Originally Posted by T773ER

These numbers look compelling on the surface but the comparison is largely apples-to-oranges, and here's why:

The pre-tax income gap is mostly noise. UAL's $870M GAAP pre-tax includes $444M in sale-leaseback gains on aircraft transactions — essentially UAL sold planes and leased them back, booking a one-time accounting gain that flows straight through to pre-tax income. Strip that out and UAL's adjusted pre-tax is $498M vs Delta's $532M. Delta actually wins on an adjusted basis, which is the only number that reflects actual airline operations.

The cash flow comparison is even more misleading. UAL's $4.8B operating cash flow and $2.9B free cash flow look dramatically better, but Delta's $2.4B operating cash flow reflects a fundamentally different balance sheet structure. UAL raised $2.2B in new unsecured debt during Q1 and paid down $3.1B — that debt activity flows through financing, but the advance ticket sales and other working capital movements that accompany capacity growth inflate operating cash flow optically. UAL's FCF definition is:
Operating cash flow + Investing cash flow, adjusted for short-term investments and restricted cash. Since Sales Lease Back proceeds land in investing activities as an inflow, they directly reduce the net cash used in investing, which flows straight into UAL's free cash flow calculation. So the $444M in SLB proceeds is essentially boosting UAL's reported $2.9B free cash flow dollar for dollar.

Straight from the earnings release:
"During the three months ended March 31, 2026, and 2025, the company recorded $389 million and $108 million, respectively, of net gains on sale of assets and other special charges, which were primarily comprised of $444 million and $110 million, respectively, of gains on various aircraft sale-leaseback transactions"

"Additionally, for the first time since 2019, United returned to the unsecured market and successfully raised $2 billion across two unsecured bond issuances — exceeding initial expectations"

Just wanted to add some context on what investors actually look at. And for those of you who dont know what a Sales Lease Back is, its where a company sells an asset it owns and simultaneously agrees to lease it back from the buyer. Frontier airlines has been doing this agressively to boost their numbers for example. You get immediate cash but you've traded an owned asset for a future stream of lease payments.