Allegiant Travel (ALGT) 31 Jul 242024 Q2 Earnings call transcript

Thank you for standing by. My name is Amy, and I will be your conference operator for today. At this time, I would like to welcome you to the Alliant Travel Company Second Quarter 2024 Earnings Call. At this time, all lines have been placed on mute to prevent any background noise. [Operator Instructions] And it is now my pleasure to turn the call over to Sherry Wilson, Managing Director of Investor Relations. ahead. go Please

Good Travel Amy. and to welcome Thank Second afternoon, Quarter Allegiant Company's XXXX the you, everyone, Earnings Call.

of with and and SVP Financial President President SVP and On questions. company's and Chief Marketing DeAngelo, Chief call me Revenue a answer Wells, Maury and Sunseeker others are of the our Drew Gallagher, our Executive to EVP Chairman Richins, incoming Officer; CEO; Officer; and Anderson, Chief handful Micah Officer; Greg help Resort CEO; Scott today the Robert Neal,

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

speakers our and positioned We're joining of to aircraft, Boeing news announced we you new you good partnering recent work old. everyone. they've and West the people, numerous is way located. been our property, A and on development Prospect and sold Coast increasing on to XXXX, afternoon, and particularly will different on including our We our major management its review its Sherry, our of the quality a call of operated X utilization, Florida, you, Hotel are efforts, services impressed. well top. addition with today. working go Sunseeker hear platform release the mentioned for Thank that for And personal where on of Thank Prospect. They from They've products back of reservations our a the complimented in team. its Allegiant properties, our Navitaire Good I'm out note today. on After the continuing note both is and Advisors. bought recently and happy construction,

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this is increased have periods, increase to revenue airline, are with asset the Moreover, be and peak fleet our Turning on the we existing available flying ability which flying in us the to year the coming to personnel. accretive. our will concentrated #X very

this CASM-X. our cost, down Additionally, also line our will increased drive unit

to team. served will I people in these not the I XX-some you, analysts, would They remiss As past applauding in this be by investors represent years. this with have than well industry the be world-class this team as sidelines, had work to any coming the The leaders not I move in management better, if years. excellent privilege in good, are the the

industry-leading our our top This of understands the aspect XX%-plus what reputational and world-class not the carriers. critical and ranking categories. best media in do the to our excellence is we the every profitability. reputation quality and NPS to particularly Just of been is among as team important in if best to seen top can in its also, scores fortunate though, in this Their world. from one everyone we've industry. be to social completion industry's workforces, And factor at near brand X matter, Allegiant members point, the these rank the continually have

business has unique model Our to years us over well continues the and served so. do

environment we substantial poor incumbent recent a does number of and the However, of portend low-fare brand reputation this of all certainly has of be suggest a for industry's This of changes low carriers. well industry has fare near revenues, plan. hard fare viable losses driven will players of a that to The situation turn low the cost players these massive to undoing The not increases, almost increase business of will changes number a that combination certain condemned term. the around. schedule make search part to loss weakening in magnitude

By worry the best front, working is On has broken. I government efforts that to XXXX for any U.S. about of Act Airline this been traveling the measure, that regulatory Deregulation not the the fix something the outcome federal is public.

been DOT since the industry. the has of drumbeat to current began have X However, business the The travel. to in a XXXXs, government constant administration early merge. mergers current regulations, new out that they believe made been known any But cost the must it bad not on X business industry. only pay you a mergers, not introduced the you they carrier's air path the go work, a or add Allegiant does do number only consumer additional there's The that by recently which for for want the or there's reregulate of will options, when

yesterday, I'm to As suit Fifth the rewrite, regulation block rewrite issued Circuit and the comply to with stay rule. This millions website fee products DOT's to cost the to and a present we these the of implementation fee filed victory. ancillary imagine, our carrier ancillary that in will every trade develop one you you would NACA This rule, a format. DOT as customers. AXA motion proposed proposed a can have our of dictating must Circuit the Fifth the report a to presentation required small with new the regulations, industry's would groups complete are websites cost how the have industry aware, of to happy

Looking noncompetitive with coming as of I'm said, Allegiant's grow with profitably and model years. to the routes bullish its on its XX% in unique ability I its forward, strengthen position

months ownership more low-fare think my politicians with a share the service which and be to years carriers. find position unwinding majors of Unfortunately, pay increasing. and in will difficult number I will should market says increasing low lip fares, much. of as coming the the be Accordingly, all to be

execute coming will plan that model in proven team years. most is the over the It a effort. and do the XX well you It years. Allegiant oversee leadership It to care I one members the very Thank Greg? However, works. has the the this resilience about much. has to its

everyone. world. by this transition you, congratulating in his X Maury I'd and airlines Executive and successful to afternoon, the of industry decades been better by the like on thank part for career has culminating good to Chairman unique and the pioneer of the back one most He true the in last role. start Maury, a building his

the alongside on have to and our We them and differentiated continuous carry honored legacy, Team strengthening right to Allegiant his management and of airline. work the all of team I'm

position for we I primary at spoke strong Last airline are X Our team is that initiatives XXXX. will on management length as delivering key about working the objective a industry-leading quarter, a the results.

increased First utilization. is peak the period

on the of Allegiant same as quarter, resumed the note, outage X% significant quickly our is Next second we look would members, headwinds the open managed great these a next-gen all no Thank forward but normal and overdue. to our that report airline optimizing require factor. staffing last is our XX.X% hour the the lastly aircraft impressive operating have our a choice guidance turn controllable delivered has to the initiatives to pilots management to provided the way been the effectively into among proud that that and of working day contract possible. a to And just controllable the X.X despite do. our that important is very outage. we team came as margin increased you. best new Make afternoon. Navitaire; to were in of I'm operation performance the as Executing system, our the our running the referenced, that that as saved an And focused also performance we model. completion that quarter. to team situation, from new industry. resulting the half with our all which supported airline July This is successful happy for stable pilots, the of utilization increase job team The work hours our we on we airline since I challenges, the unique per noted, working an revenue did outage for and around in software in conclusion well incredibly hundreds I'm end, bringing global is ensure to which was to we during Boeing we of I'm let year-over-year. the during pilot a appreciative these We an people With without possible not continued On and ahead The outstanding It IBT levels. are CBA report background, up bring are clock was back as together, behind of increasing and service. delivered peak me XX.X% utilization. and have time, achieving mistake, XX.X% day increased June last flights adjusted second utilization of faced of with completion the supports get that of vendor our long induced systems in remaining negotiations into will by pleased Team I'm contract the X% quarter. they a our

expect outage by the quarter. We X our the in software margin points will impact global

margin to from Recognizing a of their we travel. disrupted third we where the issue outages guidance negative of our of plan is the result, X.X%, temporary typically our on for reflects or current compensation following half period, lowest service reported customer nearly that impact additional related reasons. financial a financial And basis, quarter the assist it. performing loss expect challenges to a X.X% help airline-only the excluding an As our

XXXX's below still XX% third quarter aircraft. average First, our per peak of for hours utilization is X.X months summer about the

we levels we next that However, substantial a performance. to would were would be third closer utilization X this of as provide peak margin estimate benefit -- quarter XXXX to financial we of at expect to points summer, our summer

year a optimizing improved of how Navitaire our revenue despite ancillary Drew affecting vis-a-vis loss functionality absence our The ancillary and points. currently Navitaire ago are with our the revenue by revenue our The quarter team management year-over-year second increased of third in quarter Navitaire. important we system. from Next, the fact is still the highlights cutover that X margin the functionality

this steadily impact reflected While estimates, delivery resolving we we the our this addressing in progressing are issue. challenges related are lastly, to And the is delays. current Boeing toward

absorbing that were We productive million are $XX not associated hired currently aircraft. the and annual assets, pilots are MAX expenses with as on of such that trained

a significantly substantially currently mitigate this Our delays. continue improved for team getting as forward that on negative starting look of margin. extended focused fair a these we our this delivery later execute to to We impact, to said, on and and 'XX which delivering compensation at the will we realistic estimate stands into X is performance points All schedule year plan. efforts

to sustained sight peak utilization of line increases. have We

of weeks aircraft X are of December, per utilization For peak scheduled the per day. we hours for

the We in number planned have of aircraft expected 'XX. with These utilization expect periods accomplished peak as in and are the roughly in increases infrastructure we for be utilization same 'XX. similar to

optimized routes And commercial legacy identified the are by ancillary This through confident options passenger incremental We In will revenues continues the which homegrown addition, are should nonstop incremental Navitaire our is feel pricing provide the technology estimated beautifully. service. these and without Most more by our per fit underserved we've in Navitaire, currently XXXX. with team of versus communities front, $X be fee the that dynamic new system. that of driven yield working X,XXX optimization many network routes us that an largely maturity. on improved

quarter. MAX our this discussions delivery Boeing indicate order, with we take Regarding will our first

head burn, integrating into our start we remain we gauge into to Allegiant scale in new aircraft we gain increased able efficiencies improved Extra, fleet, confident operational will will the the in we fuel we integration of As be efficiencies that from 'XX. as this

near we in for delivery our should slower slower Regarding and Boeing needs. are cycle 'XX and deliveries, reduction a cadence expect delivery a capital planning elongated result in and medium-term 'XX. in fleet an This growth

discussions we Boeing, focus right In active allowing dividend, it in was and our share concurrently with driving through our on entire management executing However, at to move us fresh those stocks we'll believe on while to a meantime, we financial program when finalized. suspend higher the removing are plan. have and more the working are is our look our our from by capital costs earnings returns, structural team and enhancing taking our focused on to business

not network, to roughly with offset EBITDA a difference going be loss routes interruption Sunseeker economic business. meeting ability Although comprising And immune the for by noncompetitive forward. meet opening back conditions, the delays pricing to to We've we to coupled touching successful to expect $XX fluctuations, on the capacity results the expectations. be demand cash proceeds provides we million. seen results are $XX from our are around includes trends, a moat not roughly formidable various expected no our and of year in million our a to model Sunseeker, up million, This $XX Clearly, produce in year forecast pull to full incremental of resort. due business insurance we estimate financial our loss XX%

hospitality by addressing performance Sunseeker engaging for potential an to improve nicely pair successful Advisors, record. They developing parallel track with proactively this a with financial near-term are firm will Hotel our alternatives working management We with Prospect both strategic Sunseeker. in team, experienced

before positioning we Scott, position over we focusing resort and into is that on addition And their removing to Given Prospect turn our and I software to to look airline benefits beyond. optimization and are the to the help XXXX Scott? value our should it aren't maximize selling Prospect track team's much combination from plan. of Boeing as forward just reiterate I record alternatives. aircraft, operating to a strength, for distractions our expertise proven additive want utilization, many which The leaning well explore we revenue that of the Advisors of our our and of increased us improved management properties,

Thanks, Greg.

this to domestic current takes it more are the our has impact spend point, our leisure and While been air modestly business, them supply environment hear we planning at more customers in travel of this of is documented spend as less more brand on demand the Allegiant and from versus of that year. our industry's capacity and puts travel we while having evolving some about well product from on is improve. domestic remarks. our for There expect will his to the goodness to see awareness marginal and continue Drew and adoption talk reductions. here Also preference

than segments half are. percentage and rose $XXX,XXX lower Our higher And X in who household of passenger less last points. That's customers annual household other Net the X/X in of materially incomes Promoter than XX% differences household between the booked to higher It's customers have second rate our income, incomes Score incomes the quarter. nation. was continue in remember of have important annual customers quarter. than also than household our we greater to our all to Nearly greater airlines $XX,XXX. Regardless of and us reported than XX year-over-year nearly points higher

with us. swim more they value of the convenient or Rather, ULCC matter of new said X with data consistent most airlines nearly again. connecting with these connecting Only our customers this network these new regional no Allegiant arms before choosing are More win before the and/or years surveyed customers in extremely these us, or are prior XX% typically year, importantly, Allegiant asking times more prior income new first customers flew we what of with customers say customers, of the smaller, of they or flights, how they that for more customers consistent based frequently often overall they nonstop I've seen also flew said via than on via This fly largest fly to is we've customers per them is carriers. year. with airlines nation's new often travel who own and most We often they with fly likely Allegiant. leisure where having overall they these with shared and often flew flown airports. XX% and before carriers most flew past other flying flights flew XX% they X XX% likely new and line among Most its Allegiant than

third-party high-margin the Our product the first second to XXXX. year half revenue XX% both during compared quarter increased and of

versus the QX versus way cardholders nearly led $XX earned total $XX credit in the program's up new compensation, card to always Visa this more XXX,XXX nearly Our XX% this year, than the we've in on up only XXXX. acquisition ever surpassed highest XX% our and program million year earned credit million behind XXXX. second co-brand total Card up new in make XXXX. sign And history Rewards we're the in co-brand Year-to-date, cardholders quarter X-year would track cardholder compensation, XXX,XXX which card as

merchandising credit it continued and rental ultimately rates over Our both co-brand high-margin turn increased take air had program Chief strong increased legacy Officer, our that, versus our sales period year. Wells. systems Drew that and and ancillary from along us to continue generative with capacity virtually products booking our during Revenue in and open car to attachment to technology growth we experience offerings. a And prior to and credit platforms capabilities, enable web self-service will gain award-winning flat high-margin and that lastly, technology showing incorporate with drive even modern steam, continues for card for enhance card third-party capacities AI co-brand bundles hotel, transition I'll app growth integration And

of today. and the prepandemic us represent ASMs basis, performances 'XX. both of year-over-year have Allegiant ASM performances $X.XX. of Both history. drove once performance, the of price and pleased in X.X%, ancillary detailed additional joining airline million strong June and the thanks more record versus that second the but among revenue more I'm both of second fleet Scott third the On back way expansion When XQ fourth a down along nearly by and year. Extra TRASM XQ rewards the Scott, leading a to fee figures to Always aircraft, reported decreased $XXX.X TRASM second and best quarter we aircraft. of performance XX each in results, testing our gains was quarters aircraft Allegiant value for both half with best year-end. the of the the half fixed approximately the of in with system targeting X.X% quarter MAX of Visa the retrofitting feature continues X after carriers card through with you, combined product aircraft, Thank and XX first XXXX, TRASM We're versus performance, will immense report quarterly versus on XX Among everyone year-over-year. Allegiant successful one consecutive extra half Allegiant the Boeing double-digit to initial

during than from of XXXX, Navitaire paper was in aircraft priority X in plane board. space product revenue more hurdle management and per the continued no our small Allegiant is than snack have Extra As but more excelled certainly, implementation. would headwinds Allegiant currently reserved to a the work offset of environment X practice. we $X reservation loss it believe X customers, In to contributing access, a have opportunity overall system it seen product. along on itineraries reminder, higher the driving Allegiant XXXX, worked bin benefits passenger the the These Extra there Extra incremental on XXX and test while of better, unique starting overhead on to rate, in with functionality markets Extra helped additional flights lane. features rows legroom, our dramatically mix cost And When a revenue given a certainty with the from has included

XXXX. as We show to the we Greg steps expect But early a are creating of time see in up detailed line. benefits in mentioned,

May. think our maximized unit fully certainly through early I positive, revenue a we April don't and earnings While potential

continued therefore, quarter, last than time delivery in the mentioned initially of transition in slip. more This Boeing March As had lines, true training to pilots and timing half our held available first as and QX pilot needs we well. as planned

have in better and just we digits down held single likely capacity demand Additionally, would than instead. imply, should been our deployment

decisions, immune currently right as of overall given a affect of the it goes The to better but quarter points capacity carry ASMs third will ASM years, routes. goes, stronger our expected post-summer third revenues unit for XXXX, results. capacity down flat with learning relative are look quarter compared approximately a the XX% plan likely capacity off-peak benefit exit reflect that to third network not the quarter, quarter earnings. approximately quarter are to in to from for a just and obviously X.X our expect from most fully quarter setup, second slightly. fly to XQ headwind with expected X.X% third will decisions, believe capacity carriers, rate and the we We expected capacity the versus does the roughly year-over-year reduced other to July. industry of be The grow as And than be year-over-year. when see July Further, will which revenues July will basis our down on unit to we This impact the while thing we XQ is quarter

ASM change July the meaningfully, Most requires. need though, we our important our for percentage of inflection September the our given utilization However, longer-term distribution quarter profile. roughly impact to the is to plan, point that double

the the is profiles. operational peak quarter, and our Summer our with a first performance. acceptable strong of restoration that margin As step last toward small we return in gains discussed paramount was to successful utilization XXXX

to a to percentage opposed back versus current the from We as period deficit XXXX has as just single-digit will summer. utilization XX%-plus the harder for push look reduction to still our holiday outlook us this

turn to integrity. headcount and valuable Robert. operations And find in confidence drive I'd keep and gather like with it ways our that, working to to pilot continue teams planning numbers over We sacrificing upside not operational to the flying to while

afternoon, everyone. good and Drew, Thanks,

been to review be The and just I we been our have delivery retirement have the It's work to Before fleet for and easy, thanks operational groups and year, schedule aircraft Thank to in a causing results, been while delivered keeping reacting sincere team my want you have members. Throughout not excellence multiple organization. has for adjusting fluid felt I various this, continuously team dynamic still all prepared situation extend to face a people financial this changing our focus impacts do. on operating the But and Allegiant cost of throughout you scenarios. our the execution. to plan.

expectations. EBITDA airline. in Now I'll $XXX.X speak million, in yielding to Today, results. revenue financial was of $XX.X the EPS in income our at $X.XX, airline our cost $XXX.X at which our consolidated performance. was financial results quarter share and EBITDA Adjusted income of driven a of excluding in million for for guidance second was of the stronger-than-anticipated $XX $X.XX. EBITDA role an today EBITDA significant consolidated were earnings airline Airline special with the any Financial to on net Airline XX.X%. resulting by resulting an million initial net for Consolidated and continue Fuel reported the an a an million, margin of came results above play costs, adjusted items. basis, we top quarter, line XX.X% margin better-than-expected of per course,

$X.XX. cost our For quarter, per slightly second the guide below gallon, was of average fuel $X.XX

our extra the timing began higher reduction costs other the capacity than supported of cost increase flight better third This sales the and to are increased the the of to second of work was Nonfuel X.X% heavy 'XX, reduction per we to and IT the cost quarter For capacity depreciation unit and fuel as related when groups, be of previous 'XX. compared included compared pilot a prior estimate improvements X.X% May slight to gallon. in during and a given year. our the in centers of on $X.XX bonus by Increases various in slight unit estimating equipment quarter. of X%, up accrual month expense labor X quarter, on retention costs costs systems maintenance

but the peak higher we reflect structurally our for our industry, are utilization are something that costs periods, results from labor unit with are we focused costs they benefit mindful this Greg While in mentioned. highly Allegiant, higher productivity increased associated as don't agreements, at and unit year delivering, on leisure

Turning billion, was at undrawn revolver sheet. to million $XXX the and the in including $XXX liquidity of Total and $X.X capacity. investments end cash the balance quarter million in

million. made During the quarter, $XX.X totaling we principal payments

leverage net costs trailing the was consolidated related of in end $XX retention at quarter EBITDA, million our X.Xx XX-month includes which the to pilot Our bonus.

remainder expect the repay expect debt in PDP as the $XX $XX aircraft million During million of million by naturally associated refinanced to be delivered. approximately we principal to $XX year-end year, and amortization in scheduled to regular MAX are

In of As previously levels around noted, the dividend. half following sustained of year the initiatives the we to delever during before see deliveries, announced through we in start next temporary margin conjunction our expect back the outlined. July, remain year-end half key expect at our of early leverage first net we to peak with Boeing we've we and 'XX those as improvement suspension to

for allocation leverage these We support aircraft aircraft potential liquidity earnings. as prepare year. a believe our CapEx is later are excited the of this this to capital airline prudent We remain we managing and on focused to earnings deploy and about long-term deliveries

are AXXX X anticipate X year, aircraft the X into total revenue MAX We during was back we delivered inducted which down we currently service September, this X and Boeing first call. on to fleet, discussed delivery units earnings a our from the Regarding last expecting in from in quarter, us March. of

a based and forecast Boeing. our best on represents from here is plan not Our estimate

to remainder delivery into the for year full our as of a the of capacity year delays As compared operations increase the initial updated assumptions capacity and have XXXX. shifting result the XXX our continued MAX now roughly X.X% expect we to fourth quarter,

prepared to event availability. align with delivery adjust plans are the in aircraft shift operational We to aircraft further

which time the delivery delivery profile an to our needed availability we manage Boeing updated aircraft we timing this a than fleet active originally new ahead, of and ramp the on current schedule, the which million would slower full properly down roughly million in year into guide. into we are of to account expected forecast, quarter. million, MAX on the expenditures airline XXXX, are we working $XXX schedule, planned. the discussions for on better Boeing come capital are fleet, And the at would Looking last continue expecting in $XXX Based approximately with unchanged had take which flight expect a disconnected now To for year are business. with crew of envision we is $XXX $XX full capital to million from $XX prior heavy year, from CapEx or our expenditures engine for related. type to Other aircraft maintenance full million be

quarter, estimate a consolidated the attributable $X.XX losses at of systems that at loss the per is $X For the July loss of about share to is of $X Sunseeker. midpoint guidance. and Roughly in outage our third attributable we to

third increase below quarter quarter delays, achieved. seasonally and from up and call, expect a and On points year-over-year. the XXXX. of related period, marketing July points X% outage, from to removed the digits CASM-X last now of point costs the basis, offset noted, expect we've year. well to handful to in items. expecting station in about a have X unit was ground fourth roughly same our comprised low given we low CASM-X cost points by system flat the and and continued another X the related other of period point labor charges, down be But represents the reductions single to were quarter third The of X At time roughly versus X be we of Boeing will capacity X.X our utilization X.X we quarter to as prior The levels of points is roughly CASM-X historically handling increase over fourth

now entire team building is this As table continue financial our our in leadership invest unique here company. Allegiant, our of well-deserved reiterate as prepared and that up, the want of team, the And finally, to the call. you. in are in hands, performance We on very coming his to I and years want the portion on Amy, that, at company on is amazing balance of appointment the and I congratulations future for can remarks. strengthening while sheet to improved behind Maury of Allegiant with the the Q&A And I We to wrap concludes entire And the we the good priorities financial focused begin behalf quarters. this everyone delivering CEO. Greg and know and thank

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

forward. on This strategic be is sentence your as Doherty Shannon you will particularly congratulations regarding that for rate path on was interesting. found Mike. Greg, one morning's Micah. and within review announcement, key role, I identify Street maximizing alternatives, this maybe new you And which the to

be now? Sunseeker to With how us basis can at the you long you EBITDA get how would seeking And produce on profitability worse, are to getting expect expect X, willing it -- to divestment. X, you tell losses to profitability an to it take before how Sunseeker of long you a

question, us, going in Sunseeker ourselves I we know, partners. on That's parallel and more I options thinking earnings But on players. bring open for back the optimizing table. the distribution increase positioning the on resort and discussions don't the as we focused investments, we're through Shannon, maximize and and with But selling some the a what's Prospect off design -- want excuse why some value experience, they We're big service bit to and kick little but don't that's us complementary some color a what there in any doors your record how a And to more reflected. any potential capital then asset, concurrently profile. -- they strategic Micah, of interesting levels think, bit you be we half the are and on to Prospect as very and resorts proven But well say on come these by it we're if as Sunseeker the more existing for and further the more the limit commentary paths. perspective importantly, how there all will strategic on terms being me. our give I engage management do we team. But track is little there's, of doors positioning here highly and some want recommended and in open is digging with that to provide review, currently value Prospect positioning of add is best strategic maybe extensive maybe just help of go I and the able in Prospect to

No.

looks spend this us group has XX,XXX 'XX. going of the on we we've working tell for is pace be, like changes looking happy rooms for to do ADR can understand occupancy very I'm the 'XX very drive everything we on we as of will last what versus think driven, rooms And to we on talked achieve see 'XX. in I different about dollar rest drive, look like to results think we're something around we'll is been XX,XXX, It be more sales can report, food at the group then business with well we if importantly, group be being and what able literally here can't to XX,XXX I beverage. as team terms that you talked think like. very, And achieving the and call, that. I catering in in 'XX before how hard can materializing. like think we how high we and will continue

money. at excited lose build interested continuing really not think quarter for improve in fourth and alternative for to we looking we're look beyond We So in what will 'XX. certainly in to We really, results. didn't it like QX degree a and financial every that. improvements see to here We think the we'll are

Maury. is This

us the is the the we Prospect needs can it who need to we then financial and for notch Board, a is We different certainly us. But time this with clients cognizant wanted with think Board Board come very can to that working revenue-driven a operational. the Prospect the where it on alternatives Sunseeker's some focused takes really performance while long And much very is thought It at we get that alternatives need drive product don't just we we product. and has to everybody be both top bring for Speaking exceptional point done so looking of economically. to operational. got and term, of Prospect can

tuned. So stay

Amy. ahead, Sorry, go

you I answers. to get margins? XXXX on need you limiting at is just know you remind what us may the that 'XX utilization great infrastructure. to to can back this point get shift indicated back levels If can you you Really to aircraft your I and levels boost to the airline, in aircraft of utilization full

why I'm So not just now. there wondering you're

strategic in the or Why terms want may we've staffing constraint just and has again, is Shannon. But that biggest That's also excellence. what seen a Greg particularly much infrastructure that levels, is perhaps kick improved resulted in been in performance that has others the then Drew jump pilots. to with from off, been and stabilized planning peak we've don't operational of This our here. and our dramatically. And strengthened I facing period

items think And Drew, to X together so increasing anything? start these peak gives our utilization. confidence I And coupled us

as Yes. Maybe performance with block color given to could the and June just keeping fly well we planned we hours as were We 'XX. forecasted more working on we thought to we the a little resilient ensure July summer operation. off-planning and maximum a headcount

to growth our allowing the forward, more where been aircraft and fly move to continues grow, headcount number commensurate more. us we as has So with

through generally most it's that think I of the peaks. simple

quick. mention other inefficiencies one the that real forgot that. to to I just and And add the delays with thing come Boeing have is

couple expect a pattern And more normalized we also issues in are been together, XXXX. everything so those we've working through, but

our and that. fall. to the Getting thing, when we And particular But timing other in have June in for we you the what July could you the been did you something one March and know and ready Well, pilots is in historically far favor. had were half hasn't slowing the and result, pilot do our no airplanes we pushing in nicely a started to losing in when we a could missed candidly, scheduling. down back as summer year. But And a push of day feel as the utilization. last the That we how 'XX. could comfortable sense date of predict

So really timing which we into summer X July. lost months that the to as are a to and period, in get in spring June, the in of year March much as peak

color 'XX why airplanes, comfortable we're and got had that's So last Boeing -- than albeit with a very the to better going we that's is fall. be product. But even headcount

far, So it's picture. stretched has clearer but it's degree. is become to fog unfortunate the gone away timing a definitely great a out kind of so The

next Morgan comes from Stanley. Ravi Our question with Shanker

is This on Ravi. for Katherine

on Curious Just Sunseeker off you're of going between review sheet what the balance or that to or was the taker kind of and catalyst whether off some your of of question. this agnostic not conduct it. having

property, period 'XX, start engagement. as in which will the up is I and of having off, be we've seeing felt the what now kind as And and gear been kick terms that now of the Prospect well of we've with had timing Katherine. for do. discussions we to Yes, right -- settle actual And to some time could we the I around time first into peak into think and don't we why what some we just wanted of the quarter and see

and timing all I terms I -- frame second that's, sale the to why hopefully the mentioned, remove in in includes announced on the of a of your as part options So helps be timing on think the I we are think think an question that as will about it the future, or essence, not-too-distant we then balance or sheet. And road that stake a off the our option of sale. in now. And it table, down

I could ask if overall. a like demand And follow-up, quick just on just

is you're curious seeing in whether end or Just versus there, what consumer. there not that low maybe seeing, cracks especially you're end demand high any

Yes, cracks. consumer wouldn't Drew we're here. seeing that say I any

weighing I little seeing I the is coming There's us of have airlines point. down. think at of from the overall bit this capacity seats of now through ton talked in summer. a most think that that's the relief And most the it's when been a covered pretty right about quarter industry well exiting

we're that's where I'm not reporting yes, the front, on here. So consumer seeing much

it is problem. a think I capacity

difference And in remarks. When less. my a just highest prepared you lowest had Yes. we rounding points customers to look couple income brief a segment, or will, the at and error, is of within percentage the between comment by if reiterate, the household I

against or is favoring it's issue we higher income a see where demand groups. lower disproportionately So that no, environment don't an

from with The next question Wolfe Group Research. comes Scott

biggest guys wanted really capacity your of Congrats question don't competition just you is I say I because I thought to have the point, to up a think so really QX, own on going about that be the decline lot on -- heard and among your worst your down is far. growing. Greg. the And RASM X% airlines year-over-year in to isn't I you routes follow last which

aren't your demand a doesn't of routes shouldn't if as suggest you if competitive? for So issue is a be that factor as that it supply much

between level to performance Yes. one It's correlation always -- same-store and going of know network overall even performance We our the exists right? it's our of -- That for tackle, try level just our of the same-store capacity there's effects. a sorry, and overall to our fun pre-pandemic, us domestically. always regardless

that industry September an third feeling we So our seats, to the as we have relative of we kind July. think the the to like the the capacity, through Where aligned it ASM you be, we where goes it and about of industry right? of quarter our perspective of that most to from down are pressure distribution missed have most from ASMs relieves capacity half

distribution of a bit a issue. there's So

that us, reported. carriers to among certainly think unique is that I have

of Second exist implementation for far of quarter and right? loss comping offset we're here. ancillary. is the to X Navitaire performance that some at still least more Remember, that, some will still that but overhang the that, and We've had of an strong that of thus ability

than really anything think primary those are drivers, the more else Scott, I now.

to September just month. It is has continues just a it god awful been, be.

as in in going historically. it's the have down than you -- kind X ascending going it 'XX now of look down last line you had 'XX now think the goes I years, and would graph you the and it faster the September at into 'XX, if

month our So why toughest of year. the for that's is us September just

I has Greg think mentioned hit won't certainly his the I dwell second And earlier who it reported the which think since us. it, CrowdStrike remarks. have but we're We in outage, on carriers

have we already. may in So they where baked not have that

And thoughts I about Any 'XX? was and costs fourth preliminary know thoughts, to capacity think for the how quarter color on about CASM in helpful.

Scott, early. little a It's BJ. bit it's

be about can like deliveries Boeing get capacity to or I we to cadence in running wait and of there what But -- how an too think end deploy XXXX, expect want kind what flat and prepared the in 'XX. maybe 'XX up Greg would next we in to of we count I fleet up X. relatively his and year the remarks, looks of airplane speak before see mention much did or we sorry, at kind of

ASM our that intend would just understand So way. for come would growth much kind And most utilization. through that say how of that not levels, next year, but of infrastructure. growth growth to can much if room XXXX there's XX% grow achieved you XX% to a And we the efficient in at look in be more existing to you

And so I think envision on growth you depending could flat levels. CASM-X being to down

I reduce And I said power by we true. will think flying, past, every think think X.X%. holds the this in I may it of incremental CASM-X Scott, have and that's about And

we're periods. more in So the talking peak

about reiterate year but utilization think BJ's place roughly just we full if incremental incremental aircraft flying a down. or will to on with infrastructure have that So CASM basis, point, the flat in help that drive you count,

next Savi the Syth from question James. with And Raymond comes

of up along the end of of based on in the kind just to that it. FAA have actually aircraft you gives and getting just to are terms you retirement on that you'll last retirement planning kind on you is gives question. the -- that's September in the confidence adjusting might, something that something you there like flattish that follow that plan the Is getting? stick MAX fleet what If up approvals? -- on I Or different confidence next get you'll based kind kind or you happened year, of And that, of

the call of it which that that I'll retain first can since during longer and some jump happened spec FAA. that's that, I they review the the line, think additional the airplane Boeing. What Savi. I and delegate, those being certifications subject some in choose since that the they was starts retain happened Sure, thing or to ticking. by certifications, clock call last And they those first The main certification to here. time it anybody time if try take call, whether has to or delegate of can of is else means to on mentioned -- the not the would to chose means last but be last

are XX And so marching what before hoping we're so is around to or days delivers. another we airplane an

And MROs. for pretty next that's bring So the you just difficult. as at largely And about which man-hours difficult the that's retirements ones into retired, in. are but going the MRO, going the constraints heaviest the the us most types I back of impossible, need to really that are checks, planned with they're not really most to and think locked being retirements fleet year, about thing means the with days changed. next airplanes to to be be our then they year, think just it's It's the

we'll next end and next we've aircraft from X year, at end So that's we a view positive think holding deliver grow taken the okay. we pretty utilization. conservative with year. up how on Boeing constant, many or X aircraft We of And would then retirements just

timing functionality the gotten like still kind it on and back and outperformance, the that that? having seems revenue just Because drag, all I'm a think guessing Navitaire when And haven't mentioned how you've driving Helpful. is you ancillary you next what's of we I'm of a Or passenger, like the doesn't the of that fix this? Navitaire the turn $X in? year but got guessing on middle should about

Yes.

$X we provide believing or of in was implementation. banking The were So in additional the comp for to future what terms today, about on functionality. that us the terms the from get to Navitaire we are to we're $X of $X where would down the

there. So $X hole about a

XX-ish system overall at to existing you If per call a away to We've we flying percent of setup really the that benefit something in to to extra has success had that. Further, about help work at at optimizing the it, chip working constraints get helps XX% it's, passenger within $X XX%, like incremental again. June been bundle away team have. the the part, the Allegiant through hard with chip

'XX that front when a it we will And still on see it's believe ancillary comes specifically. that but to benefits lot will pay last be Navitaire part, front. to I what we know hit on on a be things I venture think probably talk would program then and phenomenal. do want little 'XX. we early Scott goodness online. can anything of the early line of part. And I the to part you to I in had that time when to versus later I co-brand The if continues So -- don't the with say there, of believe the we'll else it. add

we've prepandemic second rule, in on new with to while come of And first been we general this record-setting where No, program typically nearly a in card as we growth a capacity-wise, don't the you obviously, worth just just see that month half customers ever basically expanding or new announcements, were haven't done card sign-ups flat we flight Allegiant. XXXX. it's that had was that and/or given which co-brand route credit noting like in did

what card about really the when can lot the like So like hyper looks remove future to that ceiling growth fuel and a we program. from finally capacity

question next from Research. Melius with comes The Conor Cunningham

context route if September mentioned of inflection. curious you your network just the important the Drew, structure this the just give are is in revenue your of X%. bit, expect was to any play different. you a out. little I of a months talking I know lot declining how unit It that the you could but on about But a seems airlines color pretty lot

that is all, and I thoughts July know is lower there just is on that you for lot but would helpful. a any demand lot? curious in down just expectation the thoughts is be So a September I'm down any in September general.

much the a I down level. and think than July stop bit Yes. be We more quarter of little will doing likely I the less usually short for right, than September guide mean, at directionally, month the that.

give as probably mean, we'll I a that's month So level. much on about as

then ask the different. question little I'll maybe utilization 'XX And bit a

in aircraft I if the an think, adding context by, of the ASMs understand increase utilization. lot also pushing you So and cost will that's a I offset what totally be but benefit,

kind in how revenue impact think the you're willing that to general? about offset on currently Just curious to unit take cost you're carrying the you of

I'm earnings reasonable overly still fuel come may across unit we're the the earnings or someone to structure. in right? enough in me in driving to place take cost margin or so unforeseen revenue But here. This buffer a of we're willing Yes. driven, spikes event can demand to hit the point put general, with flippant largely my a that changes

forward. that So lower we're if at the even EPS. forecasting believe And end to that's that, of then path is day, the a TRASM trying the accomplishing I maximize we're meaningfully right

And just about flat year -- utilization on leisure the prioritize focus on count, right, is think peak Drew, those generally in we roughly next we or strongest where as fleet that demand. there that we that would periods,

can. highest our And we're, point, so that to I would be guess, approach, Drew's still that ensure to Conor, possibly margins our, driving that the we

to, the already When headroom right, especially, periods where about there that relative Yes. versus most TRASM have peak talked say, Maury we you of of about. fuel runway the September our CASM, most think have the amount

fly XX alone reliable, The we up to When in are they're brand airplanes about to the up. of product savings real kind new. -- other bunch I those 'XX, we benefits airplanes of going they together. exceptional. XXX, those those to 'XX, new The that, that mean, XXX savings, began is factor of The just Boeing the there's assumption more fuel piece you've show profitability benefit that part hours put a be they're and ability from exceptional. of because and show an did gallons is hour. of this fuel airplanes the was is got This they the

come as outside, make along. layman looking the flying. those sure And are here airplanes need at to we just these already the So sitting

it certification it XXX hard for So been cabin certify XX will XX, They've it's a interior. years the class whatever all part to just now. outside and there's XXX upfront little be most you that no issues believe seats, configuration can't have And niceness. with doing we X of for seats,

have push together and So nice try FAA get and done. a been a to thing get for little Boeing we're to and now. this year They've this the let's going and powwow doing

long. too taking just it's So

from next And comes Pfennigwerth Duane the with Evercore. question

how fair needing to higher relative that say to stimulate past? to again, responding seen cycles fair come revenue lot just fares? to to you're of Maury, Is you in the is stimulation seeing And seen as chime it Is And we in to, to back you've guidance? a that the demand? pushback it this Can time say demand lots you're can of cycles. maybe, you've

'XX. July the year. went We me $XX, of 'XX, to here, by in back fuel 'XX $XX a for let jump Well, hit $XX prices a end to the in $XXX go gas from barrel. customer

You're here not that. down stuff And going anytime just is anything in offset Russia and not soon, in with seeing on is which not what's unique. coming fuel like going Oil you're see to Middle declining any revenues, East my the going drop opinion. and in the to to be

X came not huge And at and our you with So with -- had higher that's down it. gas gas, you've this revenue anymore. got the to gas way, just deal the tied of cost It's independently. Back things and revenue wrong hip is differentiator. aren't those going operating a then,

lost we top. Xs, the of $X.XX, gallon $X, -- X be gas to high right We'd you at down us. $X.XX talk a there If whatever from to $X.XX, $X

could, helpful. you're on That's if that one on you here to loss the side you Maury, XQ bridge how this side us then your excluding actually XQ? through guidance hotel detailed report. could And maybe in special will walk And not the you Can for some just charges ones. airline the you and

And the I different your has not. guidance. then loss assume vendor X impact. guides the consolidated does have We One in ex

those us. for So issues just could up maybe clean you

Sure.

try, Let me a Duane. it give

the call heading about hit calcs. We an on different this it might issue. EPS me let First, into thought talked and be the that

second tough won't while what Some because due to are the when for just the will in through, little way side, be it's quarter, special tax seeing individual something we EPS airline to. And then on to the just get offline take a on you're get take can tie items the it rather to affected had it and the but special of segments out, adjusting I'd items, the for attendants their I the CBA and depreciation Dwayne, we flight but add. of outage, And the AXXX as then bonus out wanted special, then transparency, to rest just new We airframes. part our was not on sign-on reported quarter, outage. the accelerated that think at the on in as third give just Rebecca, as looking that break a to would and I'm exclude I'll

So the you a about the special. be part outage quarter, not of think third just as would

clean all a implies Do a for last basis? have That's ex XQ? a interruption just you your maybe guidance And one. loss And Sunseeker in again, maybe EBITDA for helpful. any on XQ business one EBITDA clean what

basis. a EBITDA clean on have not that you Do for available

Let to me here. you come back

It's Duane, as doesn't that that year thinking direction. really By loss We're Sunseeker getting about or annual a the quarter for not and just number anything. to start way, right quarter. the thing course, do EBITDA X of moving this in matter,

So nice it'd be manage you can't. if I can just level, mean you but at quarter the

Global. McKenzie Dan And comes question with the Seaport next from

I picking other Sunseeker question review here. guess strategic and and the up just on

about up to you at of at back Does path help least first quarter this time economics can maturity thinking given of comment and point? profitability -- expectation you're the point? would understand is profitable where the at shape about at tie that us how are the the to that XXXX. Sunseeker of to just we not, today, pulling that an frame next be if Or So

start, in to the profitability. I'll jump on may path Micah to and want

Prospect But that of comment I path the of in, that, the of terms demand Dan, to ask getting in with 'XX. the quarter around Southwest in, Micah a in advance such terms Just first to jump let important year in was for that me quarter the peak profitability. comes Florida. the making in, more an that's in just because period, was where

Yes.

all XXXX ability the and dramatic look related profitability or see over will it all is beating think to think, group sound across we horse, the a X do we'll drive like I'm like that same then quarters. performance to our what completely going but can is get I to whether business to understand improvement, in we and 'XX certainly, distributably to

see the bookings well, seeing feel been in has growth forth that us. tied for is to we're wonderful we confident reason are forward-looking that that that 'XX? we our ask, do type And going of putting to might You the sales why team

for somewhere the to expecting think QX group As do materialize mentioned we an being QX, that to QX and -- And -- and on of roughly will we everything were we're I keep get we And I absolutely we continue business, occupancy of We nights I already catering the is. in we'll to It to close 'XX profitability, somewhere already. like our ability in what our example, to there. drive in about our now our around already QX. books that doing books told to rooms in think a XX,XXX to you room with drive good critical. I'm 'XX. we 'XX. ability on half Well, changes roughly we're get compared can Greg to XX,XXX rate, decent do X,XXX I'm funnel funnel XX,XXX spend. positions need think around I assuming in, to continue that In and really where refreshed drive again, also to think the

that we're think see that ready the don't that to be see remarkable profitable. 'XX We to over improvement know that say signs So 'XX. yet. But I will don't to we indicate again, going will certainly we're us

question guess. guess topic, I of Greg, separate think quarter here, out where second to XX temporary pressures. in you're separate row, a calling And margin a is the percentage this I a I X points

is guess the it trying to points going. asking I expansion internal is margin quarters not where expansion? the that pretty on in X to I basic for, of based here sense the just the is you're saying. think, seems I'm I'm business get Street projection Is of -- just And it margin a better I a guide, what for guess And say, XXXX. of year messaging modeling, is XX percentage row a X X.X next So in now points really

Yes.

think think The our that. that on the there's that some to think with yes, Drew million some into points, to at X that's the upside for technology I 'XX, incremental And be could will I elements mature. on an time on take the front worth X from XXXX. think as timing periods, based basis. estimates, in to talk worth those $XX maturity, anywhere But that one points. mentioned Navitaire, will have annual is we about flying peak we that most flying X we

do delays but today. we we the like substantial but side in think take I we're 'XX, could areas the that's get time planning mature that be think, to some it with we lot step that sit take up, that $XX to all that the a number, build you of other there, with the as cadence that's XXXX. But But the where the the Boeing a will efficiencies for Navitaire that's, we along flying, and on that the deliveries million So into and what in on confidence math, will able of step have up house. that peak But to of we'll period the time XXXX.

that you here. speak the I'm free if make can one PDPs squeeze wondering to could deliveries, you? much I the that PDPs. were just could one if for to just the actual to with And BJ, up aircraft sync If continuing how like potentially delivered. you're not payments cash are being It looks in for last progress

way think Dan. about answer to right the that, me Let

Right been would payment shakes since to cash continuing payments. to deliver. up moment. it first could Just made, us. we are to PDP some are for make be But and free the again to PDPs start And a we new you, the as overpaid There clear, some in time. on not to Naturally the due with out, believe, quarter candid I then. be haven't start aircrafts depending be for PDPs delivery now, was we how at nothing on schedule

at of question from you. last comes Bank from Didora our Dan America. this Thank And time,

It's Andrew.

have all that, had And to airplane be model obstacles in back decide one ever the here for or you and what but at given real, question so? the issues for earlier, -- the Just strategic you away to I from were the considered biggest answered with simple guess, Greg that have all? many the this ever you years. may would walking have And just you you MAX, doing or Maury if going

a new lead the after keep a airplanes, very a times things. to airplanes, Part was used a can while, used Well, ability when airplane overhauling we're to you a growing with reason and XXX to of couple just the of MRO airplane. we just the short fleet. identify went big

and a way work -- turning for instead just keys, So go pick that of better you're airplane would new planning growth to a a maintenance to into be felt go, it yourselves was up the organization.

airplanes. So looking become for we holds, if it's but that All talk even those to more still used you're the in industry, difficult. players

ridiculously priced think a to airplanes we them sell I of because the you the my opinion. on -- the we're a in shell at tenfold like can economics used work, BJ, looking point from are buy to XX don't wouldn't cost increase,

directionally. unserviceable teardown Yes. Yes. I an but true, that's mean that's airframe Yes,

Yes. the with it's tortoise I and other we that this I a can some think as approached of put we've you rabbits one carriers. mean just not always that versus the -- thing table the of some see on the

The has with nice keep Our growth up always manageable. it. management team steady can been

things All of good. those are

of more looking our the we there airplanes to if age given that So don't airplanes. really if we're out get with. And don't think no -- you some there's grow of retirements the take appropriate alternatives importantly, we MAX, to at are

we as deal. an alternative. ourselves looking of that one So a hell got no, furthermore, at we're not And

what today it's great So got do. to relative economics and buy you Greg? can

but And caused Andrew, the and themselves, couple I'll there. just of of the add to delays, not to just some us. disruption, significant mentioned we brings equity they've long-term quick Maury his value there's value just that a MAX point, the These we're aircraft executing benefits what help in bring and but towards. feel to order, comments do, that's extended that and a to lot challenges we're we resolution to Boeing and concluding also what that's We're to faced we're these begin address planning point and but a close. fair with flying And what look them. talks we that the aircraft near our forward and online -- that

strategic to when the go as fare that tweak returning our big not, numbers we we're when carriers to suggests of and doing, many and a macro we that can the business nose of therefore, and we think while profitable will don't or end, used it. in I be we are at the Furthermore, profitable grow, So we competitors low low we grow. statement, do

is long-term the that suggest aspects company the have future those should all for growth. one So that

to profitable. starting next to you these we need will You need to allow grow, model nauseum the ad aspects And with and airplanes talked year. be all us continue of about as

So we're relatively well very positioned, speaking.

on own know our and the don't watched As if world polo. water I comments last lane have is my in playing time, we private opening guys the said I swim of you rest the any of same game. the Paris polo but see stuff that's more water top. underneath nasty And on is going a a here. There's thing going you lot that don't on

already All questions been my asked. have other

So I appreciate the thoughts.

to At I Mr. closing you would time, Thank take ahead. remarks. all any turn for we back it for go Gallagher Please are like this over questions. to further questions. to your unable

will all Thank company quarter. be very next to the you you much, and talking

does Thank you so today's much. conclude That call.

disconnect. may You now