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What changed in United Airlines Holdings's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of United Airlines Holdings's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+424 added−480 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-16)

Top changes in United Airlines Holdings's 2023 10-K

424 paragraphs added · 480 removed · 307 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

102 edited+67 added−81 removed69 unchanged
Biggest changeThe Company has worked collaboratively across its organization and with Air Traffic Control ("ATC") providers to improve fuel efficiency through the implementation of best practices, by providing training to its pilots and dispatchers and supplying them with the tools needed to execute on those strategies. • Innovating in Carbon Reduction Technology : The Company has been forming, through its corporate venture capital arm, United Airlines Ventures ("UAV"), collaborations with, as well as investing in, early-stage climate technology companies that have the potential to scale and support the Company's climate targets or are generally supportive of advancing sustainability within the broader economy. ◦ In 2021, the Company announced, through UAV, investments in aerospace technologies, like electric vertical takeoff and landing ("eVTOL") aircraft (through its investment in Archer Aviation), electric aircraft (Heart Aerospace) and hydrogen-electric engines (ZeroAvia) to advance technologies with a potential to help decarbonize air travel in the future, once regulatory approvals are obtained. ◦ In September 2022, UAV announced an addition to its eVTOL investment portfolio with an investment in Eve Air Mobility ("Eve"), a company that is developing an electric four-seater aircraft.
Biggest changeThe Company has worked collaboratively across its organization and with Air Traffic Control ("ATC") providers to strive to improve fuel efficiency through the implementation of best practices and by training its pilots and dispatchers and supplying them with the necessary tools to execute those strategies. 7 Table of Contents The Company, through the aerospace-focused investment vertical, of its corporate venture capital arm, United Airlines Ventures, Ltd.
UAL, through United and its regional carriers, operates across six continents, with hubs at Newark Liberty International Airport ("EWR"), Chicago O'Hare International Airport ("ORD"), Denver International Airport ("DEN"), George Bush Intercontinental Airport ("IAH"), Los Angeles International Airport ("LAX"), A.B. Won Pat International Airport ("GUM"), San Francisco International Airport ("SFO") and Washington Dulles International Airport ("IAD").
UAL, through United and its regional carriers, operates across six continents, with hubs at Chicago O'Hare International Airport ("ORD"), Denver International Airport ("DEN"), George Bush Intercontinental Airport ("IAH"), Los Angeles International Airport ("LAX"), Newark Liberty International Airport ("EWR"), San Francisco International Airport ("SFO"), Washington Dulles International Airport ("IAD") and A.B. Won Pat International Airport ("GUM").
This regional service complements our operations by carrying traffic that connects to our hubs and allows flights to smaller cities that cannot be provided economically with mainline aircraft. CommuteAir LLC ("CommuteAir"), Republic Airways Inc. ("Republic"), GoJet Airlines LLC ("GoJet"), Mesa Airlines, Inc. ("Mesa"), SkyWest Airlines, Inc.
This regional service complements our operations by carrying traffic that connects to our hubs and allows flights to smaller cities that cannot be provided economically with mainline aircraft. CommuteAir LLC ("CommuteAir"), GoJet Airlines LLC ("GoJet"), Mesa Airlines, Inc. ("Mesa"), Republic Airways Inc. ("Republic") and SkyWest Airlines, Inc.
These include noise-related restrictions on aircraft types and operating times and state and local air quality initiatives which have resulted, or could in the future result in curtailments in services, increased operating costs, limits on expansion, or further emission reduction requirements.
These include noise-related restrictions on aircraft types and operating times and state and local air quality initiatives which have resulted in, or could in the future result in, curtailments in services, increased operating costs, limits on expansion, or further emission reduction requirements.
With respect to executives, a substantial proportion of their total rewards is variable, at-risk pay that is based on Company performance and delivered in the form of equity, supporting alignment over the long term between our executives and our shareholders. We align our executives' long-term equity compensation with our shareholders' interests by linking realizable pay with stock performance.
With respect to executives, a substantial proportion of their total rewards package is variable, at-risk pay that is based on Company performance and delivered in the form of equity, supporting alignment over the long term between our executives and our shareholders. We align our executives' long-term equity compensation with our shareholders' interests by linking realizable pay with stock performance.
The airline industry is subject to increasingly stringent federal, state, local and international environmental regulations, including those regulating emissions to air, water discharges, safe drinking water and the use and management of hazardous substances and wastes. The Company endeavors to comply with all applicable environmental regulations. Climate Change.
The airline industry is subject to increasingly stringent federal, state, local and international environmental regulations, including those regulating emissions to air, water discharges, safe drinking water and the use and management of hazardous substances and wastes. The Company endeavors to comply with all applicable environmental regulations. Climate Change and Sustainability.
In addition, even though purchasing carbon offsets could present near-term emissions reductions, as outlined above, the Company is resolute in attaining its mid-term and long-term climate goals without relying on the use of traditional carbon offsets to support its voluntary climate targets and has made progress towards implementing solutions that are needed to permanently change aviation and reduce the environmental impact of air travel to protect our planet for generations to come.
In addition, even though purchasing voluntary carbon offsets could present near-term emissions reductions, as outlined above, the Company is resolute in attaining its mid-term and long-term climate goals without relying on the use of voluntary carbon offsets to support its climate targets and has made progress towards implementing solutions that the Company believes are needed to permanently change aviation and reduce the environmental impact of air travel to protect our planet for generations to come.
Seasonality. The air travel business is subject to seasonal fluctuations. Historically, demand for air travel is higher in the second and third quarters, driving higher revenues, than in the first and fourth quarters, which are periods of lower travel demand.
The air travel business is subject to seasonal fluctuations. Historically, demand for air travel is higher in the second and third quarters, driving higher revenues, than in the first and fourth quarters, which are periods of lower travel demand.
We also review both industry and local market data at least annually to identify trends and market gaps in order to maintain the competitiveness of our compensation and employee benefit programs.
We review both industry and local market data at least annually to identify trends and market gaps in order to maintain the competitiveness of our compensation and employee benefit programs.
Carriers with lower costs may offer lower fares to passengers, which could have a potential negative impact on the Company's revenues. Domestic pricing decisions are impacted by intense competitive pressure exerted on the Company by other U.S. airlines. In order to remain competitive and maintain passenger traffic levels, we often find it necessary to match competitors' discounted fares.
Carriers with lower costs may offer lower fares to passengers, which could have a potential negative impact on the Company's revenues. Domestic pricing decisions are impacted by intense competitive pressure exerted on the Company by other U.S. airlines. In order to remain competitive and maintain passenger traffic levels, we often find it necessary to match competitors' discounted fares. International Competition.
To compensate partially for these structural limitations, U.S. and foreign carriers have entered into alliances, immunized JBAs and marketing arrangements that enable these carriers to exchange traffic between each other's flights and route networks. Through these arrangements, the Company strives to provide consumers with a growing number of seamless, cost-effective and convenient travel options. See Alliances, above, for additional information.
To compensate partially for these structural limitations, U.S. and foreign carriers have entered into alliances, immunized JBAs and marketing arrangements that enable these carriers to exchange traffic between each other's flights and route networks. Through these arrangements, the Company strives to provide consumers with a growing number of seamless, cost-effective and convenient travel options. See "Alliances" for additional information. Seasonality.
United has developed and expects to continue to develop capabilities to sell certain ancillary products through the GDS channel to provide an enhanced buying experience for customers who purchase in that channel. Third-Party Business. United generates third-party business revenue that includes maintenance services, frequent flyer award non-travel redemptions, flight academy and ground handling.
United has developed and expects to continue to develop capabilities to sell certain ancillary products through the GDS channel to provide an enhanced buying experience for customers who purchase in that channel. Third-Party Business. United generates third-party business revenue that includes maintenance services, frequent flyer award non-travel redemptions, flight academy and ground handling. Aircraft Fuel.
We are committed to transparency and accountability as we work to better reflect the diversity of the communities we serve in all areas of our business and, to track our progress, have committed to sharing our U.S. workforce demographic data by self-identified race, ethnicity and gender on an annual basis on our website.
We are committed to transparency and accountability as we work to better reflect the diversity of the communities we serve in all areas of our business and have committed to sharing our U.S. workforce demographic data by self-identified race, ethnicity and gender on an annual basis on our website.
Potential policy changes for consideration could include airline customer service requirements, aviation safety, investments in FAA staffing and resources, advancements in improving air traffic control ("ATC") technology, labor requirements and managing new entrants in the National Air Space. These issues could impact the Company and larger airline industry.
Potential policy changes for consideration could include airline customer service requirements, aviation safety, investments in FAA staffing and resources, advancements in improving ATC technology, labor requirements and managing new entrants in the National Air Space. These issues could impact the Company and larger airline industry.
Total miles redeemed for flights on United and United Express, including class-of-service upgrades, represented approximately 92% of the total miles redeemed. In addition, excluding miles redeemed for flights on United and United Express, MileagePlus members redeemed miles for approximately 1.2 million other awards. These awards include United Club memberships, car and hotel awards, merchandise and flights on other air carriers.
Total miles redeemed for flights on United and United Express, including class-of-service upgrades, represented approximately 92% of the total miles redeemed. In addition, excluding miles redeemed for flights on United and United Express, MileagePlus members redeemed miles for approximately 2.4 million other awards. These awards include United Club memberships, car and hotel awards, merchandise and flights on other air carriers.
Competition can be direct, in the form of another carrier flying the exact non-stop route, or indirect, where a carrier serves the same two cities non-stop from an alternative airport in that city or via an itinerary requiring a connection at another airport. Air carriers' cost structures are not uniform and are influenced by numerous factors.
Competition can be direct, in the form of another carrier flying the exact non-stop route, or indirect, where a carrier serves the same two cities non-stop from an alternative airport in that city or via an itinerary requiring a 5 Table of Contents connection at another airport. Air carriers' cost structures are not uniform and are influenced by numerous factors.
The Company believes that it is critical, now more than ever, to continue to serve its purpose of connecting people and uniting the world, and is committed to finding solutions, both individually as a company, and together 6 Table of Contents with partners in both the private and public sectors, to do so sustainably and responsibly while also achieving its financial goals.
The Company believes that it is critical, now more than ever, to continue to serve its purpose of connecting people and uniting the world and is committed to finding solutions, both individually as a company and together with partners in both the private and public sectors, to do so sustainably and responsibly while also achieving its financial goals.
However, even with Open Skies, many of the airports that the Company serves in Africa, the Middle 15 Table of Contents East, Asia/Pacific, Europe, and Latin America maintain slot controls. A large number of these slot controls exist due to congestion, environmental and noise protection and reduced capacity due to runway and ATC construction work, among other reasons.
However, even with Open Skies, many of the airports that the Company serves in Asia, Africa, the Middle East, the Pacific, Europe, and Latin America maintain slot controls. A large number of these slot controls exist due to congestion, environmental and noise protection and reduced capacity due to runway and ATC construction work, among other reasons.
Finally, environmental cleanup laws could require the Company to undertake (or subject the Company to liability for costs associated with) investigation and remediation actions at certain owned or leased locations or third-party disposal locations.
Finally, environmental cleanup laws and lease obligations could require the Company to undertake (or subject the Company to liability for costs associated with) investigation and remediation actions at certain owned or leased locations or third-party disposal locations.
Nocella served as Senior Vice President, Alliances and Sales of American Airlines, Inc. From December 2013 to August 2016, he served as Senior Vice President and Chief Marketing Officer of American Airlines, Inc. From August 2007 to December 2013, he served as Senior Vice President, Marketing and Planning of US Airways. 19 Table of Contents
Nocella served as Senior Vice President, Alliances and Sales of American Airlines, Inc. From December 2013 to August 2016, he served as Senior Vice President and Chief Marketing Officer of American Airlines, Inc. From August 2007 to December 2013, he served as Senior Vice President, Marketing and Planning of US Airways. 18 Table of Contents
United also participates in four passenger joint business arrangements ("JBAs"): one with Air Canada and the Lufthansa Group (which includes Lufthansa and its affiliates Air Dolomiti, Austrian Airlines, Brussels Airlines, Edelweiss, Eurowings, Eurowings Discover and SWISS) covering transatlantic routes, one with ANA covering certain transpacific routes, one with Air New Zealand covering certain routes between the United States and New Zealand, and one with Air Canada, established in July 2022, covering certain United States and Canada transborder routes.
United also participates in four passenger joint business arrangements ("JBAs"): one with Air Canada and the Lufthansa Group (which includes Lufthansa and its affiliates Air Dolomiti, Austrian Airlines, Brussels Airlines, Discover Airlines, Edelweiss, Eurowings and SWISS) covering transatlantic routes, one with ANA covering certain transpacific routes, one with Air New Zealand covering certain routes between the United States and New Zealand, and one with Air Canada covering certain United States and Canada transborder routes.
The information contained on or connected to the Company's website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report filed with the SEC. Industry Regulation Airlines are subject to extensive domestic and international regulatory oversight.
The information contained on 13 Table of Contents or connected to the Company's website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report filed with the SEC. Industry Regulation Airlines are subject to extensive domestic and international regulatory oversight.
The main focus in realizing this objective is reducing its fossil jet fuel consumption, which is both the largest contributor to its environmental footprint and a sizable expense for the Company.
Its main focus in realizing this objective is reducing its conventional jet fuel consumption, which is both the largest contributor to its environmental footprint and a sizable expense for the Company.
Unless otherwise stated, employment is by UAL and United. There are no family relationships between any executive officer or director of UAL. 17 Table of Contents Torbjorn (Toby) J. Enqvist. Mr. Enqvist has served as Executive Vice President and Chief Operations Officer of UAL and United since July 2022.
Unless otherwise stated, employment is by UAL and United. There are no family relationships between any executive officer or director of UAL. Torbjorn (Toby) J. Enqvist. Mr. Enqvist has served as Executive Vice President and Chief Operations Officer of UAL and United since July 2022.
The following discussion summarizes the principal elements of the regulatory framework applicable to our business. Regulatory requirements, including but not limited 14 Table of Contents to those discussed below, affect our operations and increase our operating costs, and future regulatory developments may continue to do the same.
The following discussion summarizes the principal elements of the regulatory framework applicable to our business. Regulatory requirements, including but not limited to those discussed below, affect our operations and increase our operating costs, and future regulatory developments may continue to do the same.
In cases where this activity exceeds U.S. requirements, additional burden and liability may be placed on the Company. Certain countries have regulations requiring passenger compensation from the Company and/or enforcement penalties in addition to changes in operating procedures due to overbooked, canceled or delayed flights. Airport Access.
In cases where this activity exceeds U.S. requirements, additional burden and liability may be placed on the Company. Certain countries have regulations requiring passenger compensation from the Company and/or enforcement penalties in addition to changes in operating procedures due to overbooked, canceled or delayed flights. 14 Table of Contents Airport Access.
The Company's business and operations are dependent on its regional flight network, with regional capacity accounting for approximately 8% of the Company's total capacity for the year ended December 31, 2022. The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express.
The Company's business and operations are dependent on its regional flight network, with regional capacity accounting for approximately 6% of the Company's total capacity for the year ended December 31, 2023. The Company has contractual relationships with various regional carriers to provide regional aircraft service branded as United Express.
Congressional action on reauthorization is expected to occur after the September 2023 expiration date, and in that case, Congress will likely pass an extension of current law to prevent any lapse in taxing authority. International Regulation. International air transportation is subject to extensive government regulation.
Congressional action on reauthorization is expected to occur after the March 2024 expiration date, and in that case, Congress will likely pass an extension of current law to prevent any lapse in taxing authority. International Regulation. International air transportation is subject to extensive government regulation.
The following table contains aggregate information regarding certain self-identified characteristics of our U.S. employees and directors: U.S.
The following table contains aggregate information regarding certain self-identified characteristics of our U.S. employees and directors: 10 Table of Contents U.S.
A policy to regulate GHG emissions from aviation known as the European Union ("EU") Emission Trading System ("ETS") was adopted in 2009, but applicability to flights arriving at or departing from airports outside the EU has been postponed several times.
A policy to regulate GHG emissions from aviation known as the European Union ("EU") Emission Trading System ("ETS") was adopted in 2009, but applicability to flights arriving at or departing from airports outside the EU has been postponed several times, most recently until 2027.
The proposed rule would also require the Company to immediately report releases that meet or exceed the reportable quantity of PFOA or PFOS to the EPA and any other applicable state and local agencies.
The rule, if finalized, would also require the Company to immediately report releases that meet or exceed the reportable quantity of PFOA or PFOS to the EPA and any other applicable state and local agencies.
In addition to its members, Star Alliance includes Shanghai-based Juneyao Airlines and Thailand-based Thai Smile Airways, a subsidiary of THAI Airways International, as connecting partners and Germany-based Deutsche Bahn, a rail company, as an intermodal partner.
In addition to its members, during 2023, Star Alliance included Shanghai-based Juneyao Airlines and Thailand-based Thai Smile Airways, a subsidiary of THAI Airways International, as connecting partners and Germany-based Deutsche Bahn, a rail company, as an intermodal partner.
Air Cargo. United provides freight and mail transportation services (air cargo). The majority of air cargo services are provided to commercial businesses, freight forwarder and logistics firms as well as national postal services. Through our global network, our cargo operations are able to connect the world's major freight gateways.
Air Cargo. United provides freight and mail transportation services (air cargo). The majority of air cargo services are provided to commercial businesses, freight forwarders, logistics firms and national postal services. Through our global network, our air cargo operations are able to connect the world's major freight gateways.
The Company's Board of Directors (the "Board"), including through its Public Responsibility Committee, provides oversight of its climate-related goals and strategy to ensure integration with its core business strategy and management periodically updates the Board on the implementation of the Company's climate-related goals and strategy.
The Company's Board of Directors (the "Board"), including through its Public Responsibility Committee, provides oversight of its environmental sustainability and climate-related strategic goals and objectives to ensure integration with its core business strategy. Management periodically updates the Board on the implementation of the Company's climate-related strategic goals and objectives.
The Company's earnest intention on meeting the net zero GHG emission goal by 2050 led the Company to commit to a mid-term objective of reducing, compared to 2019, its carbon intensity by 50% by 2035.
The Company's earnest intention on meeting the net zero GHG emissions goal by 2050 led the Company to commit to a mid-term target of reducing, compared to 2019, its carbon emissions intensity by 50% by 2035.
Because PFOA, PFOS and other PFAS substances are expected to be regulated under CERCLA and have been regulated other environmental cleanup laws, the Company may become subject to potential liability for its historic usage of PFAS-containing materials, although such potential liability is not expected to be significant.
Because PFOA, PFOS and other PFAS substances are expected to be regulated under CERCLA and have been regulated under other environmental cleanup laws, the Company may become subject to potential liability for its historic usage of PFAS-containing materials.
The Co-Brand Agreement also provides for joint marketing and other support for the MileagePlus credit card and provides Chase with other benefits such as permission to market to the Company's customer database. In 2022, approximately 5.6 million MileagePlus flight awards were used on United and United Express. These awards represented approximately 7.3% of United's total revenue passenger miles.
The Co-Brand Agreement also provides for joint marketing and other support for the MileagePlus credit card and provides Chase with other benefits such as permission to market to the Company's customer database. In 2023, approximately 7.4 million MileagePlus flight awards were used on United and United Express. These awards represented approximately 8.1% of United's total revenue passenger miles.
For instance, the Board's Executive Committee oversees and reviews significant human capital strategies, including culture, talent management and DEI matters, and the Board's Public Responsibility Committee reviews and monitors the development and implementation of the Company's DEI and strategic goals and objectives.
The Board's Executive Committee oversees and reviews significant human capital strategies, including culture, talent management and diversity, equity and inclusion ("DEI") matters, and the Board's Public Responsibility Committee reviews and monitors the development and implementation of the Company's DEI and strategic goals and objectives.
In 2022, Star Alliance carriers continued to serve more than 1,200 airports in 184 countries with approximately 14,000 average daily departures. Star Alliance members, in addition to United, are 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.
In 2023, Star Alliance carriers continued to serve more than 1,200 airports in 186 countries with over 16,000 average daily departures. Star Alliance members, in addition to United, are 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.
The Board, including through its Public Responsibility Committee, also oversees management's identification, evaluation and monitoring of environmental (including climate-related) trends, issues, concerns, risks and opportunities that affect or could affect the Company's reputation, business activities, strategies and performance. • Reducing Environmental Footprint : As part of this plan, the Company is focused on maximizing fuel efficiency and reducing fuel usage in its operations.
The Board, including through its Public Responsibility Committee, also oversees management's identification, evaluation and monitoring of environmental (including climate-related) trends, issues, concerns, risks and opportunities that affect or could affect the Company's reputation, business activities, strategies and performance. • Emitting Less GHGs : As part of this plan, the Company is focused on improving fuel efficiency and reducing GHG emissions in its operations.
The Company's ability to compete successfully with non-U.S. carriers on international routes depends in part on its ability to generate traffic to and from the entire United States via its integrated domestic route network and its ability to overcome business and operational challenges across its network worldwide.
Competition on international routes is subject to varying degrees of governmental regulation. The Company's ability to compete successfully with non-U.S. carriers on international routes depends in part on its ability to generate traffic to and from the entire United States via its integrated domestic route network and its ability to overcome business and operational challenges across its network worldwide.
In addition, while the Company is resolute in attaining its mid-term and long-term climate goals without relying on voluntary use of traditional carbon offsets, the Company may be subject to future regulatory requirements that require the purchase of carbon offsets, which may expose the Company to additional costs associated with the procurement of offsets or limited supply in the carbon offsets market.
In addition, while the Company continues to plan on meeting its mid-term and long-term climate goals without relying on voluntary carbon offsets, the Company may be subject to future regulatory requirements that require the purchase of non-voluntary carbon offsets, which may expose the Company to additional costs associated with the procurement of offsets or limited supply in the carbon offsets market.
At the end of 2020, the Company pledged a net zero goal to eliminate its greenhouse gas ("GHG") emissions by 100% by 2050 without relying on the use of traditional carbon offsets, like planting trees or purchasing voluntary offsets. United was the first airline globally to make such a commitment without relying on the use of traditional offsets.
At the end of 2020, the Company pledged a net zero goal to reduce its greenhouse gas ("GHG") emissions by 100% by 2050 without relying on the use of voluntary carbon offsets. United was the first airline globally to make such a commitment without relying on the use of voluntary carbon offsets.
United will retrofit 100% of its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight WiFi, as well as a bright look-and-feel with LED lighting.
United is in the process of retrofitting its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight Wi-Fi, as well as a bright look-and-feel with LED lighting.
Uniting the World" by enabling connections that matter and move society—whether it is connecting people across cultures, flying a loved one to a wedding, connecting medical professionals at a breakthrough conference or getting a business traveler to an important meeting or back home in time for a child's big game.
Our employees around the world are joined together to enable connections that matter and move society—whether it is connecting people across cultures, flying a loved one to a wedding, connecting medical professionals at a breakthrough conference or getting a business traveler to an important meeting or back home in time for a child’s big game.
In August 2022, EPA proposed to designate two PFAS substances, perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”) as hazardous substances under CERCLA. The proposed rule would authorize the EPA to order cleanup actions and hold responsible parties liable under CERCLA's joint and several liability scheme.
In August 2022, EPA proposed to designate two PFAS substances, perfluorooctanoic acid ("PFOA") and perfluorooctanesulfonic acid ("PFOS") as hazardous substances under CERCLA. The proposed rule, expected to be finalized in March 2024, would authorize the EPA to order cleanup actions and hold responsible parties liable under CERCLA's joint and several liability scheme.
In conjunction with its SAF strategy and improving the fuel efficiency of its fleet, the Company has been revamping its flight and ground operations, including implementing operational and procedural initiatives to drive fuel conservation.
In conjunction with improving the fuel efficiency of its fleet, the Company has been incorporating fuel efficiency considerations within flight and ground operations, including implementing operational and procedural initiatives designed to drive fuel conservation.
This carbon intensity target is intended to align the Company's net zero goal with the temperature limit goals of the Paris Agreement and allow the Company to show progress towards its 2050 net zero GHG emissions goal in the nearer term. In 2021, the Company also committed to validating this 2035 target with the Science Based Targets Initiative (SBTi).
This intensity target is intended to align the Company's net zero goal with the temperature limit goals of the Paris Agreement and allow the Company to show progress towards its 2050 net zero GHG emissions goal in the nearer term. This 2035 target received independent validation from the Science Based Targets initiative (SBTi) in May 2023.
Year Gallons Consumed (in millions) Fuel Expense (in millions) Average Price Per Gallon Percentage of Total Operating Expense 2022 3,608 $ 13,113 $ 3.63 31 % 2021 2,729 $ 5,755 $ 2.11 22 % 2020 2,004 $ 3,153 $ 1.57 15 % Our operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel.
Year Gallons Consumed (in millions) Fuel Expense (in millions) Average Price Per Gallon Percentage of Total Operating Expense 2023 4,205 $ 12,651 $ 3.01 26 % 2022 3,608 $ 13,113 $ 3.63 31 % 2021 2,729 $ 5,755 $ 2.11 22 % Our operational and financial results can be significantly impacted by changes in the price and availability of aircraft fuel.
Name Position Age Torbjorn (Toby) J. Enqvist Executive Vice President and Chief Operations Officer 51 Kate Gebo Executive Vice President Human Resources and Labor Relations 54 Brett J. Hart President 53 Gregory L. Hart Executive Vice President and Chief Growth Officer 57 Linda P. Jojo Executive Vice President and Chief Customer Officer 57 J.
Name Position Age Torbjorn (Toby) J. Enqvist Executive Vice President and Chief Operations Officer 52 Kate Gebo Executive Vice President Human Resources and Labor Relations 55 Brett J. Hart President 54 Linda P. Jojo Executive Vice President and Chief Customer Officer 58 J.
The Company lauded the U.S. government's passage of the IRA and will continue to work with policymakers to adopt policies that incentivize the production of SAF to allow the industry to transition to a lower carbon future.
The Company lauded the 15 Table of Contents U.S. government's passage of the IRA and will continue to work with policymakers to adopt policies that incentivize the production of SAF to allow the industry to transition to a lower carbon future, including policies that will allow ethanol-based SAF to qualify for IRA tax credits.
The Company is committed to redefining the future of air travel with environmental sustainability at the forefront because it believes that it is the Company's responsibility to take tangible steps to mitigate climate change impacts from its operations. In addition, the Company's climate goals and overall climate strategy are increasingly important factors in its relationships with its employees and customers.
The Company is committed to redefining the future of air travel with environmental sustainability and responsibility at the forefront because it believes that it is the Company's responsibility to take tangible steps to mitigate climate change impacts from its operations.
We are focused on promoting our safety culture to ensure that every employee across the Company holds each other to the highest safety standards.
We are focused on promoting our safety culture to help ensure that every employee across the Company holds each other to the highest safety standards and strives to protect themselves, their colleagues and our customers.
SAF can reduce lifecycle GHG emissions by up to 85% compared with conventional jet fuel and has the added benefits of having a limited impact on performance or safety and providing energy diversification.
SAF is intended to reduce lifecycle GHG emissions by up to 85% compared with conventional jet fuel and has the added benefits of having a limited impact on performance or safety, reducing sulfur dioxide (SO 2 ) and soot particle emissions as well as providing energy diversification.
Given the airline industry's designation as a 'hard-to-abate sector', the Company believes that not relying on traditional carbon offsets is important and the right priority because the airline industry should focus on decarbonization within its own activities as the industry cannot afford to divert resources and attention toward offset programs that do not effectuate real progress within aviation operations.
The Company believes that not relying on voluntary carbon offsets that assert to accomplish emissions reductions out-of-sector is important and the right priority because the airline industry should focus on decarbonization within its own activities as the industry cannot afford to divert resources and attention toward voluntary carbon offset programs that do not effectuate real progress within aviation operations.
Scott Kirby Chief Executive Officer 55 Gerald Laderman Executive Vice President and Chief Financial Officer 65 Andrew Nocella Executive Vice President and Chief Commercial Officer 53 Set forth below is a description of the background of each of the Company's executive officers.
Scott Kirby Chief Executive Officer 56 Michael Leskinen Executive Vice President and Chief Financial Officer 44 Andrew Nocella Executive Vice President and Chief Commercial Officer 54 Set forth below is a description of the background of each of the Company's executive officers.
Approximately 84% of the Company's employees were represented by various U.S. labor organizations at year-end 2022. As of December 31, 2022, of our U.S. employees, approximately 39% were female and approximately 49% self-identified as part of an underrepresented racial or ethnic group. Our workforce diversity metrics are reported regularly to the executive team and to the Board.
As of December 31, 2023, of our U.S. employees, approximately 39% were female and approximately 50% self-identified as part of an underrepresented racial or ethnic group. Our workforce diversity metrics are reported regularly to the executive team and to the Board.
Kirby has served as Chief Executive Officer of UAL and United since May 2020. Mr. Kirby served as President of UAL and United from August 2016 to May 2020. Prior to joining the Company, from December 2013 to August 2016, Mr. Kirby served as President of American Airlines Group and American Airlines, Inc. Mr.
Kirby served as President of UAL and United from August 2016 to May 2020. Prior to joining the Company, from December 2013 to August 2016, Mr. Kirby served as President of American Airlines Group and American Airlines, Inc. Mr. Kirby also previously served as President of US Airways from October 2006 to December 2013. Mr.
We now expect to take delivery of about 700 new narrow and widebody aircraft by the end of 2033. Our groundbreaking United Next strategy is expected to increase United's average gauge in North America, to increase the total number of available seats per departure and to significantly lower carbon emissions per seat.
Our groundbreaking United Next strategy is expected to increase United's average gauge in North America, to increase the total number of available seats per departure and to significantly lower carbon emissions per seat.
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, Airlink Proprietary Limited, Azul Linhas Aéreas Brasileiras S.A. ("Azul"), Boutique Air, Cape Air, Edelweiss, Emirates, Eurowings, Eurowings Discover, flydubai (in process of completion), Hawaiian Airlines, JetSuiteX, Inc.
In addition to the alliance agreements with Star Alliance members, United currently maintains independent alliance agreements with other air carriers, including Aer Lingus, Air Dolomiti, Airlink, Azul Linhas Aéreas Brasileiras, Boutique Air, Cape Air, Discover Airlines, Emirates, Eurowings, flydubai, Hawaiian Airlines, JetSuiteX, Olympic Air, Silver Airways, Virgin Australia Airlines and Vistara.
Prior to joining America West, Mr. Kirby worked for American Airlines Decision Technologies and at the Pentagon. Gerald Laderman. Mr. Laderman has served as Executive Vice President and Chief Financial Officer of UAL and United since August 2018. Mr.
Prior to joining America West, Mr. Kirby worked for American Airlines Decision Technologies and at the Pentagon. Michael Leskinen. Mr. Leskinen has served as Executive Vice President and Chief Financial Officer of UAL and United since September 2023. Mr. Leskinen served as Vice President of Corporate Development and Investor Relations of United from April 2019 to September 2023.
Congress approved a five-year reauthorization for the FAA that will expire in September 2023. Discussions in connection with the reauthorization could include a wide range of tax and policy issues.
Congress approved a five-year reauthorization for the FAA, expiring September 30, 2023. Congress subsequently extended the FAA's authorization through March 8, 2024. Discussions in connection with the reauthorization could include a wide range of tax and policy issues.
(e) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. (f) Scope 1+2+3 regional emissions/mainline+regional ASMs; metric used for tracking progress against our 2035 and 2050 climate change goals. Additional information on United's commitment to environmental sustainability is available at united.com/sustainability.
(g) The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown. (h) Scope 1+2+3 (categories 3, 4, 7 and 14) emissions/mainline+regional ASMs. Additional information on United's commitment to environmental sustainability is available at united.com/sustainability.
From July 2011 to October 2014, she served as Executive Vice President and Chief Information Officer of Rogers Communications, Inc., a Canadian communications and media company. From October 2008 to June 2011, she served as Chief Information Officer of Energy Future Holdings, a Dallas-based privately held energy company and electrical utility provider. J. Scott Kirby. Mr.
From October 2008 to June 2011, she served as Chief Information Officer of Energy Future Holdings, a Dallas-based privately held energy company and electrical utility provider. 17 Table of Contents J. Scott Kirby. Mr. Kirby has served as Chief Executive Officer of UAL and United since May 2020. Mr.
In 2022, we more than doubled our spend with diverse and women-owned businesses and added more than 80 new diverse suppliers to our supply chain. • Board Oversight : Our Board, assisted by several of its committees, plays a key role in the strategic oversight of management regarding the development, implementation and effectiveness of the Company's policies and strategies relating to human capital management.
Board Oversight : Our Board, assisted by several of its committees, plays a key role in the strategic oversight of management regarding the development, implementation and effectiveness of the Company's policies and strategies relating to human capital management.
These passenger JBAs enable the participating carriers to integrate the services they provide in the respective regions, capturing revenue synergies and delivering enhanced customer 4 Table of Contents benefits, such as highly competitive flight schedules, fares and services.
These passenger JBAs enable the participating carriers to integrate the services they provide in the respective regions, capturing revenue synergies and delivering enhanced customer benefits, such as highly competitive flight schedules, fares and services. Separate from the passenger JBAs, United is also a party to cargo JBAs with ANA for transpacific cargo services and with Lufthansa for transatlantic cargo services.
While the Company is required to comply with numerous applicable environmental regulations, the Company believes that these regulations and programs, including the pilot phase of CORSIA, EPA regulations regarding PFAS and GHG emissions, and other existing environmental regulations, are not reasonably likely to have a material effect on the Company's results or competitive position.
Until the applicability of new regulations to our specific operations is better defined and/or until pending regulations are finalized, future costs to comply with such regulations will remain uncertain but are likely to increase our operating costs over time. 16 Table of Contents While the Company is required to comply with numerous applicable environmental regulations, the Company believes that these regulations and programs, including the first phase of CORSIA, EPA regulations regarding PFAS and GHG emissions, and other existing environmental regulations, are not reasonably likely to have a material effect on the Company's results or competitive position.
Jojo has served as Executive Vice President and Chief Customer Officer of UAL and United since July 2022. From June 2017 to July 2022, she served as Executive Vice President Technology and Chief Digital Officer of UAL and United. From November 2014 to June 2017, she served as Executive Vice President and Chief Information Officer of UAL and United.
Hart served as Deputy General Counsel and Chief Global Compliance Officer of Sara Lee Corporation. Linda P. Jojo. Ms. Jojo has served as Executive Vice President and Chief Customer Officer of UAL and United since July 2022. From June 2017 to July 2022, she served as Executive Vice President Technology and Chief Digital Officer of UAL and United.
International competition has increased and may continue to increase in the future as a result of airline mergers and acquisitions, JBAs, alliances, restructurings, liberalization of aviation bilateral agreements and new or increased service by competitors. Competition on international routes is subject to varying degrees of governmental regulation.
Internationally, the Company competes not only with U.S. airlines, but also with foreign carriers. International competition has increased and may continue to increase in the future as a result of airline mergers and acquisitions, JBAs, alliances, restructurings, liberalization of aviation bilateral agreements and new or increased service by competitors.
Such agreements typically do not contain an expiration date and instead specify an amendable date, upon which the agreement is considered "open for amendment." The following table reflects the Company's represented employee groups, the number of employees per represented group, union representation for each employee group, and the amendable date for each employee group's collective bargaining agreement as of December 31, 2022: Employee Group Number of Employees Union Agreement Open for Amendment United Airlines, Inc.: Flight Attendants 23,065 Association of Flight Attendants (the "AFA") August 2021 Fleet Service 15,088 International Association of Machinists and Aerospace Workers (the "IAM") December 2021 Pilots 13,831 Air Line Pilots Association January 2019 Passenger Service 11,649 IAM December 2021 Technicians 8,499 International Brotherhood of Teamsters (the "IBT") December 2022 Storekeepers 965 IAM December 2021 Dispatchers 393 Professional Airline Flight Control Association (the "PAFCA") December 2024 Fleet Tech Instructors 180 IAM December 2021 Load Planners 69 IAM December 2021 Security Officers 45 IAM December 2021 Maintenance Instructors 42 IAM December 2021 United Ground Express, Inc.: Passenger Service 4,480 IAM March 2025 In November 2022, United dispatchers represented by the PAFCA voted to ratify a two-year contract extension.
Such agreements typically do not contain an expiration date and instead specify an 12 Table of Contents amendable date, upon which the agreement is considered "open for amendment." The following table reflects the Company's represented employee groups, the number of employees per represented group, union representation for each employee group, and the amendable date for each employee group's collective bargaining agreement as of December 31, 2023: Employee Group Number of Employees Union Agreement Open for Amendment United Airlines, Inc.: Flight Attendants 25,803 Association of Flight Attendants August 2021 Fleet Service 15,624 International Association of Machinists and Aerospace Workers (the "IAM") May 2025 Pilots 15,445 Air Line Pilots Association ("ALPA") October 2027 Passenger Service 11,674 IAM May 2025 Technicians 9,752 International Brotherhood of Teamsters (the "IBT") December 2024 Storekeepers 1,216 IAM May 2025 Dispatchers 500 Professional Airline Flight Control Association December 2024 Fleet Tech Instructors 167 IAM May 2025 Technical Operations Maintenance Planners 123 IBT May 2028 Technical Operations Maintenance Controllers 84 IBT November 2026 Load Planners 77 IAM May 2025 (a) Maintenance Instructors 54 IAM May 2025 Security Officers 40 IAM May 2025 (a) United Ground Express, Inc.: Passenger Service 5,163 IAM March 2025 (a) Reflecting contract ratification in February 2024.
Various states have passed legislation restricting the use of Class B fire-fighting foam agents that contain intentionally added per- and polyfluoroalkyl substances ("PFAS"), which are requiring the Company to continue to incur costs to convert existing fixed foam fire suppression systems to accommodate PFAS-free firefighting foam agents.
State governments and local municipalities have adopted legislation prohibiting the use of Class B fire-fighting foam agents that contain intentionally added PFAS. As a result, the Company continues to incur costs to convert existing fixed foam fire suppression systems to accommodate PFAS-free firefighting foam agents.
(b) Intensity rates and operational figures are calculated based on third-party verified data for 2021 and 2020. (c) The number of mainline revenue (passenger and cargo) tons transported multiplied by the number of miles flown on each segment. (d) Scope 1+2 emissions/mainline RTMs; metric used for tracking progress against industry goal of 1.5%/year efficiency improvement.
(b) Excludes biogenic emissions in accordance with Greenhouse Gas Protocol. (c) Intensity rates and operational figures are calculated based on third-party verified data for 2022 and 2021. (d) The number of mainline revenue (passenger and cargo) tons transported multiplied by the number of miles flown on each segment.
As part of its membership, the Company has committed to using emerging technologies with significant emissions reductions by 2030 and has also set a target of replacing at least 5% of conventional jet fuel demand with SAF that reduces lifecycle GHG emissions by 85% or more compared with conventional jet fuel by 2030. ◦ At the international level, the Company was the only U.S. airline that attended the 2022 UN Conference of the Parties ("COP27") climate conference, to continue its engagement with policymakers on aviation decarbonization strategies.
As part of its membership, the Company has committed to using emerging technologies with significant emissions reductions by 2030 and has also set a target of replacing at least 5% of conventional jet fuel demand with SAF that reduces lifecycle GHG emissions by 85% or more compared with conventional jet fuel by 2030. ◦ The Company worked with federal policymakers to champion passage of new production tax credits for SAF in the Inflation Reduction Act of 2022 (the "IRA").
The Company's primary effort in reducing its fossil jet fuel consumption is directed on working with strategic partners to scale, employ and commercialize the use of sustainable aviation fuel ("SAF"). SAF is the most promising technology solution realized today that can abate emissions from the Company's flight operations.
The Company is working with strategic partners to scale, employ and commercialize the use of SAF as the Company believes that it is the most promising technology solution in development to date that can help abate emissions from the Company's flight operations.
The Company is the U.S. aviation leader in SAF production investment based on publicly announced offtake agreements of certain airlines for future purchases of SAF as of the date hereof. However, SAF supply in the jet fuel market is constrained today and represents, according to industry estimates, far less than 1% of global commercial aviation fuel usage.
While the Company is an aviation leader in investing in future SAF production, SAF supply in the jet fuel market is currently constrained and represents, according to industry estimates, far less than 1% of global commercial aviation fuel usage.
CORSIA, which was adopted in October 2016, is intended to create a single global market-based measure to achieve carbon-neutral growth for international aviation, through airline purchases of eligible carbon offset credits and the use of eligible sustainable fuels.
The International Civil Aviation Organization's ("ICAO") Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"), adopted in October 2016, is intended to be a single global market-based measure to achieve carbon-neutral growth for international aviation, by requiring airlines to purchase eligible carbon offsets, or, lower their carbon offsetting obligations through the use of eligible sustainable fuels.
Under these CPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable rate adjustment based on agreed performance metrics, subject to annual adjustments. The fees are based on specific rates multiplied by specific operating statistics (e.g., block hours, departures), as well as fixed monthly amounts.
("SkyWest") are all regional carriers that operate with capacity contracted to United under capacity purchase agreements ("CPAs"). Under these CPAs, the Company pays the regional carriers contractually agreed fees (carrier costs) for operating these flights plus a variable rate adjustment based on agreed performance metrics, subject to annual adjustments.
Diversity tracking is prohibited by law in some international locations. Numbers may not sum due to rounding. Connecting People.
Diversity tracking is prohibited by law in some international locations. Numbers may not sum due to rounding. People & Culture : We believe that our employees represent the brightest and highest-performing people in the aviation industry.
Its strategy to achieve its climate goals is centered around four key pathways, each of which is described in further detail below: (i) reducing the Company's environmental footprint, (ii) innovating for potentially transformative carbon reduction technologies, (iii) removing the Company's atmospheric carbon impacts and (iv) collaborating with employees, customers, airports, suppliers, cross-industry partners and policymakers to facilitate faster action and the commercialization of technology solutions concerning climate change.
Its strategy to achieve its climate goals is centered around four key pathways, each of which is described in further detail below: (i) emitting less GHGs; (ii) adopting more sustainable alternatives to conventional jet fuel; (iii) making improvements to its operations beyond its flights; and (iv) collaborating with employees, customers, airports, suppliers, cross-industry partners and policymakers to facilitate faster action and commercializing technology solutions designed to address climate change.
We believe that our employee engagement initiatives, competitive pay and benefit programs and career growth and development opportunities help increase employee satisfaction and tenure and reduce voluntary turnover. 13 Table of Contents • Talent and Pay: While our rewards package for most of our employees is defined by our collective bargaining agreements, it includes competitive base pay, travel privileges and other comprehensive benefits, including health, wellness and retirement programs for all our employees, including part-time employees.
The ability for our employees to qualify for retirement, health and wellness benefits as well as, of course, travel privileges. While our rewards package for most of our employees is defined by collective bargaining agreements, it includes competitive base pay, travel privileges and other comprehensive benefits, including health, wellness and retirement programs for all our employees, including part-time employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe market price of our common stock could fluctuate significantly for various reasons which include: the market reaction to another COVID-19-like pandemic and our responses thereto; the sale of substantial amounts of our common stock; changes in the prices or availability of oil or jet fuel; our quarterly or annual earnings or those of other companies in our industry; the public's reaction to our press releases, our other public announcements and our filings with the SEC; changes in our earnings or recommendations by research analysts who track our common stock or the stock of other airlines; changes in general conditions in the United States and global economy, financial markets or airline industry, including those resulting from changes in fuel prices or fuel shortages, war, incidents of terrorism, pandemics or responses to such events; changes in the competitive landscape for the airline industry, including any changes resulting from industry consolidation whether or not involving our Company; our liquidity position; and the other risks described in these "Risk Factors." In addition, in recent periods, the stock market has experienced extreme declines and volatility.
Biggest changeThe market price of our common stock could fluctuate significantly for various reasons which include: the market reaction to events like the COVID-19 pandemic and our responses thereto; changes in the prices or availability of oil or jet fuel; our quarterly or annual earnings or those of other companies in our industry; changes in our earnings or recommendations by research analysts who track our common stock or the stock of other airlines; the public's reaction to our 32 Table of Contents press releases, our other public announcements and our filings with the SEC; changes in the competitive landscape for the airline industry, including any changes resulting from industry consolidation whether or not involving our Company; an accident, catastrophe or incident involving an aircraft that the Company operates; mandatory grounding of an aircraft that the Company operates; changes in general conditions in the United States and global economy, financial markets or airline industry, including those resulting from changes in fuel prices or fuel shortages, war, incidents of terrorism, pandemics or responses to such events; our liquidity position; the sale of substantial amounts of our common stock; and the other risks described in these "Risk Factors." In addition, in recent periods, the stock market has experienced extreme declines and volatility.
Furthermore, if, for any reason, the Company is unable or does not want to accept deliveries of new aircraft or integrate such new aircraft into its fleet as planned, the Company may face higher financing and operating costs than planned or litigation risks, or be required to seek extensions of the terms for certain leased aircraft or otherwise delay the exit of other aircraft from its fleet.
Furthermore, if, for any reason, the Company is unable or does not want to accept deliveries of new aircraft or integrate such new aircraft into its fleet as planned, the Company may face higher financing and operating costs than planned or litigation risks and may be required to seek extensions of the terms for certain leased aircraft or otherwise delay the exit of other aircraft from its fleet.
In the future, we may not be able to adjust our operations to mitigate their effect in the future, which may have a negative impact on our business, operating results, financial condition and liquidity and limit our ability to expand or change our route network in the future and execute our United Next strategy.
In the future, we may not be able to adjust our operations to mitigate their effect, which may have a negative impact on our business, operating results, financial condition and liquidity and limit our ability to expand or change our route network and execute our United Next strategy.
Terrorist attacks or international hostilities, even if not made on or targeted directly at the airline industry, or the fear of or the precautions taken in anticipation of such attacks (including elevated national threat warnings, travel restrictions, selective cancellation or redirection of flights and new security regulations) could materially and adversely affect the Company and the airline industry.
In addition, terrorist attacks or international hostilities, even if not made on or targeted directly at the airline industry, or the fear of or the precautions taken in anticipation of such attacks (including elevated national threat warnings, travel restrictions, selective cancellation or redirection of flights and new security regulations) could materially and adversely affect the Company and the airline industry.
The Company may also have disagreements with such providers or such contracts may be terminated or may not be extended or renewed. For example, the number of flight reservations booked through third-party GDSs or OTAs may be adversely affected by disruptions in the business relationships between the Company and these suppliers.
The Company may also have disagreements with such third-party providers and related contracts may be terminated or may not be extended or renewed. For example, the number of flight reservations booked through third-party GDSs or OTAs may be adversely affected by disruptions in the business relationships between the Company and these suppliers.
We are subject to many forms of environmental regulation and liability and risks associated with climate change and may incur substantial costs as a result. In addition, failure to achieve or demonstrate progress towards our climate goals may expose us to liability and reputational harm.
We are subject to many forms of environmental regulation and liability as well as risks associated with climate change and may incur substantial costs as a result. In addition, failure to achieve or demonstrate progress towards our climate goals may expose us to liability and reputational harm.
Information Technology, Cybersecurity and Data Privacy Risks The Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems could materially harm its business.
Information Technology, Cybersecurity and Data Privacy Risks The Company relies heavily on technology and automated systems to operate its business and any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems could materially harm its business or business strategy.
The Company must manage increasing legislative, regulatory and consumer focus on privacy issues, data security and cybersecurity risk management in a variety of jurisdictions across the globe.
The Company must manage increasing legislative, regulatory and consumer focus on privacy issues, data security and cybersecurity risk management in a variety of jurisdictions domestically and across the globe.
However, these measures may not be adequate to prevent or mitigate disruptions or provide coverage for all of the Company's associated costs, some of which may be unforeseeable.
However, these measures may not be adequate to prevent or mitigate disruptions or provide coverage for the Company's associated costs, some of which may be unforeseeable.
The Company could experience adverse publicity, harm to its brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving its aircraft or its operations or the aircraft or operations of another airline, which may result in a material adverse effect on the Company's business, operating results or financial condition.
Business, Operational and Industry Risks The Company could experience adverse publicity, harm to its brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving its aircraft or its operations or the aircraft or operations of another airline, which may result in a material adverse effect on the Company's business, operating results or financial condition.
These systems could suffer substantial or repeated disruptions due to various events, some of which are beyond the Company's control (including natural disasters (which may occur more frequently or intensely as a result of the impacts of climate change), power failures, terrorist attacks, dependencies on third-party technology services, equipment or software failures, cybersecurity attacks or other 26 Table of Contents security breaches and the deployment by certain wireless carriers of "5G" service networks), which could reduce the attractiveness of the Company's services versus those of our competitors, materially impair our ability to market our services and operate our flights, result in the unauthorized release of confidential or sensitive information, or information that should be protected from inadvertent disclosures, negatively impact our reputation among our customers and the public, subject us to liability to third parties, regulatory action or contract termination and result in other increased costs, lost revenue and the loss of, or compromise to the integrity, availability or confidentiality of, important data.
These systems could suffer substantial or repeated disruptions due to various events, some of which are beyond the Company's control (including natural disasters (which may occur more frequently or intensely as a result of the impacts of climate change), power failures, terrorist attacks, dependencies on third-party technology services, equipment or software failures, cybersecurity attacks, insider threats or other security breaches and the deployment by certain wireless carriers of "5G" service networks), which could reduce the attractiveness of the Company's services versus those of our competitors, materially impair our ability to market our services and operate our flights, result in the unauthorized release of confidential or sensitive information, or information that should be protected from inadvertent disclosures, negatively impact our reputation among our customers and the public, subject us to liability to third parties, regulatory action or contract termination and result in other increased costs, lost revenue and the loss of, or compromise to the integrity, availability or confidentiality of, important data.
In addition, an increase in price levels generally or in price levels in a particular sector (such as current rising inflationary pressures related to domestic and global supply chain constraints, which have led to both overall price increases and pronounced price increases in certain sectors) could result in a shift in consumer demand away from both leisure and business travel.
Furthermore, an increase in price levels generally or in price levels in a particular sector (such as current rising inflationary pressures related to domestic and global supply chain constraints, which have led to both overall price increases and pronounced price increases in certain sectors) could result in a shift in consumer demand away from both leisure and business travel.
Similarly, a government or regulatory agency, including DOT, could choose to impose slots at one of our hubs or other airports or grant increased access to another carrier and limit or reduce our operations at an airport, whether or not slot-controlled, which could have significant impact on our operations.
Similarly, a government or regulatory agency, including DOT, could choose to impose slot restrictions at one of our hubs or other airports or grant increased access to another carrier and limit or reduce our operations at an airport, whether or not slot-controlled, which could have significant impact on our operations.
These industry-wide operational challenges had a negative impact on our business and operating results and are expected to continue.
These industry-wide operational challenges have had a negative impact on our business and operating results and are expected to continue.
The Company has engaged third-party service providers to perform a large number of functions that are integral to its business, including regional operations, operation of customer service call centers, distribution and sale of airline seat inventory, provision of information technology infrastructure and services, transmitting or uploading of data, provision of aircraft maintenance and repairs, provision of various utilities and performance of airport ground services, aircraft fueling operations and catering services, among other vital functions and services.
The Company has engaged third-party service providers to perform a large number of functions that are integral to its business, including regional operations, operation of customer service call centers, distribution and sale of airline seat inventory, provision of information technology infrastructure and services, transmitting or uploading of data, provision of aircraft maintenance and repairs, provision of various utilities and performance of airport ground services, aircraft fueling operations, catering services and air cargo handling services, among other vital functions and services.
For instance, the COVID-19 pandemic has resulted in increased regulatory burdens in the U.S. and around the globe, which include closure of international borders to flights and/or passengers from specific countries, passenger and crew quarantine requirements and other regulations promulgated to protect public health but that have had and may continue to have a negative impact on travel and airline operations.
For instance, the COVID-19 pandemic resulted in increased regulatory burdens in the U.S. and around the globe, which included closure of international borders to flights and/or passengers from specific countries, passenger and crew quarantine requirements and other regulations promulgated to protect public health but that have had and may continue to have a negative impact on travel and airline operations.
Furthermore, the loss, disclosure, misappropriation of or access to sensitive Company information, customers', employees' or business partners' information or the Company's failure to meet its privacy obligations could result in legal claims or proceedings, penalties and remediation costs.
Furthermore, the loss, disclosure, misappropriation of or access to sensitive Company information, customers', employees' or business partners' information or the Company's failure to meet its privacy or data protection obligations could result in legal claims or proceedings, penalties and remediation costs.
These actions have caused and may continue to cause the Company to experience increased space rental rates at various airports in its network, including a number of our hubs and gateways, and increased operating costs.
These actions have caused and may continue to cause the Company to experience increased space rental rates at various airports in its network, including a number of our hubs and gateways, as well as increased operating costs.
Further airline and airline alliance consolidations or reorganizations could occur in the future, and other airlines participating in such activities may significantly improve their cost structures or revenue generation 22 Table of Contents capabilities, thereby potentially making them stronger competitors of the Company and impairing the Company's ability to realize expected benefits from its own strategic relationships.
Further airline and airline alliance consolidations or reorganizations could occur in the future, and other airlines participating in such activities may significantly improve their cost structures or revenue generation capabilities, thereby potentially making them stronger competitors of the Company and impairing the Company's ability to realize expected benefits from its own strategic relationships.
Many aspects of the Company's operations are subject to increasingly stringent federal, state, local and international laws protecting the environment, including those relating to water discharges, safe drinking water and the use and management of hazardous materials and wastes.
Many aspects of the Company's operations are subject to increasingly stringent federal, state, local and international laws regarding the environment, including those relating to water discharges, safe drinking water and the use and management of hazardous materials and wastes.
The Company depends on technology and automated systems to operate its business, including, but not limited to, computerized airline reservation systems, electronic tickets, electronic airport kiosks, demand prediction software, flight operations systems, in-flight wireless internet, cloud-based technologies, technical and business operations systems and commercial websites and applications, including www.united.com and the United Airlines mobile app.
The Company depends on technology and automated systems, including artificial intelligence ("AI"), to operate its business, including, but not limited to, computerized airline reservation systems, electronic tickets, electronic airport kiosks, demand prediction software, flight operations systems, in-flight wireless internet, cloud-based technologies, technical and business operations systems and commercial websites and applications, including www.united.com and the United Airlines mobile app.
In addition, negative or inaccurate posts or comments about us on any social networking website could damage our reputation, brand image and goodwill. Further, the disclosure of non-public Company-sensitive information by our workforce or others, whether intentional or unintentional, through external media channels could lead to information loss.
In addition, negative or inaccurate posts or comments about us on any social networking website could damage our reputation, brand image and goodwill. Further, the disclosure of non-public Company-sensitive information by our workforce or others, whether intentional or unintentional, through external media channels could lead to information loss and reputational or competitive harm.
While we continually work to safeguard our network, systems and applications, including through risk assessments, system monitoring, cybersecurity and data protection policies, processes and technologies and employee awareness and training, and seek to require third-parties adhere to security standards, there is no assurance that such actions will be sufficient to prevent cybersecurity incidents or data breaches or the damages that result therefrom.
While we continually work to safeguard our network, systems and applications, including through risk assessments, system monitoring, cybersecurity and data protection policies, processes and technologies and employee awareness and training, and seek to require that third-parties adhere to security standards, there is no assurance that such actions will be sufficient to prevent actual or perceived cybersecurity incidents or data breaches or the damages and impacts to our business that result therefrom.
We have minimal control over the operation, quality or maintenance of these services or whether vendors will improve or continue to provide services that are essential to our business.
We have minimal control over the operation, quality or maintenance of these services or whether our suppliers will improve or continue to provide services that are essential to our business.
Failure of these parties to perform as expected, or interruptions in the Company's relationships with these providers or their 24 Table of Contents provision of services to the Company, could have a material adverse effect on the Company's business, operating results and financial condition.
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 a material adverse effect on the Company's business, operating results and financial condition.
In addition, disruptions to the Company's business could result from the deployment by certain wireless carriers of "5G" cellular networks, which, due to potential interference with aircraft systems, could cause flights to be cancelled or diverted, which in turn could affect consumer perceptions of the safety of air travel.
In addition, disruptions to the Company's business could result from the deployment of new cellular networks (e.g., "5G") by wireless carriers, which, due to potential interference with aircraft systems, could cause flights to be cancelled or diverted, which in turn could affect consumer perceptions of the safety of air travel.
In addition, we cannot provide any assurance that we will be able to successfully execute our strategic plan, our strategic plan will not result in additional unanticipated costs, the growth that we anticipate will occur through execution of our strategic plan will not exacerbate any other risk described in this Form 10-K (especially relating to fuel costs, the impact of inflationary pressures, our supply chain or our ability to attract, train and retain talent), our suppliers will timely provide adequate products or support for our products (including delivery of aircraft) or our strategic plan will result in improvements in future financial performance.
In addition, we cannot provide any assurance that we will be able to successfully execute our strategic plan, that the growth that we anticipate will occur through execution of our strategic plan will not exacerbate any other risk described in this Form 10-K (especially relating to fuel costs, the impact of economic pressures or geopolitical events, our supply chain or our ability to attract, train and retain talent), that our strategic plan will not result in additional unanticipated costs, that our suppliers will timely provide adequate products or support for our products (including but not limited to certification and delivery of aircraft) or that our strategic plan will result in improvements in future financial performance.
In addition, an event of default or declaration of acceleration under one financing agreement could also result in an event of default under other of our financing agreements due to cross-default and cross-acceleration provisions.
In addition, an event of default or declaration of acceleration under one financing agreement could also result in an 31 Table of Contents event of default under other of our financing agreements due to cross-default and cross-acceleration provisions.
An extended interruption or disruption at one of our hubs or other airports where we have a significant presence resulting from ATC delays, weather conditions, natural disasters, growth constraints, relations with third-party service providers, failure of computer systems, disruptions to government agencies or personnel (including as a result of government shutdowns), disruptions at airport facilities or other key facilities used by us to manage our operations, labor relations and market constraints, power supplies, fuel supplies, terrorist activities, international hostilities or otherwise could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a material adverse impact on our business, operating results and financial condition.
An extended interruption or disruption at one of our hubs or other airports where we have a significant presence resulting from ATC delays, weather conditions, natural disasters, growth constraints, relationships with or the performance of third-party service providers, cybersecurity incidents and other failures of computer systems, disruptions to government agencies or personnel (including as a result of government shutdowns), regulatory changes, disruptions at airport facilities or other key facilities used by us to manage our operations, labor relations and market constraints, power supplies, fuel supplies, terrorist activities, international hostilities or other factors could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a material adverse impact on our business, operating results and financial condition.
If we fail—or are perceived to fail—to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from other investors, activist groups, or other stakeholders, which could result in reputational harm or other adverse effects to the 30 Table of Contents Company.
If we fail—or are perceived to fail—to meet or properly report on our progress toward achieving our climate change goals and commitments, we could face adverse publicity and reactions from investors, activist groups, or other stakeholders, which could result in reputational harm, liability or other adverse effects to the Company.
In addition, as airports around the world become more congested, space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner because of a number of factors, including capital improvements at such airports being imposed by the relevant airport authority without the Company's approval.
In addition, as airports around the world become more congested, space, facility and infrastructure constraints at our hubs or other airports where we operate now or may operate in the future may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner because of a number of factors, including capital improvements at such airports being imposed by the relevant airport authorities without the Company's approval.
Such transactions may include the exercise of warrants issued in connection with the CARES Act programs, the issuance of UAL common stock for cash, the conversion of any future convertible debt, the repurchase of any debt with the Company's common stock, the acquisition or disposition of any stock by a stockholder owning 5% or more of the outstanding shares of UAL common stock, or a combination of the foregoing.
Such transactions may include the exercise of warrants issued in connection with the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") programs, the issuance of UAL common stock for cash, the conversion of any future convertible debt, the repurchase of any debt with the Company's common stock, the acquisition or disposition of any stock by a stockholder owning 5% or more of the outstanding shares of UAL common stock, or a combination of the foregoing.
Furthermore, there is increasing litigation in the airline industry over the application of state and local employment and labor laws to airline employees, particularly those based in California. Most recently, the U.S.
Furthermore, there is increasing litigation in the airline industry over the application of state and local employment and labor laws to airline employees, particularly those based in California. For example, the U.S.
Rising fuel prices can also lead to constraints on the Company's regional partners, reduced capital available for other spending or other outcomes that could adversely impact the Company.
Rising fuel 30 Table of Contents prices can also lead to constraints on the Company's regional partners, reduced capital available for other spending or other outcomes that could adversely impact the Company.
Therefore, if the Company is unable to acquire additional aircraft at acceptable prices from Boeing or Airbus, or if Boeing or Airbus fails to make timely deliveries of aircraft (whether as a result of any failure or delay in obtaining regulatory approval or certification for new model aircraft, such as the 737 MAX 10 aircraft, which has not yet been certified, or manufacturing delays or otherwise) or to provide adequate support for its products, including with respect to the aircraft subject to firm orders under our United Next plan, the Company's operations could be materially and adversely affected.
Therefore, if the Company is unable to acquire additional aircraft at acceptable prices from Boeing or Airbus, or if Boeing or Airbus fails to make timely deliveries of aircraft (whether as a result of increased FAA oversight of the production process, any failure or delay in obtaining regulatory approval or certification for new model aircraft, such as the 737 MAX 10 aircraft, which has not received a type certificate from the FAA, manufacturing delays or otherwise) or to provide adequate support for its products, including with respect to the aircraft subject to firm orders under our United Next plan, the Company's operations could be materially and adversely affected.
Business—Environmental, Social and Governance Approach and Highlights—Climate Strategy, the Company has made several commitments regarding its intended reduction of carbon emissions, including eliminating its GHG emissions by 100% by 2050 and by reducing its carbon intensity by 50% by 2035 compared to 2019.
Business—Environmental, Social and Governance Approach—Environmental Sustainability Strategy, the Company has made several commitments regarding its intended reduction of carbon emissions, including reducing its GHG emissions by 100% by 2050 and by reducing its carbon emission intensity by 50% by 2035 compared to 2019.
However, increased competition in forming and maintaining relationships with other airlines (since there are a limited number of potential arrangements and other airlines and industry participants seek to enter into similar relationships) may make it difficult for the Company to complete strategic investments on commercially reasonable terms or at all. These investments are inherently risky and may not be successful.
However, since there are a limited number of potential arrangements, and other airlines and industry participants seek to enter into similar relationships, this may make it difficult for the Company to complete strategic investments on commercially reasonable terms or at all. These investments are inherently risky and may not be successful.
The ongoing relevance of our brand may depend on our ability to achieve our ESG goals, further our ESG initiatives and comply with related federal, state and international binding or non-binding legislation, regulation, standards and accords as well as on the accuracy, adequacy or completeness of our disclosures relating to our ESG goals and initiatives and progress against those goals.
The ongoing relevance of our brand may depend on our ability to achieve our ESG goals, make progress on our ESG initiatives and comply with applicable federal, state and international binding or non-binding legislation, regulation, standards and accords as well as on the accuracy, adequacy or completeness of our disclosures relating to our ESG goals and initiatives and progress towards those goals.
The Company's reputation or brand image could be adversely impacted by any failure to maintain satisfactory practices for all of our operations and activities; any failure to achieve and/or make progress toward our environmental, safety, diversity, equity and inclusion or other social and governance ("ESG") goals, which are subject to risks and uncertainties that are outside of our control; our stakeholders not being satisfied with our ESG goals or strategy or efforts to meet the goals; public pressure from investors or policy groups to change our policies; customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, including greenwashing concerns regarding our advertising campaigns and marketing programs related to our sustainability initiatives; or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
The Company's reputation or brand image could be adversely impacted by any failure to maintain satisfactory practices for all of our operations and activities; any failure or perceived failure to achieve and/or make progress toward our environmental, safety, diversity, equity 24 Table of Contents and inclusion or other social and governance ("ESG") goals, which are aspirational and subject to risks and uncertainties that are outside of our control; our stakeholders not being satisfied with our ESG goals or strategy or efforts to meet such goals; public pressure from investors or policy groups to change our policies and strategies; customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, including greenwashing concerns regarding our advertising campaigns and marketing programs related to our sustainability initiatives; deficiencies in the quantitative data that we disclose in relation to our ESG goals; or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
For example, in February 2021, the FAA issued an Emergency Airworthiness Directive regarding certain Boeing 777 Pratt & Whitney powered aircraft, which required the Company to keep more than 50 aircraft out of service until required repairs were made to improve the safety of the engines.
Previously, in 20 Table of Contents February 2021, the FAA issued an Emergency Airworthiness Directive regarding certain Boeing 777 Pratt & Whitney powered aircraft, which required the Company to keep more than 50 aircraft out of service until required repairs were made to improve the safety of the engines.
Accordingly, any of these third-party service providers may materially fail to meet its service performance commitments to the Company or may suffer disruptions to its systems that could impact its services. For example, failures in certain third-party technology or communications systems may cause flight delays or cancellations.
Accordingly, any of these third-party service providers may materially fail to meet their service performance commitments to the Company or may suffer disruptions to their systems, labor groups or supply chains that could impact their services. For example, failures in certain third-party technology or communications systems may cause flight delays or cancellations.
Capital spending projects of airport authorities currently underway and additional projects that we expect to commence over the next several years is expected to result in increased costs to airlines 25 Table of Contents and the traveling public that use those facilities as the airports seek to recover their investments through increased rental, landing and other facility costs.
Capital spending projects of airport authorities currently underway and additional projects that we expect to commence over the next several years are expected to result in increased costs to airlines and the traveling public that use those facilities as the airports seek to recover their investments through increased rental rates, landing fees and other facility costs.
The precise nature of future binding or non-binding legislation, regulation, standards and accords in this area of increased focus by global, national and regional regulators is difficult to predict and the financial impact to the Company would likely be significant if future legal standards do not align with the Company's plans to achieve its climate goals or if proposed U.S. legislation to accelerate the production of SAF development fails to be enacted into law.
The precise nature of future binding or non-binding legislation, regulation, standards and accords in this area of increased focus by global, national and regional regulators is difficult to predict and the financial impact to the Company would likely be significant if future legal standards do not align with the Company's plans to achieve its climate goals or if U.S. legislation establishing financial incentives to accelerate the production of SAF development expires and is not renewed.
During the year ended December 31, 2022, the Company's fuel expense was approximately $13.1 billion. The timely and adequate supply of fuel to meet operational demand depends on the continued availability of reliable fuel supply sources as well as related service and delivery infrastructure.
During the year ended December 31, 2023, the Company's fuel expense was approximately $12.7 billion. The timely and adequate supply of fuel to meet operational demand depends on the continued availability of reliable fuel supply sources as well as related service and delivery infrastructure.
Short-haul travelers, in particular, have the option to replace air travel with surface travel. In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due to cost-saving initiatives, the replacement of travel with alternatives such as videoconferencing or as a result of decreased business activity requiring travel.
In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due to cost-saving initiatives, the replacement of travel with alternatives such as videoconferencing or as a result of decreased business activity requiring travel.
For example, because we prioritize operational excellence and continually work to optimize our route network and schedule, in light of the industry-wide operational challenges at airports in our network that have limited our system-wide capacity (one of the more prominent being the grounding of a number of the Company's transatlantic flights in response to the capacity cut by London Heathrow airport during the summer of 2022), in 2022 we decided to reconfigure our proposed flight schedule and capacity to help improve our operational performance and our customers' experience.
For example, because we prioritize operational excellence and continually work to optimize our route network and schedule, in light of the industry-wide operational challenges at airports in our network that have limited our system-wide capacity (two of the more prominent examples being the grounding of a number of the Company's transatlantic flights in response to the capacity cut by London Heathrow during the summer of 2022 and the flight disruptions experienced at EWR during the summer of 2023), we have reconfigured our proposed flight schedule and capacity to help improve our operational performance and our customers' experience.
Our network, systems and storage applications, and those systems and applications maintained by our third-party commercial partners (such as cloud computing companies, credit card companies, regional airline carriers and international airline partners) may be subject to attempts to gain unauthorized access, breach, malfeasance or other system disruptions, including those involving criminal hackers, denial of service attacks, hacktivists, state-sponsored actors, corporate espionage, employee malfeasance and human or technological error.
Our network, systems and storage applications, and those systems and applications maintained by our third-party commercial partners (such as aircraft and engine suppliers, cloud computing companies, credit card companies, regional airline carriers and international airline partners) have been and likely will continue to be subject to attempts to gain unauthorized access, breaches, malfeasance or other system disruptions, including those involving criminal hackers, denial of service attacks, hacktivists, state-sponsored actors, corporate espionage, employee malfeasance and human or technological error.
In addition, certain of our operations and facilities around the world are in locations that may be impacted by the physical impacts of climate change, increasing global chemical restrictions and bans and water and waste requirements and we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to, and mitigate the effects of climate change.
In addition, certain of our operations and facilities around the world are in locations that may be impacted by the physical impacts of climate change and we could incur significant costs to improve the climate resiliency of our infrastructure and supply chain and otherwise prepare for, respond to, and mitigate the effects of climate change.
Actual conditions may be different from our assumptions and could cause the Company to adjust its strategic operating plan.
Actual conditions may be different from our assumptions at any time and could cause the Company to further adjust its strategic operating plan.
The Company may also face challenges in implementing, integrating and modifying the automated systems and technology required to operate its business, which may require significant expenditures, human resources, the development of effective internal controls and the transformation of business and financial processes.
The Company may also face challenges in implementing, integrating and modifying the automated systems and technologies required to operate its business or new systems and technologies designed to enhance its business, each of which may require significant expenditures, human resources, the development of effective internal controls and the transformation of business and financial processes.
Much of our future success is largely dependent on our continued ability to attract, train and retain skilled personnel with industry experience and knowledge, including our senior management team and other key employees. Competition for qualified talent in the aviation industry is intense and labor market constraints have impacted our operations in 2022, which may continue during 2023.
Much of our future success is largely dependent on our continued ability to attract, train and retain skilled personnel with industry experience and knowledge, including our senior management team and other key employees. Competition for qualified talent in the aviation industry is intense and labor market constraints may arise in the future.
We could also be subject to environmental liability claims from various parties, including airport authorities and other third parties, related to our operations at our owned or leased premises or the off-site disposal of waste generated at our facilities. As discussed in Part I, Item 1.
We could also be subject to environmental liability claims from various parties, including airport authorities and other third parties, related to our operations at our owned or leased premises, including our use of PFAS-containing fire suppression systems as required by fire codes, or the off-site disposal of waste generated at our facilities. As discussed in Part I, Item 1.
Disruptions to our regional networks as a result of the COVID-19 pandemic, pilot shortage or other factors could adversely affect our business, operating results and financial condition. Unfavorable economic and political conditions, in the United States and globally, may have a material adverse effect on our business, operating results and financial condition.
Disruptions to our regional networks, the pilot shortage or other factors could adversely affect our business, operating results and financial condition. 22 Table of Contents Unfavorable economic and political conditions, in the United States and globally, may have a material adverse effect on our business, operating results and financial condition.
Any divestitures also may result in continued financial exposure to the divested businesses following the transaction, such as through guarantees or other financial arrangements or potential litigation. In addition, we may incur asset impairment charges related to acquisitions, divestitures, investments or joint ventures that reduce our earnings.
Any divestitures also may result in continued financial exposure to the divested businesses following the transaction, such as through guarantees or other financial arrangements or potential litigation. In addition, we have incurred, and may again in the future incur, asset impairment charges related to acquisitions, divestitures, investments or joint ventures that have the effect of reducing our earnings.
The Company will continue its efforts to meet its privacy, data security and cybersecurity risk management obligations; however, it is possible that certain new obligations or customer expectations may be difficult to meet and could require changes in the Company's operating processes and increase the Company's costs. Additionally, the Company must manage the increasing threat of continually evolving cybersecurity risks.
The Company will continue its efforts to meet its privacy, data security and cybersecurity risk management obligations; however, it is possible that certain new obligations or customer expectations may be difficult to meet and could require changes in the Company's operating processes and increase the Company's costs.
For instance, CORSIA-related costs cannot be fully predicted at this time, but the program is expected to increase operating costs for airlines that operate internationally.
For instance, CORSIA-related costs cannot be fully predicted at this time, but the program, which requires the purchasing of carbon offsets, is expected to increase operating costs for airlines that operate internationally.
In addition, any businesses or assets that we acquire in the future increase our exposure to unknown liabilities or other issues and also may underperform as compared to expectations. 20 Table of Contents Although we are committed to reducing our debt over the long term, an important part of the Company's strategy to expand its global network has included making significant investments, both domestically and in other parts of the world, including in other airlines and other aviation industry participants, producers of SAF and manufacturers of electric and other new generation aircraft.
In addition, any businesses or assets that we acquire in the future increase our exposure to unknown liabilities or other issues and also may underperform as compared to expectations. 19 Table of Contents An important part of the Company's strategy to expand its global network and operate an environmentally sustainable and responsible airline has included making significant investments, both domestically and in other parts of the world, including in other airlines and other aviation industry participants, producers of SAF and manufacturers of electric and other new generation aircraft.
As of December 31, 2022, the Company and its subsidiaries had approximately 92,800 employees, of whom approximately 84% were represented by various U.S. labor organizations (See Part I, Item 1. Business—Human Capital Management and Resources, of this report for additional information on our represented employee groups and collective bargaining agreements).
As of December 31, 2023, the Company and its subsidiaries had approximately 103,300 employees, of whom approximately 83% were represented by various U.S. labor organizations. See Part I, Item 1. Business—Human Capital Management and Resources of this report for additional information on our represented employee groups and 26 Table of Contents collective bargaining agreements.
In developing our United Next plan, we made certain assumptions including, but not limited to, those related to the duration and scope of the impacts from the COVID-19 pandemic, customer demand (in light of the COVID-19 pandemic, inflation and changing economic conditions), fuel costs, delivery of aircraft, labor market constraints and related costs, supply chain constraints, inflationary pressures, voluntary or mandatory groundings of aircraft, our regional network, competition, market consolidation and other macroeconomic and geopolitical factors.
In developing our United Next plan, we made certain assumptions including, but not limited to, customer demand (in light of changing economic conditions), fuel costs, delivery of aircraft, aircraft certification approval timelines, labor market constraints and related costs, supply chain constraints, inflationary pressures, voluntary or mandatory groundings of aircraft, our regional network, competition, market consolidation and other macroeconomic and geopolitical factors.
A significant data breach or the Company's failure to meet its obligations may adversely affect the Company's operations, reputation, relationships with our business partners, business, operating results and financial condition. Increased use of social media platforms present risks and challenges. We are increasing our use of social media to communicate Company news and events.
A significant data breach or the Company's failure to meet its data privacy or data protection obligations may adversely affect the Company's operations, reputation, relationships with our business partners, business, operating results, financial condition and business strategy. Increased use of social media platforms present risks and challenges.
Political disruptions and instability in certain regions have negatively impacted the demand and network availability for air travel, as well as fuel prices, and may continue to have a negative impact on these and other items.
The Company's international operations are a vital part of its worldwide airline network. Political disruptions and instability in certain regions have negatively impacted the demand and network availability for air travel, as well as fuel prices, and may continue to have a negative impact on these and other items.
United also operates pursuant to an air carrier operating certificate issued by the FAA, and FAA orders and directives have previously resulted in the temporary grounding of an entire aircraft type when the FAA identifies design, manufacturing, maintenance or other issues requiring immediate corrective action (including the FAA Emergency Airworthiness Directive grounding our Boeing 777 Pratt 28 Table of Contents & Whitney powered aircraft), which has had an effect that has been material to the Company's business, operating results and financial condition.
United also operates pursuant to an air carrier operating certificate issued by the FAA and FAA orders and directives have previously resulted in the temporary grounding of an entire aircraft type when the FAA identifies design, manufacturing, maintenance or other issues requiring immediate corrective action (including the FAA Emergency Airworthiness Directives suspending service of the Company's Boeing 737 MAX 9 aircraft in January 2024 and grounding our Boeing 777 Pratt & Whitney powered aircraft in February 2021), which has had and could in the future have a material effect on the Company's business, operating results and financial condition.
As a result, the Company's quarterly operating results are not necessarily indicative of operating results for an entire year, and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results.
Such factors have adversely affected, and could in the future adversely affect, the Company. As a result, the Company's quarterly operating results are not necessarily indicative of operating results for an entire year and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results.
Extended interruptions or disruptions in service at major airports where we operate could have a material adverse impact on our operations, including our ability to operate our existing flight schedule and to expand or change our route network in the future, and space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner.
Extended interruptions or disruptions in service at major airports where we operate could have a material adverse impact on our operations, including our ability to operate our existing flight schedule and to expand or change our route network in the future, and space, facility and infrastructure constraints at our hubs or other airports may prevent the Company from maintaining existing service and/or implementing new service in a commercially viable manner. 23 Table of Contents The airline industry is heavily dependent on business models that concentrate operations in major airports in the United States and throughout the world.
As of December 31, 2022, UAL reported consolidated U.S. federal net operating loss ("NOL") carryforwards of approximately $13.2 billion.
As of December 31, 2023, UAL reported consolidated U.S. federal net operating loss ("NOL") carryforwards of approximately $12.0 billion.
The DOT also regulates consumer protection and, through its investigations or rulemaking authority (including, for example, any rulemakings or initiatives in response to the Executive Order on Promoting Competition in the American Economy issued by the President on July 9, 2021), could impose restrictions that materially impact the Company's business.
The DOT also regulates consumer protection and, through its investigations or rulemaking authority (including, for example, the DOT's recent enforcement settlement against Southwest Airlines for its operational disruption resulting in an announced fine of $140 million, and any rulemakings or initiatives in response to the Executive Order on Promoting Competition in the American Economy issued by the President on July 9, 2021), could impose restrictions that materially impact the Company's business.
The inappropriate and/or unauthorized use of certain media vehicles could cause brand damage or information leakage or could lead to legal implications, including 27 Table of Contents from the improper collection and/or dissemination of personally identifiable information from employees, customers or other stakeholders.
We are increasing our use of social media to communicate Company news and events. The inappropriate and/or unauthorized use of certain media vehicles could cause brand damage or information leakage or could lead to legal implications, including from the improper collection and/or dissemination of personally identifiable information from employees, customers or other stakeholders.
The Company believes that strategic opportunities exist for it as a result of climate change and that the sustainability-related solutions being pursued to advance its climate goals will help mitigate several of these potential risks posed by the transition to a lower-carbon economy.
The Company believes that climate change presents, along with challenges, strategic opportunities and that the sustainability-related solutions the Company is pursuing to advance its climate goals will help mitigate several of these potential risks posed by the transition to a lower-carbon economy.
The Company has been able to increase its purchases of SAF in recent years due to its corporate customers' funding of the price premium for SAF through the Company's Eco-Skies Alliance, but the willingness of corporate customers to fund the price premium for SAF in the future could decrease, including based on economic factors or concerns regarding the validity of a book and claim approach for claiming the emissions reductions from SAF.
The Company has been able to increase its purchases of SAF in recent years due to its corporate customers' funding of the price premium for SAF through the Company's Eco-Skies Alliance, but the willingness of corporate customers to assist the Company in covering the price premium for SAF in the future could decrease, including based on economic factors or concerns regarding the validity of a book and claim approach for claiming the emissions reductions from SAF, or emerging SAF certification schemes developed by non-governmental organizations or practices whereby corporate customers purchase the environmental attributes from SAF directly from fuel producers, bypassing the airlines.
An adverse resolution of lawsuits, arbitrations, investigations or other proceedings or actions could have a material adverse effect on our financial condition and operating results, including as a result of non-monetary remedies, and could also result in adverse publicity.
No assurances can be given that the results of these or new matters will be favorable to us. An adverse resolution of lawsuits, arbitrations, investigations or other proceedings or actions could have a material adverse effect on our financial condition and operating results, including as a result of non-monetary remedies, and could also result in adverse publicity.
Compliance with existing and future environmental laws and regulations can require significant expenditures and operational changes and violations can lead to significant fines and penalties and reputational harm.
Compliance with existing and future environmental laws and regulations has required and may in the future require significant expenditures and operational changes. Violations have led and may in the future lead to significant fines, penalties, lawsuits and reputational harm.
The Company maintains insurance policies, including, but not limited to, terrorism, aviation hull and liability, workers' compensation and property and business interruption insurance, but we are not fully insured against all potential hazards and risks incident to our business.
Increases in insurance costs or inadequate insurance coverage may materially and adversely impact our business, operating results and financial condition. The Company maintains insurance policies, including, but not limited to, terrorism, aviation hull and liability, workers' compensation and property and business interruption insurance, but we are not fully insured against all potential hazards and risks incident to our business.
The Company may never realize the full value of its intangible assets or its long-lived assets causing it to record impairments that may negatively affect its financial condition and operating results. 33 Table of Contents In accordance with applicable accounting standards, the Company is required to test its indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment, and certain of its other assets for impairment where there is any indication that an asset may be impaired.
In accordance with applicable accounting standards, the Company is required to test its indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment, and certain of its other assets for impairment where there is any indication that an asset may be impaired.
In 2018, the U.S. Congress approved a five-year reauthorization for the FAA, which encompasses a range of policy issues related to aviation tax, airline customer service and aviation safety. Depending on how the issues are implemented, our operations and costs could be materially impacted. Additionally, the U.S.
In 2018, the U.S. Congress approved a five-year reauthorization for the FAA, which encompasses a range of policy issues related to aviation tax, airline customer service and aviation safety.
There can be no assurance that such approvals and clearances will be granted or will continue in effect upon further regulatory review or that changes in regulatory requirements or standards can be satisfied. See Part I, Item 1.
There can be no assurance that such approvals and clearances will be granted or will continue in effect upon further regulatory review or that changes in regulatory requirements or standards can be satisfied. See Part I, Item 1. Business—Industry Regulation, of this report for additional information on government regulation impacting the Company.
Any of the foregoing would adversely affect the Company's business and operating results. Significant declines in industry passenger demand, particularly with respect to the Company's business and premium cabin travelers and a reduction in fare levels, could lead to a material reduction in revenue, changes to the Company's operations and deferrals of capital expenditure and other spending.
Significant declines in industry passenger demand, particularly with respect to the Company's business and premium cabin travelers and a reduction in fare levels, as well as the continuing slow return of business travel demand to pre-COVID-19 levels, could lead to a material reduction in revenue, changes to the Company's operations and deferrals of capital expenditure and other spending.
As a global business with operations outside of the United States from which it derives significant operating revenues, volatile conditions in certain international regions may have a negative impact on the Company's operating results and its ability to achieve its business objectives. The Company's international operations are a vital part of its worldwide airline network.
Geopolitical conflict, terrorist attacks or security events may adversely affect our business, financial condition and results of operations. As a global business with operations outside of the United States from which it derives significant operating revenues, volatile conditions in certain international regions may have a negative impact on the Company's operating results and its ability to achieve its business objectives.
If the Company is unable to timely or effectively implement, integrate or modify its systems and technology, the Company's operations could be adversely affected . Increasing privacy and data security obligations or a significant data breach may adversely affect the Company's business.
If the Company is generally unable to timely or effectively implement, integrate or modify its systems and technology, the Company's operations could be adversely affected.
As a result we may take actions to ensure that the MileagePlus Financing debt is satisfied or that the lenders' remedies under such debt are not exercised, potentially to the detriment of our other creditors. 32 Table of Contents The proposed phase out of the London interbank offer rate could have a material adverse effect on us.
As a result we may take actions to ensure that the MileagePlus Financing debt is satisfied or that the lenders' remedies under such debt are not exercised, potentially to the detriment of our other creditors.
In addition, our competitors have established new routes and destinations, including some at our hub airports, in light of the expansion opportunities presented by the COVID-19 pandemic, which may compete with our existing routes and destinations and expansion plans. Our international operations are subject to competition from both foreign and domestic carriers.
In addition, our competitors have established new routes and destinations, including some at our hub airports, which may compete with our existing routes and destinations and expansion plans. Our international operations are subject to competition from both foreign and domestic carriers. For instance, competition is significant from government-subsidized competitors from certain Middle East countries.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2022, United's mainline and regional fleets consisted of the following: Aircraft Type Total Owned Leased Seats in Standard Configuration Average Age (In Years) Mainline: 777-300ER 22 22 — 350 5.0 777-200ER 55 54 1 276-362 22.8 777-200 19 19 — 364 25.5 787-10 19 19 — 318 2.5 787-9 38 34 4 257 5.3 787-8 12 12 — 243 9.5 767-400ER 16 16 — 231-240 21.3 767-300ER 37 37 — 167-214 26.8 757-300 21 9 12 234 20.3 757-200 40 36 4 169-176 25.9 737 MAX 9 48 32 16 179 2.0 737 MAX 8 32 16 16 166 0.7 737-900ER 136 136 — 179 10.0 737-900 12 8 4 179 21.3 737-800 141 109 32 166 18.8 737-700 40 35 5 126 23.8 A320-200 99 86 13 150 24.4 A319-100 81 52 29 126 21.1 Total mainline 868 732 136 16.7 In addition to the aircraft presented in the table above, United is leasing one Boeing 767-200 that is being subleased to a third party as of December 31, 2022.
Biggest changeAs of December 31, 2023, United's mainline and regional fleets consisted of the following: Aircraft Type Total Owned Leased Seats in Standard Configuration Average Age (In Years) Mainline: 777-300ER 22 22 — 350 6.0 777-200ER 55 54 1 276-362 23.8 777-200 19 19 — 364 26.5 787-10 21 21 — 318 3.2 787-9 38 34 4 257 6.3 787-8 12 12 — 243 10.5 767-400ER 16 16 — 231 22.3 767-300ER 37 37 — 167-203 27.8 757-300 21 21 — 234 21.3 757-200 40 39 1 176 26.9 737 MAX 9 79 63 16 179 2.0 737 MAX 8 80 34 46 166 1.0 737-900ER 136 136 — 179 11.0 737-900 12 10 2 179 22.3 737-800 141 119 22 166 19.8 737-700 40 38 2 126 24.8 A321neo 4 4 — 200 0.1 A320-200 91 81 10 150 24.9 A319-100 81 52 29 126 22.1 Total mainline 945 812 133 16.0 Aircraft Type Total Owned Owned or Leased by Regional Carrier Regional Carrier Operator and Number of Aircraft Seats in Standard Configuration Regional: Embraer E175/E175LL 189 73 116 SkyWest: Mesa: Republic: 90 54 45 70/76 Embraer 170 21 — 21 Republic: 21 70 CRJ900 26 — 26 Mesa: 26 76 CRJ700 19 — 19 SkyWest: 19 70 CRJ550 35 2 33 GoJet: 35 50 CRJ200 70 — 70 SkyWest: 70 50 Embraer ERJ 145XR 53 53 — CommuteAir: 53 50 Total regional 413 128 285 35 Table of Contents In addition to the aircraft presented in the table above, United owned or leased the following regional aircraft as of December 31, 2023: • 24 CRJ550s, 26 E175/E175LLs and 45 Embraer ERJ 145s that were temporarily grounded; and • 8 CRJ700s awaiting conversion to CRJ550s.
The amount and timing of the Company's future capital commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify the contracts governing those orders; (ii) rights are exercised pursuant to the relevant agreements to modify the timing of deliveries; or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.
The amount and timing of the Company's future capital commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify the contracts governing those orders; (ii) rights are exercised pursuant to the relevant agreements to cancel deliveries or modify the timing of deliveries; or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders.
United leases gates, hangar sites, terminal buildings and other airport facilities in the municipalities it serves. United has major terminal facility leases at SFO, IAD, ORD, LAX, DEN, EWR, IAH and GUM with expiration dates ranging from 2023 through 2053.
See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information. Facilities. United leases gates, hangar sites, terminal buildings and other airport facilities in the municipalities it serves. United has major terminal facility leases at SFO, IAD, ORD, LAX, DEN, EWR, IAH and GUM with expiration dates ranging from 2024 through 2053.
As of December 31, 2022, United had firm commitments to purchase aircraft from Boeing and Airbus presented in the table below: Scheduled Aircraft Deliveries Aircraft Type Number of Firm Commitments (a) 2023 2024 After 2024 787 102 2 8 92 737 MAX 433 135 88 210 A321neo 70 12 31 27 A321XLR 50 — — 50 A350 45 — — 45 (a) United also has options and purchase rights for additional aircraft.
As of December 31, 2023, United had firm commitments to purchase aircraft from Boeing and Airbus presented in the table below: Contractual Aircraft Deliveries Expected Aircraft Deliveries (b) Aircraft Type Number of Firm Commitments (a) 2024 2025 After 2025 2024 2025 After 2025 787 150 8 18 124 7 18 125 737 MAX 8 43 43 — — 37 6 — 737 MAX 9 34 34 — — 19 15 — 737 MAX 10 277 80 71 126 — (c) (c) A321neo 126 26 38 62 25 24 77 A321XLR 50 — 8 42 — 1 49 A350 45 — — 45 — — 45 (a) United also has options and purchase rights for additional aircraft.
Removed
Aircraft Type Total Owned Owned or Leased by Regional Carrier Regional Carrier Operator and Number of Aircraft Seats in Standard Configuration Regional: Embraer E175/E175LL 183 81 102 SkyWest: Mesa: Republic: 89 63 31 70/76 Embraer 170 35 — 35 Republic: 35 70 CRJ700 20 — 20 SkyWest: 20 70 CRJ550 36 2 34 GoJet: 36 50 CRJ200 133 — 133 SkyWest: Air Wisconsin: 70 63 50 Embraer ERJ 145XR 63 63 — CommuteAir: 63 50 Total regional 470 146 324 In addition to the aircraft presented in the table above, United owned or leased the following regional aircraft as of December 31, 2022: • 23 CRJ550s,18 Embraer E175LLs and 38 Embraer ERJ 145s that were temporarily grounded; and • 8 CRJ700s awaiting conversion to CRJ550s. 35 Table of Contents Firm Order and Option Aircraft.
Added
(b) Expected aircraft deliveries reflect adjustments communicated by Boeing and Airbus or estimated by United. (c) Due to the delay in the certification of the 737 MAX 10 aircraft, we are unable to accurately forecast the expected delivery period. The aircraft listed in the table above are scheduled for delivery through 2033.
Removed
The aircraft listed in the table above are scheduled for delivery through 2033.
Removed
Airbus notified United that eight Airbus A321neo aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024, and Boeing notified United that 37 Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, are now expected to deliver in 2024.
Removed
Also, United estimates that an additional six Boeing 737 MAX aircraft scheduled for delivery in 2023, as shown in the table above, will deliver in 2024. See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information. Facilities.
Removed
In 2022, United expanded its club footprint with new United Clubs in EWR, ORD and Phoenix Sky Harbor International Airport, as well as a new Polaris Club at IAD and announced a planned club expansion at DEN. United also added new operational support facilities with a new Inflight Training Center at IAH and new widebody hangar in LAX.
Removed
Additionally, in January 2023, United opened new gates in DEN and ORD as well as EWR's New Terminal A.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. The Company is involved in legal proceedings, including litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, inquiries and similar action , involving its passengers, customers, suppliers and employees as well as government agencies arising in the ordinary course of business and that have not been fully resolved.
Biggest changeThe Company is involved, both as a plaintiff and a defendant, in various legal proceedings, including, without limitation, litigation, arbitration and other claims, and investigations, inspections, subpoenas, audits, inquiries and similar actions involving its passengers, customers, suppliers, employees and shareholders, as well as government agencies, among others, arising in the ordinary course of business and that have not been fully resolved.
There can be no assurance that there will not be an increase in the scope of one or more of these pending matters or any other or future lawsuits, claims, government investigations or other legal proceedings will not be material to the Company's financial position, results of 36 Table of Contents operations or cash flows for a particular period.
There can be no assurance that there will not be an increase in the scope 36 Table of Contents of one or more of these pending matters or any other or future lawsuits, claims, government investigations or other legal proceedings will not be material to the Company's financial position, results of operations or cash flows for a particular period.
Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that its defenses and assertions in pending legal proceedings have merit and the ultimate disposition of any pending matter will not materially affect the Company's financial position, results of operations or cash flows .
Management believes, after considering a number of factors, including (but not limited to) the information currently available, the views of legal counsel, the nature of contingencies to which the Company is subject and prior experience, that its defenses and assertions in pending legal proceedings have merit and, except as otherwise specifically noted below, the ultimate disposition of any pending matter will not materially affect the Company's financial position, results of operations or cash flows .

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information for Common Stock UAL's common stock is listed on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." Holders of Common Stock As of February 9, 2023, there were 5,885 holders of record of UAL common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information for Common Stock UAL's common stock is listed on the Nasdaq Global Select Market ("Nasdaq") under the symbol "UAL." Holders of Common Stock As of February 22, 2024, there were 5,695 holders of record of UAL common stock.
The comparison assumes $100 was invested on December 31, 2017 in our common stock and in each of the foregoing indices and assumes that all dividends were reinvested. 37 Table of Contents Note: The stock price performance shown in the graph above should not be considered indicative of potential future stock price performance.
The comparison assumes $100 was invested on December 31, 2018 in our common stock and in each of the foregoing indices and assumes that all dividends were reinvested. 37 Table of Contents Note: The stock price performance shown in the graph above should not be considered indicative of potential future stock price performance.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers In 2020, the Company's Board of Directors terminated the Company's share repurchase program. As such, the Company did not make any purchases of its common stock during the three months ended December 31, 2022.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers In 2020, the Company's Board of Directors terminated the Company's share repurchase program. As such, the Company did not make any purchases of its common stock during the three months ended December 31, 2023.
Dividend Policy There were no cash dividend payments during the year ended December 31, 2022 and we do not expect to pay cash dividends in the foreseeable future.
Dividend Policy There were no cash dividend payments during the year ended December 31, 2023 and we do not expect to pay cash dividends in the foreseeable future.
Stock Performance Graph The following graph compares the cumulative total stockholder return during the period from December 31, 2017 to December 31, 2022 of UAL's common stock to the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL").
Stock Performance Graph The following graph compares the cumulative total stockholder return during the period from December 31, 2018 to December 31, 2023 of UAL's common stock to the Standard and Poor's 500 Index ("SPX") and the NYSE Arca Airline Index ("XAL").

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 38 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 52 Item 8. Financial Statements and Supplementary Data 53 Combined Notes to Consolidated Financial Statements 69
Biggest changeItem 6. [Reserved] 38 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 50 Item 8. Financial Statements and Supplementary Data 51 Combined Notes to Consolidated Financial Statements 67

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: the execution risks associated with our United Next plan; the impact on the Company of significant operational challenges by third parties on which we rely; rising inflationary pressures; labor market and supply chain constraints and related costs affecting us and our partners; volatile fuel prices; aircraft delivery delays; the lasting effects of the COVID-19 global pandemic and related governmental regulations and restrictions, that we believe will change how our customers fly in ways that we expect to be both positive and negative for the Company, including the lingering impact of the pandemic on the return of business and international—especially in our China market— travel demand to pre-COVID-19 levels; the closure of our flying airspace and termination of other operations due to regional conflicts, including the continuation of the suspension of our overflying in Russian airspace as well as third-party general sales agent services in Russia as a result of the Russia-Ukraine military conflict and an escalation of the broader economic consequences of the conflict beyond their current scope; and changes in general economic conditions in the markets in which the Company operates, including an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand.
Biggest changeThe economic and market factors and trends that we currently 39 Table of Contents believe are or will be most impactful to our results of operations and financial condition include the following: the execution risks associated with our United Next plan, especially relating to the growth in the scale of our operations as a result of the plan; the impact on the Company of significant operational challenges by third parties on which we rely; rising inflationary pressures; labor market and supply chain constraints and related costs affecting us and our partners; volatile fuel prices; aircraft delivery delays; increasing maintenance expenses; high interest rates; and changes in general economic conditions in the markets in which the Company operates, including an economic downturn leading to a decrease in demand for air travel or fluctuations in foreign currency exchange rates that may impact international travel demand.
Co-Brand Agreement . United has a contract (the "Co-Brand Agreement") to sell MileagePlus miles to its co-branded credit card partner Chase. Chase awards miles to MileagePlus members based on their credit card activity.
United has a contract (the "Co-Brand Agreement") to sell MileagePlus miles to its co-branded credit card partner Chase. Chase awards miles to MileagePlus members based on their credit card activity.
Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements.
Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the Company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the Company's control and could cause the Company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements.
Amounts also exclude a portion of United's finance lease obligations recorded for certain of its CPAs. See Note 10 to the financial statements included in Part II, Item 8 of this report for the significant assumptions used to estimate the payments. (f) Amounts represent postretirement benefit payments through 2032. Benefit payments approximate plan contributions as plans are substantially unfunded.
Amounts also exclude a portion of United's finance lease obligations recorded for certain of its CPAs. See Note 10 to the financial statements included in Part II, Item 8 of this report for the significant assumptions used to estimate the payments. (f) Amounts represent postretirement benefit payments through 2033. Benefit payments approximate plan contributions as plans are substantially unfunded.
Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and pay dividends or repurchase stock. As of December 31, 2022, UAL and United were in compliance with their respective debt covenants.
Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional indebtedness and pay dividends or repurchase stock. As of December 31, 2023, UAL and United were in compliance with their respective debt covenants.
The Company remains squarely focused on delivering on four strategic pillars: • United Next: Along with the items mentioned above, additional elements of the United Next plan include hiring over 50,000 new employees, expanding our leading global network to underserved countries and making significant technology changes designed to improve the customer experience and drive operational efficiency. • Operational excellence: The most important factor for customer satisfaction is on-time flights.
The Company will be squarely focused on delivering on four strategic pillars: • United Next: Along with the items mentioned above, additional elements of the United Next plan include hiring over 50,000 new employees, expanding our leading global network to underserved countries and making significant technology changes designed to improve the customer experience and drive operational efficiency. • Operational excellence: The most important factor for customer satisfaction is on-time flights.
Cash requirements do not include the debt discount, premiums and debt issuance costs. (b) Future interest payments on variable rate debt were computed using the rates as of December 31, 2022. (c) Represents future payments under fixed rate operating lease obligations.
Cash requirements do not include the debt discount, premiums and debt issuance costs. (b) Future interest payments on variable rate debt were computed using the rates as of December 31, 2023. (c) Represents future payments under fixed rate operating lease obligations.
For a discussion of the Company's sources and uses of cash in 2021 as compared to 2020, see "Liquidity and Capital Resources" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2021 Annual Report. Credit Ratings.
For a discussion of the Company's sources and uses of cash in 2022 as compared to 2021, see "Liquidity and Capital Resources" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2022 Annual Report. Credit Ratings.
In several financing transactions involving loans or leases from non-U.S. entities, with remaining terms of up to 12 years and an aggregate balance of $9.8 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customary exclusions.
In several financing transactions involving loans or leases from non-U.S. entities, with remaining terms of up to approximately 12 years and an aggregate balance of $8.1 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customary exclusions.
Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Economic and Market Factors" and "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A. Risk Factors, of this Form 10-K.
Our current expectations described below are forward-looking statements and our actual results and timing may vary materially based on various factors that include, but are not limited to, those discussed below under "Strategy," "Economic and Market Factors," "Governmental Actions," "Cautionary Statement Regarding Forward-Looking Statements" and in Part I, Item 1A. Risk Factors, of this Form 10-K .
The aircraft mortgage debt is subject to increased cost provisions and the Company would potentially be responsible for those costs under the guarantees. The increased cost provisions in the $92 million of aircraft mortgage debt are similar to those in certain of the Company's debt agreements.
The aircraft mortgage debt is subject to increased cost provisions and the Company would potentially be responsible for those costs under the guarantees. The increased cost provisions in the $77 million of aircraft mortgage debt are similar to those in certain of the Company's debt agreements.
As of the filing date of this report, UAL and United had the following corporate credit ratings: S&P Moody's Fitch UAL B+ Ba2 B+ United B+ * B+ *The credit agency does not issue corporate credit ratings for subsidiary entities.
As of the filing date of this report, UAL and United had the following corporate credit ratings: S&P Moody's Fitch UAL BB- Ba2 BB- United BB- * BB- *The credit agency does not issue corporate credit ratings for subsidiary entities.
Business of this Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows. This section generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
Business of this Form 10-K to enhance the understanding of our results of operations, financial condition and cash flows. This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
See Note 12 to the financial statements included in Part II, Item 8 of this report for more information related to these letters of credit and surety bonds. Guarantee of Debt of Others. As of December 31, 2022, United is the guarantor of $92 million of aircraft mortgage debt issued by one of United's regional carriers.
See Note 12 to the financial statements included in Part II, Item 8 of this report for more information related to these letters of credit and surety bonds. Guarantee of Debt of Others. As of December 31, 2023, United is the guarantor of $77 million of aircraft mortgage debt issued by one of United's regional carriers.
Cautionary Statement Regarding Forward-Looking Statements 49 Table of Contents This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part II, Item 7.
Cautionary Statement Regarding Forward-Looking Statements This report contains certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including in Part II, Item 7.
We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition and future results of operations, which are dependent on future developments, including as a result of those factors discussed in Item 1A. Risk Factors, of this Form 10-K.
We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, future results of operations, liquidity and financial flexibility, which are dependent on future developments, including as a result of those factors discussed in Part I, Item 1A. Risk Factors, of this Form 10-K.
As such, our actual flown capacity may differ materially from currently published flight schedules or current estimations. 51 Table of Contents
As such, our actual flown capacity may differ materially from currently published flight schedules or current estimations. 49 Table of Contents
In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on LIBOR or SOFR, for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs.
In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements 46 Table of Contents and, in the case of loans with respect to which the interest rate is based on the Secured Overnight Financing Rate ("SOFR"), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs.
As of December 31, 2022, approximately $2.5 billion principal amount of such bonds was secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has provided indirect guarantees of the debt.
As of December 31, 2023, approximately $2.5 billion principal amount of such loans was secured by significant fuel facility leases in which United participates, as to which United and each of the signatory airlines has provided indirect guarantees of the debt.
United identified the following significant separately identifiable performance obligations in the Co-Brand Agreement: 47 Table of Contents • MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions.
United identified the following significant separately identifiable performance obligations in the Co-Brand Agreement: • MileagePlus miles awarded – United has a performance obligation to provide MileagePlus cardholders with miles to be used for air travel and non-travel award redemptions.
The table below provides a summary of the Company's current and long-term material cash requirements as of December 31, 2022 (in billions): 45 Table of Contents 2023 2024 2025 2026 2027 After 2027 Long-term debt (a) $ 2.9 $ 3.9 $ 3.4 $ 5.2 $ 2.4 $ 13.7 Finance leases—principal portion 0.1 — — — — — Interest on debt and finance leases (b) 1.7 1.4 1.2 1.0 0.8 0.9 Operating leases (c) 0.9 0.7 0.6 0.6 0.8 3.2 Leases not yet commenced (d) 0.2 0.3 0.4 0.4 0.4 1.5 Other financial liabilities 0.1 0.1 0.1 0.1 0.4 0.4 Regional CPAs (e) 2.2 1.9 1.5 1.3 0.9 3.2 Postretirement benefit payments (f) 0.1 0.1 0.1 0.1 0.1 0.3 Pension funding (g) — — 0.1 0.4 0.2 0.5 Capital and other purchases (h) 10.2 8.0 7.8 5.9 5.0 16.6 Total $ 18.4 $ 16.4 $ 15.2 $ 15.0 $ 11.0 $ 40.3 (a) Long-term debt presented in the Company's financial statements is net of $386 million of debt discount, premiums and debt issuance costs which are being amortized over the debt terms.
The table below provides a summary of the Company's current and long-term material cash requirements as of December 31, 2023 (in billions): 45 Table of Contents 2024 2025 2026 2027 2028 After 2028 Long-term debt (a) $ 4.0 $ 3.5 $ 5.2 $ 2.5 $ 5.3 $ 8.9 Finance leases—principal portion 0.2 0.1 — — — — Interest on debt and finance leases (b) 1.5 1.3 1.1 0.9 0.6 0.8 Operating leases (c) 0.8 0.7 0.7 0.9 0.7 2.9 Leases not yet commenced (d) — 0.1 0.1 0.2 0.2 1.0 Other financial liabilities 0.2 0.2 0.2 0.5 0.1 2.1 Regional CPAs (e) 2.4 2.1 2.1 1.6 1.3 4.1 Postretirement benefit payments (f) 0.1 0.1 0.1 0.1 0.1 0.3 Pension funding (g) — 0.2 0.3 0.2 0.2 0.3 Capital and other purchases (h) 12.1 7.9 6.0 4.5 6.1 23.5 Total $ 21.3 $ 16.2 $ 15.8 $ 11.4 $ 14.6 $ 43.9 (a) Long-term debt presented in the Company's financial statements is net of $277 million of debt discount, premiums and debt issuance costs which are being amortized over the debt terms.
Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, as well as related costs or other issues; the adverse impacts of the ongoing COVID-19 global pandemic on our business, operating results, financial condition and liquidity; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally; reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constrains at our hubs or other airports; geopolitical conflict, terrorist attacks or security events; any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; increasing privacy and data security obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or compliance costs on our operations or financial performance; any failure to attract, train or retain skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change, including our climate goals; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel; the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements; the impacts of the proposed phase out of the London interbank offer rate; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage and other risks and uncertainties set forth under Part I, Item 1A.
Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned, including as a result of any mandatory groundings of aircraft; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, as well as related costs or other issues, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft, engines and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally; reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constraints at our hubs or other airports; geopolitical conflict, terrorist attacks or security events (including the suspension of our overflying in Russian airspace as a result of the Russia-Ukraine military conflict and to Tel Aviv as a result of the Israeli-Hamas military conflict and an escalation of the broader economic consequences of the conflicts beyond their current scope); any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, these technologies or systems; increasing privacy, data security and cybersecurity obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs on our operations or financial performance; any failure to attract, train or retain skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or agreement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change, and any failure to achieve or demonstrate progress towards our climate goals; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel; the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage and other risks and uncertainties set forth under Part I, Item 1A.
As of December 31, 2022, United had approximately $441 million of letters of credit and surety bonds securing various obligations with expiration dates through 2032. Certain of these amounts are cash collateralized and reported within Restricted cash on our statement of financial position.
As of December 31, 2023, United had approximately $518 million of letters of credit and surety bonds securing various obligations with expiration dates through 2033. Certain of these amounts are cash collateralized and reported within Restricted cash on our statement of financial position.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 are not included in this Form 10-K and can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 16, 2023 (the "2022 Annual Report").
The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods or services are delivered.
The Company records Passenger revenue related to the travel awards when the transportation is provided and records Other revenue related to the non-travel awards when the goods 47 Table of Contents or services are delivered.
In general, each consortium lease agreement requires the consortium to make lease payments in amounts sufficient to pay the maturing principal and interest payments on the bonds.
In general, each consortium lease agreement requires the consortium to make lease payments in amounts sufficient to pay the maturing principal and interest payments on these debt obligations.
Income Taxes. See Note 6 to the financial statements included in Part II, Item 8 of this report for information related to income taxes. Liquidity and Capital Resources As of December 31, 2022, the Company had $16.4 billion in unrestricted cash, cash equivalents and short-term investments, a decrease of approximately $2.0 billion from December 31, 2021.
See Note 6 to the financial statements included in Part II, Item 8 of this report for information related to income taxes. Liquidity and Capital Resources As of December 31, 2023, the Company had $14.4 billion in unrestricted cash, cash equivalents and short-term investments as compared to approximately $16.4 billion as of December 31, 2022.
As of December 31, 2022, the Company's contingent exposure was approximately $400 million principal amount of such bonds based on its recent consortia participation. The Company's contingent exposure could increase if the participation of other air carriers decreases. The guarantees will expire when the tax-exempt bonds are paid in full, which ranges from 2023 to 2056.
As of December 31, 2023, the Company's contingent exposure was approximately $447 million principal amount of such obligations based on its recent consortia participation. The Company's contingent exposure could increase if the participation of other air carriers decreases. The guarantees will expire when these obligations are paid in full, which ranges from 2027 to 2056.
The Company concluded it was not necessary to record a liability for these indirect guarantees. 46 Table of Contents Increased Cost Provisions.
The Company concluded it was not necessary to record a liability for these indirect guarantees. Increased Cost Provisions.
United will retrofit 100% of its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight WiFi, as well as a bright look-and-feel with LED lighting.
United is in the process of retrofitting its mainline, narrow-body planes with its signature interior that includes seat-back entertainment in every seat, larger overhead bins for every passenger's carry-on bag and the industry's fastest available in-flight Wi-Fi, as well as a bright look-and-feel with LED lighting.
We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations. As of December 31, 2022, the Company had approximately $37.3 billion of debt, finance lease, operating lease and other financial liabilities, including $3.6 billion that will become due in the next 12 months.
We have a significant amount of fixed obligations, including debt, leases of aircraft, airport and other facilities, and pension funding obligations. As of December 31, 2023, the Company had approximately $36.7 billion of debt, finance lease, operating lease and other financial liabilities, including $4.8 billion that will become due in the next 12 months.
See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information. Significant financing events in 2021 were as follows: Debt, Finance Lease and Other Financing Liability Principal Payments. During 2021, the Company made $5.2 billion in principal payments for debt, finance leases, and other financing liabilities.
See Note 9 and Note 10 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing. Significant financing events in 2022 were as follows: Debt, Finance Lease and Other Financial Liability Principal Payments. During 2022, the Company made $4.0 billion of principal payments on debt, finance leases, and other financial liabilities.
At December 31, 2022, the Company had $12.9 billion of floating rate debt with remaining terms of up to 12 years that are subject to these increased cost provisions.
At December 31, 2023, the Company had $11.3 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions.
Strategy Our shared purpose is "Connecting People. Uniting the World." We have the most comprehensive route network among North American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C.
The results presented in this report are not necessarily indicative of future operating results. Strategy Our shared purpose is "Connecting People. Uniting the World." We have the most comprehensive route network among North American carriers, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C.
The following table summarizes our cash flow for the years ended December 31 (in millions): 2022 2021 2020 2019 Total cash provided by (used in): Operating activities $ 6,066 $ 2,067 $ (4,133) $ 6,909 Investing activities (13,829) (1,672) 50 (4,560) Financing activities (3,349) 6,396 12,957 (1,280) Net increase (decrease) in cash, cash equivalents and restricted cash $ (11,112) $ 6,791 $ 8,874 $ 1,069 See the Statements of Consolidated Cash Flows included in Part II, Item 8 of this report for additional information.
The following table summarizes our cash flow for the years ended December 31 (in millions): 2023 2022 2021 Total cash provided by (used in): Operating activities $ 6,911 $ 6,066 $ 2,067 Investing activities (6,106) (13,829) (1,672) Financing activities (1,892) (3,349) 6,396 Net increase (decrease) in cash, cash equivalents and restricted cash $ (1,087) $ (11,112) $ 6,791 See the Statements of Consolidated Cash Flows included in Part II, Item 8 of this report for additional information.
For additional information regarding these Liquidity and Capital Resource matters, see Notes 2, 9, 10 and 12 to the financial statements included in Part II, Item 8 of this report. For information regarding non-cash investing and financing activities, see the Company's statements of consolidated cash flows.
Debt Issuances. During 2022, United borrowed $0.8 billion for aircraft financings. For additional information regarding these Liquidity and Capital Resource matters, see Notes 9, 10 and 12 to the financial statements included in Part II, Item 8 of this report. For information regarding non-cash investing and financing activities, see the Company's statements of consolidated cash flows.
Interest income increased $262 million in 2022 as compared to 2021, primarily due to higher short-term investments in U.S. government and agency notes. See Note 8 to the financial statements included in Part II, Item 8 of this report for additional information.
Interest income increased $529 million in 2023 as compared to 2022, primarily due to higher interest rates on the Company's cash balances and U.S. government and agency notes. See Note 8 to the financial statements included in Part II, Item 8 of this report for additional information.
Other operating expenses increased $2.2 billion, or 49.5%, in 2022 as compared to 2021, primarily due to increases in ground handling, passenger services, food and beverage offerings, navigation fees and personnel-related costs as a direct result of the increase in flight activity and inflationary pressures and higher expenditures on information technology projects and services. Nonoperating Income (Expense).
Other operating expenses increased $1.4 billion, or 21.6%, in 2023 as compared to 2022, primarily as a direct result of the increase in flight activity and the impacts of inflationary pressures. Other operating expenses include expenditures related to ground handling, passenger services, food and beverage offerings, navigation fees, personnel-related costs and information technology projects and services. Nonoperating Income (Expense).
Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals", "targets" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements.
Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned," and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not 48 Table of Contents all forward-looking statements contain such terms.
We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation.
All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation.
We have contracts to sell miles to these partners with the terms extending from one to seven years. These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards.
These partners include domestic and international credit card issuers, retail merchants, hotels, car rental companies and our participating airline partners. Miles can be redeemed for free (other than taxes and government-imposed fees), discounted or upgraded air travel and non-travel awards. Co-Brand Agreement .
Operating Activities. Cash flows provided by operating activities for 2022 were $4.0 billion higher than 2021 primarily due to an approximately $3.4 billion increase in operating income as improvements in the demand for air travel continued and an approximately $0.6 billion increase in various working capital items.
Operating Activities. Cash flows provided by operating activities for 2023 were $0.8 billion higher than 2022 primarily due to an approximately $1.9 billion increase in operating income as improvements in the demand for air travel continued partially offset by a decrease in various working capital items. Investing Activities.
To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns.
To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns. Frequent Flyer Accounting. United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants.
Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, the potential impacts of the COVID-19 pandemic and steps the Company plans to take in response thereto and goals, plans and projections regarding the Company's financial position, results of operations, market position, capacity, fleet, product development, ESG targets and business strategy.
Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere, relating to, among other things, goals, plans and projections regarding the Company's financial position, results of operations, market position, capacity, fleet, product development, ESG-related strategy initiatives and business strategy.
We now expect to take delivery of about 700 new narrow and widebody aircraft by the end of 2033. Our groundbreaking United Next strategy is expected to increase United's average gauge in North America, to increase the total number of available seats per departure and to significantly lower carbon emissions per seat.
Our groundbreaking United Next strategy is expected to increase United's average gauge in North America, to increase the total number of available seats per departure and to significantly lower carbon emissions per seat.
The table below presents special charges (credits) recorded by the Company during the years ended December 31 (in millions): 2022 2021 CARES Act grant $ — $ (4,021) Severance and benefit costs — 438 Impairment of assets — 97 (Gains) losses on sale of assets and other special charges 140 119 Total special charges (credits) $ 140 $ (3,367) 42 Table of Contents See Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.
The table below presents special charges recorded by the Company during the years ended December 31 (in millions): 42 Table of Contents 2023 2022 Labor contract ratification bonuses $ 814 $ — (Gains) losses on sale of assets and other special charges 135 140 Total special charges $ 949 $ 140 See Note 13 to the financial statements included in Part II, Item 8 of this report for additional information.
Distribution expenses increased $858 million, or 126.7%, in 2022 as compared to 2021, primarily due to higher credit card fees, higher travel agency commissions and higher volumes of global distribution fees as a result of the overall increase in passenger revenue.
Distribution expenses increased $442 million, or 28.8%, in 2023 as compared to 2022, primarily due to higher credit card fees, travel agency commissions and global distribution fees driven by the overall increase in passenger revenue.
For the Company's China route authority, the Company performed a quantitative assessment which involved determining the fair value of the asset and comparing that amount to the asset's carrying value. For all other intangible assets, the Company performed a qualitative assessment of whether it was more likely than not that an impairment had occurred.
For all other intangible assets, the Company performed a qualitative assessment of whether it was more likely than not that an impairment had occurred. To determine the fair value of the China route authority, the Company used a discounted cash flow method.
United's MileagePlus loyalty program builds customer loyalty by offering awards, benefits and services to program participants. Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members can also earn miles by purchasing goods and services from our network of non-airline partners.
Members in this program earn miles for travel on United, United Express, Star Alliance members and certain other airlines that participate in the program. Members can also earn miles by purchasing goods and services from our network of non-airline partners. We have contracts to sell miles to these partners with the terms extending from one to six years.
Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report.
All statements, other than those that relate solely to historical facts, are forward-looking statements. Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured.
Results of Operations Select financial data and operating statistics are provided in the tables below: (in millions) 2022 2021 2020 2019 Operating revenue $ 44,955 $ 24,634 $ 15,355 $ 43,259 Operating expense 42,618 25,656 21,714 38,958 Operating income (loss) 2,337 (1,022) (6,359) 4,301 Nonoperating expense, net (1,347) (1,535) (2,463) (387) Income tax expense (benefit) 253 (593) (1,753) 905 Net income (loss) $ 737 $ (1,964) $ (7,069) $ 3,009 40 Table of Contents 2022 2021 2020 2019 Passengers (thousands) (a) 144,300 104,082 57,761 162,443 Revenue passenger miles ("RPMs") (millions) (b) 206,791 128,979 73,883 239,360 Available seat miles ("ASMs") (millions) (c) 247,858 178,684 122,804 284,999 Cargo revenue ton miles (millions) (d) 3,041 3,285 2,711 3,329 Passenger load factor (e) 83.4 % 72.2 % 60.2 % 84.0 % Passenger revenue per available seat mile ("PRASM") (cents) 16.15 11.30 9.61 13.90 Total revenue per available seat mile ("TRASM") (cents) 18.14 13.79 12.50 15.18 Average yield per revenue passenger mile ("Yield") (cents) (f) 19.36 15.66 15.98 16.55 CASM (cents) 17.19 14.36 17.68 13.67 CASM-ex (Non-GAAP) (cents) 11.73 12.96 17.13 10.21 Average stage length (miles) (g) 1,437 1,315 1,307 1,460 Employee headcount, as of December 31 92,800 84,100 74,400 95,900 (a) The number of revenue passengers measured by each flight segment flown.
Results of Operations Select financial data and operating statistics are provided in the tables below: (in millions) 2023 2022 2021 Operating revenue $ 53,717 $ 44,955 $ 24,634 Operating expense 49,506 42,618 25,656 Operating income (loss) 4,211 2,337 (1,022) Nonoperating expense, net (824) (1,347) (1,535) Income (loss) before income taxes 3,387 990 (2,557) Income tax expense (benefit) 769 253 (593) Net income (loss) $ 2,618 $ 737 $ (1,964) 40 Table of Contents 2023 2022 2021 Passengers (thousands) (a) 164,927 144,300 104,082 Revenue passenger miles ("RPMs") (millions) (b) 244,435 206,791 128,979 Available seat miles ("ASMs") (millions) (c) 291,333 247,858 178,684 Cargo revenue ton miles (millions) (d) 3,159 3,041 3,285 Passenger load factor (e) 83.9 % 83.4 % 72.2 % Passenger revenue per available seat mile ("PRASM") (cents) 16.84 16.15 11.30 Total revenue per available seat mile ("TRASM") (cents) 18.44 18.14 13.79 Average yield per revenue passenger mile ("Yield") (cents) (f) 20.07 19.36 15.66 Cost per available seat mile ("CASM") (cents) 16.99 17.19 14.36 Average stage length (miles) (g) 1,479 1,437 1,315 Employee headcount, as of December 31 103,300 92,800 84,100 (a) The number of revenue passengers measured by each flight segment flown.
The Company's estimate for aircraft expenditures reflects its assumptions regarding delayed aircraft deliveries. See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays.
See Note 12 to the financial statements included in Part II, Item 8 of this report for additional information on commitments, including aircraft expenditures reflecting contractual delivery dates without adjustment for expected delays. The Company has backstop financing commitments available from certain of its aircraft manufacturers for a limited number of its future aircraft deliveries, subject to certain customary conditions.
When appropriate, UAL and United are named specifically for their individual contractual obligations and related disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained. We sometimes use the words "we," "our," "us," and the "Company" in this report for disclosures that relate to all of UAL and United.
When appropriate, UAL and United are named specifically for their individual contractual obligations and related 38 Table of Contents disclosures and any significant differences between the operations and results of UAL and United are separately disclosed and explained.
Our future results of operations may be subject to volatility and our growth plans may be delayed, particularly in the short term, due to the impact of the above factors and trends.
Our future results of operations may be subject to volatility and our growth plans may be delayed, particularly in the short term, due to the impact of the above factors and trends. Governmental Actions We operate in complex, highly regulated environments in the U.S., the European Union, the United Kingdom and other regions around the world.
Investors should understand that it is not possible to predict or identify all such factors and should 50 Table of Contents not consider this list to be a complete statement of all potential risks and uncertainties.
The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties.
Other operating revenue increased $664 million, or 31.8%, in 2022 as compared to 2021, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending recovery with our co-branded credit card partner, 41 Table of Contents JPMorgan Chase Bank, N.A.
Other operating revenue increased $424 million, or 15.4%, in 2023 as compared to 2022, primarily due to an increase in mileage revenue from non-airline partners, including credit card spending and new credit card member acquisitions with the co-branded credit card partner, JPMorgan Chase Bank, N.A., as well as increases in the purchases of United Club memberships and one-time lounge passes as compared to the year-ago period. 41 Table of Contents Operating Expense.
As of December 31, 2022, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, route authorities and airport slots, was pledged under various loan and other agreements.
As of December 31, 2023, a substantial portion of the Company's assets, principally aircraft and certain related assets, its loyalty program, route authorities and airport slots, was pledged under various loan and other agreements. See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information on aircraft financing and other debt instruments.
A great route network, new aircraft, great 39 Table of Contents Wi-Fi, etc. are a necessary but not sufficient condition for a great brand. Ultimately our people provide customers with the service they expect.
Our people are our greatest asset and they are by far the most important part of our product. Aspects of the customer experience such as a great route network, new aircraft, and great Wi-Fi are necessary, but not sufficient, conditions for a great airline brand. Ultimately our people provide customers with the service they expect.
Significant financing events in 2022 were as follows: Debt, Finance Lease and Other Financing Liability Principal Payments . During 2022, the Company made $4.0 billion of principal payments on debt, finance leases, and other financing liabilities. Debt Issuances. During 2022, United borrowed $0.8 billion for aircraft financings.
Capital expenditures were primarily attributable to the purchase of aircraft, aircraft improvements and advance deposits for future aircraft purchases. Financing Activities. Significant financing events in 2023 were as follows: Debt, Finance Lease and Other Financial Liability Principal Payments . During 2023, the Company made $4.2 billion of principal payments on debt, finance leases, and other financial liabilities.
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): 2022 2021 Increase (Decrease) % Change Interest expense $ (1,778) $ (1,657) $ 121 7.3 Interest income 298 36 262 NM Interest capitalized 105 80 25 31.3 Unrealized gains (losses) on investments, net 20 (34) (54) (158.8) Miscellaneous, net 8 40 (32) (80.0) Total nonoperating expense, net $ (1,347) $ (1,535) $ (188) (12.2) Interest expense increased $121 million, or 7.3%, in 2022 as compared to 2021, primarily due to higher interest rates on variable rate debt as well as a full year of interest expense in 2022 on certain debt incurred in the second quarter of 2021.
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): 2023 2022 Increase (Decrease) % Change Interest expense $ (1,956) $ (1,778) $ 178 10.0 Interest income 827 298 529 NM Interest capitalized 182 105 77 73.3 Unrealized gains on investments, net 27 20 7 35.0 Miscellaneous, net 96 8 88 NM Total nonoperating expense, net $ (824) $ (1,347) $ (523) (38.8) Interest expense increased $178 million, or 10.0%, in 2023 as compared to 2022, primarily due to higher interest rates on variable rate debt and new debt issuances in the current period, partially offset by reduced interest expense on the prepayment of $1.0 billion of the outstanding principal amount under a 2021 term loan facility in the second quarter of 2023.
Actual results will be influenced by the competitive environment, fuel costs and other expenses, and potentially other unforeseen events or circumstances that could have a material impact on future results. In 2022, the Company evaluated its intangible assets for possible impairments.
Because we are required to make estimates and assumptions when evaluating goodwill and indefinite-lived intangible assets for impairment, actual results may differ materially from these estimates. Actual results will be influenced by the competitive environment, fuel costs and other expenses, and potentially other unforeseen events or circumstances that could have a material impact on future results.
Cash flows used in investing activities increased $12.2 billion in 2022 as compared to the year-ago period mainly related to an approximately $9.5 billion increase in net purchase and sales of short-term and other investments.
Cash flows used in investing activities decreased $7.7 billion in 2023 as compared to the year-ago period mainly related to approximately $10.2 billion due to lower purchase and higher sales activity in short-term and other investments, partially offset by a $2.4 billion increase in capital expenditures.
As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL, unless otherwise noted. United's operating revenues and operating expenses comprise nearly 100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating 38 Table of Contents cash flows.
United's operating revenues and operating expenses comprise nearly 100% of UAL's revenues and operating expenses. In addition, United comprises approximately the entire balance of UAL's assets, liabilities and operating cash flows.
Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis as of October 1, or on an interim basis whenever a triggering event occurs. An impairment occurs when the fair value of an intangible asset is less than its carrying value.
Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment on an annual basis as of October 1, or more frequently if events or circumstances indicate that the asset may be impaired. When there is a triggering event, the Company typically determines fair value using either market or variation of the income approach valuation techniques.
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): 2022 2021 Increase (Decrease) % Change Passenger revenue $ 40,032 $ 20,197 $ 19,835 98.2 Cargo 2,171 2,349 (178) (7.6) Other operating revenue 2,752 2,088 664 31.8 Total operating revenue $ 44,955 $ 24,634 $ 20,321 82.5 The table below presents passenger revenue and select operating data of the Company, broken out by geographic region, expressed as year-over-year changes: Increase (decrease) from 2021: Domestic Atlantic Pacific Latin Total Passenger revenue (in millions) $ 11,104 $ 5,634 $ 1,513 $ 1,584 $ 19,835 Passenger revenue 74.9 % 244.3 % 247.2 % 64.3 % 98.2 % Average fare per passenger 31.2 % 21.6 % 4.8 % 35.4 % 43.0 % Yield 27.0 % 31.8 % (15.1) % 24.6 % 23.6 % PRASM 36.0 % 80.9 % 100.0 % 50.5 % 42.9 % Passengers 33.3 % 183.1 % 231.5 % 21.4 % 38.6 % RPMs 37.8 % 161.3 % 309.0 % 31.8 % 60.3 % ASMs 28.7 % 90.3 % 73.4 % 9.1 % 38.7 % Passenger load factor (points) 5.6 22.5 39.3 14.4 11.2 Passenger revenue increased $19.8 billion, or 98.2%, in 2022 as compared to 2021, primarily due to the ongoing recovery in air travel which was impacted by the COVID-19 pandemic and strength in the pricing environment as a result of inflationary pressures on fuel prices and other costs.
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): 2023 2022 Increase (Decrease) % Change Passenger revenue $ 49,046 $ 40,032 $ 9,014 22.5 Cargo 1,495 2,171 (676) (31.1) Other operating revenue 3,176 2,752 424 15.4 Total operating revenue $ 53,717 $ 44,955 $ 8,762 19.5 The table below presents passenger revenue and select operating data of the Company, broken out by geographic region, expressed as year-over-year changes: Increase (decrease) from 2022: Domestic Atlantic Pacific Latin Total Passenger revenue (in millions) $ 3,641 $ 2,225 $ 2,525 $ 623 $ 9,014 Passenger revenue 14.0 % 28.0 % 118.8 % 15.4 % 22.5 % Average fare per passenger 0.9 % 8.9 % 6.7 % 7.4 % 7.2 % Yield 3.2 % 9.7 % (1.9) % 6.2 % 3.7 % PRASM 2.7 % 9.5 % 12.8 % 9.7 % 4.3 % Passengers 13.0 % 17.6 % 105.1 % 7.4 % 14.3 % RPMs 10.5 % 16.7 % 123.1 % 8.6 % 18.2 % ASMs 11.0 % 16.9 % 94.0 % 5.2 % 17.5 % Passenger load factor (points) (0.4) (0.1) 10.2 2.8 0.5 Passenger revenue increased $9.0 billion, or 22.5%, in 2023 as compared to 2022, primarily due to a 17.5% increase in capacity, strength in yield, and a 0.5 point increase in passenger load factor.
The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel storage and distribution facilities that are typically financed through tax-exempt bonds, either special facilities lease revenue bonds or general airport revenue bonds, issued by various local municipalities.
Interline agreements govern the rights and responsibilities of the consortia members and provide for the allocation of the overall costs to operate the consortia based on usage. The consortia (and in limited cases, the participating carriers) have entered into long-term agreements to lease certain airport fuel storage and distribution facilities that are typically financed through various debt obligations.
Aircraft maintenance materials and outside repairs increased $837 million, or 63.6%, in 2022 as compared to 2021, primarily due to higher volumes of flying, increased engine overhauls, higher repair volumes, heavy airframe checks and contractual rate escalations.
Aircraft maintenance materials and outside repairs increased $583 million, or 27.1%, in 2023 as compared to 2022, primarily due to increased flight activity and increased volumes of both engine overhauls and airframe heavy maintenance checks. Depreciation expense increased $215 million, or 8.8%, in 2023 as compared to 2022, primarily due to new aircraft inducted into service.
Cargo revenue decreased $178 million, or 7.6%, in 2022 as compared to 2021, primarily due to lower yields as a result of increased market capacity. Cargo revenue was especially high in 2021 due to the limited market capacity, lower passenger load factors and the utilization of cargo-only flights in the first half of 2021.
Cargo revenue decreased $676 million, or 31.1%, in 2023 as compared to 2022, primarily due to lower yields as a result of increased market capacity and rate pressures.
The Revolving Credit and Guaranty Agreement, under the Term Loan Credit and Guaranty Agreement (the "2021 Term Loan Facility"), provides revolving loan commitments of up to $1.75 billion until April 21, 2025, subject to certain customary conditions. No borrowings were outstanding under this facility at December 31, 2022.
We also regularly evaluate our liquidity and capital structure to ensure financial risks, adequate liquidity access and cost of capital are efficiently managed. The Revolving Credit and Guaranty Agreement, under the Term Loan Credit and Guaranty Agreement, provides revolving loan commitments of up to $1.75 billion until April 21, 2025, subject to certain customary conditions.
The table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes): 2022 2021 Increase (Decrease) % Change Aircraft fuel $ 13,113 $ 5,755 $ 7,358 127.9 Salaries and related costs 11,466 9,566 1,900 19.9 Landing fees and other rent 2,576 2,416 160 6.6 Depreciation and amortization 2,456 2,485 (29) (1.2) Regional capacity purchase 2,299 2,147 152 7.1 Aircraft maintenance materials and outside repairs 2,153 1,316 837 63.6 Distribution expenses 1,535 677 858 126.7 Aircraft rent 252 228 24 10.5 Special charges (credits) 140 (3,367) (3,507) NM Other operating expenses 6,628 4,433 2,195 49.5 Total operating expenses $ 42,618 $ 25,656 $ 16,962 66.1 Aircraft fuel expense increased $7.4 billion, or 127.9%, in 2022 as compared to 2021, primarily due to both a higher average price per gallon of fuel and increased consumption from higher flight activity.
The table below includes data related to the Company's operating expense for the years ended December 31 (in millions, except percentage changes): 2023 2022 Increase (Decrease) % Change (a) Salaries and related costs $ 14,787 $ 11,466 $ 3,321 29.0 Aircraft fuel 12,651 13,113 (462) (3.5) Landing fees and other rent 3,076 2,576 500 19.4 Aircraft maintenance materials and outside repairs 2,736 2,153 583 27.1 Depreciation and amortization 2,671 2,456 215 8.8 Regional capacity purchase 2,400 2,299 101 4.4 Distribution expenses 1,977 1,535 442 28.8 Aircraft rent 197 252 (55) (21.8) Special charges 949 140 809 NM Other operating expenses 8,062 6,628 1,434 21.6 Total operating expenses $ 49,506 $ 42,618 $ 6,888 16.2 (a) NM - Greater than 100% change or otherwise not meaningful.
FFCs and ETCs are valid up to one year from the date of issuance; however, all credits issued on or before December 31, 2022 have been extended to December 31, 2023. The Company estimates the value of Advance ticket sales that will expire unused ("breakage") and recognizes revenue in proportion to the usage of the related tickets.
The Company estimates the value of Advance ticket sales that will expire unused ("breakage") and recognizes revenue and any changes in estimates in proportion to the usage of the related tickets.
Securities and Exchange Commission (the "SEC") on February 18, 2022 (the "2021 Annual Report"). Executive Summary Overview United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United").
Executive Summary Overview United Airlines Holdings, Inc. (together with its consolidated subsidiaries, "UAL" or the "Company") is a holding company and its wholly-owned subsidiary is United Airlines, Inc. (together with its consolidated subsidiaries, "United"). As UAL consolidates United for financial statement purposes, disclosures that relate to activities of United also apply to UAL, unless otherwise noted.
To determine fair value, the Company used discounted cash flow methods appropriate for each asset. Key inputs into the models included forecasted capacity, revenues, fuel costs, other operating costs and an overall discount rate. The assumptions used for future projections include that demand will continue to recover. These assumptions are inherently uncertain as they relate to future events and circumstances.
Key inputs into the models included forecasted revenues, fuel costs, other operating costs, margin and an overall discount rate. These assumptions are inherently uncertain as they relate to future events and circumstances. See Notes 1 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.
Unrealized gains on investments, net was $20 million in 2022 as compared to unrealized losses on investments, net of $34 million in 2021, primarily due to the change in the market value of the Company's investments in equity securities. See Notes 8 and 13 to the financial statements included in Part II, Item 8 of this report for additional information.
Interest capitalized increased $77 million in 2023 as compared to 2022, primarily due to increased capitalization associated with aircraft purchases and increased interest rates. Unrealized gains on investments, net was $27 million in 2023 as compared to $20 million in 2022, primarily due to the change in the market value of the Company's investments in equity securities.
Moreover, having best-in-class CASM-ex performance is expected to provide the cash flow needed to support our planned investments in growth. • Customer service: We believe that excellent customer service is part of de-commoditizing air travel. Our people are our greatest asset and they are by far the most important part of our product.
We believe that we have been working strategically to overcome operational challenges, but we continue to innovate in order to make advancements in this area. • Pre-tax margin: We believe that best-in-class margin performance will enable us to provide the cash flow needed to support our planned investments in growth. • Customer service: We believe that excellent customer service is part of de-commoditizing air travel.
The Company: • repaid in full $1.4 billion aggregate principal amount outstanding under a 2017 term loan facility; • repaid in full $1.0 billion aggregate principal amount outstanding under a 2017 revolving credit facility; • repaid in full $520 million aggregate principal amount outstanding under a CARES Act loan; and • made $1.9 billion of aircraft-related debt principal payments.
The payments in 2023 included a prepayment of $1.0 billion of the outstanding principal amount under a 2021 term loan facility. Debt Issuances.
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): 2022 2021 % Change Fuel expense $ 13,113 $ 5,755 127.9 Total fuel consumption (gallons) 3,608 2,729 32.2 Average price per gallon $ 3.63 $ 2.11 72.0 Salaries and related costs increased $1.9 billion, or 19.9%, in 2022 as compared to 2021, primarily due to an approximately 10% increase in headcount, volume-driven pay from increased flight activity, an increase in employee incentive accruals due to current year profitability (including profit sharing of $133 million in 2022) and $405 million of employee retention credits under the CARES Act in 2021 that did not reoccur in 2022.
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): 2023 2022 % Change Fuel expense $ 12,651 $ 13,113 (3.5) Total fuel consumption (gallons) 4,205 3,608 16.5 Average price per gallon $ 3.01 $ 3.63 (17.1) Landing fees and other rent increased $500 million, or 19.4%, in 2023 as compared to 2022, primarily due to increased rates and increased flight activity driving higher landed weight volume and a higher number of enplaned passengers as well as expansion in airport rental space at certain hubs.
Risk Factors, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC. The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements.
Risk Factors, of this Form 10-K, and under "Economic and Market Factors" and "Governmental Actions" in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, of this report, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.
See Note 2 to the financial statements included in Part II, Item 8 of this report for additional information on the warrants issued in connection with the PSP2 and PSP3 Notes and Note 9 to such financial statements for a discussion of the PSP2 and PSP3 Notes. Investing Activities.
Also, on February 22, 2024, the Company refinanced its 2021 term loans by paying down $1.37 billion of its outstanding balance and lowering the margin applied to these term loans by 1.00%. See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information on these financing transactions.
Removed
Our business and operating results for 2022 continued to be negatively impacted by the COVID-19 pandemic, particularly in the first half of the year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table summarizes information related to the Company's interest rate market risk at December 31, 2022 (in millions): Variable rate debt Carrying value of variable rate debt $ 12,754 Impact of 100 basis point increase on projected interest expense for the following year 93 Fixed rate debt Carrying value of fixed rate debt 18,440 Fair value of fixed rate debt 17,189 Impact of 100 basis point increase in market rates on fair value (407) On January 1, 2022, LIBOR was phased out for the one-week and two-month USD LIBOR settings and starting on July 1, 2023 the remaining USD LIBOR settings are expected to be phased out.
Biggest changeThe following table summarizes information related to the Company's interest rate market risk at December 31, 2023 (in millions): Variable rate debt Carrying value of variable rate debt $ 11,184 Impact of 100 basis point increase on projected interest expense for the following year 77 Fixed rate debt Carrying value of fixed rate debt 17,891 Fair value of fixed rate debt 17,276 Impact of 100 basis point increase in market rates on fair value (406) A change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments.
Assuming our cash, cash equivalents and short-term investments remain at their average 2022 levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately $186 million during 2023. Commodity Price Risk (Aircraft Fuel).
Assuming our cash, cash equivalents and short-term investments remain at their average 2023 levels, a 100 basis point increase in interest rates would result in a corresponding increase in the Company's interest income of approximately $171 million during 2024. Commodity Price Risk (Aircraft Fuel).
The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, 2022 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 $17 million for the year ending December 31, 2023.
The result of a uniform 1% strengthening in the value of the U.S. dollar from December 31, 2023 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 $16 million for the year ending December 31, 2024.
This sensitivity analysis was prepared based upon projected 2023 foreign currency-denominated revenues and expenses as of December 31, 2022. 52 Table of Contents
This sensitivity analysis was prepared based upon projected 2024 foreign currency-denominated revenues and expenses as of December 31, 2023. 50 Table of Contents
Changes in foreign currency exchange rates impact the Company's results of operations through changes in the dollar value of foreign currency-denominated operating revenues and expenses. Some of the Company's more significant foreign currency exposures include the Canadian dollar, European euro, British pound, Japanese yen, Chinese renminbi and Mexican peso.
The Company generates revenues and incurs expenses in numerous foreign currencies. Changes in foreign currency exchange rates impact the Company's results of operations through changes in the dollar value of foreign currency-denominated operating revenues and expenses. Some of the Company's more significant foreign currency exposures include the Canadian dollar, European euro, Japanese yen, Chinese renminbi, Brazilian real and Mexican peso.
The Company's current strategy is to not enter into transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors.
The Company's current strategy is to not enter into transactions to hedge fuel price volatility, although the Company regularly reviews its policy based on market conditions and other factors. A one-dollar change in the price of a barrel of aircraft fuel would change the Company's 2024 projected fuel expense by approximately $100 million. Foreign Currency.
Removed
Uncertainty as to the nature and performance of alternative reference rates may adversely impact our interest rates and related interest expense. 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.
Removed
Risks and uncertainties related to the LIBOR phase out are further described in Part I, Item 1A. Risk Factors— " The proposed phase out of the London interbank offer rate could have a material adverse effect on us." A change in market interest rates would also impact interest income earned on our cash, cash equivalents and short-term investments.
Removed
The Company's 2023 forecasted fuel consumption is presently approximately 4.3 billion gallons, and based on this forecast, a one-dollar change in the price of a barrel of aircraft fuel would change the Company's annual fuel expense by approximately $102 million. Foreign Currency. The Company generates revenues and incurs expenses in numerous foreign currencies.

Other UAL 10-K year-over-year comparisons