First On CNBC: CNBC Transcript: United Continental Holdings Inc (NASDAQ:UAL) CEO Oscar Munoz Speaks with CNBC’s Phil LeBeau Today
WHEN: Today, Thursday, May 30, 2019
WHERE: CNBC’s “Squawk on the Street” – Live from Terminal B at LaGuardia Airport in New York City
The following is the unofficial transcript of a FIRST ON CNBC interview with United CEO Oscar Munoz and CNBC’s Phil LeBeau on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Thursday, May 30th. The following is a link to video of the interview on CNBC.com:
Q1 hedge fund letters, conference, scoops etc
United CEO Oscar Munoz on Boeing 737 Max, company growth and more
All references must be sourced to CNBC.
CARL QUINTANILLA: We’ll see in you a bit. Rick Santelli in New York City today. Let’s get to LaGuardia this morning. Phil LeBeau has the CEO of United, Oscar Munoz. Good morning, Phil.
PHIL LEBEAU: Good morning, Carl. And we are here in the new terminal, Terminal B, at LaGuardia. We’ll talk about that in a bit. Oscar Munoz, CEO of United Airlines. Before we talk about this and the changes here and the importance of New York City, I have to ask you about the 737 Max. Dennis Muilenburg talking with CBS News last night and this morning talking about bringing the Max back. What is your expectation in terms of when do you think we will see the plane flying again?
OSCAR MUNOZ: I think the expectation is simply that we are going to do it in a safe manner. That all of the external folks, regulators, investigators aside, agree that it is the right time to bring it back. I think that is really the focus. And, what I heard from Dennis, in particular – the important thing is that safety is first.
PHIL LEBEAU: August, maybe even as early as July? Or should we even push it back maybe to September?
OSCAR MUNOZ: You know, from an operational perspective, at United, we’re prepared to do it at any point in time. The critical point before we have any of those conversations is that this aircraft returns to flight safely and that not only regulators agree but that the flying public agrees, as well.
PHIL LEBEAU: So—but, and I hate to a date on this, but are you looking at August as most likely?
OSCAR MUNOZ: We, from an operational perspective, are about a couple of months out. So, we pushed to August, August 4 I believe specifically. So, we’ll continue to monitor, see when the process goes through, and when we think that it is safe to fly, we will be incredibly communicative to all of our customers and very transparent when that flight comes back -- those aircrafts come back. You’ve heard, I pledged to be on the first one. It’s just one of many things we’re going to make sure that we reassure our customers that it’s safe to fly.
PHIL LEBEAU: You want to reassure the customers, and I know that you are going to try to do that, but I’m telling you, when I fly, it is a punchline. People make a joke about the 737 Max. Not only that, there are people who stop me and say, ‘I’m never getting on that plane again.’ How do you convince people that they should fly it again when it’s back in the air?
OSCAR MUNOZ: You know, I think that it’s -- there is a combination of communication tools that we’ll be doing, certainly. But the first and foremost objective, is not to assume that everyone will want to fly or assume that everyone will get over it. We have to make sure and assure them in any way possible. And so, again, we’ll be transparent, we’ll allow any kind of rebooking if required and more importantly, we’re going to continue to just prove to you, like everything that we do in our business. I always say, ‘proof, not promise,’ and this will apply in this case in particular. A safe return to flight of this aircraft is very critical, not only to us but to people around the world. And it is a good aircraft, clearly. But at the same time, that is our view. And our flying public needs to be assured and feel the same confidence.
PHIL LEBEAU: Oscar, Jim has a question for you. Jim.
JIM CRAMER: It has been a remarkable resurgence for your company since you came in. Your airline is the one stock that has just worked really well. You had an incident a couple years ago where a passenger was dragged off and a lot of people felt that your company was finished, that it wasn’t handled right. What did you do to make it so -- people aren’t thinking about that at all. What they are thinking about is that you are on time, they are thinking about that you have what I regard as being the most reliable record of all the airlines. What happened at the airline in such a short period of time that you were able to make it so that we don’t think about the bad, we think about the good and we take it?
OSCAR MUNOZ: Well, thank you for you for the compliments, Jim. I think the most important thing, the thing we say about that event is that we they never want to forget it. It always needs to be top of mind, so it drives our focus and our mission on caring for our customers. To the other issues, and I was here at the Bernstein Conference all day yesterday, and we got a lot of these questions, we are focusing – we, and you were part of this, the morning we announced our growth strategy and there was a lot of concern. And we said, ‘Listen, it is a uniquely United opportunity that is going to make sense,’ and we bookended our growth with an EPS target for not one, but three years. And I think the combination of those things, our sound, smart cost management and again, the thing I always say, ‘proof not promise.’ We are delivering. We had a full 2018, despite headwinds. We had a great first quarter, despite a lot of headwinds. And we feel very bullish about not only this quarter but yesterday I once again reaffirmed our full-year EPS targets for this year, despite all the noise that’s going on. So, I think that confidence, that conviction and the execution, I think gives investors a great comfort.
JIM CRAMER: And so, Oscar, do we -- should we take heart and look at, say, oil, let’s say oil goes to 50, which I think oil is really rolling over here. I mean, are these things not your numbers and we should be thinking, ‘Wow, there is potential upside for that’?
OSCAR MUNOZ: I think with regards to fuel, we gave our guidance with the 40 to 80 sort of range. Again, let us worry about all those things. We’ll give you the right parameters, we’ll give you the right guidance, and we’ll have any kind of transparency around it. But between 40 and 80 we’ve said, no excuses, we are going to get to our numbers.
PHIL LEBEAU: One last question for you, Oscar. We’re here in this B Terminal that lot of people in New York have not flown out of, or people flying in. We’re used to the C Terminal. How much of a difference will it make that you have not only a new brighter fresher with better amenities terminal, but also run more efficiently?
OSCAR MUNOZ: Yeah, no, it’s -- you always say game changer is a constant term, but this is beautiful. It is spectacular. It is what our customers deserve. It is what New York City deserves. It is a great city and great cities should have great airports. And for us, it is a big business market for us. We have 40 flights out of LaGuardia to all the big business cities where we operate our hubs. It’s our second location, obviously. EWR is our hub in the area where you can basically get anywhere. LaGuardia will take you to 40 different places. So, we’re excited about it.
PHIL LEBEAU: And speaking of Newark and your flights overseas internationally, there has been a slowdown in international travel to the U.S. What are you noticing?
OSCAR MUNOZ: You know, it keeps being brought up. We’re not seeing it. We’re not seeing it. Now, you know, later in the year possibly. But, at this point in time, our numbers for the second quarter and guidance that we’re given, we’re still on that. So, we have not seen the issues that people are talking about. And we hope not to see them. And-- but we feel strong about it.
PHIL LEBEAU: Oscar Munoz, CEO of United Airlines here at the new Terminal B at LaGuardia. Later on, I get to go out of Terminal C for the last time. The last time. Dodge the water buckets. Back to you.
CARL QUINTANILLA: And we all know how much you fly, Phil. You must be -- we’re as excited as you are. Our Phil LeBeau and Oscar Munoz at LaGuardia. Phil, thanks.
