Spirit Airlines (SAVEQ) 6 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spirit Airlines First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to DeAnne Gabel, Senior Director for Investor Relations.

You may begin.

Pam. you, Thank call Matt today's Haralson, Christie, Chief Spirit's Chief Presenting our are Chief Officer; Klein, Officer. Scott Commercial Executive Financial on Ted Officer; our and team. members Also are of our joining other senior us leadership

materially limited statements. In and our results future otherwise discussion forward-looking those but company's performance. should including, update be Today's investors in from SEC. results current noted. There remarks, be will comparing unless the on any not file periods various We to not and risks are reports contains will the forward-looking questions and statements, not could statements take Following our from to, uncertainties prepared in today, exclude discussed we place a actual risks and analysts. forward-looking with special all to expectations based items differ that that cause the forward-looking adjusting our we undue contained guarantee significant uncertainties of undertake reliance to duty no these on on statements,

For first the and the ir.spirit.com. I in our is under please on provided GAAP, section reconciliation Officer. Relations the release, tables non-GAAP Christie, refer our these an available measures President will Ted reconciliation and XXXX copy of now Spirit's to earnings website a which over explanation at turn call Investor quarter to of to Chief Executive

on joining DeAnne, call today. the Thanks, for thanks us to and everyone

XX-year Dania Campus and of our We from We history. than to weeks Central milestone a new in our Beach. marking chapter a major coming grand are you in morning a ago, this celebrated more Spirit new opening couple our

proud for training we to the our training. Until our Airport. be to us also we and the but team yellow. Fort Fort provides now fabulous facility Dania and new in signature corporate campus our the In might new Lauderdale offices and to pilots boldly convenient Point are blue allowing at all amenities consolidate addition the recently, access display branding our to thought It center Spirit town they are attendants our Lauderdale is of flight facilities, when for of based support to

still dynamic Federal with Looking back a the enjoin waste the a couple X% it Court in our for was companies through evidence months, and misreading case government And brought DOJ X both shows to the the of the to and the of X aside the law particularly a share, uninformed from the merger our just serious between process, that era. merger done than business, of fact funds JetBlue. a feel post-COVID proud combined this how block airline carriers with taxpayer damage the to strongly, even market about is we less

the strongly the normal, of our challenges the entire smaller Our scrambled what between ULCCs this listen. industry in in with outline game. big tried and nearly process has carriers X of consumers new our airline The American are a shareholders industry profits in ever seems companies, concentrated long-term of non-legacy U.S. Today, proposed X all beginning merger but profitability beneficiaries the largest changed while dramatically. losers. In the the like advocated did XXXX, restore to we X more just the transaction, to are rig the the JetBlue not a are for consolidation

aware our merger still that the prevent risk were our believe very be an JetBlue well not with While as We merger successfully of closing. for other alternative first regulatory constituents. choice, the we and would positive the from consumers might

make product on rightsize that to changes a the do improve by levels with business we GTF could derisk over stand-alone issues As limited to several our have address been necessary to and our The JetBlue the plan caused engines we agreement the such, our the had developing NEO performance. over business restrictions aircraft and actions our have numerous thank staffing simultaneously financial will longer last and merger year, first the we dedication swiftly what operating those and restrictions for to plan members taking lead and believe adjust deploy profitability. evolving Spirit to to team return results contributions are no profitability. I our to generation as the and all that our their and We environment. their to quarter industry sustained strategy we unwavering cash to flow patience

quarter net adjusted first reported million. our to an on We of $XXX Moving XXXX loss results.

have to last During months. the see tactical few we network strategic benefits we started from quarter, the the made and changes over

a margin but traffic Seaboard Florida. by civil we affected along weather have air impacted in were unrest to we Eastern We control-related Haiti. are negatively and delays, steady long particularly in also We by health, to adverse were the way making the go progress. Operationally, and

the system-wide set us However, execute factor done. With taken our actions go-forward is team over quarter, share and performance up excluding control, for entire Kudos outside well quarter and the Scott completion XX.X%. that was events have about our that job plan. Matt, our that, first our details Matt to well we to you. to controllable the operational for to here's more a

entire the in sky the to too, for and our everywhere deck flight and From line thank the their the along front delivering guests. job the great service contributions. the Spirit does Thanks, best our exceptional support to the I, to Ted. an way, want team value team center to

first decrease to quarter a on billion, for revenue revenue year-over-year. approximately X.X% Total the of was $X.X first our quarter Now performance. moving

As loads has deal the capacity serve has in we a gaining been we amount difficult. have and industry the nonpeak full growth been and markets there previously periods traction in noted, of significant

believe revenue degree for March that to days of And also but the Given to the time total a On a perspective, from was this week the as looking XXXX, a year-over-year. we anticipated, the back, down strong correct yield X.X% strategy revenue. year-over-year to spring a demand we $XX.XX QX segment bit moving pulled per that per revenue unit basis, and backdrop, on we segment full choppier activity, had first in XX.X% decrease fair basis, break of and On a in XXXX half per line the than declined for peak for substantial to expectations. Total was year-over-year into sequential results were a was some frame. From declined a in due the our was improvement RASM revenue period competitive in X.X% QX $XX.X. achieved first we had fare anticipated Non-ticket February. of schedule greater quarter. segment with January the we than usual off-peak by slightly the quarter total $X.XXXX,

and know that to we continue we see with times. the the environments As competitive demand change must also develop, we

that to happen move the different continue places as into seen us aircraft network look to for parts we You have already our and revenue. best of maximize our will

total involve We generation. Ancillary yield opportunities will critical which about may revenue a will change there revenue of to be the maximize we ancillary out business, how continues bucket test to continue are to new that think revenue components our but believe the strategies, from of we shifts the part bucket. merchandising we ticket of revenue anticipate into

to we a design and Center right being continue formula. Operationally, perspective, Jacksonville issues. balance until will we the network from find ATC We iterate still impacted are by

capacity Florida at Florida. growth the with today. into points limitations, limiting train takes the least larger we few of been large of in increases. we self-imposed help Given are these industry controllers, Therefore, for operational difficult than percentage of it and has time likely our purposely to a we pace to with out performance, center it to keep are our the be Without amount would length

markets, well. Latin the ahead capacity American an commented have there Looking remains increases pronounced demand. the in remains chasing to second leisure of capacity as quarter, quite in situation but markets on amount elevated carriers domestic Several the

exited in to continuous and trends balance where We as a markets a better exercise. our suspended service have more few the to others, capacity making cities align are with and demand supply adjustments

broadening where we've in cities relatively our the network recent are We too in been small past. some

how less cities We schedules. the some cities. fewer also daily seasonal attempt to take added than our of certain new we advantage rethinking with to changes where new network in we're future. we to introduce in have now immediate expect a And flight position routes in We're

summer meantime, will the the through revenues. to in the ultimately see starting will is see earlier to improvement well. In believe that our last order had forecast to material year, have improving shoulder demand we would make encouraging dislocation booking we combined trends experience we an be the anticipated the ongoing in Given trends to environment case. peaks but domestic domestic our the for and brand, had environment, to will everything impact positive modifications we so demand unit would to to continue with anticipated. and In with while the a and we this to rate year, initially expect at a slower continuous pointed to than has continue June periods it guest improve, date, to do see the does performing done the need We materialize, improve, off-peak domestic that improvement. And

second Caribbean will points of in are between total American this We down weakness We range that specifically revenue attributed and estimating $X.XX to to to a X% of XXXX X.X% XXXX Latin about approximately to the second be year-over-year. We the increase on billion. quarter second trends. quarter percentage last X% X capacity year decline $X.XX can estimate be estimate will quarter TRASM revenue billion compared

of be difficult issues accurately further with availability the on to returned makes we service, will of when number AOG limited predict the phasing service, out being aircraft visibility taken produce assets it to together will Looking engine aircraft and GTF capacity. the out, of these have to

anticipate an be XX about QX single assumption, Based the we the high For estimate low we full for down will up QX to digits. year-over-year on single year be of will XXXX, AOGs, about XX digits expected average capacity and AOGs. finishing year is we with this have

versus year this low estimated fluid full situation. XXXX. Again, between XXXX, capacity now single digits range flat to the full to up a year is is For

efforts estimate & grow XXXX ground So that the on this we point, improve is and just AOG baseline Pratt at aircraft will next over our with not could now this and aircraft will XX XX for mitigation forecast. potential We around that throughout issue. it year number from and XXXX include could somewhere the end estimate this from any does with start Whitney

Again, you or gain Additionally, we our fluid, recently capacity it the account will change. And we is working year will very update if that now XXXX is down do XXXX. insight into to be announced, assumptions assumption working will further deferrals I situation the with turn over to that, our single aircraft we versus as our Scott. taking best high full digits for

thanks the team. Matt. entire to Spirit and Thanks,

will wrap Ted the is we've closing and most steps overview roller quarter the on The emotional a value This of was competitive laying coaster, views of bit items of on of where best focused X longer. the then the taken, details the lot remarks framework of I business plan. merger many a first second quarterly the on running the executed in few for the of the and JetBlue, was team guests. There terminated some delivering a and headquarters, new plan and an bit first for our evolution the our confidential tidbits has next our results thank in Spirit, our a I of activity are first to staying the a the began quarter. of his well, with phase plan keeping We go-forward brief of we cover of some stand-alone will share with the as our Phase the for already finalized share and I and for building up for quarter. in

refinement past months. couple more Regarding past our stand-alone the years of has plan, over over few with it evolving happening been the

consummated, planning the allowed merger was While the the were event the it. that to airline that we terminated, on be transaction we were we in not proceed. will JetBlue was optimistic executing Once began thoughtfully

updates our phase some first financial to operational The involves infrastructure. and

compensation of to million first to business The we & XXXX, liquidity to million should agreement finalize for This the agreement in approximately did add the benefit March. Pratt Whitney in was XXXX. $XXX AOG which with $XXX

second XXXX. positions we will from by and to This about a completed quarter end delivery in Airbus million. liquidity of XXXX deliveries to Next, XXXX $XXX improve agreement of the move deferral with XXXX XXXX, the through

that it in actioning rightsize rest the and from items the our capacity capacity. began $XXX reduced business we the our several the throughout rightsizing means need will XXX achieve pilots furlough to the other progresses in involves to capacity further This future from Given our to plan business reduction the goal. We cost action unfortunately reductions and deferrals, to AOGs up to as initiatives, through million of initiatives the we year September.

majority bondholders addressing In A our our May of addition, initial with notes us have September discussions holders current of notes. large and XXXX, with both advisers respectively, with resolution due our summer. loyalty been have limited, have The and bond have assisting the been discussions 'XX is noteholders in plan both hired began convertible having of this organized Even have well. the initial of to the discussions constructive. advisers and though as

items to done all get reach One go-forward of and some of in discussion need the require in going order to Spirit important plan to is in the possibly the some a bondholders and gating presenting collection will a be line. actions advisers finish the patience this order to to resolution. date Therefore, the specific of to forward

for the results of the Now quarter.

During managed out good and a of airlines the ran completion major coming costs for fourth factor quarter, the we well and XX in airline, quarter.

original were end of results guidance. at the good our financial Our

other as offset of aircraft relevant Our to that would over the from initial be expense. of amortized & a we Whitney Upon the credits further recognized basis goods review life over the to compensation from be guidance the an services recognized thought treated included purposes accounting GAAP reduction $XX the of guidelines, the AOG assets. purchased credits will as during and as for of cost operating and vendor quarter and Pratt million primarily respective

Most the have liquidity of years. credits was only in we earned earnings through and statement effect the applied will be and the this, credits. credits benefit a perspective, for of Of these million a X the repairs makes $XX.X the income materials will year. on from the recognized for by be future million accounting points economic it maintenance quarter, reflect a of negative While over the within credit our around impact on will the $X.X recorded for as statement. Unfortunately, AOG In XXXX. the we full margin difficult income full to credits

our of economic explain impact the to the out help some the accounting, cash do metrics need to will further best add We we but guidance help may lay and compensation. to

network rents mentioned Had well flat. operating as changes landing airport of estimated guidance the expense during with Operating were these still than be being in ended margin first operating AOG negative year-over-year under total efficiencies lower-than-expected margin estimate with unrestricted operating facility. our have were of the $X.X AOG that to disruption and engine amount of calls, equivalents, resulted on been due all rebates. On while an would and a XX.X%. on investments with XX.X%. negative to available credit as was first signatory better-than-expected includes airport in cash fees quarter and have cash billion help able liquidity, to basis, margins and impact operational been quarter the P&L damage earned understated. Despite quarter, the credit earned, the labor recognize we about cannot the the points. what initial costs recognized that our was revolving do short-term million prior I quarter X As our We and the the $XXX significantly during of credits our expenses associated which due in less expense mitigate were credits capacity The by additional to X AOGs, we line passenger our of business Pratt penalized issues

we new quarter, the AXXXneo aircraft quarter retired our aircraft of fleet. ending delivery and XXX took X X the AXXXceo, in with During

of early 'XX, We in of million. December. remaining the and to finalized for January, sale-leaseback aircraft leasebacks, completed aircraft in total all XX we of the million, remaining from completed X also the December net bringing the cash the 'XX in were $XXX We 'XX for announced transactions X sale the $XX proceeds in transactions resulting

$X.XXX negative between negative credits estimate AOG or For for earned AOG negative We expenses between of Ted our quarter the earned to ranging in billion. And will estimated credit be be operating recognize million, between credits We to when which it estimated margin through XX.X% negative estimate the and difference total $X.XXX adjusting will and recognized X.X% we the back second the that, and X.X% to X%, between the billion operating will remarks. second turn quarter, estimate range will fuel earnings. $XX closing over I'll per estimate be for million. average with about we $X $X.XX with cost to about gallon

with the significant Scott. Thanks, progress been only we have our agreement stand-alone since terminated, was first plan. on merger JetBlue made X phase of months but It's our already

of we the approach the share phase the strategy with next our of public to the Once that bondholders notes we summer, Spirit. to notes. details status the take our As and on negotiations we clarify time plan more complete, is of loyalty XXXX the for will convertible

an to at details of is of the business say been early details deploying our on the guests to products now and the product work do been work cost to be Day and have competitively have and have piecemeal of we to basis, our some We competitive discuss industry. model a components do revised go-forward core in reviewing We sensitive. But company's opportunity, to and as the in passengers assortment and will The drive intend the to strategy can the August. Analyst I intend set of not production density our well: Between market. give it then, improve revenue that choice. we efficiency discuss to general the listening approach elements and consumers we and margin airline utilization to

the is reflect industry we some to clear public. the new need the introduce changes traveling to option for that more and Spirit a it dynamics However, to make in compelling

results in expectations perspective. in and some volume but these early to tested of work reestablish to confidence very ourselves are disruptive back yield excess a of Spirit market. And have the markets, airlines, in for merchandising done encouraging. U.S. to the DeAnne to our and a times our the challenging Q&A. appear are the be These in as is our we have and pricing now and I from It to force that strategy Some changes for smaller the date already domestic but being of team

are the from session Thank you, Pam, gentlemen. the to we analysts. question-and-answer With that, begin ready

[Operator Brandon your line Instructions] of from And first the of question Oglenski from comes Barclays.

is airline I do difference? pandemic a underlying beyond prepared a control like by share mentioned industry the shift potentially driving carriers to carriers. have backup and at But think struggle you the you premium what low-cost [indiscernible] with with you you the the or market of couple feel even products? challenge here maybe here? post just fundamental how it's diagnosed the profits in the Ted, your remarks network feeling focused the you this think what is consumers desiring of have Do don't know, of a

Thanks for question. the

So say few things. a there's I'd

First moving of that be exist even corporate normally in But is travel carry we segment it demand where that demand it back is pre-COVID in it direction, does not extent the to though lot all, not to of right the a to that. appears was pre-COVID. don't a did

for so available There the traffic. up of the And least for changing corporate airlines more at that's because leisure-based competing there isn't as some are are fares way much soaking seats that. demand

recast in still stand-alone that still that So we're by we behaving, last indicated whole shifting matter, place. very we $XXX to an to as consumer going the normalization the whatever people to way successful we there improve this that we ago, where -- products efficient decade, are are also years over some. on and experience of couple business nuanced forward, low-cost give the will the a guests introducing are they to the that. our studying to been were we're going million way, ago. And relates improve, airline, a way this been we've the to And we in while more the said while years made that we're is, of to review XX-plus we target or going be opportunity were credence from thought starting have XXXXs, perspective. And forefront starting the been been have over that the we've it using an last that type But attack at we've the to that be pursue are believe model, us some of the help in buying [indiscernible] people balance put we that X product, would extent X while beyond of fundamentally years to to we're that a the recognize vigorously moves will and to opportunity that, the back at to that to board made our affords of different hyper continues the closing, the behavior, think were changes and we've sacrifice as model than the continue having my airplane. And I in will an could components and I see of that were costs

are better today. We a operator

that to stability. really products But the real needs plan to up in market the yield the want more we've think chance is we in demand to factor But we I appreciate. Clearly, our available. and to could with buy that And want than line some in Spirit doesn't for with deliver can services level of people that expect. [indiscernible] performance got what the attack boon have airlines. want move that's think continue to also well us to on-time currently Our market faster low other that some perform. I a to could for need affordably The domestic on and afford be they're we products and And cost more reach we a currently feel to of that market people us. confident load we the guests to opportunity than

in you I urgency of place really Ted. the really terms and downs do have profitability? you given have now, through here act that with I gone guess appreciate especially culturally write the the guys in all that operating response, you And to ship feel to team ups

to the And have urgency. an of I've be been group certainly action-oriented couple the blessed we a management appreciate We've and is team in industry get a me, this it. changing the was for and entire adjustments. seesaw group my and a and comment. of making been Well, to that glad I part around years, yes, it the been experience [indiscernible] I'm has here, a But

we've something deal the the for is is that's things move had what happen. a this So for the by over, was We the shareholders, that waiting voted would that was not to did happen. chance deal do. perhaps take that advantage been quickly. But deal of fact along if our That to that's we us agreed really on now to that this and to prepare

I think sheet we're you've that. seen And and all as of some a Scott there's of stuff. come with has lot cost balance evidence growth But urgency. related more to outlined, been rate and it, and and and pace moving this due summer,

question from Group comes of Wolfe line with next Your Research. the Scott

on wanted the do on are can stuff. What I you're the any remind to more of any just minimum can -- and liquidity focus to of just sources targeting? sale any liquidity us more you some PDPs liquidity, creditor leasebacks, you additional are what get What terms the some at the And specifics. of resolution in of What here? sort the too get table I'm this many -- to maybe creditor just back? summer, into want level, are of then you the a high guessing options

Scott. is this Scott,

So yes, for so or process the I far. constructive think been has the bondholders us

finalized and minimum We $XXX be of us, for million publicly sort loyalty sort of disclosed through of to the liquidity, when million outside And $XXX expect think for you of we our bond the haven't revolver. minimums about for cash that summer. a minimum sort

minimums those well. We disclosed our to anything credit card those regards today but holdback above as well haven't we in agreement, are

some we back move enough the year. start as half we So expect liquidity into forward to generating we think and cash of have we the

the really, good we've probably we future here, Obviously, and got And feel And operating about forward. But ability do sometime what get so generate think is we plan we to enhancement move some going in assets, go-forward have about as forward. really expect WTC the generating about. are. we have we we financeable liquidity. have to more still cash, But business where the some remaining, ability to that's the

you just sort Okay. I seeing when the comment you away you're now? right any you then Spirit given involving Just RASM any on made guess do off-peak know then like do thoughts book QX that there? think why of And have a better? color I you all And look that happens? impact gets the I'm guide, feel you wondering, any And at noise I think

This being nature. Scott. indicate anything do our which What booking Matt. make that would marketplace We're have about what or in little think noise here right is is the than that anything that to Sure, seeing some asking we to And not what -- is patterns now we're is that today customers different what alluded is Yes. happening, is you're today. changes. what of affecting we a offering want

and place But seen in lot we've program. points. coming on COVID the far changes there. And So happening make start we hit that competitive that great we activity of to of same and is, throughout price a ended points things move expect of what summer through great of has thus have model to then sort to summer, out playing and make would now we then to be a get some play used improve we up changes as a done price those to see COVID, created others a and we're and would the the as at after because we what what we've

product. So do where expect shoulders we to Peak through. we periods see is have and incremental we of where to what to And are is It's to things good, to it's but off-peaks really materialize, changes. then really hold take the bit to where where kinds which down line the -- for improvement to and expect of make line. that's and we plays take to And the periods. help the bottom the time shoulders fully to changes. And off-peak relatively start is going and and see how need us is we we're a kind as seeing is end in make fully, the to accretion different we used just service that not and of the where and and little of we now, to as to more to, we'll to do well. And opportunities expect in creating need up improvement for we're see looking going well breadth the Ted see pretty comeback, doing be, that's alluded help period we overall right this

Your from the comes next question line Duane of Pfennigwerth.

Ted team, cash a questions. flow and just of couple

heavy any deferred Can think year expectation net in would million $XXX credits? your to been talk on $XXX after about this just a credit should maintenance. before that line First, credits? the And about basis how we you what million on have

what to? spend referring this cash are estimated about Duane, year? So the CapEx we would that Primarily, this you're you guess, is asking I

Exactly.

were sort forecasting $XXX Most of offset still the probably that's of million the WeWork. for Yes, use be credits to case. to of that. then And Cap about that's to we'll going in $XXX of some million and we sort maintenance, range

Okay.

million I So looks net was $XXX by could it that million, offset would be quarter, first it of put on in you the $XX that a finer guess million. about outflow like $XXX helpful. any point

Yes. and we'll other this I Pratt, cat mean spend associated. than we'll and year spend maintenance mean, more I parts from things look, -- the other credits in

will the within then and but the yes, P&L trying to you're get if beyond at well. usage we be the able as and will of of Part of some is all use period. other credits, maintenance, expenses that to be the Cap in So likely credits

it in back the there's any What And the line? that investment And would on line that was on about like pieces front-loaded you use is kind a what moving million quarter. helpful. color looks it eases in other the in Is talk be half? are seasonality? cash $XXX driving if this that? just liabilities, Any about that of Can of March

on we'll reach have we I'll detail you get DeAnne Yes, Duane, don't on to have the that. that. out. back

James. Syth comes question Raymond next Savi with the of from line Your

Savi Scott. for

on need going to as you year Just next structure the $XXX you're reduction million as this you're or of size by next -- $XXX right well? for to capacity I goal. to cost it curious, you to again the alluded seeing, the was the cost end year? get to, as contemplating right year. have is you Or reductions million where Does be

number, of that's the will to yes, $XXX a end of rightsize the really million. end of where about the we sort internally. the we for rightsized and facilities of other where the based the of airport some we we But that the rate the that all the as of relief as rate his the the year, a this easier labor not the of some we the But We of the some Obviously, back are year. number to as to that year's pieces that of XX furloughs have move manage number bit be have get as with that could high mentioned in lot next of we'll groups year. remarks, reevaluate to the hopefully, components on is little XXXX. is and run the is organization. And have first and us. we of of run lower from think year, happen prepared high AOGs we P&L. as on we'll rightsizing sort this at that's Savi, Matt and number have reevaluate are a in AOG Pratt mitigation Hopefully, But next capacity. Depending to have

for then And the points revenue maybe of just on Understood. you mentioned the pressure. side, X Matt,

curious, from Is of to is I much And alluding I quarter of kind kind think kind overlap is having domestic just pressure in changing Is patterns off-peak, think those redo of this I you're and that of international. in was pressure? how schedule, but the as any fact does you kind as it's realized just mostly the the this change? RASM that schedules? your to there

Yes, Savi. sure. Thanks,

some there those weakness we domestic revenue network are the as seeing So in points be out because still well. additional would

down American come we it past, it's more. is And is a So bit part of we city moves -- in and We've cities the network of around, our network sort significant and the of of the permanently bringing exited international geographic network will in made interim, again. In back well. the have expect and now. We've average suspended this a some U.S. for territory we've in had network. as Latin one this that issues important our system always number with that top Caribbean on

there. world. of region is network. we're COVID, traffic COVID, days kind guess, put So the early And to of to the even of I They're digesting the during everybody the of went lot coming in of just that like kind of other still of lot during out of capacity just parts speak, or to so else, our a a shifted demand that place world that's of

and bit will there'd we little thinking that to Caribbean. what of that over happening to America back were more time, we're So a come Latin the And than be now right seeing.

Of course, there is capacity as increases well. on going

little network that underserved would opportunities think intended are of of a that's place. that a we of part I the are put much making go too network. Also, we there in say moves and just we to lot the can where a that where supply that we find are some -- it's lot opportunities, So in bit additions our of

us, not to they can that wherever also true dynamic this for can capacity want, airline, is it's think for industry add remember, important This move route. is is I anyone just any and a in and very whenever anyone they want. capacity any

network the important. around moving is incredibly So

have it sure makes product network that course, also about important important to or than to a again, our to we're as And them more also used Of to And possibly be. going we for us thinking guests that just top is. But do can our making the itself. we present what's is like we that's important of customers, that. that mind

from The next of Baker line question Jamie comes JPMorgan. with the

markets. competitor. is, to any asked on really be with just more Obviously, in competition behavior maybe whether the I'm relates markets one that question markets My question to first So assume lucrative those tend of competitors you less of competitive of there than competition. competition of What towards many multiple one airlines, with would sort is being sort you've morning, thing? the is don't challenges whether some need that Spirit, truth Or people, behaving discussing been to given it that? more name seats, vanilla this too usual, to plain too as potentially just they're few any aggressively names, but

Ted. industry kick always he been if Matt first off, competitive. of can. very has Thanks, to Jamie. add the Well, all, anything I'll wants It's

today. that's power I is think concentrated the And been that, the case. So

And lucrative away of does if competing revenue bigger to those speaks that things market strip the -- you So they're the it they're how transatlantic of out, credit what I appears take domestically. loyalty if and the very airlines, money. think you losing to programs card-based be a

place. positioning to have right product we what and the is make to do sure we right so airplanes Matt's in suite have the And point, we're the

definitely Now that on there things. are focusing airlines are different

which have to the a we're bit structure, see are dislocation way least showing we actually premium a the ready could that to just competing, to of little And of much brand market. there's down as revenue. competitive the the just bigger we pivot, you market right on keeping actively others now, couple could in are think I can there always our there reaching and doing cost what about we're their a X at are and get that way. that for they in around as a are going on I hands really And going products or who be really X airlines to do. But some is also going think our compete but their is getting certain thinking introduce airlines can that is focus we're as unit think aid

that? you would add what So to

seeing how of to time compete around would just that that say a I they competition them time. terms quite what's I all Yes. move at would Airlines think the call the we're I important tactical in normal. from and perspective,

get then around. So changes aggressive, little some a get a some more it airlines and little less,

anything would I don't sort. sort different pattern of know there's your question, understand I specifically call of Jamie. So emerging that I any that

but thinking question, assuming that about a helpful. down the of book we brand should CASM And aircraft leasebacks thing. market changes, some changes, your relief. remains sort about the product be the recall That's form of when a being it today DNA, you're then the being future, sale making as foreseeable we road don't order part I and of is that think about Okay. second this for obviously talking

just might square I'm also I'm towards potential with if to this wondering double kind of ETCs. So said that model? potential you -- about trying Spirit the pivot basically what

any So help. color there would

and I the We do gains. relief, of to jump activity. off be you me referring as not let what that. expense potentially -- offset wouldn't view financing that recording can think That's to operating CASM Well, you Scott, don't sale form meaning we as something using that is by may leasebacks an --

You could know and financing. could the But of that do form effective I by an activity. it an be operating it, don't it's way,

when leasebacks we obviously. today, out just it. it We we do So talk don't about sale strip -- we

slots get When down we domestically, our deferral the fuel to owned do we WTC we from asset. But outstanding because the the So did liquidity points. of an today. order real we at a is coming will Scott think this to want advantage have we very together, road incremental think the on program, for the today. EETCs held that's our be number because fleet. translate some when a it may And alluded of right value peers versus forward. time their to benefit modernize deliver margin the We burn airplanes powerful continue into cost be Pratt the form why gets a the will financing going I when have of as we to look potential market book

of and be And we to so there, want a that. it will part get

So anything you want to add?

hit No, it, you on. head I think

line of Didora Your Bank question America. Andrew of with comes next from the

know Ted. Maybe generating flow I of maybe spoke first move Scott to Matt or as for question possibility but early, it's cash year. through we the

about revenue across begin year thinking flow? given the the Or RASM capacity the of operating and both you you potential what positive maybe ask back to the generating in are easier the cash in half another of comps half really to way, back how unit industry? kind So the need lower

thanks. Andrew,

accretive August the would I fully flow. come to this changes operating the the is to expect what going we implementing revenue we'll But profitability. expect -- talk that we our start things be Day to we to that more not at then summer, and I'm lot we other cash need specifically do started to can will talk about speak generating a Analyst So

yields in relative we the take in too, that quite the country is has say and that it time people number have itself, product in of some quite this and hear what time, tried will will important immediate the experience is benefits people some be this only flow and that things tell to to not would to that some we when as change. There's and you out. I to will not who funnel friends media and expect that will how that to will a the neglected bit about to product think recommend I through push their shocking that and how will we in over and a that And product news or not in be travel that guests Spirit between have they funnel longer the what's that they parts things changes, the Spirit hear do tried about to us difference up a product people of versus ever of then terms and time, and earlier, allow people have to here, then take the difference and think So they roll book change. widening means a little significant their terms other or who relatives, Spirit develop, loyalty.

time with So our past, talking everything guests, instead relationship will thinking will to said guests. take just we we will we're just in doing more which become over largely to expect of about like about begin cash with And be of lead we've there. And done flow and the time, our will and being and transactional driven some things quickly I this earlier, doing develop. positive other

think probably that's describe of the the the me and we coming about about how to what's for best half way think I So back year.

an quarters. fourth with of point to NEO probably ground, might we head year, X an it be when as get advantage contributor point at retirement and to, near-term burn on and that's as of but another we back, on as reach the while NEO that but generation AOG important of start much been the will structure the of over cost as time. fleet, we've the still aircraft I taken another then not now, we eventual margin significant still not of or builds right most the fleet the Matt point, said, total the that that this has still XXXs. as to then profitability really as Scott have while adjusted fuel we the announced which could incremental challenges probably it's roll run us way hasn't margin notable, today right from look probably moving expenses utilization with that not the in XXXX. we're is But to alluded on we've just year. And there increasing And to product And all better, starts add, but right a it through yet. will a of half to We're be, we And back towards in think to aligned, it third the a rate Yes. also road in look cash of aircraft. percentage reduction the But rest basis burdened cost there. And that's from all airline's target its we're the the the we there. right come cost efficiency. If as get back of place back. rightsize, And and north, into and The way

now. show seeing alluded like team don't that we're to he right going in Matt to, network May, pivots we're is the the force and really until efficiencies year, revenue besides optimistically improvements us the margin we're So about last points talking that then the of of X to thinking. And X that the network have the been month of them in back half get thing,

And third of quarter, better the of margin, really fourth. the that so much in we as be benefit and of as And but we'll a think. second get much points it's couple could that in some out

right add forward. a things. cash we airline profitability you right the things, the be unit to from a make need But just the we where need to rest to near have the be that's them not of push And of where on -- generation where rely get from anywhere perspective. further to pivots start to us can't revenue probably side we up, even those So perspective, we

think have cost to generation. that in business. and to a flow we help that room we recognize improve We cash are We

with Research. the comes question line The from next of Conor Melius Cunningham

XXXX. just about for the maybe of days times in turnaround number And the is Pratt have maybe then, on 'XX, dependent there clean as is a we now like credits, ground? there. get that a on million is Are a today? right the think compensation on all And spread outcomes $XX Just how you potential much the for how trying clarification, to issues Just XXXX? given XXXX for the as what and

AOG the the days. Yes. we're the And today number $XX based spread over seeing so a on turn are obviously year. is million uppers Conor, times of

prior Matt push as the 'XX, to -- get some the earlier, of reduced for XXXX, period those better, through. And how turn mitigation primarily have what your is credits much AOG, get going is of mentioned will there So XXXX. is for about to $XX be question the probably is so remaining that times that accumulated of latter they to for and more be this around help -- efforts probably materials for from kind million

to kind need offpeak or quarter perk for Okay. That's revenue to of comment up does your to if year? a super know to full hit need I much -- helpful. And And hit your then plan? you offpeak it does you the mentioned didn't need was second for assumption. just to that improve a how

Yes, sure.

quarter, into quarter, second So to baking now. of what terms second we're be we expect in happening

was saw, first faster. And we need about it to what what we're earlier the order overall So speaks again from were talking there. attractive that of become just we And about to quarter. more seeing improvements say, I do some wish to earlier we in out need see to what happen. slight just some do in we it

having sure don't things They this do periods of here. shoulder confused as that just see talking about the well. we're need shortly We'll and the the to off-peak about helps that's make of that on day, that we to the is also what peak help get of periods as do So we that want we the all That the this I days It's and also Fall. where that for self-help here overall contribute doing, be we we will the and that produce itself. lot to we're operating order the do the challenges, year. and part in in what to bring that a And revenue. we generally did Tuesdays in see need at line of those we off can Wednesdays finalizing end But where fine. in peaks. We used that that's of the think those back margin can week on how unit every the most September most is so to and early to bottom up well year. October. the We We cancels

Next Linenberg of question Deutsche comes from the line Michael with Bank.

quarter it Presumably, lot respect promotional look build Like city like does does to new How initially adding those timing with much to you're new markets a market the for development, I and it your ramp have the just the is I some it unit How know issues you of that the -- I guide. your subpar revenue Matt, call for result. think top as highlighted of of June much line driven, it, pairs. activity take? guide there's what's traction. to about up?

a how have sense much us the and time. ramp-up maybe exposure Just give of you developments to

Yes. Thanks, Mike.

a of we So day a of Not lot announced have A new routes. all are them few week. them, lot them quite a are. of

low. that in So right QX the high. have relatively now exposure actually is actual It's really we not

little QX increase of say something bit. into that that, move necessarily I as where rotated As and wouldn't now, QX, number will a there. that's right over we've But

how risk we how can. and new because we we as we're also we to this with as recognize careful derisk much that very be do will routes, We bring trying

and the we'll that, been that and of much reestablish that a some larger help there. And of think cities as So We've we're some it, we there's in past. our smart in cities been position we've couple kind will of doing overall. the about smaller. We of things be to we haven't in that past done need on them top that

So I hope that helps.

Okay. And Great. then just Scott. to question does. No, second that

liquidity past, guide. But gave seasonality sure going quarter, about bit quarter from year-end behind As think the just March much year-end number. impacts I know trend. $XXX the you that squaring trends thinking could with maybe how I sort the revenue that But seem operating liquidity. quarter-over-quarter? my fact cash demand us I any to as I a it ATL great. and down, does just June that about It given think Easter not I'm conceivable was Any are and earlier a the about be to like the in is the little be it would $XXX multipronged year flow. And I right? of it's one part it know, million of realize clarity sort but is the again, this don't that guide, that's the million of question, a

probably little of we we'll we'll part little still And $X.X think are the actually I sort million the which first think the that full possible. were ATO think not than be bit year. probably million at into Yes, quarter, part probably we if of cash positive of generation end the quarter, neutral, to And additional a some that the of a year, cash the bit I lower we be for second Heading Mike. Thanks, second little the turnaround. do cash was doesn't financings lower. $X.X a I bookings in the the quarter to, guided range for think to year. include But light, the of expect for but negative the remaining that initially any is in

see So second to we'll plays half of how kind have out. the

Stathoulopoulos next Susquehanna. comes question from The Chris with

again, should how Do to you composition you the of you primary what then believe spoke if departures lot markets, capacity. in what's kind Spirit off-peak, And are B, Latin America. guide you've but eventually peak and markets adding could the of of and to for both here help a peak part you a presence capacity capacity around -- is frame normalize? single-digit versus for industry and departure on or within to happening your I nonpeak. within believe So Scott relates short-haul you XQ. to where have guessing it Ted, color you thoughts said I'm allocating these you're, that given high Florida capacity versus which smaller thinking about as driven, spoke

of and and the There's Yes, takes we there, some utilization. coming as deliveries well through the AOGs I'll Scott, is summer as as in utilization start, sort changes head and this into peak. puts on year obviously, with increased

the overall, have we'll maybe mid fleet number non-AOG down But fleet higher a So a AOGs. on utilization because of a basis, just of utilization.

QX. that a in of versus higher in piece. so QX to on single of the into plays out the capacity QX, the will sort in QX But deliveries digits bit up a be that down probably utilization sort And flatten basis with will in

we down not it's the to there, part And your stage expect bit, other Right. Chris, a be will dramatic. question be little of going but

about So from it of it But also, normalize Latin we of see much would out tell to in should America I anticipate will normalization. flat how -- would kind produced. And itself would likely terms that you I ASM departures you really think more growth. be overall maybe slightly ASMs than be should you be the pretty asked

So supply very things. and always out. demand are themselves work powerful They

how So the plays the of and question answer that out yes, your is. and timing to is to we'll just how have kind see

structure. cost a have We great

a doing can we're that as about part well. our allows generate all making America the compete to Latin structure talking things also revenue. of lot Our and And the network it's us we about sure and cost will Caribbean benefit of

And question. then my Okay. second

as I single-digit down, So it think think about it's 'XX, capacity we gave high you guide.

have believe reshaping $XXX stands do we within effectively below cost can X.X here. looking models, base. all put efforts all to the But arguably at as But normalizing CASM? and million cost You admittedly and as together, these -- cost. post-demand relates rightsizing if target. The that this you moving today savings it stay AOGs in it Spirit are our

I a I initiatives, puts utilization. mentioned, some what takes and mean from around of Ted the we of lot mean here. there's have

actually. a initiatives we're probably plan some targeting But that, think that our I of that influence some stand-alone have We stuff. number will around of

one Pam, more question. for we have time

right. And McKenzie line this Dan of the from All Seaport is Global. with

underway Is quarters the at can plan profitability or it this least to year? breakeven expected be contemplate to any Does in margin? profitability. get you accretive operating to a current Or

first We question, that Dan. of part the missed

quarters does least margin. at a really, in current this get is of contemplate the you if operating to any part profitability year. breakeven first The the can And not, plan

Yes.

at half looking On back this be QX be just kind we're year QX. the of for we'll think basis right positive of basis, above operating I breakeven at an to and on net for a But net generate a is QX bit back of basis. neutral, probably we of the cash sort year. in think maybe the a at we'll on going little to of be breakeven. right be cash half

Wow.

I'm And new consumer you some from Ted, about of wondering I you more is headcount? Spirit of And new wondering cost minimis. is DOT rules? cost And share a rules operation de favor happen to of maintain And just rules. the just the cost compliance I believe can spare that in has if guess carry incremental new headwind? the the Or Nice. higher I'm might need reduce bill, the the Okay. of this what what set to to aircraft, with perspective was

to is a don't Dan. was been I the decide solicited. place by don't have There in should as in as got where them they're and has to it We're I speak done feedback. robustly been provide which of as process those And was I done think believe feedback it how know past. your digesting the you going Thanks, perhaps feedback. not rules. trying we in industry favor

ability forward reaccommodated and industry of its passengers when always get care good our to And what's guests are We best traveling on we they anyway. a We've So stuff is taking its does the at the airline at each own public. where that been leaning airline job do refunds. disrupted. of guests at can to pressure all for their the offer making sure competitive thing right does

we'll now, let for what see So next. and out this happens play

And or Relations today. you further with have Investor Please all joining if you contact us that, thank Media questions. any for

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