the BRW Term Loan Agreement.

In order to protect the value of its collateral, on May 24, 2019, United began to exercise certain remedies available to it under the terms of the BRW Term Loan Agreement and related documents.

In connection with the delivery by United of a notice of default to BRW, Kingsland Holdings Limited ("Kingsland"), AVH's largest minority shareholder, was granted, in accordance with the agreements related to the BRW Term Loan Agreement, authority to manage BRW, which remains the majority shareholder of AVH.

After a hearing on September 26, 2019, a New York state court granted Kingsland summary judgment authorizing it to foreclose on the BRW Loan Collateral under the BRW Term Loan Agreement.

Kingsland is continuing with the foreclosure process, which is expected to result in a judicially supervised sale of the BRW Loan Collateral.

The New York state court also granted Kingsland's motion for a preliminary injunction that, among other things, enjoins BRW Holding from interfering with Kingsland's ability to exercise voting and other rights in certain equity interests in BRW.

adverse effects of any future terrorist attacks, international hostilities or other security events.

could be required to indemnify and advance expenses to them in connection with their involvement in certain actions, suits, investigations and other proceedings.

Concurrently with this transaction, United advanced a loan of $456 million to affiliates of Synergy Aerospace Corporation ("Synergy"), the majority shareholder of Avianca Holdings S.A. ("AVH"), the parent company of Avianca, and entered into certain other related agreements, including a put arrangement with Avianca's significant minority shareholder, Kingsland Holdings Limited ("Kingsland").

The loan is secured by a pledge of Synergy's equity and Synergy's shares of AVH stock, and the loan and other agreements contain several provisions whereby the Company may acquire AVH stock.

We also have an equity investment in Azul.

We also have investments in several domestic regional airlines.

These transactions and relationships involve significant challenges and risks.

with other airlines regarding strategic activities.

The FAA may limit the Company's

The precise

The timing of the proposed exit is currently scheduled for March 29, 2019, with a transition period potentially running through December 2020.

A withdrawal plan was presented to the UK parliament in January 2019 and rejected, creating further uncertainty in negotiations and the process of withdrawal.

In addition, our variable rate indebtedness may use

London interbank offered rates ("LIBOR") as a benchmark for establishing the rate.

Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely impact the availability and cost of borrowings.

[removed: Overview][added: Overview]

United [removed: Continental] [added: Airlines] Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United").

| • | [removed: 2018] [added: 2019] net income was [removed: $2.1] [added: $3.0] billion, or [removed: $7.70] [added: $11.58] diluted earnings per share, as compared to $2.1 billion, or [removed: $7.06] [added: $7.67] diluted earnings per share, in [removed: 2017.] [added: 2018.] |

| • | Revenue for [removed: 2018] [added: 2019] increased [removed: $3.5] [added: $1.9] billion over [removed: 2017] [added: 2018] due to a [removed: 4.9%] [added: 3.5%] growth in ASMs and a PRASM increase of [removed: 4.3%] [added: 1.5%] in [removed: 2018] [added: 2019] compared to [removed: 2017.] [added: 2018.] |

| • | In [removed: 2018,] [added: 2019,] UAL repurchased approximately [removed: 17.5] [added: 19.2] million [removed: shares] of its common stock for [removed: $1.2] [added: $1.6] billion. As of December 31, [removed: 2018,] [added: 2019,] the Company had approximately [removed: $1.8] [added: $3.1] billion remaining to purchase shares under its share repurchase [removed: program.] [added: programs.] |

| • | UAL ended [removed: 2018] [added: 2019] with [removed: $6.0] [added: $6.9] billion in unrestricted liquidity, which consisted of unrestricted cash, cash equivalents, short-term investments and available capacity under the revolving credit facility of its Amended and Restated Credit and Guaranty Agreement (as amended, the "Credit Agreement"). |

| • | RPMs for [removed: 2018] [added: 2019] increased [removed: 6.4%] [added: 4.0%] as compared to [removed: 2017,] [added: 2018,] and ASMs increased [removed: 4.9%] [added: 3.5%] from the prior year, resulting in a load factor of [removed: 83.6%] [added: 84.0%] in [removed: 2018] [added: 2019] versus [removed: 82.4%] [added: 83.6%] in [removed: 2017.] [added: 2018.] |

| • | For [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the Company recorded U.S. Department of Transportation on-time arrival rates of [removed: 79.8%] [added: 77.9%] and [removed: 81.9%,] [added: 79.8%,] respectively, and mainline completion factors of [removed: 99.2% and 99.0%, respectively.] [added: 99.2%.] |

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

[added: Operating Revenue.] The table below illustrates the year-over-year percentage change in the Company's operating revenues for the years ended December 31 (in millions, except percentage changes):

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: Increase (Decrease)] [added: Increase (Decrease)] | | | | [removed: % Change] [added: % Change] | [added: |]

| Other operating revenue | [removed: 2,360] [added: 2,455] | | | | [removed: 2,210] [added: 2,360] | | | | [removed: 150] [added: 95] | | | | [removed: 6.8] [added: 4.0] | [added: |]

| Total operating revenue | $ | [removed: 41,303] [added: 43,259] | | | $ | [removed: 37,784] [added: 41,303] | | | $ | [removed: 3,519] [added: 1,956] | | | [removed: 9.3] [added: 4.7] | [added: |]

| | | [removed: Increase] [added: Increase] (decrease) from [removed: 2017 (a): | | | | |] [added: 2018 (a):] | | | | | | | | | | | | | |

| | | [removed: Domestic | | | | Atlantic |] [added: Domestic] | | | [removed: Pacific] [added: Atlantic] | | | [added: Pacific] | [removed: Latin] | | [added: Latin] | | [removed: Total] | [added: Total] | |

| Passenger load factor (points) | | [removed: 0.2 | | | | 5.1 |] [added: (0.2] | [added: )] | | [removed: 0.2] [added: 0.8] | | | [added: 1.5] | [removed: 0.8] | | [added: 0.9] | | [removed: 1.2] | [added: 0.4] | |

| (a) See Part II, Item [removed: 6,] [added: 6.] Selected Financial Data, of this report for the definition of these statistics. | | | | | | | | | | | | | | | | [removed: | | | | |]

[added: Operating Expense.] The table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes):

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: Increase (Decrease)] [added: Increase (Decrease)] | | | | [removed: % Change] [added: % Change] | |

| Salaries and related costs | $ | [removed: 11,458] [added: 12,071] | | | $ | [removed: 10,941] [added: 11,458] | | | $ | [removed: 517] [added: 613] | | | [removed: 4.7] [added: 5.3] | |

| Landing fees and other rent | [removed: 2,359] [added: 2,543] | | | | [removed: 2,240] [added: 2,449] | | | | [removed: 119] [added: 94] | | | | [removed: 5.3] [added: 3.8] | |

| Aircraft maintenance materials and outside repairs | [removed: 1,767] [added: 1,794] | | | | [removed: 1,856] [added: 1,767] | | | | [removed: (89] [added: 27] | | [removed: )] | | [removed: (4.8] [added: 1.5] | [removed: )] |

| Special charges | [removed: 487] [added: 246] | | | | [removed: 176] [added: 487] | | | | [removed: 311] [added: (241] | | [added: )] | | NM | |

| Other operating expenses | [removed: 5,801] [added: 6,275] | | | | [removed: 5,550] [added: 5,801] | | | | [removed: 251] [added: 474] | | | | [removed: 4.5] [added: 8.2] | |

Salaries and related costs increased [removed: $517] [added: $613] million, or [removed: 4.7%,] [added: 5.3%,] in [removed: 2018] [added: 2019] as compared to [removed: 2017,] [added: 2018,] primarily due to higher [added: contractual] pay rates, higher benefit [removed: expenses (primarily health and pension costs),] [added: expenses, higher employee incentives] and a [removed: 0.7%] [added: 4.0%] increase in average full-time [added: equivalent] employees.

[removed: The table below presents the significant changes in aircraft fuel cost per] gallon for the years ended December 31 (in millions, except percentage changes and per gallon data):

| | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: % Change] [added: % Change] | [added: |]

| Fuel expense | | $ | [removed: 9,307] [added: 8,953] | | | $ | [removed: 6,913] [added: 9,307] | | | [removed: 34.6] [added: (3.8] | [added: ) |]

| Total fuel consumption (gallons) | | [removed: 4,137] [added: 4,292] | | | | [removed: 3,978] [added: 4,137] | | | | [removed: 4.0] [added: 3.7] | [added: |]

| Average price per gallon | | $ | [removed: 2.25] [added: 2.09] | | | $ | [removed: 1.74] [added: 2.25] | | | [removed: 29.3] [added: (7.1] | [added: ) |]

Depreciation and amortization increased [removed: $91] [added: $123] million, or [removed: 4.2%,] [added: 5.7%,] in [removed: 2018] [added: 2019] as compared to [removed: 2017,] [added: 2018,] primarily due to [added: the] additions of new and used [removed: aircraft,] aircraft [removed: improvements] and [removed: increases in information technology] [added: new capital projects related both to] infrastructure and [removed: application development projects.][added: information technology.]

Aircraft rent decreased [removed: $188] [added: $145] million, or [removed: 30.3%,] [added: 33.5%,] in [removed: 2018] [added: 2019] as compared to [removed: 2017,] [added: 2018,] primarily due to the purchase of leased [removed: aircraft,] [added: aircraft and the] conversion of certain operating leases to [removed: capital leases and lease term expirations.][added: finance leases.]

| Impairment of assets | $ | [removed: 377] [added: 171] | | | $ | [removed: 25] [added: 377] | |

| Termination of an engine maintenance service agreement | [removed: 64] [added: —] | | | | [removed: —] [added: 64] | | |

| Severance and benefit costs | [removed: 41] [added: 16] | | | | [removed: 116] [added: 41] | | |

| (Gains) losses on sale of assets and other special charges | [removed: 5] [added: 59] | | | | [removed: 35] [added: 5] | | |

| Total special charges | $ | [removed: 487] [added: 246] | | | $ | [removed: 176] [added: 487] | |

See Note [removed: 14] [added: 8] to the financial statements included in Part II, Item 8 of this report for additional information.

Other operating expenses increased [removed: $251] [added: $474] million, or [removed: 4.5%,] [added: 8.2%,] in [removed: 2018] [added: 2019] as compared to [removed: 2017,] [added: 2018,] primarily due to [removed: an increase in] [added: increased] purchased services related to [removed: our] airport operations [removed: resulting from capacity growth,] [added: weather-related costs,] technology initiatives, [added: catering costs,] facility [removed: projects, crew-related lodging and trucking] [added: projects] and [removed: handling of cargo shipments.][added: crew-related expenses.]

[added: Nonoperating Income (Expense).] The following table illustrates the year-over-year dollar and percentage changes in the Company's nonoperating income (expense) for the years ended December 31 (in millions, except percentage changes):

2019 Highlights

The following discussion provides an analysis of our results of operations and reasons for material changes therein for 2019 as compared to 2018.

See "Results of Operations" in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's 2018 Annual Report on Form 10-K, filed with the SEC on February 28, 2019 (the "2018 Annual Report"), for analysis of the 2018 results as compared to 2017.

| Passenger revenue | $ | 39,625 | | | $ | 37,706 | | | $ | 1,919 | | | 5.1 | |

| Cargo | 1,179 | | | | 1,237 | | | | (58 | | ) | | (4.7 | ) |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | |

| Average fare per passenger | | 3.4 | % | | (1.9 | )% | | (4.0 | )% | | 5.9 | % | | 2.4 | % |

| Passengers | | 2.1 | % | | 6.5 | % | | 4.0 | % | | 3.9 | % | | 2.6 | % |

| RPMs (traffic) | | 3.5 | % | | 6.9 | % | | 2.4 | % | | 4.0 | % | | 4.0 | % |

Passenger revenue increased $1.9 billion, or 5.1%, in 2019 as compared to 2018, primarily due to a 4.0% increase in traffic, continuing strong domestic demand, improvements in average fares in the Latin and Domestic markets, and increases in ancillary fees driven by improved product offerings.

Cargo revenue decreased $58 million, or 4.7%, in 2019 as compared to 2018, primarily due to an approximately 3% decrease in cargo ton miles and a 2% decline in cargo ton mile yield.

In December 2019, a novel strain of coronavirus ("COVID-19") was reported in Wuhan, China.

The World Health Organization has declared COVID-19 to constitute a "Public Health Emergency of International Concern." On January 30, 2020, the U.S. Department of State issued a Level 4 "do not travel" advisory for China.

The U.S. government has also implemented enhanced screenings, quarantine requirements and travel restrictions in connection with the COVID-19 outbreak.

The Company has suspended its flights between the United States and each of Beijing, Chengdu, Shanghai and Hong Kong through April 24, 2020.

These routes represented approximately 5% of the Company's 2020 planned capacity and the Company's other trans-Pacific routes represented an additional 10% of the Company's 2020 planned capacity.

As of the date of this report, the Company is experiencing an approximately 100% decline in near-term demand to China and an approximately 75% decline in near-term demand on the rest of the Company's trans-Pacific routes.

The extent of the impact of the COVID-19 on the Company's operational and financial performance will depend on future developments, including the duration and spread of the outbreak and related travel advisories and restrictions and the impact of the COVID-19 on overall demand for air travel, all of which are highly uncertain and cannot be predicted.

If traffic on the Company's trans-Pacific routes were to remain at these levels for an extended period, and/or routes in other parts of the Company's network begin to see significant declines in demand, our results of operations for full year 2020 may be materially adversely affected.

| Aircraft fuel | 8,953 | | | | 9,307 | | | | (354 | | ) | | (3.8 | ) |

| Regional capacity purchase | 2,849 | | | | 2,649 | | | | 200 | | | | 7.6 | |

| Depreciation and amortization | 2,288 | | | | 2,165 | | | | 123 | | | | 5.7 | |

| Distribution expenses | 1,651 | | | | 1,558 | | | | 93 | | | | 6.0 | |

| Aircraft rent | 288 | | | | 433 | | | | (145 | | ) | | (33.5 | ) |

| Total operating expenses | $ | 38,958 | | | $ | 38,074 | | | $ | 884 | | | 2.3 | |

Employee incentives included $157 million increase in profit sharing in 2019 as compared to 2018.

Aircraft fuel expense decreased $354 million, or 3.8%, in 2019 as compared to 2018, primarily due to a 7.1% decrease in fuel prices, partially offset by a 3.5% increase in capacity.

The table below presents the significant changes in aircraft fuel cost per

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

Regional capacity purchase costs increased $200 million, or 7.6%, in 2019 as compared to 2018, primarily due to a rate increase under various capacity purchase agreements with regional carriers and a 4.1% increase in regional flying.

| | 2019 | | | | 2018 | | |

| Interest expense | $ | (731 | ) | | $ | (670 | ) | | $ | 61 | | | 9.1 | |

| Unrealized gains (losses) on investments, net | 153 | | | | (5 | | ) | | 158 | | | | NM | |

| Total nonoperating expense, net | $ | (387 | ) | | $ | (581 | ) | | $ | (194 | ) | | (33.4 | ) |

Interest income increased $32 million, or 31.7%, in 2019 as compared to 2018, primarily due to higher levels of cash balances throughout the year.

2018 Financial Highlights

| | |

| --- | --- |

| • | Aircraft fuel cost for 2018 increased 34.6% over 2017 mainly due to higher fuel prices. |

2018 Operational Highlights

Outlook

Set forth below is a discussion of matters that we believe could impact our financial and operating performance and cause our results of operations in future periods to differ materially from our historical operating results and/or from our anticipated results of operations described in the forward-looking statements in this report.

See Part I, Item 1A., Risk Factors, of this report and the factors described under "Forward-Looking Information" below for additional discussion of these and other factors that could affect us.

Growth Strategy.

In 2018, the Company completed the first year of its multi-year growth strategy, increasing ASMs 4.9% compared to 2017.

Our priorities for 2019 are delivering top-tier operational reliability and customer service while continuing to execute on our growth plan by strengthening our domestic network through strategic and efficient growth and investing in our people and product.

Fuel.

The Company's average aircraft fuel price per gallon including related taxes was $2.25 in 2018 as compared to $1.74 in 2017.

Based on the Company's projected fuel consumption in 2019, a one-dollar change in the price of a barrel of crude oil would change the Company's projected fuel expense by approximately $104 million.

2018 Compared to 2017

Operating Revenue

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Passenger revenue | $ | 37,706 | | | $ | 34,460 | | | $ | 3,246 | | | 9.4 |

| Cargo | 1,237 | | | | 1,114 | | | | 123 | | | | 11.0 |

The table below presents selected passenger revenue and operating data of the Company, broken out by geographic region, expressed as year-over-year changes:

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Passenger revenue (in millions) | | $ | 2,340 | | | $ | 688 | | | $ | 185 | | | $ | 33 | | | $ | 3,246 | |

| Passenger revenue | | 11.1 | | % | | 11.7 | | % | | 4.3 | | % | | 1.0 | | % | | 9.4 | | % |

| Average fare per passenger | | 2.8 | | % | | 0.2 | | % | | 8.5 | | % | | 2.5 | | % | | 2.3 | | % |

| Yield | | 3.8 | | % | | (0.4 | | )% | | 2.7 | | % | | (0.3 | | )% | | 2.8 | | % |

| PRASM | | 4.1 | | % | | 6.3 | | % | | 3.0 | | % | | 0.8 | | % | | 4.3 | | % |

| Passengers | | 8.1 | | % | | 11.5 | | % | | (3.9 | | )% | | (1.4 | | )% | | 6.9 | | % |

| RPMs (traffic) | | 7.0 | | % | | 12.1 | | % | | 1.5 | | % | | 1.3 | | % | | 6.4 | | % |

| ASMs (capacity) | | 6.7 | | % | | 5.1 | | % | | 1.3 | | % | | 0.3 | | % | | 4.9 | | % |

Passenger revenue increased $3.2 billion, or 9.4%, in 2018 as compared to 2017, primarily due to a 6.4% increase in traffic.

PRASM increased 4.3% in 2018 as compared to 2017.

The increase in PRASM was driven by improvements in scheduling, higher corporate demand, increases in close-in bookings in the domestic markets and premium cabin demand improvements in the Atlantic and Pacific markets.

Cargo revenue increased $123 million, or 11.0%, in 2018 as compared to 2017, primarily due to freight volume and higher yield in the Atlantic and Pacific markets.

Other operating revenue increased $150 million, or 6.8%, in 2018 as compared to 2017, primarily due to increased revenue related to MileagePlus miles sales.

Operating Expense

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Aircraft fuel | 9,307 | | | | 6,913 | | | | 2,394 | | | | 34.6 | |

[added: Interest Rates.] Our net income is affected by fluctuations in interest rates (e.g. interest expense on variable rate debt and interest income earned on short-term investments).

| [removed: Variable] [added: Variable] rate [removed: debt] [added: debt] | | | | | | | |

| Carrying value of variable rate debt at December 31 | $ | [removed: 3,500] [added: 3,408] | | | $ | [removed: 3,342] [added: 3,500] | |

| Impact of 100 basis point increase on projected interest expense for the following year | [removed: 35] [added: 33] | | | | [removed: 33] [added: 35] | | |

| [removed: Fixed] [added: Fixed] rate [removed: debt] [added: debt] | | | | | | | |

| Carrying value of fixed rate debt at December 31 | [removed: 9,945] [added: 11,144] | | | | [removed: 9,926] [added: 9,945] | | |

| Fair value of fixed rate debt at December 31 | [removed: 9,901] [added: 11,736] | | | | [removed: 10,349] [added: 9,901] | | |

| Impact of 100 basis point increase in market rates on fair value | [removed: (378] [added: (458] | | ) | | [removed: (403] [added: (378] | | ) |

Assuming our cash, cash equivalents and short-term investments remain at their average [removed: 2018] [added: 2019] levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately [removed: $45] [added: $47] million during [removed: 2019.][added: 2020.]

[added: Commodity Price Risk (Aircraft Fuel).] The price [removed: level] of aircraft fuel can significantly affect the Company's operations, results of operations, financial position and liquidity.

The Company's [removed: 2019] [added: 2020] forecasted fuel consumption is presently approximately [removed: 4.3] [added: 4.5] billion gallons, and based on this forecast, a one-dollar change in the price of a barrel of crude oil would change the Company's annual fuel expense by approximately [removed: $104] [added: $108] million.

[added: Foreign Currency.] The Company generates revenues and incurs expenses in numerous foreign currencies.

The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, [removed: 2018] [added: 2019] levels relative to each of the currencies in which the Company has foreign currency exposure would result in a decrease in pre-tax income of approximately [removed: $24] [added: $23] million for the year ending December 31, [removed: 2019.][added: 2020.]

This sensitivity analysis was prepared based upon projected [removed: 2019] [added: 2020] foreign currency-denominated revenues and expenses as of December 31, [removed: 2018.][added: 2019.]

| | 2019 | | | | 2018 | | |

As announced in July 2017, LIBOR is expected to be phased out by the end of 2021.

Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR may adversely impact our interest rates and related interest expense.

As of December 31, 2019, the Company had $3.4 billion in variable rate indebtedness.

See Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations—Other Liquidity Matters, of this report, for more information on interest expense.

Interest Rates.

| | 2018 | | | | 2017 | | |

Commodity Price Risk (Aircraft Fuel).

Foreign Currency.

[removed: Overview][added: Overview]

United [removed: Continental] [added: Airlines] Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its principal, wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United").

[added: Effective June 27, 2019, UAL amended its Certificate of Incorporation to change its name to "United Airlines Holdings, Inc."] Our principal executive office is located at 233 South Wacker Drive, Chicago, Illinois 60606 (telephone number (872) 825-4000).

[removed: Operations][added: Operations]

The Company transports people and cargo throughout North America and to destinations in Asia, Europe, [added: Africa,] the [added: Pacific, the] Middle East and Latin America.

UAL, through United and its regional carriers, operates more than [removed: 4,800] [added: 4,900] flights a day to [removed: 353] [added: 362] airports across [removed: five] [added: six] continents, with hubs at Newark Liberty International Airport ("Newark"), Chicago O'Hare International Airport ("Chicago O'Hare"), Denver International Airport ("Denver"), George Bush Intercontinental Airport ("Houston Bush"), Los Angeles International Airport ("LAX"), A.B. Won Pat International Airport ("Guam"), San Francisco International Airport ("SFO") and Washington Dulles International Airport ("Washington Dulles").

As discussed under [removed: Alliances] [added: *Alliances*] below, United is a member of Star Alliance, the world's largest alliance network.

[added: Regional.] The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express.

[removed: Republic Airlines ("Republic"),] Champlain Enterprises, LLC d/b/a CommutAir ("CommutAir"), [added: Republic Airline Inc. ("Republic"),] ExpressJet Airlines [added: LLC] ("ExpressJet"), GoJet Airlines [added: LLC] ("GoJet"), Mesa [removed: Airlines] [added: Airlines, Inc.] ("Mesa"), SkyWest [removed: Airlines] [added: Airlines, Inc.] ("SkyWest"), Air Wisconsin Airlines [added: LLC] ("Air Wisconsin"), and Trans States [removed: Airlines] [added: Airlines, LLC] ("Trans States") are all regional carriers that operate with capacity contracted to United under capacity purchase agreements ("CPAs").

[removed: Under these CPAs, the Company pays the regional carriers contractually agreed fees] (carrier costs) for operating these flights plus a variable [removed: reimbursement (incentive payment for operational performance)] [added: rate adjustment] based on agreed performance metrics, subject [added: to annual adjustments.]

The fees [removed: for carrier costs] are based on specific rates [removed: for various operating expenses of the regional carriers, such as crew expenses, maintenance and aircraft ownership, some of which are] multiplied by specific operating statistics (e.g., block hours, departures), [removed: while others are] [added: as well as] fixed monthly amounts.

Under these CPAs, the Company is [added: also] responsible for all fuel costs incurred, as well as landing fees and other costs, which are either passed through by the regional carrier to the Company without any markup or directly incurred by the [removed: Company, and, in some cases, the Company owns or leases some or all of the aircraft subject to the CPA, and leases or subleases, as applicable, such aircraft to the regional carrier.][added: Company.]

The Company also determines pricing and revenue management, assumes the inventory and distribution risk for the available seats and permits mileage accrual and redemption for regional flights through its [removed: MileagePlus®] [added: MileagePlus] loyalty program.

[added: Alliances.] United is a member of Star Alliance, a global integrated airline network and the largest and most comprehensive airline alliance in the world.

As of January 1, [removed: 2019,] [added: 2020,] Star Alliance carriers served [removed: over] [added: nearly] 1,300 airports in [removed: 193] [added: 195] countries with [removed: 18,800] [added: more than 19,000] daily departures.

Star Alliance members, in addition to United, are [removed: Adria Airways,] Aegean Airlines, Air Canada, Air China, Air India, Air New Zealand, All Nippon Airways ("ANA"), Asiana Airlines, Austrian Airlines, Aerovías del Continente Americano S.A. ("Avianca"), [removed: Avianca Brasil,] Brussels Airlines, Copa [removed: Airlines,] [added: Airlines ("Copa"),] Croatia Airlines, EGYPTAIR, Ethiopian Airlines, EVA Air, LOT Polish Airlines, Lufthansa, SAS Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, SWISS, TAP Air Portugal, THAI Airways International and Turkish Airlines.

In addition to the alliance agreements with Star Alliance members, United currently maintains independent marketing alliance agreements with other air carriers, including Aeromar, Aer Lingus, Air Dolomiti, Azul Linhas Aéreas Brasileiras S.A. ("Azul"), Boutique Air, Cape Air, [added: Edelweiss,] Eurowings, Hawaiian Airlines, [removed: and] [added: Olympic Air,] Silver [removed: Airways.][added: Airways and Vistara.]

[added: Loyalty Program.] United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants.

Members can also earn miles by purchasing [removed: the] goods and services [removed: of] [added: from] our network of non-airline partners, such as domestic and international credit card issuers, retail merchants, hotels and car rental companies.

Members can redeem miles for free (other than taxes and [removed: government imposed] [added: government-imposed] fees), discounted or upgraded travel and non-travel awards.

United has an agreement with [added: JPMorgan] Chase [removed: Bank USA,] [added: Bank,] N.A. ("Chase"), pursuant to which members of United's MileagePlus loyalty program who are residents of the United States can earn miles for making purchases using a MileagePlus credit card issued by Chase (the "Co-Brand Agreement").

[removed: Approximately 5.6 million and 5.4] [added: In 2019, approximately 6.1] million MileagePlus flight awards were used on United [removed: in 2018] and [removed: 2017, respectively.][added: United Express.]

These awards represented [removed: 7.1% and 7.5%] [added: 7.2%] of United's total revenue passenger [removed: miles in 2018 and 2017, respectively.][added: miles.]

Total miles redeemed for flights on United [removed: in 2018,] [added: and United Express,] including class-of-service upgrades, represented approximately [removed: 86%] [added: 87%] of the total miles redeemed.

In addition, excluding miles redeemed for flights on [removed: United,] [added: United and United Express,] MileagePlus members redeemed miles for approximately [removed: 2.4 million other awards in 2018 as compared to 2.3] [added: 2.2] million other [removed: awards in 2017.][added: awards.]

[added: Aircraft Fuel.] The table below summarizes UAL's aircraft fuel consumption and expense during the last three years.

| [removed: Year] [added: Year] | | [removed: Gallons Consumed (in millions)] [added: Gallons Consumed (in millions)] | | | [removed: Fuel Expense (in millions)] [added: Fuel Expense (in millions)] | | | | [removed: Average] [added: Average] Price Per [removed: Gallon] [added: Gallon] | | | | [removed: Percentage] [added: Percentage] of Total Operating [removed: Expense | |] [added: Expense] | [removed: Available Seat Miles per Fuel Gallon] |

| [removed: 2018] [added: 2018] | | 4,137 | | | $ | 9,307 | | | $ | 2.25 | | | 24 | % | [removed: | 67 |]

| [removed: 2017] [added: 2017] | | 3,978 | | | $ | 6,913 | | | $ | 1.74 | | | 20 | % | [removed: | 66 |]

[added: Third-Party Business.] United generates third-party business revenue that includes [added: maintenance services, catering,] frequent flyer award [removed: non-air redemptions, maintenance services, catering] [added: non-travel redemptions] and ground handling.

Expenses associated with third-party business, except [removed: non-air] [added: non-travel] redemptions, are recorded in Other operating expenses.

[removed: Non-air] [added: Non-travel] redemptions expenses are recorded to Other operating revenue.

[added: Distribution Channels.] The Company's airline seat inventory and fares are distributed through the Company's direct channels, traditional travel agencies and on-line travel agencies.

[removed: Industry Conditions][added: Industry Conditions]

[added: Domestic Competition.] The domestic airline industry is highly competitive and dynamic.

Air carriers' cost structures are not uniform and [removed: there] are [added: influenced by] numerous [removed: factors influencing cost structure.][added: factors.]

[removed: Decisions on domestic] [added: Domestic] pricing [added: decisions] are [removed: based on] [added: impacted by] intense competitive pressure exerted on the Company by other U.S. airlines.

Since we compete in a dynamic marketplace, attempts to generate additional revenue through increased fares [removed: oftentimes] [added: often] fail.

[added: International Competition.] Internationally, the Company competes not only with U.S. airlines, but also with foreign carriers.

See [removed: Alliances,] [added: *Alliances,*] above, for additional information.

Under these CPAs, the Company pays the regional carriers contractually agreed fees

In some cases, the Company owns some or all of the aircraft subject to the CPA and leases such aircraft to the regional carrier.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| 2019 | | 4,292 | | | $ | 8,953 | | | $ | 2.09 | | | 23 | % |

*Legislation*.

*Catering Operations*.

As a result, the Company's catering and food service operations are periodically subject to inspections and enforcement by regulatory agencies.

*Climate Change*.

However, the European Parliament is expected to assess CORSIA implementation and re-assess the applicability of EU ETS to international aviation in 2024, at which point the EU could require all extra- and intra-EU flights to participate in EU ETS.

However, CORSIA is expected to increase operating costs for the Company, depending on a number of factors, including the number of its flights that are subject to CORSIA, the fuel efficiency of the Company's fleet, the Company's purchase and use of CORSIA-eligible sustainable aviation fuels, aviation sector growth, and the price of CORSIA-eligible offsets.

*Other Regulations*.

On February 1, 2019, the collective bargaining agreement with the Air Line Pilots Association ("ALPA"), the labor union representing United's pilots, became amendable.

The Company and ALPA are in negotiations for an amended agreement.

The Company and UNITE HERE, the labor union representing United's Catering employees, started negotiations for a first collective bargaining agreement in March 2019.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Pilots | | 12,251 | | | ALPA | | January 2019 |

| Storekeepers | | 989 | | | IAM | | December 2021 |

(a) The collective bargaining agreement with the IBT contains provisions that require the Company to align contract terms with other airlines' workgroups under certain conditions.

Information about Our Executive Officers

Kate Gebo. Age 51.

Ms. Gebo has served as Executive Vice President Human Resources and Labor Relations of UAL and United since December 2017.

From November 2016 to November 2017, Ms. Gebo served as Senior Vice President, Global Customer Service Delivery and Chief Customer Officer of United.

From October 2015 to November 2016, Ms. Gebo served as Vice President of the Office of the Chief Executive Officer.

From November 2009 to October 2015, Ms. Gebo served as Vice President of Corporate Real Estate of United.

Brett J.

Hart. Age 50.

Mr. Hart has served as Executive Vice President and Chief Administrative Officer of UAL and United since March 2019.

From May 2017 to March 2019, he served as Executive Vice President, Chief Administrative Officer and General Counsel of UAL and United.

From February 2012 to May 2017, he served as Executive Vice President and General Counsel of UAL and United.

Mr. Hart served as acting Chief Executive Officer and principal executive officer of the Company, on an interim basis, from October 2015 to March 2016.

From December 2010 to February 2012, he served as Senior Vice President, General Counsel and Secretary of UAL, United and Continental Airlines, Inc. ("Continental").

From June 2009 to December 2010, Mr. Hart served as Executive Vice President, General Counsel and Corporate Secretary at Sara Lee Corporation, a consumer food and beverage company.

From March 2005 to May 2009, Mr. Hart served as Deputy General Counsel and Chief Global Compliance Officer of Sara Lee Corporation.

Gregory L.

Hart. Age 54.

Mr. Hart has served as Executive Vice President and Chief Operations Officer of UAL and United since February 2014.

Regional.

to annual adjustments.

Alliances.

Loyalty Program.

Aircraft Fuel.

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2016 | | 3,904 | | | $ | 5,813 | | | $ | 1.49 | | | 18 | % | | 65 |

Third-Party Business.

Distribution Channels.

Domestic Competition.

International Competition.

Seasonality.

Domestic Regulation

Airport Access.

Legislation.

Catering Operations.

As a result, ready-to-eat catering operations are a focus of enhanced scrutiny by the FDA with inspections and greater enforcement.

International Regulation

Environmental Regulation

Climate Change.

However, CORSIA is expected to increase operating costs for airlines that operate internationally.

Other Regulations.

Certain states may also elect to impose restrictions apart from the revised national standards.

| | | | | |

| --- | --- | --- | --- | --- |

| Pilots | 11,742 | | Air Line Pilots Association, International | January 2019 |

| Storekeeper Employees | 1,012 | | IAM | December 2021 |

(a) On October 23, 2018, United's Catering Operations employees voted to unionize under the RLA.

In an election overseen by the National Mediation Board, UNITE HERE received the majority of the votes and was officially certified to represent United's frontline Catering Operations employees.

The Company expects contract negotiations to begin in 2019.

The Company [removed: is working with the DOJ and] has completed its response to the CID.

The Company [removed: is also cooperating] [added: continues to cooperate] with the government in [removed: this aspect of] their investigation [removed: and, on December 21, 2016,] [added: and] representatives from the Company [added: have] met with both the Civil and Criminal Divisions to provide additional information.

[added: Other Legal Proceedings.] The Company is involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies arising in the ordinary course of business.

Other Legal Proceedings

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

[removed: FORM 10-K][added: | FORM | 10-K |]

| [removed: x] [added: ☒] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2018][added: 2019]

| [removed: o] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from [removed: to][added: to]

[removed: ][added: ]

| [removed: Commission File Number] | [added: Commission File Number] | [removed: Exact] [added: | Exact] Name of Registrant as Specified in its [removed: Charter, Principal] [added: Charter, Principal] Executive Office [removed: Address, Zip Code] [added: Address] and Telephone [removed: Number, Including Area Code] [added: Number] | | [removed: State of Incorporation] | | [removed: I.R.S. Employer Identification No.] | [added: | State of Incorporation | | I.R.S. Employer Identification No. |]

| [added: |] 001-10323 | | [removed: United] [added: United] Airlines, [removed: Inc. 233 South Wacker Drive Chicago, Illinois 60606 (872) 825-4000] [added: Inc.] | | [added: | | | |] Delaware | | 74-2099724 |

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| | | [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Trading Symbol | | Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | Common Stock, $0.01 par value | | [added: UAL | |] The Nasdaq Stock Market LLC |

| United Airlines, Inc. | | None | | None | [added: | None |]

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

| | [removed: | |] United [removed: Continental] [added: Airlines] Holdings, Inc. | | None | | [removed: |]

| | [removed: | |] United Airlines, Inc. | | None | | [removed: |]

[removed: |] Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities [removed: Act. | | | | | | | | | | |][added: Act]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | Yes [removed: x] [added: | ☒ |] No [removed: o] | [added: ☐] | | [added: United Airlines, Inc.] | | [added: Yes] | [added: ☒] | [added: No] | [added: ☐] |

| United Airlines, Inc. | | Yes [removed: x No o] | [removed: | | | |] [added: ☐] | [added: No] | [added: ☒] | |

[removed: |] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the [removed: Act | | | | | | | | | | |][added: Act.]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | Yes [removed: o] [added: | ☐ |] No [removed: x] | [added: ☒] | | [added: United Airlines, Inc.] | | [added: Yes] | [added: ☐] | [added: No] | [added: ☒] |

| United [removed: Airlines,] [added: Airlines Holdings,] Inc. | | Yes [removed: o] [added: | ☒ |] No [removed: x] | [added: ☐] | | [added: United Airlines, Inc.] | | [added: Yes] | [added: ☒] | [added: No] | [added: ☐] |

[removed: |] Indicate by check mark whether the [removed: Registrant] [added: registrant] (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the [removed: Registrant] [added: registrant] was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [removed: | | | | | | | | | | |]

[removed: |] Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this [removed: chapter)] [added: Chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [removed: | | | | | | | | | | |]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | [removed: x | | | | | | | |] [added: ☐] |

| United Airlines, Inc. | | [removed: x | | | | | | | |] [added: ☐] |

[removed: |] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. [removed: See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. | | | | | | | | | | |]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | [removed: |] Large accelerated filer [removed: x] | [added: ☒] | Accelerated filer [removed: o] | [added: ☐] | Non-accelerated filer [removed: o] | [added: ☐] | Smaller reporting company [removed: o] | [added: ☐] | Emerging growth company [removed: o] | [added: ☐ |]

| United Airlines, Inc. | [removed: |] Large accelerated filer [removed: o] | [added: ☐] | Accelerated filer [removed: o] | [added: ☐] | Non-accelerated filer [removed: x] | [added: ☒] | Smaller reporting company [removed: o] | [added: ☐] | Emerging growth company [removed: o] | [added: ☐ |]

[removed: |] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [removed: | | | | | | | | | | |]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | [removed: o] [added: Yes] | [added: ☒] | [added: No] | [added: ☐] | | [added: United Airlines, Inc.] | | [added: Yes] | [added: ☒] | [added: No | ☐ |]

| United [removed: Airlines,] [added: Airlines Holdings,] Inc. | | [removed: o | | | |] [added: Yes] | [added: ☐] | [added: No] | [added: ☒] | |

[removed: |] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [added: Exchange] Act). [removed: | | | | | | | | | | |]

The aggregate market value of common stock held by non-affiliates of United [removed: Continental] [added: Airlines] Holdings, Inc. was [removed: $17,844,650,113] [added: $21.1 billion] as of June [removed: 29, 2018,] [added: 28, 2019,] based on the closing sale price of [removed: $69.73] [added: $87.55] on that date.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of February [removed: 22, 2019.][added: 18, 2020.]

| United [removed: Continental] [added: Airlines] Holdings, Inc. | | [removed: 266,727,577] [added: 247,951,116 |] shares of common stock ($0.01 par value) |

| United Airlines, Inc. | | 1,000 [added: |] shares of common stock ($0.01 par value) (100% owned by United [removed: Continental] [added: Airlines] Holdings, Inc.) |

This combined Form 10-K is separately filed by United [removed: Continental] [added: Airlines] Holdings, Inc. and United Airlines, Inc.

OR

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| | 001-06033 | | United Airlines Holdings, Inc. | | | | | | Delaware | | 36-2675207 |

| | | | 233 South Wacker Drive, | | Chicago, | Illinois | 60606 | | | | |

| | | | (872) | 825-4000 | | | | | | | |

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| | | | 233 South Wacker Drive, | | Chicago, | Illinois | 60606 | | | | |

| | | | (872) | 825-4000 | | | | | | | |

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See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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Risk Factors and in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

10-K 1 ual_201810k.htm 10-K

OR

| 001-06033 | | United Continental Holdings, Inc. 233 South Wacker Drive Chicago, Illinois 60606 (872) 825-4000 | | Delaware | | 36-2675207 |

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| Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. | | | | | | | | | | |

| [removed: Aircraft Type | | Total |] [added: Aircraft Type] | | [removed: Owned] [added: Total] | | | [removed: Leased] [added: Owned] | | | [added: Leased] | | | [removed: Seats] [added: Seats] in Standard [removed: Configuration] [added: Configuration] | | | | [removed: Average] [added: Average] Age (In [removed: Years)] [added: Years)] | |

| [removed: Mainline: | | |] [added: Mainline:] | | | | | | | | | | | | | | | | |

| 777-300ER | | [removed: 18] [added: 20] | | | [removed: 18] [added: 20] | | | — | | | [removed: | | | 350-366] [added: 350] | | | | [removed: 1.5] [added: 2.2] | |

| 777-200 | | 19 | | | 19 | | | — | | | [removed: | | |] 364 | | | | [removed: 21.5] [added: 22.5] | |

| 787-10 | | [removed: 3] [added: 11] | | | [removed: 3] [added: 11] | | | — | | | [removed: | | |] 318 | | | | [removed: 0.1] [added: 0.7] | |

| 787-9 | | 25 | | | 25 | | | — | | | [removed: | | |] 252 | | | | [removed: 2.8] [added: 3.8] | |

| 787-8 | | 12 | | | 12 | | | — | | | [removed: | | |] 219 | | | | [removed: 5.5] [added: 6.5] | |

| 767-300ER | | 38 | | | 25 | | | 13 | | | [removed: | | |] 167-214 | | | | [removed: 22.9] [added: 23.9] | |

| 757-300 | | 21 | | | 9 | | | 12 | | | [removed: | | | 213-234] [added: 234] | | | | [removed: 16.3] [added: 17.3] | |

| 757-200 | | [removed: 56 | | | 50] [added: 53] | | | [removed: 6] [added: 48] | | | [added: 5] | | | [removed: 142-169] [added: 142-176] | | | | [removed: 22.8] [added: 23.5] | |

| 737-900ER | | 136 | | | 136 | | | — | | | [removed: | | |] 179 | | | | [removed: 6.0] [added: 7.0] | |

| 737-900 | | 12 | | | 8 | | | 4 | | | [removed: | | |] 179 | | | | [removed: 17.3] [added: 18.3] | |

| 737-800 | | 141 | | | [removed: 90 | | | 51] [added: 95] | | | [added: 46] | | | 166 | | | | [removed: 14.8] [added: 15.8] | |

| 737-700 | | [removed: 40 | | | 25] [added: 41] | | | [removed: 15] [added: 29] | | | [added: 12] | | | 126 | | | | [removed: 19.8] [added: 20.8] | |

| A320-200 | | [removed: 99 | | | 70] [added: 97] | | | [removed: 29] [added: 76] | | | [added: 21] | | | 150 | | | | [removed: 20.3] [added: 21.3] | |

| A319-100 | | [removed: 70 | | | 55] [added: 80] | | | [removed: 15] [added: 57] | | | [added: 23] | | | [removed: 128] [added: 126-128] | | | | [removed: 17.6] [added: 18.1] | |

| [removed: Aircraft Type | | Capacity Purchase Agreement Total |] [added: Aircraft Type] | | [removed: Owned] [added: Total] | | | [removed: Leased] [added: Owned] | | | [removed: Owned] [added: Owned] or Leased by Regional [removed: Carrier] [added: Carrier] | | | [removed: Regional] [added: Regional] Carrier Operator and Number of [removed: Aircraft] [added: Aircraft] | | | | [removed: Seats] [added: Seats] in Standard [removed: Configuration] [added: Configuration] | |

| [removed: Regional: | | |] [added: Regional:] | | | | | | | | | | | | | | | | |

| Embraer [removed: E175 | | 153 |] [added: E175/E175LL] | | [removed: 54] [added: 170] | | | [removed: —] [added: 71] | | | 99 | | | SkyWest: Mesa: Republic: [added: ExpressJet:] | 65 60 28 [added: 17] | | | [removed: 76] [added: 70-76] | |

| Embraer 170 | | 38 | | | — | | | [removed: — | | |] 38 | | | Republic: | 38 | | | 70 | |

| CRJ700 | | [removed: 64 | | | —] [added: 47] | | | — | | | [removed: 64] [added: 47] | | | [added: Mesa:] SkyWest: GoJet: [removed: Mesa:] | [removed: 19 25] 20 [added: 19 8] | | | 70 | |

| CRJ200 | | [removed: 128 | | | —] [added: 133] | | | — | | | [removed: 128] [added: 133] | | | SkyWest: Air Wisconsin: [removed: ExpressJet:] | [removed: 60 56 12] [added: 70 63] | | | 50 | |

| Embraer ERJ 145 (XR/LR/ER) | | [removed: 176 | | | 82] [added: 175] | | | [removed: 90] [added: 168] | | | [removed: 4] [added: 7] | | | ExpressJet: Trans States: CommutAir: | [removed: 105 40 31] [added: 95 43 37] | | | 50 | |

In addition to the aircraft presented in the [removed: tables] [added: table] above, United owned the following [added: regional] aircraft [removed: listed below] as of December 31, [removed: 2018:][added: 2019:]

| • | One Boeing 767-200, which is being subleased to another [removed: airline;] [added: airline.] |

| • | [removed: Nine] [added: Four] Boeing [removed: 747s,] [added: 747-400s,] which are permanently grounded; [removed: and] |

| • | Three Embraer [removed: ERJ 145s,] [added: ERJ145s,] which are temporarily grounded. |

[added: Firm Order and Option Aircraft.] As of December 31, [removed: 2018,] [added: 2019,] United had firm commitments and options to purchase new aircraft from Boeing, Airbus and Embraer as presented in the table below:

| [removed: Aircraft Type] [added: Aircraft Type] | | [removed: Number] [added: Number] of Firm Commitments [removed: (a)] [added: (a)] | [added: | | 2020 | | | After 2020 | |]

| Airbus A350 | | 45 | [added: | | — | | | 45 | |]

| Boeing 737 MAX | | [removed: 175] [added: 171] | [added: | | 44 | | | 127 | |]

| Boeing 777-300ER | | [removed: 4] [added: 2] | [added: | | 2 | | | — | |]

| Boeing 787 | | [removed: 24] [added: 16] | [added: | | 15 | | | 1 | |]

| Embraer E175 | | [removed: 25] [added: 20] | [added: | | 20 | | | — | |]

[removed: |] (a) United also has options and purchase rights for additional aircraft. [removed: | | |]

The aircraft listed in the table above are scheduled for delivery [removed: from 2019] through [removed: 2027.][added: 2030.]

To the extent the Company and the aircraft manufacturers with [removed: whom] [added: which] the Company has existing orders for new aircraft agree to modify the contracts governing those orders, the amount and timing of the Company's future capital commitments could change.

United also has agreements to purchase 20 used Airbus A319 aircraft with expected delivery dates through [removed: 2022.][added: 2022 and 19 used Boeing 737-700 aircraft with expected delivery dates through 2021.]

[removed: United's principal facilities relate to] [added: Facilities. United] leases [removed: of airport facilities,] gates, hangar sites, terminal buildings and other [added: airport] facilities in the municipalities it serves.

United has major terminal facility leases at SFO, Washington Dulles, Chicago O'Hare, LAX, Denver, Newark, Houston Bush and Guam with expiration dates ranging from [removed: 2019] [added: 2020] through [removed: 2055.][added: 2053.]

Fleet. As of December 31, 2019, United's mainline and regional fleets consisted of the following:

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| 777-200ER | | 55 | | | 51 | | | 4 | | | 267-276 | | | | 19.8 | |

| 767-400ER | | 16 | | | 14 | | | 2 | | | 240 | | | | 18.3 | |

| Total mainline | | 777 | | | 635 | | | 142 | | | | | | | 15.6 | |

In addition to the aircraft presented in the table above, United owned or leased the following mainline aircraft as of December 31, 2019:

| • | Fourteen Boeing 737 MAX 9s, which are temporarily grounded pursuant to the FAA Order; |

| • | Three Airbus A320s, which are temporarily grounded; and |

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| CRJ550 | | 18 | | | — | | | 18 | | | GoJet: | 18 | | | 50 | |

| Total regional | | 581 | | | 239 | | | 342 | | | | | | | | |

| • | Eight Embraer E175LLs, which were delivered but not yet in service; and |

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| | | | | | Scheduled Aircraft Deliveries | | | | |

| Airbus A321XLR | | 50 | | | — | | | 50 | |

The Company expects to assign the purchase obligation for each of the 20 Embraer E175 aircraft to one of its regional partners at the time of such aircraft's delivery, subject to certain conditions.

The 44 Boeing 737 MAX aircraft in the table above include 16 Boeing B737 MAX aircraft of which the Company planned to take delivery in 2019, and 28 aircraft of which the Company planned to take delivery of in 2020; however, following the FAA Order, Boeing suspended deliveries of new Boeing 737 MAX aircraft.

The extent of the delay to the scheduled deliveries of new 737 MAX aircraft is expected to be impacted by the length of time the FAA Order remains in place, Boeing's production rate and the pace at which Boeing can deliver aircraft following the lifting of the FAA Order, among other factors.

As a result, the Company is unable to estimate the number of Boeing 737 MAX aircraft of which it will take delivery in 2020.

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Fleet

Including aircraft operated by United's regional carriers, United's fleet consisted of 1,329 aircraft as of December 31, 2018, the details of which are presented in the tables below:

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 777-200ER | | 55 | | | 46 | | | 9 | | | | | | 269-274 | | | | 18.8 | |

| 767-400ER | | 16 | | | 14 | | | 2 | | | | | | 242 | | | | 17.3 | |

| 737 MAX 9 | | 9 | | | 9 | | | — | | | | | | 179 | | | | 0.4 | |

| Total mainline | | 770 | | | 614 | | | 156 | | | | | | | | | | 15.1 | |

| Total regional | | 559 | | | 136 | | | 90 | | | 333 | | | | | | | | |

| Total | | 1,329 | | | 750 | | | 246 | | | 333 | | | | | | | | |

| • | One Boeing 737 MAX 9 and one Airbus 319-100, which were delivered in December 2018 but were awaiting operating certificates as of December 31, 2018; |

Firm Order and Option Aircraft

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In 2019, United expects to take delivery of 25 Embraer E175 aircraft, 20 Boeing 737 MAX aircraft, 8 Boeing 787 aircraft and 2 Boeing 777-300ER aircraft.

Facilities

[removed: PART II][added: PART II]

The following graph shows the cumulative total stockholder return for UAL's common stock during the period from December 31, [removed: 2013] [added: 2014] to December 31, [removed: 2018.][added: 2019.]

The graph also shows the cumulative returns of the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL") of [removed: 15] [added: 14] investor-owned airlines over the same five-year period.

The comparison assumes $100 was invested on December 31, [removed: 2013] [added: 2014] in each of UAL common stock, the SPX and the XAL.

[removed: ][added: ]

[removed: Note:] [added: *Note:*] The stock price performance shown in the graph above should not be considered indicative of potential future stock price performance.

The following table presents repurchases of UAL common stock made in the fourth quarter of [removed: 2018:][added: 2019:]

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] number of shares purchased (a) [removed: (b)] [added: (b)] | | | [removed: Average] [added: Average] price paid per share [removed: (b)(c)] [added: (b)(c)] | | | | [removed: Total] [added: Total] number of shares purchased as part of publicly announced plans or programs [removed: (a)] [added: (a)] | | | [removed: Approximate] [added: Approximate] dollar value of shares that may yet be purchased under the plans or programs (in millions) [removed: (a)] [added: (a)] | | |

(a) In [removed: 2018,] [added: 2019,] UAL repurchased approximately [removed: 17.5] [added: 19.2] million shares of UAL common stock for [removed: $1.2] [added: $1.6] billion.

As of December 31, [removed: 2018,] [added: 2019,] the Company had approximately [removed: $1.8] [added: $3.1] billion remaining to purchase shares under its [removed: share] repurchase [removed: program.][added: programs.]

A total of [removed: 1,368] [added: 1,930] shares were withheld under the plans in the fourth quarter of [removed: 2018] [added: 2019] at an average price of [removed: $91.79] [added: $89.67] per share.

UAL's common stock is listed on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." As of February 18, 2020, there were 5,073 holders of record of UAL common stock.

| October 2019 | | 1,071,915 | | | $ | 87.65 | | | 1,071,915 | | | $ | 3,231 | |

| November 2019 | | 430,400 | | | 92.70 | | | | 430,400 | | | 3,191 | | |

| December 2019 | | 922,600 | | | 88.72 | | | | 922,600 | | | 3,109 | | |

| Total | | 2,424,915 | | | | | | | 2,424,915 | | | | | |

In July 2019, UAL's Board of Directors authorized a new $3.0 billion share repurchase program to acquire UAL's common stock, in addition to any amounts remaining under the prior program.

Since September 7, 2018, UAL's common stock has traded on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." Previously, UAL's common stock was traded on the New York Stock Exchange ("NYSE").

As of February 22, 2019, there were 5,615 holders of record of UAL common stock.

| October 2018 | | 572,349 | | | $ | 85.76 | | | 572,349 | | | $ | 1,941 | |

| November 2018 | | 927,969 | | | 91.76 | | | | 927,969 | | | 1,856 | | |

| December 2018 | | 1,228,339 | | | 85.87 | | | | 1,228,339 | | | 1,750 | | |

| Total | | 2,728,657 | | | | | | | 2,728,657 | | | | | |

| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | | [removed: 2018] [added: 2019] | | | | [removed: 2017 (a)] [added: 2018 (a)] | | | | [removed: 2016 (a)] [added: 2017 (a)] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Income] [added: Income] Statement Data (in millions, except per share [removed: amounts):] [added: amounts):] | | | | | | | | | | | | | | | | | | | | |

| Operating revenue | | $ | [removed: 41,303] [added: 43,259] | | | $ | [removed: 37,784] [added: 41,303] | | | $ | [removed: 36,558] [added: 37,784] | | | $ | [removed: 37,864] [added: 36,558] | | | $ | [removed: 38,901] [added: 37,864] | |

| Operating expense | | [removed: 38,011] [added: 38,958] | | | | [removed: 34,113] [added: 38,074] | | | | [removed: 32,214] [added: 34,166] | | | | [removed: 32,698] [added: 32,214] | | | | [removed: 36,528] [added: 32,698] | | |

| Operating income | | [removed: 3,292] [added: 4,301] | | | | [removed: 3,671] [added: 3,229] | | | | [removed: 4,344] [added: 3,618] | | | | [removed: 5,166] [added: 4,344] | | | | [removed: 2,373] [added: 5,166] | | |

| Net income | | [removed: 2,129] [added: 3,009] | | | | [removed: 2,144] [added: 2,122] | | | | [removed: 2,234] [added: 2,143] | | | | [removed: 7,340] [added: 2,234] | | | | [removed: 1,132] [added: 7,340] | | |

| Basic earnings per share | | [removed: 7.73] [added: 11.63] | | | | [removed: 7.08] [added: 7.70] | | | | [removed: 6.77] [added: 7.08] | | | | [removed: 19.52] [added: 6.77] | | | | [removed: 3.05] [added: 19.52] | | |

| Diluted earnings per share | | [removed: 7.70] [added: 11.58] | | | | [removed: 7.06] [added: 7.67] | | | | [removed: 6.76] [added: 7.06] | | | | [removed: 19.47] [added: 6.76] | | | | [removed: 2.93] [added: 19.47] | | |

| [removed: Balance] [added: Balance] Sheet Data at December 31 (in [removed: millions):] [added: millions):] | | | | | | | | | | | | | | | | | | | | |

| Unrestricted cash, cash equivalents and short-term investments | | $ | [removed: 3,950] [added: 4,944] | | | $ | [removed: 3,798] [added: 3,950] | | | $ | [removed: 4,428] [added: 3,798] | | | $ | [removed: 5,196] [added: 4,428] | | | $ | [removed: 4,384] [added: 5,196] | |

| Total assets | | [removed: 44,792] [added: 52,611] | | | | [removed: 42,346] [added: 49,024] | | | | [removed: 40,208] [added: 47,469] | | | | [removed: 40,861] [added: 40,208] | | | | [removed: 36,595] [added: 40,861] | | |

| Debt and [removed: capital] [added: finance] lease obligations [added: (b)] | | [removed: 14,728] [added: 14,818] | | | | [removed: 14,392] [added: 13,792] | | | | [removed: 11,705] [added: 13,576] | | | | [removed: 11,759] [added: 11,705] | | | | [removed: 11,947] [added: 11,759] | | |

[added: (a) Amounts adjusted due to the adoption of Accounting Standard Update No. 2016-02, *Leases* *(Topic 842).*] See Note 1 to the financial statements contained in Part II, Item 8 of this report for additional information.

| | [removed: Year] [added: | Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] | [added: 2019] | | | [removed: 2017 (a)] | [added: 2018] | | | [removed: 2016 (a)] | [added: 2017] | | | [removed: 2015] | [added: 2016] | | | [removed: 2014] | [added: 2015] | | [added: |]

| Passengers (thousands) [removed: (c)] [added: (b)] | [removed: 158,330] | [added: 162,443] | | | [removed: 148,067] | [added: 158,330] | | | [removed: 143,177] | [added: 148,067] | | | [removed: 140,369] | [added: 143,177] | | | [removed: 138,029] | [added: 140,369] | | [added: |]

| Revenue passenger miles ("RPMs") (millions) [removed: (d)] [added: (c)] | [removed: 230,155] | [added: 239,360] | | | [removed: 216,261] | [added: 230,155] | | | [removed: 210,309] | [added: 216,261] | | | [removed: 208,611] | [added: 210,309] | | | [removed: 205,559] | [added: 208,611] | | [added: |]

| Available seat miles ("ASMs") (millions) [removed: (e)] [added: (d)] | [removed: 275,262] | [added: 284,999] | | | [removed: 262,386] | [added: 275,262] | | | [removed: 253,590] | [added: 262,386] | | | [removed: 250,003] | [added: 253,590] | | | [removed: 246,021] | [added: 250,003] | | [added: |]

| Cargo revenue ton miles (millions) [removed: (f)] [added: (e)] | [removed: 3,425] | [added: 3,329] | | | [removed: 3,316] | [added: 3,425] | | | [removed: 2,805] | [added: 3,316] | | | [removed: 2,614] | [added: 2,805] | | | [removed: 2,487] | [added: 2,614] | | [added: |]

| Passenger load factor [removed: (g)] [added: (f)] | [removed: 83.6] | [added: 84.0] | [added: |] % | | [removed: 82.4] [added: 83.6] | | % | | [removed: 82.9] [added: 82.4] | | % | | [removed: 83.4] [added: 82.9] | | % | | [removed: 83.6] [added: 83.4] | | % |

| Passenger revenue per available seat mile ("PRASM") (cents) | [removed: 13.70] | [added: 13.90] | | | [removed: 13.13] | [added: 13.70] | | | [removed: 13.18] | [added: 13.13] | | | [removed: 13.11] | [added: 13.18] | | | [removed: 13.72] | [added: 13.11] | | [added: |]

| Total revenue per available seat mile ("TRASM") (cents) | [removed: 15.00] | [added: 15.18] | | | [removed: 14.40] | [added: 15.00] | | | [removed: 14.42] | [added: 14.40] | | | [removed: 15.15] | [added: 14.42] | | | [removed: 15.81] | [added: 15.15] | | [added: |]