Frontier (ULCC) 6 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Frontier Group Holdings, Inc. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, David Erdman, Senior Director, Investor Relations. ahead. go Please

Financial morning, questions. earnings Good Chief to fourth we'll Mitchell, our Officer; prepared deliver Thank and remarks, Today's everyone. speakers XXXX then Chief Mark and call. Dempsey, to Biffle, Each will quarter will Jimmy brief your you. get President; Welcome Officer. be Executive Barry

a viewed webcast platform with On today's presenting be the will supplemental materials, PC on or smartphone. call, we which can be a

you could or ir.flyfrontier.com/eventsandpresentations. If arise, you're if call presentation the either accessing at along not technical follow from the from website downloading by issues our

yielding, customary Slides which Before let harbor me X. and the quickly on safe included review are provisions, X

During risks predicted these making be and forward-looking in subject uncertainties. this Actual differ we to those are results will from forward-looking statements. statements, call, may which materially

risk which outlined with reports such differences concerning announcement published SEC. information the with cause factors earlier are we could we along the in Additional file

financial nearest earnings in are We which reconciled discuss also and in the announcement appendix non-GAAP the this the presentation to call. will supplementing measure measures, of GAAP comparable the

I'll floor Barry his to to Barry? comments. the now begin yield

you, Thank morning, and David, good everyone.

generated fourth Before pretax X% year. I'd brief slide We I'd of -- to margin recap quarter the and the the the quarter for results. quickly both quickly nearly fourth beginning like presentation, a full

X% fourth results the on fuel Our lower quarter. with excluding significantly strong guidance than operational outperformed execution prior quarter CASM performance and our cost year

of average XXXX, highest utilization since the industry-leading We year of on-time for on departures XX.X during pandemic achieved and month the excluding a completion XX.X% and XXXX. arrivals system hours quarter the factor December

prior also busiest departures notable. to making December the more holiday history. year We the in airline holiday XX% had our season, during was season it than performance operational Our January

of best our and performance. all completion our on-time moment In Frontier our great results care want period, holiday addition, of for customers. and taking all and to such I to ranked thank as Team a producing departures during take post-pandemic arrivals the rate

the I'm operational for with generated pleased year, positive result. I'm pretax that fourth in we disappointed a absolute performance While full and the the and margin quarter

meaningful therefore, We to XXXX are, address steps and that impacted to results focused on the during on returning taking double-digit our margins. challenges

Slide to Turning X.

and industry's and of of more in many based to capacity disproportionate Orlando low-cost compared in largest oversupply challenges was with demand Las and were the carriers leisure far XXXX growth ultra-low-cost have being markets examples. and capacity significant One rapid experienced markets, the XXXX when Vegas Both balanced. X

XX% Orlando domestic a just total no in since a by total combined XXXX capacity expected This Frontier schedules. to based LCCs capacity continue grow to ULCCs, grew and increased exception. X% many over and XXXX, Vegas Las and margin resulted industry headwind and current to As has are and is U.S. in RASM published on relative in

address is more plan No to we our self-help X. Las On these in one in Slide engaging reduce combined to by share of Orlando leisure Frontier. by reducing of markets aggressive XX overcapacity markets market, capacity we than markets. either and the points year-over-year, structure share we're system and our merely in to summer, believe the By marginal flying from for are is in leader remain optimal to rational unprofitable in low-cost basis X/X. our cost both network To what clear, be cutting retreating a footprint both position Vegas not we return

X. Slide to Turning

need visiting chasing smaller are fares to extremely friends growing meaning industry RASM. of for total XX% XX%, year-over-year. The average industry we constructive summer of will market XXXX the Not revenue markets, and in fare roots share we over much a increasing revenue revenue in be only this capacity network relative on our those markets industry this pool markets. up by will mix summer growth exploring network XX% higher is despite of only Our by focused fare higher in X% increase

Additionally, sooner maturity than the VFR routes. leisure historical to suggests reach tend and routes quicker ramp data

Slide Turning X. to

strategy we discussed our that with nightly year focus extended return summer challenge call, negatively peak. XX% on that of this, the last earnings we a percentage was increasing simplification summer To significant to the address delay factor this the we ATC utilization, are ground in faced programs, completion executing during network on year. last base greater than Another which the particularly our to aircraft peak on by impacted

key plan bases this bases, including support enable leveraging strategy Single recoverability Puerto expanding day our fares. flowing Juan, operational reliability, is improve XX Cleveland, recently element and and Cincinnati, to A industry-leading Chicago our announced from our We our expect San utilization and higher bases Rico. trips in reliability. crew of crew crew our

fundamental outlined Our relative in in with advantage to key X ability demand to Slide and the United States, leadership an on to fares our cost from industry the factor savings materialize increase significant is XX% long-term Frontier in simplification our low XXXX. believe provider a the to strategy. cost our is as cost We particularly unit expect over lowest unit stimulate network will profitability cost and remain

will million network be savings, our of by earnings call. end the we implemented simplification annual highlighted run $XXX should that strategy underpin which XXXX of on expect quarter the third cost associated our We as rate

which stage-adjusted gauge. down to to CASM to ex a adjusted we is as X,XXX costs increase AXXXneo, meaningfully on book to ability to heavily Accordingly, basis high X% Further, control XXXX to contribute expect our our miles. X% weighted will the to fuel continue we order gauge be

enhancements, experience stretch small our for Less" for to "Get at travelers while providing starting extensively network, Slide our price. rebranded briefly bid cost-sensitive one promote premium seating with week, innovative highlighted diversify to to a spares about product business RASM recent economy initiatives. our XX, ] premium $XX, revenue launch [ sequential latter to so cater review brand our and plan on launched As let's our our we I've Last and drive if to leverage distribution the network our consistent low We've of we campaign. product, improvement. product spoken All

in features dollar our can program that the for Miles earn A Mastercard. new travel the by industry quarter, spending conversion significant the launch we website new enhanced XXXX Frontier of highest As spend-based tiers and as status card earned to elite each app last as rate NDC improved should as credit be and offers faster distribution, reward showcased with late expected merchandising well are and positioning. benefits provide well Barclays and mobile as brand Frontiers relaunched

this recent be revenue Further, the overlap which additional we've engage accretive in carriers guide. extent unit To seen recede rationalization, benefit drive capacity to in will competitive Frontier, our further to would months.

are and included business. our growth only in to published However, case. XX, revenue On profit and the expected drive reductions initiatives we base Slide in have network, the cost

XX% We pretax full X% the X% to down year for X,XXX in X% CASM ex expect capacity a margin adjusted XX% range of miles. with and our the stage-adjusted on to be XXXX X%, to growth to basis of to

guidance reflective during quarter. expected off-peak and XXXX the is seasonality quarter dynamics of First

Our February pricing as based guidance is on X. fuel of

Turning for the hand slide. labor flight and With of XX% slide update. amendable. and expect cost revenue I'll Jimmy presentation, XX% pretax to we commercial a to became agreements the final attendants both between expectations margins. full be and our with This initiatives, over concludes year now XXXX of to new benefit That recently call the pilots as and the network includes

$X.XXX, morning, demand X% stage represents growth on year-over-year driven decrease and RASM Thank the and down This revenue XX% from XX% sequential you, a length. an was by good Fourth $XXX in average quarter improvement third Barry, everyone. stabilizing capacity of quarter, X-point million, reflecting trends.

as initiatives. positive our multiple we momentum and better expectations revenue trends enter into XXXX, than seeing are earlier and now As our to we we on see new network improving revenue transition deliver

the We continue XX.X% during We passengers revenue carried record to show expect factor. trends the positive year-over-year X.X sequential to a completion million with a quarter improvement.

and highest excluding since departures of year our were in arrivals December XXXX, the on-time well pandemic XXXX. As

the flying, is year. employ the X first progress Cleveland, we its quarter, base San Cleveland as During crew Rico. increase expected in Juan, bases Chicago including of will at announcement and in to to flight [indiscernible] objective attendants open made March pilots percentage new XXX Puerto our mentioned, the XXX and back Cincinnati, and The of Barry toward steady

basis O'Hare/Midway XXX our tenants pilots along open finally, San flights attendats pilots based Juan already And employ crew flighted and and employ The attendants pilots employ Chicago its base, and while and in the will is XXth year. scheduled first and XXX flight be will with XXX there. base XXX both in serve XX Cincinnati to May XX will will

Rico We've role this but work is not nonstop to Rico been playing serve Latin frequently the travel to offering fastest-growing capture Puerto tourist key in Puerto share sea situated more San family a America reside as from than a island popular doubling to airline Rico, Ricans in strategy, and capacity other a or U.S. Puerto carbine large well alone. because routes remotely. routes and growth of only U.S. the Juan Puerto any it's visit destination, we and to volume Frontier now populations and disproportionate of carrier. our the they in from to XXXX friends than since the is mainland, more XX

as announced recently expansion higher of grow we of Moreover, our a significant part to in network fare our strategy routes.

largest Worth, Charlotte, friends New San launched During routes with Dallas Minneapolis and airports and Angeles, concentration York, and Fort the service ], we of Paul from [ St. Derm quarter, markets second visiting our XX relative nonstop from Los Juan. Rally

at we're launched officially trends. loyalty seeing last and and our Memberships particularly levels month, we [ least Miles ] early Finally, Frontier increased. have reimagined engagements, positive program,

also observed have credit on card. co-brand improved We spend the

up -- highest was In and over XX% December year-over-year was XX% record. level fact, over spend on the was

early, spend still continued see it's XXXX. we in improvement While expect to throughout

call That the to concludes remarks, so my lead I'll Mark.

as solid a on on range in We quarter basis on and X.X% cost-related adjusted generated margin Jimmy. performance, on GAAP above you, factors. X.X% and touched guidance fourth operational well our Thank an basis pretax earlier of the Barry a

result pretax a also of fourth generated our X.X% we a performance, year. full margin for quarter As the of

was benefit fuel our down gallon the expense the guidance quarter million, in and compared $X.XX, roughly was of from end the to below $XXX ASMs quarter, the cost year XX%. XXX offset from X% of reflects gallon was of increase efficiency by growth slightly with low consumption range. prior revenue as which to the quarter per per in XX% in was average our Fuel fuel an prices Total capacity expense X% line for fuel industry-leading the improvement lower XXXX

X% aircraft from ASM, scheduled or per fourth quarter quarter. return in in X CASM, $XX the lower lease quarter leases Adjusted extension nonfuel The benefit in year operating than otherwise were in prior December million driven that return an during AXXXceo expenses improvement by million was execution of excluding the fuel, $XXX to cost the totaled XXXX. a $X.XXX adjusted the of

opportunistic our opportunities. aircraft extension will with we to Moving fleet forward, lease continue be attractive including management,

focus continued also expenses during our operating business, given the on strong from the quarter nonfuel across costs. performance adjusted operational realized Our benefited efficiencies the and

income of our pretax tax net $XX While driven our generated $XX U.S. million by million valuation against and assets, wasn't our the deferred loss a net million, fourth in a quarter we was state federal operating tax effective allowance loss noncash guidance. of $X rate which contemplated recognition

it's income income. as Our It's noncash the NOLs quarter of adjusted that a for to don't $X to used adjustment can, significant taxable excludes note continue these special net therefore, generally future expire this million important be and against item.

Given this of income year utilize generate year. excluded guidance to X% taxable as portion NOLs Any pretax purposes. of would we we adjustment non-GAAP for our reversal corresponding expect a substantial to X%, this be presently full adjusted also to

of million year total cash net We $XXX of and cash ended unrestricted million with and equivalents debt. the $XXX

quarter. and loyalty believe X returning In year-end aircraft generate liquidity assets, We additional at unencumbered AXXXneo significant had aircraft addition, XXX after and our we desired. which delivery aircraft X fleet of AXXXceo in have brand-related if could the we during taking

AXXXneos XXXX be take of the of X sale-leaseback We delivery transactions. aircraft through in all first XXXX of are a AXXXneo financed anticipated expect to in and which of total quarter XX to

for call Barry the remarks. closing turn I'll that, With back to

Mark. Thanks,

a experience Our XXXX focused Every our revenue delivering high-fare improving clear. with member focus our Frontier are an and of network, is on VFR growth network markets. customers objective for operational Team enhanced initiatives, our on cost and executing for reliability

in provider Thanks, business. these United everyone, we drive Alongside in our the States, will open measures now call today, I'm and cost confident questions. joining higher margins the the to remain commitment the for up lowest will for

comes question Evercore of first Our Pfennigwerth Instructions] ISI. Duane [Operator from

cost to would we can on what unit year? length cost guidance? the guide the about there how some is the broad of headwinds give stage way a think Just a this to just a underlying on unit thoughts guidance, us kind from of unit perspective? convert Or should maybe And cost and tailwinds kind nominal be you strokes,

is note down. Well, to important stage so Duane, is going what's I our think

honest, intellectually on for but expect to closer be we X% stage-adjusted X,XXX down to a be the expect we to why I be pinning and So to that's think it basis, miles, we're it X% to year. to XXX

the Yes, just year-over-year? strokes, of broad headwinds kind maybe tailwinds and underlying

Yes.

full to cost over end is that implemented you going that network by at savings when annual mean fully million simplification So the on and look the underpinned touched guidance our out-and-back-flying that we've is to that year, for have rate XX%. drive the year. to by expect And run the that $XXX we the getting I of of

Additionally, go the taking those of as through XXXneos. we're the year, we aircraft that XX delivery are

get benefit gauge So the you'll there. to continue

think adjusted. the X% the main so are And in CASM those to stage length of I the down drivers X%

a Okay. then Appreciate those thoughts. the question And lot. sure you get I'm

becomes Spirit or the from tempted the you it's team, available to reengage it's would it maybe where maybe equity perspective? Is just be there you'd the can any interest your price there? sense again, a Jimmy. As extent But on make that to to gauge your extent Barry,

Duane. first Thanks, asked been the that we've It's question. time

XXX% business are our We for and on shareholders. our focused profits delivering

So to talk. sorry, we entertaining anything but have don't

And comes James. from Savi Syth question our of next Raymond

this your curious to of how roll what were are looking you of the and go along where able forward utilization was those lines, terms would in as changes, thoughts think trends targets? meet network kind I I of pilot utilization being the kind

about about a and But the marketplace. let the seen talk the we've I'll Well, change Mark side, pilot in pilots, the on utilization. dramatic talk I'll

when mean you the of everything regionals you the think this. I you shortage you've able I be being about tells to see at staffed, think And I the I think looking regionals -- that know seen pilots.

don't we challenges any see So there.

XX.X we the system relative delivered a quarter, basis. Yes. And total then on to in utilization, fourth so hours the

we'll As as network and drive utilization increase we to push to we that year, we go progress with the through the the to simplification, higher. expect continue

And might, just that. if on color. a question I I appreciate Duane's clarification

of guide? cost in mentioned increases the labor labor it Some kind XXXX the of in contemplated cost is you -- know the outlook. any XXXX I

opened. been 'XX, have These No. have 'XX. multiple that it. included open people a We know to it include I didn't of starting in are but for for just include we lot years

Ravi Shanker of next Stanley. from And our comes question Morgan

them? expecting months sounds This is which talked conference, deliveries, ATC Catherine I like you [indiscernible] on at X for pressures the curious Ravi. in lay what of for the but of you to trying environment? deal there a eased? from and About bigger of land structural current with was is kind today? about it ago Is Are an pressures kind restrictions, opportunity the plane you Have around are just work the those reset operating model to

thanks change. mean I the No, question. to situation we for don't the Yes. expect

programs. these do more we I delay think little been of a to weather ground extended continue has kind see to the industry. But hints of the kind

does spring programs. So you've what I that think season the through and have then ground to weekends kind to break is watch the next Easter, President's the Day test of in particularly you weekend all Florida got delay

trajectory, and these not are of when the multi-day and those, we them spring expect continue the to change our the the of were And that situation designing canceled look we in like several we last the flights added at summer. trips. issues of control are for our taking we to related percent summer. improve were schedule to our majority And situation, and XX% we through around year, waiting are But to

the and And network reliability have ensure so to combat these change we we the issues. overcome to challenges that

about the as seen back look -- really to had, like our we expect in because So improve out to make and feel we that if months. we recent we've it but reliability good continue we everything

close was of there curious how as Got trending. know are kind bookings slight Day. in was I just a it. last follow-up, Labor a off quick drop I And

So might any like? what color look behavior on you normal think

answer Yes. of to him that Jimmy alluded kind let this, question. we'll

back market And we seen part it, Look, progress we've end prepared as over we've Sure. of improving in I kind X seen what months an early a a remarks, in as then transition QX, booking the mentioned X QX. revenue is through seen of to the we've trajectory the QX. or bottoming of like in of last

so providing the we we're network through encouraged May March, We're term, very in terms pricing. working what you obviously hard very a progress close-in you're that's by quite restructuring demand And seeing significant June. and improvement strong April, see. internally And actually as of in short the also, improving

built last So sequential guide into our unit on quarters our a is the revenues. improvement over few

from comes Barclays. question of next our And Brandon Oglenski

up can we follow if maybe there. Jimmy,

timing, with too have that that can And that I must But and you that assume you're Is would you're the be guess acceleration what revenue built I correct? it compare in changes making positive be into your term seeing Is holiday Easter contrast the some you So not here. outlook. that bookings? improvements. the you're near seeing XQ to network

-- the recently, a Yes. big network that bigger revenue outturn. June. revenue entering improvement May, we're fares. if is but made Yes. also I you And actually Like network driving mean at March, the look one higher we've is of in announcements we've that significant shift a you pool have a shift on in things April, that happening markets focused see

that business. a as that revenue us I seeing April, during across June, And March, the It's said. so big early. network May is and outcome giving happens shift better The we're

overall. early Obviously, as quarter, you signs so April. see comes are it's That's deal mentioned, for of positive out quarter. And But to Easter we'll we've got that that good. this very, into Obviously, and this progress. the very back, with

] X will making in peak longer-term But growth [ entering particularly where support VA of utilization we think some of around markets. for periods we're the the drive business, changes more actually we're

So...

revenue also that that is from of is you maybe based? XQ or And it operating Or first summer? where XQ, this the expectations it more in your are and more the I quarter, just guess, can into down come anticipated costs and commercial environment a controllable improvement in

the clearly are where coming [ we're business costs Well, you are helps actually cost the ]. a to unit to costs a in that amount hard We're yes. part driven stated out I comparison. different working give very on just a today of doing. our to the good we extracting trajectory miles a That's lot our on mean, of the Obviously, we a the of very That's industry look, entire is is network shift down. -- significant guide trajectory. really They're adjusted that [ X,XXX That good ] fair a thing. business. by on

But easier improve to what in this we're through perspective. you year. doing this get trying is Clearly, or progress have we're the moment year-over-year, half as optimism as progress this lot revenue a the into comp of revenue improving an of hope a sequential But you you through what at year, the second as environment year. us from unit you seeing gives around

And Michael question Deutsche next comes of our from Linenberg Bank.

I ]. with talked in all, that of I Pratt you year, with you issues have GTF. indicated think Jimmy, you potential somewhat were And could XXXX the and sense groundings see Do this know you potential event? about year had conversations at you on was later it's fluid any later a last the [ a about we in that better have some if the the it call, that

Yes, Barry. Mike, this is

We financial from expect the -- expect impact financial we GTF. no impact no

characterize was cater markets. you some at you're decent past, I have some what sensitive to, VFR, you I your presence where the side, then, And look have maybe was X%, I you've in are the routes when did on and some the business I maybe it up do I XX%. actually in there you my I since at you know second, markets Good. that but business fly it to price know that would Barry, topped of as look in network Okay.

out, a because markets, or of rolling product a But I is product a, I'm one sort type some recent that's look you your with are that And in maybe to and of only when call et bringing opportunity there great. network some business this fair of bit thoughts Can of your and at maybe L.A. it, up presence of offerings, would offerings, there's that advantage Atlanta be about take Chicago changes. your Any that? the and cetera. of talk some on big these you

Sure.

yes, business. And I haven't see our from So mid-single look, to strategy historically, believe, those, are business mean, the would in we available not a customers, But small I of heard after major mean, majority past. the we we've to bundled the kind fare go business. they channels. shift third-party digits we're like of in through been something making we've for a That's had travel.

fare, includes no It the we includes as which if fees. well bag, available premium so Biz launched carry-on actually flexibility, cancel a as And economy have change seating bag. it's

frequency the product some we So for it's them money, product. that want for saves airlines a that I save think do. great It have Obviously, people a small But to businesses. it's big money. don't the great

anything solution didn't we just But and a did if just have they partnership with managed have we didn't travel we agency, do. travel now for a have a them,

the look, math. of do kind And you so can

If points improve it's great you to a to revenues fare, our RASM. and overall XX% way at XX% diversify of just get this our a few higher

from our question next Wolfe. of And Scott Group comes

to the just quarter go second, wanted a just I on cost to the for side. back fourth So

quarter million. $XXX that $XXX dropped back to look QX was cost fuel, fourth third the $XXX to just you guide million, quarter if million, ex goes at So right then and

help any what on happened in QX? So

Yes.

remarks, So on Officerlease $XX we includes So the strokes yes, the right? executed. you to I Scott, X million the AXXXcChief extensions QX, prepared in broad give Executive from million highlighted that the as benefit $XXX that

that If to looking right? to takes in right, for comes that quarter, QX, from at that, you $XXX play you're the And seasonality what the at into number in that there, adjust consideration we're first guiding million.

you've additional costs. seasonality, those fleet And a as mean growing tax-related I payroll right? de-icing. well, got So so

the day, of end QX So at then from and QX. I the walk that's think the

improving just RASM helpful. talk That's you throughout said -- can you're the And I then Okay. about assuming know year. you

how think -- the of like maybe year. X% just the to QX and to your to down want right, you X% you're of just Just RASM ending for margins about, down cadence expectation on growth where is a margin think year X% in run the I rate? to -- to sort from what up X% to overall what understand

initiatives play continue Yes. think those as look They I look, roll actually through at don't you and that guide talked We to out. we've RASM, can about we out of but the kind year. the move

you you So that cadence see accretive is would to obviously the RASM initiatives the go as that as move expect will the year mature continue and of improvement through more you out.

diversification I mean we you to take the that getting last it talked about ago, move as we're and of we a getting the Biz on fare, -- but launched But have corporations, we're they it there's different their we just through paths revenue I just for timings lot certain just all it's discuss example, week. on, mean shelf to a starting year. different slightly focused there. moment with that

Because margin are are And going to from rest trying the -- then get where year at XX% XX% we get this trying where to year? a I next with to labor. going what is guess, ultimately, we I'm perspective, of I'm to

just to of the So on just help could do sort you anything bridge? like

the Well, you year. and we've we've given you our given quarter first

you that number. quarters to that run the that will the figure well into -- that if against you algebra can do the see through X takes year, I you kind XXXX. we out that delivers hit didn't well, can kind you think the what of break take second half rate X, So of of And of out to

that look full the as that mind, being simplification keep getting all you're plan 'XX as the in of in place benefit, you network there And move initiatives right, revenue in on at you items we 'XX, the are into of put cost those and and are year and initiatives 'XX. then deliver and

So I as 'XX I versus note 'XX. that's important think to mean you consider

Stephen question And of our comes next Citi. Trent from

clarification you question be OpEx? was any if you in a on -- memory, Mark, gains sale Could will guys just my for this is including I wondering refresh maybe perspective. leaseback from a

go as in to we the practice consistently consistent credit mean expenses. I we are have forward, And past. gains sale-leaseback Yes. operating a

end And of where of sort a high-level year, on up any could this ballpark view sort example? for for that

think the to call it. most thing fair think there debt we had reason that why that the compare But to don't We the financed, it's Stephen, best out. is I way is about, it's because

it the don't will specifically but get I people get they would it [indiscernible] yet. debt mean side, benefit actually So that through leaseback. that be the we sale do impact [ those the have to the on financing ] similar finance. call to P&L we but out, who

your having No, Makes Transportation. sense. last have I there's makes code I it carrier one cross-border Yes. of And just that. sort you getting renewed with Mexican the not -- question. one by sense. Department know in appreciate of potentially competitors its share the the of

with you your relationship Volaris are regard? How in thinking guys that about

that we with exploit been over few years in do things We're category excited get our the to haven't year been really excited challenges the to but expect back that and able turned about great partnership with It's Volaris. that we we're their this disappointing, to obviously, partnership, given that on last it.

We're larger now.

brand presence. greater have We a

we position. partnership. had ATI have just We partnership with we and as It's never we're power more in a marketing growing well where overall true seeing Volaris. But a have their distribution But them coming. co-share

they're excited guess, we're more to turned comes bit So saying think it if what on. it, have get little if field level we'll through. I of a a And you playing I about guess

of question Our comes next from Melius Research. Conor Cunningham

revenue which markets I of think the seems you're unit like you're is lot a it underserved is accretive, that all the there, stuff back Just changes the indicating making to bit year years. a of a that or think a would But and over historically, surprising brand us. some received? X of spooling you well the period the to Is being fares just that being and like

any -- the why on so just being thoughts what's So around success on far?

years, like think that you processes correct. cost. you negative But pulling XX last if course, from consider over been in capacity opportunity part I assumptions -- think think is are to normal a having of this I we're those a have I the where this

better example. to is in you're the I'll financially those, give on an accretive well move you not immediately when market many So opportunities. redeployment almost you I mean cases, doing when

add If you're revenue, a more all didn't the something these frequency fourth X you and but flying day, had times any costs.

somewhere the to that that XXX% is Moving frequency else, incremental. network gain

You're helpful. That's that was the these context about wondering on Makes improvement new And probably pretax if in I just the fare premium you give could products all sense. to loyalty could margin. X-point if and just economy a you Okay. -- all some then contribution? about you're changes, Biz talking talking

of what's So new is products XXXX? what in these portion occurring

broken of shift the that appreciate I out detail. leisure and the year tell are actually haven't the year VFR you the others the smaller and each the to majority then we benefit going of And contribution. one question, from from away network the oversupplied both next is flying Yes. and but come the to can I this in markets. But

XX% mean, right? which expected as fantastic, I haven't is things spend to a frequent over Jim fare, mentioned things We for example. to mature. from Obviously, up month think so launching mean, the the it, spins I just year-over-year, earlier, within of signs while a take huge. alone. you credit card flier think We time that Biz takes the huge are mature. But early the

each of but of not a those one sorry, breakdown -- components. So we're giving

of next Bank question Didora from And comes of our Andrew America.

a think, provide bit be are what's on XXXX going question, back margins headwinds half what half very the than guess, color of assuming I back from margins incremental -- can Any to we how maybe just goal? half you folks. bridging what kind you thinking 'XX your of are I back to provide better bridge XQ. 'XX margins, And I Barry, on going your through of of color little your from you on revenues? more in Scott's kind helpful are drastically look But about would get sort for kind can know look, coming to you labor? How back to

Sure. components Look, simple begin a as X for do discussed, the actually be has year, we've the to the year. I out we've revenue given ago, as quarter multiple what through of the unfold can to figure the said has first diversification and that algebra that while solve so and you obviously, the we

now from benefit -- than will X it will have greater that And now. months so months X obviously, from better in

in we believe and play what to And to actually solely so headwind that But around I cover we think XX% to range deals. somewhere XX% that you for $X.XX a labor end XXXX, into then expect can can the you as that the in result. easily of back -- when get that our back be out, the we XXXX annualize you

all? Okay. go should these Got in had XQ for? were that? think extended the million Does you 'XX million at about long we this leases it. And lease Mark, of away, from just that extensions, kind back the come does how How $XX just benefit in $XX

Yes.

years. these X-year extended that leases are we XX So out

so is the that $XX And million out into future. far

So that's item. not a Yes. 'XX

Securities. question Curby our JPMorgan from James next ] of And comes [

there? with Savi's can you Or month last And pilot down out. a slowing question Just and just a any earlier earlier that that the turnover? of Is just with on less following There the flying? share less training reports color up pipeline. is function mere are some function of pushing

against were thanks -- expectations seen what question. seen slowdown We've attrition. We've for a Yes. actually in of kind our earlier the

we've coal in industry. so mine with around the that kind of the coupled And other canaries seen

seen just big in change you've that. a So

with And we've round right? so in to a give those to an idea, get pilots we XX, And around needed hire last several the generally years, month, right? XX attrition you for numbers

up, have a a of -- you to call takes, it happens the And your because timing, captain of months first could training full officer, X if a of a is to to new kind of so then you training what get of crew. it, the that to attrition and X dries create kind

a be could actually XXX, see XXX you very too many. attrition, change you quickly pilots in if way material the So

But to our efficiencies going significantly per the also to pilots of that, change kind needs in I our we that we out-and-back in addition schedule just seeing actually is bring of to airplane. which invested we're then actually programs add have In in pilots. would

cadet a have we program. So

have the a rotary transition for We program military.

programs. We have our college

people. so And we're more with the seeing a just pipeline, a have we really and stickiness robust lot

more we've the years, much last people we years like hired attrition rate have people X ago. that lower in than a X.X like So hired X.X years than

thing pipeline And over is XXX now. right in other have the cadets we our

X So the we supply. math cadets and alone, have worth you years' do of if just over

X X marketplace changed the years. the has last think in I dramatically it's So to

remarks, your prepared great mentioned you That's And in I markets. it. Got rescinding pressures question, second correctly recall color. competitive if certain in

of I can the is those mentioned see that markets are? as in but you trend wondering what in continuing not elaborate type you on terms believe capacity? Just it's guidance, you embedded on if goes a year rationalization of of

-- be so clear. so -- we let Look, Yes. me I mean

else of biggest DO of can seen against that other some Denver. and seeing of Rico to places money Puerto seen we've that carriers and revenue Spirit like recede. at the leave understand capacity we start We've way things one quartile some this and money. doing these their stop best out the and lose So look, we look the that of examples of capacity fares can everybody stop And to just received losing in the saw some against were lowest were

making decisions rational think I the So are system. around people

our only We expect lot the oversupply, leisure to guide of to captured thus do continue we've see we kind to markets. far. but people seen expect of rationalization a these of in would have that, in that But especially continued we changes

next from our comes SIG. And Stathoulopoulos, question Christopher

you, Thank Good morning. everyone.

to LAS So of about here again, And cadence with going the of take you're product Barry, arguably think in to where I sort about benefit for going it's outside we a ultimately, margin yield. network, try given cetera, which mature. to et is a is your of hold constant, flying and we to going time here we argue question And outperformance, for how of and year for just to this I'm piece seasonal be if that that a piece or take But of different out in important way. we change of deemphasizing to any against MCO. big get respect the RASM next, if the guess, the to or can some product, could

finer DO today, but the that. So is, can as schedules just think we a my to year, sort alike or with any anything the shift Part ]? changes this nuanced next moving type so understand you're around at composition make could far the where about we do a all and crew B your aircraft And and ultimately, C, is with for you need respect look point, similar then of point if on And question to to growing. pieces put you want to that [ scheduling better or and as

change the aircraft no, of is the becoming what with think don't simpler talked our we we So any or about to network. our scheduling simplification because I of expect

clear. we're the mentioned earlier, I we it's that mean, markets I but the average mean, chasing, as far the this very across As fare system.

same compared is you be summer. So in the on all look total. and up flying the year the at those markets of markets take this fare average markets will that we last to And X% the you

tells the chasing higher. just new significantly So that you with are we flying, that

$XX the higher I actually on think fare things that going the more is $XX range, to we're in the into.

these So today. into higher-priced significantly markets we're are than

flying over all I'll The is second the that the itself, industry in XX%. as year-over-year be so that pool of revenue pool you thing the we're that thing in point is another total the back said to -- we slides revenue up will

bigger XX% a a revenue pool going And need growing of and pie. up is you so share XX%, smaller much to when you're only XX% the

going think the we've Juan. especially San the just bunch our think to lowers grow new So routes and XX out kind ones But announced for of I way. it business of year. last out routes, about talked I really significantly, announced of it kind recently. from opened friction that it. just base We about is Dallas, new of announced obviously, a of bases, you just in specifically of have mean, And big a Fort a routes Worth, a we which bunch that We the if derisks we're competitive we

weeks this a you'll of we few in we and fares with be this announcements in week But some that next actually then come. marketplace were general later week, our We've the these trajectory. are And got RASM find I think think to considerably probably higher improving which announcements we've significantly more will in the got more all some last markets than summer, month.

done more could excuse what needs to out-and-back, that? bridge to sustain And Understood. be XX%, second that? And me, anticipated X/X, than the my for XX% or is that more you you realize question, do how importantly if March's

scheduled we kind as set the a lot will that's at the this example, Actually, be Cincinnati actually of Thanks. yesterday. there up but have We're to March already in we're hotels. XX% until base fact, it but was people still doesn't went open May, if because, with there actually And out-and-back. for if And just already we of our the not flying the schedule, you our through crew range look at in there. out-and-back.

So what and doesn't of from what out-and-back out-and-back an the cities, the happens schedule as perspective as but change they we several those in happens months flow crew have we through the an next become materially the the basis pairing. members we is metal, based open crew

actually gets you through. month It already kind as simplification. majority you've done easier So just flow of every the of the

June, And get by Juan, of final with expect. we the opening which we San there

We've Rico Chicago Puerto have Juan, got March. Cincinnati in So Cleveland in is June. in and we San in May, then

it Barry this to to remarks. for turn back like At Biffle you. Thank time, I'd closing

expectations thank and our for year through want to We're as as A that and year. the really results everybody the in as today. going our with into the we're joining company. just putting move of great forward guide us on about I well excited lot next things we

So our updating us progress our on we and success quarter. appreciate everybody look today, to forward next joining and we you

Thank This may concludes and disconnect. for you conference today's you participating, now call.