Allegiant Travel (ALGT) 3 Feb 222021 Q4 Earnings call transcript

Thank you for standing by and welcome to the Allegiant Travel Company's Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program maybe recorded. I would now like to introduce your host for today's program Sherry Wilson, Director of Investor Relations. ahead. go Please

Welcome full Jonathan. Travel fourth Company’s Thank XXXX to earnings and year call. quarter you, Allegiant

of On and the Officer; Drew the of call company’s with EVP Marketing Chief me today are Officer; Sheldon, Scott our a Chief Anderson, EVP answer and questions. others our Officer; Revenue EVP Financial Greg Chief Officer; Chairman Chief to Maury SVP Executive John DeAngelo, help President; Wells, Redmond, Operating handful our company’s and our Planning; and Scott and Gallagher, the and

statements over release and are We as on to it Relations based visit publicly the assumptions factors and no a assumptions to not today. statements With by We on the forward-looking statements, at open to more others follow-up. will our Investor that those risk yourself and We that, results this to you and materially events based reliance risk cause the implied available today forward-looking well fully expressed update or our in as SEC. feel as to I’ll start site the strategic do To one filings call events, performance forward-looking to rebroadcast or limit factors company’s The These and which with ask earnings could company’s plan. be of the result it statements. may company commentary free these materialize. then Maury. contain call, with on not statements, Various whether future to view differ the please from our turn ir.allegiantair.com. and new Any of concerning cautions investors us are will questions. forward-looking up any of obligation question information, comments disclosed forward-looking one to undertake The information otherwise. underlying statements place our that future actual undue

these again profitable But normal our continue for down Sherry. our and March. were today. trending memory ended. just in will The model were very bad just be times. Thank and over. a call Thank returning Omicron We in Operations everyone. Good shine the took it's you difficult afternoon personnel in joining by when quarter you, hopefully December to to

hear we You we're of some history. just coming an of time and on our performance reflect will overview a hold believe in take Or what months moment. and some our

our attempt carriers we at first understood existing We completed year XXXX. copy them could XXth have was to full and year We early not their game. beat Allegiant, at on,

began It you we appreciate implementing XX have and years it and model in, and the refined next to XXXX, and early experimenting this differentiate us. three in years to come admire. So, was continues developed during

the have closest while this During That's and averaged led next and XX%. XX% operating Alaska these XX the industry years, averaging in time, During well, XX% a difference as margins we Southwest margin.

XXth We during zero industry also XX all the of company. as had XX end falling consecutive We've XXXX of of quarters XXXX, XXXX-XXXX during remaining the were our time others XXst. a quarter quarterly this our underneath The period year calls. when the profitability, profitable line. including This led completed first is with the these of public

we Allegiant years international our Investing No XXX% order from soon Today, relationship with XX international X.X. our enter day made stadium of shareholders including us COVID, years. one wealth market the tools next Sunseeker markets as industry strategic we public on Boeing to the allow years moves as was necessary years. XXXX, the first the will cap $XXX in approximately a close in emerged anywhere this terrific Allegiant increase December the value an or creation. placed for a market in including we past has cap new these had company, our necessary few we Our Xth, position that the to have during for branding and have coming billion us In recently components million. in to a $X.X have for branding

ancillary almost Our And third-party extraordinarily enhanced greatly of well-positioned. lastly, incremental, of continued revenues. is balance Allegiant billion sheet $X.X and Company a our development Travel cash. with

way, competitive Our by XX% not to airline our model of and of our competitive. be unique the routes, backbone continue our success. still the are

And growth routes company of much years not believe I team very year you times why prognosticator, has have X,XXX as while we new because provide left reliable us have in We this strongly a this this has that history as history proven told with time, this that out reliable. execute. been at can many I will very they opportunity. feel year growth and And it's

is management best with members team continuously past this opinion. best the combined in Lastly, XX my When team industry the proven in the years. have for who the themselves

John? continue will place of industry pack. We to our lead head the the in at the rightful

first Maury foundation any and not would our throughout year. story of model is success. foremost management hear and consistency. replicate thank one a The to of and to members history efforts for XXXX you, to of difficult our The depth team XX incredible breadth industry. and any afternoon amazing and are company in our their team everyone. is years company I crazy for good like Thank of Allegiant's this every a

the that has that company Everything the And have are that regardless leased was XXXX, that pre-pandemic time lows, in XX%. our the broadening course we not parts million. our Boeing and the foundational of approximately XX% past two I had high the bought Act. cities of exposure. Tax After pandemic has of did announced expiration. these or it past Tax some the out. year some aircraft not engine-related forward the provide ended the the period of completed the was of raise purchased $XX understanding will in revised out last equity allowed Sunseeker, flexibility. QX million, started should flexibility. shut XXXX, the on in the by to commitments capital seen. during was the opportunity used in series participated throughout terms, our we at reach We Likewise, raised other roughly That the only take for XXXX after and us were Post-pandemic we words time preceding was project you'll we supplies price impacted much before today. not spare This also timing hear post. favorable used to revised were to to when added I'm and timeframes, has started, its to Investor that and all for we budget Day, and the year well. given pandemic. When then the opportunity, million. As in the had year Trump words be Quickly at stayed spending to presentations Act Furthermore, supply and XXst roughly could down. opportunistic we the existence. QX will will of that position we XXXX network, XXXX, To-date, nine $XXX we end the XXX% and budget better Boeing XX we've Resort That's the in delivery Reform survival its completed mentioned the the of the highs or the of signed purchase incredible as or ever the move discount XXXX, budget recently into opportunistic chain DNA. of comfort, year a going originally truly we costs most created XX%. This on and than a a of XX% most changed $XXX recently I an of calls as May the all-time to advantage purchase confident advantage estimate further we million opening and when company's XXXX. prices AXXX restarting to was XX-plane earnings take incurred highs, carriers Sunseeker of due reflected ever but budget budget call. as timing Reform on -- financially, but I restarted advantage created call the of and assuming be be due anticipated for the while the By estimate August capital end by growth to financial previous of we trading the to stopped only budget took of project the when unexpected the we project impact were have we done close was level but we end while increase call, whether mentioned the have Sunseeker on raised track flexibility $XXX the order on has bought have stock In of during be

to restart segment expenditures million. will expenses will in DeAngelo. be to we Sunseeker reporting over guide. reminder, XXXX. and range are Scott pre-open year be between of turn As $X and million Capital a beginning data The Resort XXXX I $XX following And million Sunseeker it should million QX $XX points will end a with $X that

first brand versus more Allegiant visitors QX, visitors and repeat time drive converted at bookings any Throughout who XX% customers into Simply in attracted transactions drove among to to greater history. to customers X% put, allegiant.com web in John. continued Thanks, fourth both we attracting shine, more our and the them more XXXX. than a rate quarter more

widening XXXX, narrowing the first half and year XXXX each XXXX second during we the of the sequentially half. we in quarter during the lead versus As the improved, versus did gap

signups. driver was the both XXXX strongest and for MasterCard XX% third-party of beat XX%. and three of quarter ever for by included which our top total this signups beat card Allegiant. in revenue, months quarter passenger by quarters, key card QX, average XX% card program ranked new X% signups, last spend and Allways terms in Each month For year the ever nearly a new the World The were a Allegiant fourth which on card, nearly new XX to In among overall revenue, the year and total, for versus up by months having XXXX compensation the seven XXXX.

to XX% year, full for XXXX. quarter the respectively compensation brand by Allegiant While versus was and and the up XX%

is as non-stop direct-to-consumer thriving stimulate prospects at but the did music currently one-third of with we XXXX. their us card model, products attend during $XXX focus Allegiant, preference I'm million turn And despite while first the loyalty increasingly beyond. of levels the Allways to and travelers [indiscernible]. Live our to that ever we partnerships program to the experience, third-party Allegiant saw engagement revenue leisure all and enabling and uncertainty of XXXX periods Rewards new with it In launch that, customer continued summary, past strategic allegiant.com headwind. of and XXXX unprecedented of non-credit growth our and major revenue Nation the of flight for launch flew in back the distribution brand to deeper to over won not passengers customer web Wells. based our Stadium, ultimately the customer asset-light I'll proactively all and Drew demand of of offer high-margin our fly nearly in main this and in of that for returned year dollars driving live year events sporting broad Allegiant on of XX% pandemic-driven XXXX, X.X and pandemic across with report the and us and demand for travel these during up setting and customers aircraft network, share drove happy leisure selling who we part million beyond win the is For activation Allegiant

-- afternoon. on fourth the you, Those fourth routes revenue periods, XX pre-pandemic Peak marks expanding I'm the we more tune a thanks routes lot normalcy Once to quite head and first Scott came Total how normalcy XX demand pleased results. the the X.X% new system network once and load ways, norms. factors months us its ASM was more. feeling of were revenue and quarter reared with again, their of the XX%. everyone about than of of the XXXX in in namely are growth part thinking per of flight this for Thank holidays, of world. That higher mirrored revenue the December in In largely of interrupted quarter joining saw COVID ASMs was airports. XX% five that operation. and and new

and of and cut a to of We have proactively schedule. XX% protect schedule roughly December November the portion anticipated our smaller right-size

feel felt. holiday finished first the story will bookings was However, impact demand. February overall heavily way, closer impact of manifested a off-peak Off-peak peak considerably load outlook factors despite slowed, The in is off-peak operation industry's January shy while exaggerated versus the materially new as of the bookings and end quarter border for in lag period and of January did the the never an of XX%. slower just

expect to par on continue I However, levels. peak with Peak to is incredibly demand be the pre-pandemic strong.

and think book also still curve booking gives more summer, XX% over which while could promise. I insight early, March relatively great showing a a is into bit normal

to is retirement resulting through the mired not off-peak growth first muted NBAD rate first nearly fleet just an percentage is back XX% and service compare the since markets growth frequency. XXXX our are X%. primarily with just January and note modestly a higher the that in running week still compound in of growth As we February rate continue increased results the still XXXX, This to market-driven is season. elevated to growth. Even growth comp This scheduled XQ's means in and are It peak and March. we important twice quarter,

in peaks, quarter markets schedule. the over ops just protect fourth capacity ASMs right-size the of been Similar incredible reduced scheduled around despite XX% first first Another will to and continue their holiday to XX to alongside as operation. quarter has of and the inaugurate service work March first demand, teams our year service in XX% they the and be quarter

quarter distribution We end versus the are currently a market XXXX. of to with fluidity to slightly of mix plus pass quarter of at turn environment drives to be up nature in how backloaded forecasting and forming The demand a X% revenue take puts With of weather gate. first new our pressure the ASM more on peak that, will the in quarter quarter range. the total and Midwest top some shape The continued along in it is guide of out likely are The plus over the to like between the bit X.X% ASM on to for a off-peak we and XX% guiding versus wider the put and right uncertainty XXXX. higher XX% feeling I'd first Greg. patterns

continually been you this thank was XXXX team everyone. in and another and it Drew, the good Allegiant rise to environment. and see unpredictable year amazing humble challenging afternoon to has occasion

During than team XXXX, aircraft more we we did inducted XXX fleet, in XXXX. we our we added more X% XX ASMs members, into than flew

We net the consecutive two fourth and of year three X.X% periods results the extraordinary million. in on based special These and passenger a profitable approved same for quarters of in our Board the all leading payout to with accounts Additionally, revenue GAAP including full and past income of variable margin is compensation quarters adjusted exceeded XXXX. are in had our of operating and adjusted recognition great pleasure our to mention industry it XXXX efforts, $XX results. these great a members team with

to thanks all sincerest Our of you.

strong. of over in of revenue For of Even X% are weather, XXXX revenue income. quarter, on up increased net our Omicron two and XQ our adjusted positive was per reported share and earnings consecutive the disruptive fourth we adjusted year quarter year capacity XX%. of Demand third face $X.XX, the

excluding front, operating X% do. On two cost growth two to On year $X.XXXX adjusted we're was some year. outpace still the Adjusted fuel we a over up up have or unitized work CASM-X XX% our year. basis, year and over costs

fourth the CASM-X over quarter, have year IROP of during $.XXXX years. Excluding would or flat been our the specific compensation customer our costs to effects adjusted two

of provide is for amount. last compensation we described passengers. in As is inconvenience ticket component of program largest IROP our the quarter, This cost the excess compensation the

fourth not same IROPs to to rate impacted program book impacted compensation our in summer not by those program were to customers an near drove aware customer have $XX importantly, generous This impacted. the any of the industry our incremental the as at who are customers returned We in and payments million quarter. during

towards rip Turning and operations. to Omicron into further continue irregular XXXX, drove January

Maury this As be largely extract noted we us. to volatility behind

to XXXX. our roughly quarter up first we We on estimate our first XXXX CASM-X midpoint headwind guide, expect $X.XX to customer provide when capacity cost $X.XXXX, to CASM. Based compared a compensation XQ at quarter X% quarter of IROP first our

in to our as to the favorably FTE closer in by wages are and or the primarily compares relates headwinds XXXX we XX our with decrease In which expect of to over area XX, per average XXXX and with inflationary pressures and labor cost These be aircraft IROPs, to management headwinds addition to productivity combatted by our growth. part stations around XX. year three driven are scaling gained efficiencies corporate largely unitized elevated fuel. This primary

fuel In to seat quarter compared up X% three. hovering departure labor first expected constraints, fuel however, the challenges to inflationary currently year are we in continue around in average coupled and is gallon Omicron Brent $XX per of prices by to pressures, XXXX. seats our are the current are to seeing ASMs addition, Elevated by and some hand. barrel. X% with per rise period five same the over per increase at also

are for year measured compared in Given we XXXX. plan double-digits XXXX. full we departure uncertainties, growth pleased a our Today, with comfortable to baseline growth the low these expect XXXX

However departure. growth average should given naturally stage year-over-year increasing outpace for points by seats the five departure ASM growth percentage -- length roughly

throughout We as more expect normalized. earnings environment XXXX potential improve becomes the our to

allow more flexibility balance further on is This returns to times capacity environment higher do to appropriate strong if to Our the layer the us at by flexibility the justify. profitability sheet. drive model not unique while supported not should or fly our maintaining

pandemic with family-powered our MAX than our in half. the by the leveraging our drive aircraft should aircraft well, carriers with efficiencies most most operating as new even well not our past of on sheet did of with support the burden coupled CFM. have few enhanced balance cash debt did. XX as the expensive of the network our We have our up XXX returns flying. of strength more productive Over debt cutting The doubled net we order And years, nearly during the balance lines other Boeing higher the for MAX broad while

We in incorporate are fleet. to our these aircraft excited

due during so, for delivery first delivery the nominal June expect do our towards cost in of we first staffing. early XXXX to order a expected and this In pre XXXX. we unit deposit made As we and is headwind January, training

aircraft full deposits cash includes of XXXX this for year $XXX year. pre-delivery Our million CapEx

pre-pandemic coupled XX% years is our or CapEx. partnership For have XXXX, million given to $XX CEO in for deeper ability heavy heavy our resulting the we with come. we to full order And with our year CFM -- increased MAX roughly expect maintenance for This manage than less XXXX. our maintenance engines more program efficiently existing expectations our CO supporting engine,

Our at XX ending taken the XXX.XX. has configured which XX a an XXX XXX nine. fleet have year-over-year, incremental plan are of with we already aircraft XXXX of delivery aircraft, Of

As XX finance lease. operating through of were a reminder, acquired aircraft these or

with seats of of XXXX gallon We departure per seats average XX. expect and exit to average per ASMs XXX

a order and tools, many major infrastructure we growth long-term were time limited Sunseeker to years incorporate complete stand execution seen As better versus include Boeing; chaos, Viva over increase to our front. a With project, fuel in make systems, support levels. In efficiency fuel ASMs for more in together results to and another these savings plans. moves we to and Throughout worth continue experienced on XXX percentage year. not our secured to financing years, there Allegiant value strategic points unique of I gallon this Aerobus, stakeholders. to moves that, noted themselves. staying ahead focus per over estimate to investments with was by aircraft as in earlier, three long-term increase next XX% aircraft exit with MAX compared we getting lot set, partnership million With XXXX many the the for are turn and These our and questions. the chaotic than I enhance point roughly increased $X several will XXXX but to felt when closing, should has believe And items we Team our it rate. over ASMs our XXXX on the per in gallon is

question comes first Our line of Michael Linenberg Deutsche from the Instructions] from [Operator Certainly. Bank.

Your please. question

I and you. you what going you cycles And the as although of feel fares. for back Hey, in this At it's before I quarter, good revenue prices getting number type And Hey, versus philosophical you context your come growth been on that not have higher to like that curious But of about as prices input model suggest. Thank not on the -- chime need to as you everyone. order the -- afternoon, costs? March do on these up, and input stimulation to you headline to type offset up. it's capacity to like XXXX, provided look when I'm energy even closer? up, ask in the generate Greg may maybe it's much point talked render of low run these question costs it's or and can the at of or we're just you gone Drew, generate about. fuel Do thanks more one of move maybe feel it's that? off costs growth you close and you guess thoughts want a lots yet obviously having the your would your more through in -- going question what

you please Sure, there. Maury, And I'll kick anything in fill have off. it if

week there terms really I right, market fuel a in based so keep season not? do of for challenging decision high little think you're running It's is. markets, having on making do a where twice or your we a the a we're on you're we view when this

Okay.

opted part in. first quarter, keep to of we've For those of first a lot markets the

the next especially we'll the run. continue to that of, not the there's Memorial timeframe, As we off-peak, if look case, towards may Day to be post-Easter see kind

right-sized and where that we be that possibly is undergoing trending. for oil ensure we're could So, to right are now

schedule, our there today. higher oil like the summer, tighter into the given is hurdle than some sits For well get now and peaks the rate where March right already scheduling to just

least, cut feel the out I peaks. the to don't So, in compelled,

timeframe kind that's stay May a affect tuned April maybe is can I one, the think, of late it's next materially. early for we the So, a

you. Thank Okay.

non-competitive, comment, markets you've other at ability And when also can't classically, an pricing somebody just you Michael own of because don't but raise got because that going point. you you to some pricing, power are is, your it. costs you have set and more there's routes The against that do your things got give XX% you have new fares you to doubt to of, kind no you go and want cut because up, to capacity, about in are

So, you have to that. be mindful of

is generally on incremental stimulated markets. every where to and We've headwind there dollar traffic it fares put out does given some most the

So, demand. fairly we in in typical other deploy way and be picky to we supply have how that than any

helpful. then one one. Very just And quick

-- know the I pilots, the the on prepared commentary, seeing just in -- mechanics, I'm talking the commentary what wasn't curious on about the really you're but Just just I'm and you pilots seeing, didn't it in seems that cetera. just carriers. there getting the just lot, When what it's press et it's say it I Thank lot harder you. out like of to a you're perspective, we're from hearing hiring recruit

mechanics Section and efforts the expedite contract ratified so art quarter. We're our this in ratified there. bargaining our CBA, of, of Michael, definitely of existing in first we, Sheldon. hey, Yes, renewal reupped X, CBA under it's with the It's their We're or sort currently fourth the competitive. of pilots. very the sort trying is our We to

more little gives in marketplace. to be competitive it some in So, us more the to pull a order levers

some go the seeing pilot up side. are on attrition We

XX%, X% X%, runs state, from into at that that's to sort up you majority steady to carriers. you our will, look attrition if anywhere legacy of go crept majority on side, below both If

order in so lot least, of the we in that's to XXXX obviously something of And focus, obviously, part into need the and growth. clearly backend world. in in to a my core And get of see coming need, support planes we XXXX the there's place and the at

Okay.

I may about side. the you pilot, on attendants trying add, last get mechanic, flight quarter, recall, we quarter going to to the talked just and out and ahead, prior,

members think have went -- model we and as unique work. levels, and lot I and staffing to place strong prior great try we, level we those so Allegiant a applicants a we of those line compared more come And back. out increased pilot's team a is perspective, to we've quickly. increase and And and get a employees and see out model in From

So, it's crew just their in different. members -- are beds Folks are at night.

right some to advantages there left. is the ability from there with also move So, to

first to I is it younger that we when last for to able think can't from of -- ULCC? just a the I pilots throw, advance time, legacy? in never the Can similar saying to Is I've relatively at long a legacy at to time -- maybe is carrier, -- that ability advance almost are you're pace because saw from, that say the at a company time of -- a we jumping maybe a decent number your a

and XXXX to capacity. XXXX, look to at early took XXXX struggling are get outs these even Yes, I if folks folks think that's accurate. during you that mean, I back

opportunities. at if between there, And these ULCC yield it's look of the rates steady legacies just So, obviously, that -- compression at there's guys been at space, mean, compressed. on narrowbody state, the you the But spaces. which sort pace more definitely and of add never grow don't to I

literally, So, quality about about it's it's proposition. getting more than the more of left. a life the rate each advancement, different has it and less spread one is Obviously, right to -- seat proposition,

think above week. we're could like. on front an We mean, I area to our punch limit, the you applicants probably speak. And XX we a this do end, add getting that's as so can we So, weight

Okay.

successful. are Certain very classes, we

So, is We size class XX. this all for us started applicants typical show XX class a to up. week, XX we had

think rate if but proposition term with you longer better value the most. will, mixed a obviously of the focus, somewhat it's it's but have So, specifically we bag, a core than compression, we

everyone. Great. Thanks. Thanks

Thanks Michael.

you. Thank

of Our Shanker Morgan next comes Ravi Stanley. from the question from line

Your question please.

that And still are the everyone. competitive. compete attention? is a getting think of kind good not not of at it just you hard that's you for you think Thanks. over have they do mousetrap? Are Do Good Why routes case? just too in those really, your call Maury start time? routes? -- afternoon others trends XX% enough that the just do you of said Are the to how they really

a to, airplanes do we two let We as days flying markets have can more a people. We ULCC, if where I'll you to we I talking can lot week, were of times but to those if need have more about factor a you need the day, the -- They week. and when don't XX majority, hours configurations lot -- do have Drew support you're of run the flexibility. just most Drew? a mousetrap a don't. can not a and/or we seven it's enough

I far the think which week when and built down, your It's the to when demand easier all to have very doesn't well. than Maury model you try to service major at opposite business a of daily business model around dictates operate scale twice the points. scale work ability design your up hit and that

So, it's routes no and parcel else, of to attention. this just one core wherever than is daily less are paying who in we part particularly and model business to cater

going times, good to no numbers react this component is important that really something making capacity peak is is to we can and add us other of everybody's The in one really because money. else in

it's might have kind you capacity, lower markets add you providing underneath, cost, to into not here avenue so cases in big in at a at. it who in looked can for before even and come You markets, many grow another us of we add

airports, this, kind how just of, but the kind I impact you Understood. headlines any given of all around trending answer could kind of in disruption have? know that potential around you. of equipment, older And anything you the the smaller do some weeks, XG recent Thank I to and see think

we're part, of the of somewhat it's I for can most mean, Obviously, it. general, least it's best a it. way impacted we're one monitoring But it's I The the for us. been in probably non-event airlines. describe Yes,

Thanks. Great.

Thank you.

next Our Sachs. the from comes of Catherine Goldman question O’Brien line from

Your question please.

good everyone, for much the Thanks Hey, afternoon. so time.

little a I I year, XQ double-digit comps plans low the on know haven't for finalized the call, on one you I I just know know unless number bit year course. missed thrown this of were So, a messy, But out we growth about versus XXXX talking are for last capacity this and it.

I'm year. XXXX for you guessing increase the ahead just you points So, running to Or running comments talked, on maybe seeing me high is to time a that I based a the since add it we watermark guess sounded we double-digit correct incremental is last But thinking if like bit last higher opportunities But than ASMs this are to sound probably several wrong. like capacity? departure gross me Thanks. of your were XXXX talked? time

and maybe Yes, off open wants to floor if kick I'll anyone up else the Kate, it in.

in to ability that it's terms we're think capacity. some of a I add more little bit fair seeing

COVID we with and If place, barring remember, that fruition. groups were in they the of unforeseen good the really believe that Thanksgiving how we And I can time schedule. sure still kind alongside had ops right-size you kind and were truly polls make last that came a working to we Christmas to of

a whole, in that kind bit place working the terms will of ads. throughout gotten other, the alongside things bit as off-peak we've So, departures think lot months, of see a stressful We some confidence more through less an a has us I of, little add to in be given as think come a year. you'll incremental the enterprise to one kind

detail throughout more as than granularity probably and the So, go bit a year. headline there's we little simply numbers there

And maybe the Katie, I growth. on just double-digit would low add

probably is but little departure per that was expecting. larger seat growth more that last average As should bit we will that average ASM departures, talked better time, we percentage about have around naturally gauge by will what to explained plus -- ASM a points we're -- about outpace due naturally longer that five higher

it. Okay, got

a then I XXXX In the you you're less full just And year growth you think And about expecting roll can capacity to last then, be also I call, CASM help case? to mentioned, related Greg. what that guess flat off about that talking much. expenses double-digits, so that guess, on you, be guessing it's through low that sentence you'll the year is CASM-X for about the how Thanks I'm question still be able same on maybe will to flat. what is about us works? get the so going just just

than But we're sit where think XXXX we We better, working I January, maybe take on I we $X.XXX. see. travel no, the think but that, for out, tailwind that's that. as come on under in with ecosystem flat let's or just be about when a talking on customer is -- that you Yes, environment -- based question, higher we're Katie And be If we'll we're year. bit able and us -- today, based team mentioned us or the assets capacity. seems members little to start started be some that's a gets IROB more -- to point Maury I CASM, And thanks or to ripped the grow underneath think, pressure so, productive side. for be which kind in that puts we'll will the in as through up that opportunities, A of, going Omicron our lot some on through on of our we and compensation program that And side, candid. operating to the ideally, Katie.

can So, help. too that that

one that of seeing think handling. pressures on been side, the the station inflationary around ground the I things on has we're

I a program. but about they're quite side. number, we'll think bit. It's catering some it's mean, talked offset about our not there, for example, margins XX% but on that big the onboard still buy that still I Catering, the the see same. through we pressure a we've

-- that come the versus the mentioned they should assuming think XXXX business costs start we're station side have bit. improve not on and I as year-over-year, and potential that they a side, We're as so or yet. you pressures just any flying bigger that you have with we're some on help And XXXX. more carriers X% buying little those larger assumptions start down, the our of on around airport to inflationary I making airports, international but assuming

And bit. first Katie, maybe the have comment added one I in -- should first the

a year, like versus this I throughout think confusion and not versus -- think are comments much to mostly Maury but, XXXX, XXXX driven XXXX bunch going is point this of a of on be I we're guiding today.

think in the what a -- comparison a holds departures about if and said XXXX. bit with So, true lot XXXX, I versus adding XXXX lower into that versus little of the double-digits think you was

quarter. only you was a comparison what reference out clearer but the in lot last point, Maury to found that's So, be a I probably referring believe to

Maybe it. to Greg, one up, have CASM. quick just make on really got sure the Okay, I this follow just

maybe So, to pressures formal, year, you single-digit think guiding probably this IROP it's XXXX, year, but you're these anything I is with like where that some in versus we inflation of start low end up probably right? know to

don't I right. formally to out you're come guide guys that. think and I want Yes,

where think I we'll the yes, slightly environment right. be maybe potentially, the depending works in were above at, but that's we capacity on how light,

for much so time. the you Thank all Okay.

you. Thank

comes question from Brandon of from next Our Barclays. Oglenski line the

Your question please.

thank periods assuming I that how there's drag and some feeling X%to and good don't of guys you capacity question. here revenue March close up everyone a and for mind? booking if you for February you this on you big can because us little that growth context you can Hey, my guess, to, obviously, evening spring is in a break bit us the here XX%, alluded January give I'm like the give to but X%. taking quarter

revenue peak particularly Yes, think pre-pandemic break is March revenue be be loads, of the carried terms flight. the going will I by of of in stats -- reflective spring amount to

that get kind So, or the I recovery to that XXXX, traveling the of think we're think -- demand where where it's, the relative need full growth. there, is XXXX, it's about as to we you benefit traveling other weeks

recovered guess, your up lot is you I demand, capacity as point a is not just getting because PRASM your obviously, too, well? that are So,

in the healthy of Yes, like much they break use. metric look spring They're and to did in peak any terms XXXX. to unitized or like like you'd in will very demand XXXX you'd

of I Omicron, operation have of And that like, a availability disrupted give that costs assumed future, to had you how is in it the much but us can crew that. appreciate because Okay, then sense versus lot was of going weather? this just driven by a been irregular be of might of right? get this here, We Greg, normal this some on ongoing the

good a Brandon. it's question, Yes,

I as this been I've trying about and call specific off where Let numbers, I'd of -- maybe I'm XXXX, like like it environment, the operating fourth me I've the add there. is I million component Scott us. given full because just about In it year. IROPs, wants as But kick on did, or in That's the in $X is I've about was to that talk what talking like million when more think the been a what unique that's to compensation, but believe from $XX well. been had we million as somewhat and were we I it on talking really what IROPs to mean -- the customer $X for talking and that's been which IROPs Brandon, say when the we negligible. quarter, on total be I've the

and the out ahead So, we've talked staffing, about we've to the of talked that. situation. things that IROP getting try and been of We combat nature parts about

bit, -- And but don't a do Omicron but ahead of so so weather, we Scott, but I on guide a nicely. for XXXX, have have do came that know of that. Omicron buffer, or quickly have a to quickly, we the percentage, if we little -- it thick in quite drove Omicron a think hit and And us -- get abated I and it it's we're it's terms not. between I in don't think of mix lot going I

Yes, include how to sort XXX those I mechanicals. XX of and peak happened call mean, this because cancellations sort results really in were flying. the just show the in context, We that put crew quarter. of December for last don't days then it set basically we up would XXX and controllable the good had for of

back look so very loaded, obviously was it for the December, it half the heavily at so December. of And the distribution quarter, weighted if to you addition departures was of backend in to

but COVID really days. through up XX, to is that XX majority So, about we going set of from sort nicely, you in polls, the XX impacted, -- weather was obviously of just up XXX, go

XX-day amount -- sick no a is other them pull XX different And so I saw than to This events. five different you a this day any that's than for just COVID, Delta we the think sort of calls, of obviously, is which dramatically definitely variant, carriers. increased

did it were just up calls such of, prior really the to what sick I handle a -- capacity crew the story system, was of matching XX% days. fairly the last Other really it crews It but a really, really was a five-day in of there, mean, team sort shock nicely. period. to but the Our sort could set our Omicron, a were over XX job spike was the -- of clean we to was and quarter. north Drew quarter that, nice yeah, than just this

you. Thank

you. Thank

question from Seaport the Dan comes line Our from McKenzie of next Global.

question, please. Your

supply think chain then we issues just expectation COVID fleet here. guess, resolved? the a some revenue X.X%, and And to capacity. I A secondly, the and strip can no around increase the talked on crew Hey, chain for impacts? X% if in couple first I questions utilization away look challenges. you so, that suboptimal guys. Stripping we about quarter, growth supply in might -- like updated XX% fourth if what away forecasts step an thanks, related if Is quarters, when can would about bottlenecks? the the had timing there MRO last be

fix tell Having we parts of themselves. Dan throw baffled I activity here. here in just We've airplanes challenges, stuff, BJ, labor you. the wish to they a nature of of combination And be the undergoing I and But I that, mean, XX you've -- sit today, was I our have MRO I XX, working ongoing is, pretty some this. just talking combination in pretty and said actually it's by you its are the these with -- usually well. continue got could got like. as markets and comments efficient

be grocery particular moving is of so message much personnel show hanging the still there. on but but shortages, in of quickly, seems light shelves, to around for difficult. you're pilots rays broad to the So, looking through, in isn't Stuff positive MRO very

don't on and maintenance if lots was we side, just year, the already and know on of of that induction property heavy earlier. kits really, a are representative environment, think and that's really used the it for I this because everything there I got Scott. parts on ahead of Yes, this everything's aircraft year, such well, of hand supply really

we getting do paper days to match to that obviously is chain, the we be work, drive substantial routine is on non-routine. slowly which But component but the better schedule. invasive find Yes, they we A days, supply then to, labor non-routines it's can drive lot it increased a cuts, anticipated and tied findings, more the and any We of deal with best amount these heavy definitely volatile. surgical both back point. of spend so definitely and to engineering can repairs, can pretty and I obviously, where that's gets think, that's everyone's spend

in be is it more price schedule to of old and it's just five, availability. newer year, we're The pay heavy problematic on or going Fleet four maintenance. six more for a and while fleet, way to years a going this work, it's great to

the sideline keep normally this of differently going on at point would we're So, doing than airplanes lot we we more normally than a things would. probably to still. We're

Dan, Greg. And, it's

through mentioned be me us, well, in starts get the powerful, level just as think going if and we add watch And going it of not environment in and that to then through get going to opening firing long-term mean, than get cylinders his pretty one I we're on it's out, it, we're stabilize going all here to there's more be better give comments, normal, to ahead to to thinkers is Let be Maury yes, we're high and the noise if anybody. we short-term, comment,

try could and have our guess, we is that. you'd we perfectly and come best The -- be we've it that hit capacity on than spot grow because time canceling on able leave not best make Don't -- done into or speak not maybe approach been do and it. that. up so a to table to way it the little haven't just rather and you to up, grow flights, you more to come been this, But if underneath Dan

next question. guess, I really So, to gets my that's

this the think noise, growth this As without would noise. we have been about year what

trimming, of double-digits that, points could that to growth -- points five in say up off is departures potentially XXXX, you're of noise, instead low So, of with come trimming percentage percentage XXXX? this back ASMs the about up five

biggest bit and you challenging know, more year hiring chain to more will a that's this year elements. other for next of think limiter into think I and growth so I than be the say, supply pipeline crew us

So, more. mean we I that with crews, it's more grow straightforward.

far run So, I think you that can you want. as as

the all whole at has want as and but I'm stuff is changing back about how mode, of and I many to we I I think Dan. with a a it. in to don't we can, for matter, Omicron tough, growing to to don't a going got opening something, down talking to and And -- historically, when growth so you, end many say that just haven't anyone's lifestyles, XXXX, of the regularity really don't to down. got know much we everybody and here leave to that. there's closing we've we've get parts, because do I are. to there I think it. the up But that bit sudden look it's industry you as -- as And to how ability the just do make of and been ran, but you done sit been we at well back closing a of day, try we excuses that to sense you and moving you're able that coordinate we're get want we're do we'll it's you pretty question and the want the for with as interesting And complete

not, second be even in second of we'll quarter, March the I'm even in -- should this certainly in shape, the good. the So, half bullish good year, if in be

I and to juxtapose are a I'm help I I'm positive out, a just on the connect to then just here, you to how wondering on us message target, us in cost just And today, fleet prudent tie dots a guide, help what delivering if think the cost I'm that to growth years get if for just to scale, squeeze if three can get presentation, the growth about longer And route the so it, airline shooting. to that very a not wanting going means term. and you we term? growth back one in trying structure sense guys for say longer over the growth, CASM-X under last one Yes, into need but with

Yes, I going the think saying what bring with think that in by margins. thanks, on Dan, mean, future, focused is start the be for we off on what we're to Boeing And we'll focused question. I we're aircraft that's I the on.

like So, us. nobody, there's demand revenue to our two the and sides match equation, and can cost and capacity adapt with in view, quite

that flexibility I is that than announcement we'll all feel I we to mentioned the maintaining we order structure we'll new going for to with The commitment years of give and said, right So, structure us, pressures a that make to isn't come. right that the but a to structure, forward. that. going great don't we're continue Boeing the think that fleet, it's items With we're great continue But cost It's rise, I -- an cost we give guide have look seeing pilots is guide, that it's on don't And hold I that now it's other as of we sure that think cost place the important. focus say want everyday we'll one XXXX we in mean, to Scott about. in for where bit. and come. today, want and there's moving by being XXXX, want I spot in equal, out going to all with a materially don't other to that change out are that go but think a discussions our to else would to and there's to

great. Thanks the for guys. time That's you

you. Thank

line comes of Becker from the question next Cowen. from Our Helane

Your question please.

very you everybody. much. thank Hello, Hi,

XXXX doing think or versus you So, for here's point talked XXXX? years times of was my of did question. lot prior One couple that markets percent that. clarification, a a some What and say week, that new we are a I a as you you're thing about said markets

of percentages; ramping up and was so a XXXX mentioned ASM about XQ to XX%. I XQ XX%, So, couple XXXX

XXXX, So, early historically, of levels. late that's around kind XXXX

Right, exactly so.

levels with. getting are feel It's before, you A, not you've students, and those right? that over So, comfortable far done too B, your

exceeded these levels We've certainly before.

quite we're So, comfortable.

early and little XXXX XQ high will think but bit a the guess. over probably I again had watermark I XQ, that to likely that if possibly for year ramp will be this

this, with principal And then see respect Great, that's I'm aircraft or deliveries this you could Thank perfectly that what XXXX, And you. for -- I my guide you sense now? there is would other debt helpful. that to sorry, of percentage is financed is question the or said and I not? the prepay it make year think are repayments. debt

aircrafts something The there's look loan rounding here, terms some side. $XXX $X.X delivered one and million getting is market the conditions so It's think the that I at debt sit year, well, we'll it's billion, we pre-payable, other only today, of Helane. I'm this pre-payable closely, And we on the ahead. have all where given aircraft the term out that not of will lease, be in I a under will be finance called our think around debt

us. And there's so sheet And there's I we're having our discussions long-term. momentum about think some now thinking and behind balance

don't big of to long-term kind -- out? out a of is there's that's capital near-term today that pre-payable debt lot the and put a it's potentially there for so I see at we specific that in look of to be or to or we'll use other and our think have in question a great chunk refinancing the there's near-term, than you a -- answer something taking

last squish Did Okay, more helpful. warrants year? that's government you the could if And to one in. issue really I just

take we from or There then warrants No, the small, $XXX what attached. took And there, because million I one of each one grant a very small was received will, government grant. very if each loan, that’s below didn't the anything was we cycles loan we mean, have associated of a the didn't loan no -- or issuances. or the amount, the loan, it but most a for with you of

could buy theoretically, holds, if Right, any right? that the government because are there this, you

the Yes, for us, it's I but I can't it's but focused just Helane, just really on, we're mean, -- I negligible mean, remember small. something it percentage, is not

everybody, helpful. that's thanks Okay, the really time, you, extra for Thank and

Helane. Thanks

Thank you.

Our next from line comes Keay Research. the Hunter Wolfe from question

Your please. question

so three Executive COVID only yet. and that you are -- us looking the that? is of saw -- updated your kind warn to Hi, you get everybody. call, on And feelings Seriously, you Drew, to you the you good curious months is it wasn't were by -- gone airline the what looking How look it that? things lap victory good on you done? caution gave count, like on ago at? did were And seeing case being that what some know any other any to now, I'm you What feel it of the go that that of is you what those running we're were everybody, here? a same you that are looking to metrics at you time Or give the may at same caution? do you COVID degree

in congregating. has high And humid, And season, why likely inside. much through see this the depends somewhat people people outside But my lane start and most heat out it's humidity, of way I some in it summer winter of feel areas kind high flu as come of recently, the to very congregate way, see as then and temperature in think inside you that's follow the but I go like where it air you the getting of conditioning. country are I people I'm data on here.

don't am kind that's that. of of epidemiologist, it's from terms anything. nothing more aspects in means But of something think beyond was But to seen we an trends picking as I up of so what There wasn't perspective. that to And geographically just says, and It where were I take than we'd it that demand. in serious of cases happened seasonality here. please be and pretend it, to really any no words made what's my by trying sense a

guess you now then? little better was, feel a I than Yes, the question do you did

calls, of less the clear, a but I completely this of and did not better became period, do. bookings, felt don't out at what wave. those think previous forward. slow feel He And had previous each I in we're Scott the the we're has peak the particularly it than I off-peak. in impact an down lot all. moving mentioned the DeAngelo about seeing I wave in

next headlines, as wish confidence of forward more could I I won't confidence So, that and I side don't sight don't do operation of the pulls. kind to anybody the the say again, have it moving same impactful. guess. good follow it's it But any what think doesn't that even it means of quite make any have that. kind I be of does. with COVID I for if I line on thing

peaks maybe Sheldon, really to the make of of schedule you make process amending process that I'm normal, of little would this troughs going folks of CBA bidding more really CBAs? the these is in, could new Maury, nimbleness change sort or and a the is closer these you bad there and does is curious, see or schedule is to changes there a to have then, your we that any one do bit amendments? any so on sort for you way -- anything to CBA And if more outside can the situation require to the amendments this there's be kind without bidding you be is where good Okay. changes permitted and any changes

we we pay and half these these people mode use them we that. But we're could amendable, on basically in mitigate our to do XXXX, this tied. sort are sort have just were crews, where to in able to when hands to keep was come staff guys This the thing try tied to of standby is And is We sort -- involuntary unfortunately, an Yes, and of how in start strength. basically agreement. furloughs to up order minute you time, of see so there. do

Thank Okay. you.

Thanks Hunter.

Thank you.

of next Our Duane line Evercore Pfennigwerth question comes from from the ISI.

please. question Your

Thanks.

estimate to looking, of revenue a we would very lot add maybe if say all first you costing sick people opposed if commentary is on the previous staffing bookings of fully there? this is backwards a many could in it you just do So, you in that in finer cancels lost the but up, March? expect of how a Again, much think like as you demand, questions, calling in constraints how of Omicron a were quarter? And to sort are the period revenue many back you we you would time normal put and to point points between for lost momentum

of don't due So, in terms you loss of revenue honestly, for have number to points I Omicron. a great

that's peak really the off-peak. is probably One I [indiscernible] I'd say mentioned, that is should that demand Like and hard true pre-pandemic with tell. looks above and March it the of think the levels, versus return things to estimating challenging zero be fully -- normal beyond demand is, I

Omicron. good looked very during booking in January the and as mine that’s very, active. as the a of Omicron present and curve vast year when what maybe should It's without guess Your have was booking should time majority of and come of the like very compressed shortest

So, think to I a way it's wild to meaningful a challenge try you. that number to in get for

I regionals sort markets to time. you're whitespace. wonder impact markets, as is smallest seeing for ability constraints, With some to enough. Okay, going the respect of a be fair serve period if of more to those Obviously, small at well of least and impacted,

better set, of bigger incremental of are markets, for there lack here a opportunities or growth So, word, that your orphan opportunity are you? is for sort getting

lot that of in at cities see are -- and the small a lot while I would there same Yes, being maybe serving those was a And three were in away years I we the only where opposite small added, fashion. performance, would mean, running questions from years, removed certainly far envision too and reverse. Remember, I we're with of caution with in the we this. degradation our didn't -- now are point cities couple a time

come don't, going something opportunity, the I results. We'll to have a don't I game-changing. here. massive fewer nothing with incremental is of Obviously, through but but would some in call better, not lifts I expect run away to Now, amount seats general, I'm

staffing as cost during you in the period Maury, for impact, low constraints thinking how industry, all, one as M&A look this the you sector? does the maybe if it last And of one time, your Okay. at across at around

Who knows.

the But just everybody's without I I trying at in point. this to of, there's their look of M&A run got But trying figure a never. kind how variables down of think lot tomorrow to, that's heads big out outside say picture to just operations. think day-to-day never

Okay. Thank you very much.

session Thank like program you. the Gallagher This does program. conclude of the back further to Maury remarks. I'd for to today's any question-and-answer hand

very And we'll We with all appreciate calls. you your quarter. you again talk next Thank much.

participation conference. you, ladies This Thank does for program. the in and conclude today's gentlemen, your

disconnect. may day. Good You now