Spirit Airlines (SAVEQ) 27 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

Ted Christie	President & Chief Executive Officer and Class III Director
Matthew Klein	Executive Vice President and Chief Commercial Officer
Scott Haralson	Executive Vice President And Chief Financial Officer
Duane Pfennigwerth	Evercore Partners
Jamie Baker	JPMorgan
Stephen Trent	Citi Research
Conor Cunningham	Melius Research
Helane Becker	Cowen
Michael Linenberg	Deutsche Bank
Daniel McKenzie	Seaport Global Securities

Call transcript

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Operator

Thank you for standing by. My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spirit Airlines Q1 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instruction]. [Operator

turn to now conference the will [indiscernible]. over I

may begin. You

Unidentified Company Representative

and and Thank members This Spirit recorded our replay website welcome, archived Airlines minimum will Bailey, this call webcast. call of first being for call. to on conference everyone you, be A earnings quarter is of a on simultaneously XXXX our are Klein, other Ted Presenting Commercial Officer; our Chief Chief us our Officer. of and Spirit's joining Chief days. team. XX Haralson, leadership Christie, today's call Scott Financial Also Matt Executive senior Officer; are

significant session limited including, our our on statements, undertake to Spirit, analysts. that actual cause to forward-looking acquisition there and Following company's of not but There statements, in remarks, will on uncertainties discussed update undue these differ risk prepared not no to on results and be of investors based discussion be our reliance forward-looking and current factors from statements and a forward-looking related statements. not uncertainties guarantee SEC. forward-looking those question-and-answer and contained are performance. a place various for any We the that contains with expectations materially risk the the Today's future in JetBlue to, are by duty risks should other file could reports

otherwise results comparing noted. unless to today, items, In we special will periods be all exclude adjusting

at the reconciliation copy in ir.spirit.com. section available and these a GAAP, under our is the provided of non-GAAP refer explanation tables reconciliation on Investor to an first to earnings which For quarter measures our of release, XXXX Relations website please

CEO. Ted to call I will turn the Christie, Spirit's now President and over

Ted Christie

in two team had being today. start all the joining by who these number for recently us innovation to and WalletHub's guests. and Best contributions the partners named overall network delivering their proud family Viv, work, everyone our thanks by the business through Airline want a serving XXXX high and possible to privilege experience Thanks, most our am Spirit and Value Awards. the affordable value their call guests. other across made I for airline thanking the on ATW recognitions to Year commitment members for of each Spirit I our and airline Airline and of hard in the of

merger our JetBlue. Regarding with

in views both XX, trial seems competitive sued the XXXX. expected, has As early DOJ to the on block a industry. a to with to low be transaction. March, aligned low of and fifth creation for cost set government's fares XXX% four the us the challenger with October The big The been date to

are significant can disappointed JetBlue Spirit we to So while confident the we are merger. we with benefits court to illustrate the employees and of decision, consumers the both DOJ's the successfully that

Turning now to quarter our XXXX performance. first

helped total centers better Our quarter for fuel strong various by a performance. X.X%, country. at margin events the on a operating Operationally, came environment negative air RASM throughout operating expected adjusted understaffing at by it the continued was numerous first made and the exacerbated challenging weather traffic than control in lower during

two carrier done and problems our number as unprecedented to programs, as cancellations. ground Lately, creating minimizing control. driven construction we've runway network emerged our configuration delay has our and delays for team departure the That excellent impact we and and are newest where seen said, the Vegas, changes now the within has job significant Las hotspot approach an solving

no see removals. we and unscheduled we Unfortunately, capacity the as engine long-term is do update, year. quick percentage but with first shared working X.X mid-March issues. partner the to these expect throughout we is us to availability number point Pratt an from improvement that of due about engine closely to help some we pulled solve a move there fix, is increase in the In quarter our of

want meteorologists I area Matt, a to are to Spirit by over kudos it Lauderdale severe airport, referred X,XXX closure Fort team. experienced the some to Lauderdale flooding our carrier. turn number extra we as a the where In flash one give the Fort I entire year mid-April, to Before requiring of XX-hour event,

of nearly result for others, a this As event, substantial weather numerous plans driving our of and XXX and crews. for flights guests a canceled travel disrupting Spirit many diverted number our complications

the a our and Despite the operations. as efforts our in the for innovative well getting Friday diligent quickly Aviation thank airport Department, want the possible. The was airport once as significant recovery and I as recovery and we the testament changes help morning to to to accelerate the up and primed team to team the go of have quick County entire also place outsized FAA assistance Broward disruption put network, in running as on our their is reopened. ready to

Matt, over you. to

Matthew Klein

team Ted. guests. did our for the Thanks, during a Load caring peak contributions I job thank Spirit members the our quarter. and terrific want days high, on also team their for were quite to factors the

our increased versus to was Turning revenue strong performance. was the and revenue revenue XX% same RASM great outcome trend a $XX.XX, of last year. billion, period XX.X% last was continues Total nearly up a quarter top-line This XX%. X.X now a on year, and to first production. Load increase percentage total Compared of first the points up quarter factor $X.XX capacity

with fallout factors. the variant, adverse in load an had first dealing were which flow reminder, from we quarter XXXX, on the a Omicron impact and of As

period. lower up So while historic XXXX was was for load bit it quarter the for than norms a factor year-over-year, first the

week year. As more flights day days off-peak variability noted summer less previously, have of number we by last of on flying been the the had we and since have operated in

crew and again, performance. to aircraft can we as how a technology we changes, as maintaining day bases, well opening together comfortable with have made good we network given that additional changing flow have the varied we week are more while investments our schedule operational a However, begin

over the a segment fuel factors total benefit Beginning June, revenue and as over On should first to varied a per non-ticket increase a the more increased revenue quarter passenger first unit XX% start will over record and XX% again, per quarter compared improve in segment load we Passenger schedule to basis, week per XXXX. $XX. revenue a of to $XXX, a which X% $XX to introduce to per day increased well. segment about increased

of a comparison like demand last strength of the It continue to feels year we to is COVID-XX a a more second much note the pandemic. Important we saw compare unusually a year-over-year the to prior In robust to basis. a are XXXX will true to of basis, underlying quarter not results on period to on for words, begin other period TRASM to like we normalized we performance our the year-over-year seasonality see. returning reflection

period time, of Caribbean had a our while mentioned. with footprint terms structure, Ted were fleet dealing under our for due Latin we of In previously XX% our network reduced plan to that we American capacity to fluctuating an interim issues and of

perspective, that at now a back the curve we our resume a planning and least XX% in capacity Starting from growth next our again that are in us to month, ahead allowed We on monthly basis. Caribbean of Latin to and having of are has this region. America

X% range of This down X% the $X.XX revenue estimate billion, account, quarter up X.X% on increase to into year-over-year. XXXX. to to to for a a will second X.X% compared XXXX we second this XX.X% $X.XX and capacity of between RASM quarter the estimate equates total billion all about Taking total

benefited greatly year last from pent-up quarter demand. second travel reminder, a As

environment the is strong. very So down while year-over-year, total remain RASM demand does

excellent If this an increase RASM XXXX, XX%, XX% quarter is to it you result. which nearly expectation the on to equates capacity were total up to compare of second to XX.X% of being a

And with that, over I Scott. will now turn it to

Scott Haralson

QX updates, Thanks, business today. Matt. few want by start QX to and in things guidance results then happening I some will I covering outline and a our our

correct over over with and was expenses decline crack better Our the still coming that than so down months curve have expected. implies in price remain quarter per its of will is XX% The couple tote coming first up trend. prices will past continue a roughly good downward with both The spreads that costs Fuel current flat, period. that that $X.XX we operating WTI fuel spreads were seen gallon up significantly, news non-fuel year-over-year. fuel billion,

end Total about additional non-cash came million the due of the higher liability the associated valuation to with than non-operating $X in derivative XXXX in revolving credit our expense of includes first and unrestricted the and was of driving investments quarter the notes, capacity expense billion, equivalents, estimated undrawn the which periodic convertible cash $X.X at under short-term of facility. cash Liquidity the quarter. $XXX million

we the fleet. delivery the aircraft, XXX of first took four five During ending in retired aircraft quarter, period aircraft the AXXXceo and with AXXXneo

first before end. year We AXXXneo more seven are next delivery expected of our with aircraft week the taking over

family We the be of are excited of larger variant introducing aircraft fuel efficient this AXXXneo into our fleet. to

June. AXXXneo interservice aircraft and Our in service first scheduled

delivery million, now $XXX to million. night in disclosed total PDPs. last our dates We recently, net of would received that about We reduced $XX and from that from that expenditures is number update capital updated Airbus be million investor $XX coming with

We will update modify today. investor the

So approximately to primarily total our spare to the will million headquarter is and in of related predelivery capital expenditures Dania engines to which Beach, related $XX is million, net related $XXX $XXX this with of new about million parts. be deposits and facility remainder

in the the in new the We of begin facilities to on track first of occupancy quarter are phasing XXXX.

income Fort us there lost $X.X quarter $XX with that to highlight points We collective XXXX. of about on Lauderdale reached month about adds this from for XX attendants agreement a primarily and margin, $X estimate operating couple XXXX AFA, million revenue. included million an by an second the are ahead And quarter, which in guidance. estimated our the of or mid-April, cost to the in full-year XQ to our million flight of flood bargaining amended Looking second of cost the we in are items the basis earlier represented

our second the release. a are guidance And the few in in investor in filing margin at furnished X-K range specifically than the website these which other items of because our on our I copy guidance Form providing now our along found quarter can update consideration, noted are this to between ir.spirit.com. this, we into metrics mentioned SEC, XXXX, of body operating X.X% with will rather update X.X%. in we separate investor the a Taking our of with be for estimate earnings a

of rest engine of rates put rates takeaways. for contract are should So throughout to been both has continue overall signed but industry, five towards of Number will improve with which pilot the the and year last year. NEO gradually to yet one, and by top expecting. pilot hampered have all at the to the we our utilization we that I be the new of the to attrition We end see said, levels attrition, that want highlight our key availability a clarity, improve

will are We as year levels attrition the are improve disappointed, we assuming but progresses.

normal environment. this to as during is productive will We growing growth true two, lost it Number on a a know be that has a challenge It recover inefficiency the been and and utilization short not aircraft. period run. in profitability in it as more would improve simultaneously remain with of

significant. are accretive opportunities growth expect And once the and are our to However efficient growth. return remedied, constraints to we

infrastructure are our Number paying the operation solid three, and in and in network and are operations changes investments off.

is this much would have our to handle ability evidenced in Our airport sudden recovery In event. the closure activity been much fast a by impactful improved past, early after more April. as disruptive the

engine we four, full-year ex-fuel the X's. exit improves ex-fuel be as ex-fuel throughout and CASM attrition CASM NEO should and about for year estimate we pilot the our availability the Number will will be our $X.XX. high in rate CASM year estimate decline

profitable still in remaining profitable are anticipate we full-year. of will be track we on five, for this be and quarters to number each year the And the

able Given operating lower if of right the full our now second guide environment to airline operate at and XXXX capacity we the to should quarter. our declining to this business, XX%. XX% is prices, of end towards the the the operating margins fuel full-year constraints business on demand being external producing frustrating be our Not want double-digit utilization, we obviously were is for with heading and

that guests are members running all taking however, unique to great of way. and the and airline, handling of care team our being way our thrown curve We are our are, of committed the a balls I'm proud

Spirit members. So of a to big the you team hard-working thank all

turn I'll that, with over to And it back Ted.

Ted Christie

Scott. is is the outlook sequential record remain to demand peak Thanks, domestically The first seeing and setup and new strong, a performance segment quarter, both we from year. internationally. for anticipate the Non-ticket per improvement passenger have favorable the leisure robust. and a throughout summer revenue

underway, well XXX gradually this our cost our burn. deliveries seat we and retirements will With gauge, average beginning drive that month, AXXXneo which efficiencies AXXX will increasing be will benefit and the our fuel unit

associated relief with pipeline certificated the with too to some in will attrition expect, years. team provide our coupled we deal with combination improving high, our and the Pilot in the new is an unique still pilots but coming new members benefits JetBlue

in several headwinds proven team we conclusion, and our managing provide has continued while doing can grow margins to have tactical job improve. to to plan a as and another are staffing environment, and In refine our particularly get much facing a will profitability, related great business challenging what we and continue to double-digit the a to is our fleet volatility although it adjustments to take from which making and year may normalize which are insight, base be op to as

you. with And back to that, Bailey,

Unidentified Company Representative

Thank Ted. you,

now related begin. Bailey, from that the analysts. question with to questions are one you to limit are ready ready one to ask We take yourself We follow-up. we

Operator

open. is And take Pfennigwerth. [Operator question we line your Duane will first our Instruction]. from Duane

Duane Pfennigwerth

Hey, thanks. Good morning.

to if you and what monthly and of you don't hoping is stabilization versus line I Ted, improvement seen for improvement there? attrition, what kind it. numbers you've talk and the rate on can I of about some you a might sight if put your know what attrition Just were wonder for

Ted Christie

Sure. Thanks, Duane.

April, in bit made kind us that's we one it view, if levels into we data know So it that's And results take not. would January, when saw would were of back little some don't deal, February we time. anticipate begin attrition pleasantly a that last our put with did a of We more we we and surprised to be although or sort March. our the we in anomaly the point conservative but year. an mitigate, saw knew And signed which

So not, and results an still all still expect is of hearing mitigate this we the hope. down. we're will course And And in the year, way go I optimistic to us over you're certainly very continue the that we come think we're from to it it's issue.

the said you, disclosed I actual it's like definitely we before, haven't tell can but We rates, elevated. just

recruiting be a a you can this imagine to of as pilots infrastructure the successfully now quite that the make we handling right number are in We there's will to need that of and involved training run, but airline improves, tailwind bit costs.

Duane Pfennigwerth

And Okay. maybe Matt. for one then

about guess Just March is and I of more to the you did bit Thanks resistance March? a kind you forward, of we you given fares. the a backtrack appreciate the factor that a Is in the refined trade-off And on see to factor looking yield. quarter for an load quarter. into the month wonder day with schedule into then comments week active from load if on perspective, anticipated little taking the first getting could I experience load more the respect some Or are in I the this maybe approach your between out punchline sitting a of outcome the beginning of questions. here the of factor first? taking June. second But high

Matthew Klein

the question. sure, Yes, for Duane. Thanks

suggested the QX we demand our talked had on Let call, me about period just this. as a just off-peak out there. The start in general off statement, quarterly as we remains performed by saying strong last

QX. continuing of us the surprise was we I spring what So at yield saw and strength. peak both break to trend and this in load important all the it's factor think add And to not periods strong. very was It's showing a

lead June to but For normal, of Memorial we period, a we in what QX, and month the we be shorter the expect up, Day call to rest ramp would which holiday we'll expect will relatively then a here strong strong next general.

we system. for early and added the one see on summer across getting are of we week holiday through for June around between ending detail normal schools the shorter the in Just period out some demand anticipating that, seasonality, could

from And year. a perspective, season. shorter a last happens, all off couple the year comparison year, out didn't in last I kicks we everything add realized by bit a really summer would normally weeks summer happen started peak probably early travel that that unusual of generally then year. that last bit little results last unusual early a XXXX, schools period though June getting know, As little but was really it

with I'd trends. is which so off-peak that and with we're trends The we're than caveat. Americas, normal peaks stronger normal little bit one return operating the is continues a that off to normal the where are performing say takeaway the seasonality periods all to much

We all level detail win continue QX. we QX that think about And give is because expect to the that I and you through this the that this.

as true Labor after When you factor know, versus targeting like trade-offs, that you And off-peak in until about QX. talk about get fare and what periods, to really have doesn't load se we we're Day. hit a really know thinking shorter don't QX you you be per anything

think more targeting So we volume. we need are that periods

The lower of Wednesday bit periods. us in with if even like we would will May, pull those target Wednesday little We shorter to. a for fares post-Easter those downs and situation have in need we Tuesday Tuesday, normally

a So us there. of bit for a little headwind

All of Day, Labor be trends presuming that in once to hold tailwinds like new see. operating especially be we that past to with will that future, these able up the we'll we get

your some question, that but fares. long need to seeing doing but that be So we We're is when are the the to, we strong. expect low reality still answer peaks we very to need periods

strong. year yields to the expect very, as very relatively healthy well. Last there We be was

if we'll strength general, year. is can catch still there. in So last But the see we

realize We expect that. to

Duane Pfennigwerth

Longer-term, for one you're to you're that load solving I what follow-up Thanks. questions. the again to And is both you is a that taking just for And thanks load guess for? just maybe factor towards then target minor extent there. on driving specifically. the Spirit, the longer-term or there

Matthew Klein

general, with factor there's loads wouldn't and help exactly obviously because our non-ticket of target revenue total does load that at low to just higher of But a what revenue looking we're the strength, in Clearly, low for. Yes, fares. volume for extent. We're going sell our us, shooting sure, Duane. for the not I non-ticket production, do is in model fares some we sake to that calculus. and always have selling us we're say

off-peak definitely to in we but it drive can that an more to already will be very pretty very, load demand point get one detrimental have When have periods, peak factor more try dilutive we effect. yield low fares, with period can of a

that revenue about about we generation. think So thinking total all we're of when

Duane Pfennigwerth

Thank you.

Matthew Klein

right. All

Operator

comes Baker. question next your And from Jamie

open. is line Your

Jamie Baker

for Hey, good Actually, one everybody. today. me morning just

discount get feels like to airlines that members considered are. But challenges And Spirit's for have the signed you out, get to up, Spirit to the the transitory. some big and you the restore challenges appear that three longer the can are margin of mean, do I'm takeaway your the get So them current SkyMiles pre-COVID perhaps sorted doesn't used mean still takes become. more sure it doing credit for this, I'm of issued, upper the that globally, cards better big hand. the more merger solves three simply many better period, I confident, superiority but enjoy. the during international stronger margins

consistently industry. missing? So towards see am to I not I What path improvement, those margins can a a of guess I but superior the restoration of

Ted Christie

future a hard get perspective what a that product. compare margin back legacy to production more normalized Plenty to we that from the Look, sight thanks there. us and Jamie. for it expect. while the a And of of low-cost confidence. now, right we to you We issues loaded you Thanks, challenging addressing against agree product expression the do with it's when will have your questions be line and environment in is a say

But carriers to do What the and we're low-cost premium are really down out now us towards. will happen legacy that's in resilient capacity? And good at What that business. relatively demand outperform, carriers a news economy? operating with times, has macro what large told what pushing models cycles, don't efficiency the low-cost strong tend happen history with You when in very they're carriers the will is that know really most then in outperform. is peak the right

we're I number on looking more at where double-digit upside. would within still at a mid-teens usually towards level the the mentioned that not that's sight target op That's are margins we point. ourselves, well this

the a kind And so to effectivity. get there of we and have cross we're start refine picking to prior the through them do territory. team And up mentioned hurdle it's of upon think this in we incumbent double-digit to once to burn airline as this I've that. I matures going the ways call start our we of way management fuel into phase, points getting couple on real our margin that the

between NEO any on of We're faster moving relative will and two margin four, else points, somewhere the based relatively where aircraft to is pick which more and probably more one today. towards up big everyone than absolute our calculation

You cost that fixed where We demand. of it the couple environment, that charged. board our cost demand in on airplane at the our costs see way the that the the efficiency crew way the is in gauge should spread airports airplane, larger unit costs with relative more are basically efficiency airplane, this the the fixed are untapped the of of

which we And that claw will all efficiency, way as well. those points expect of things create we margin back incremental

are that we think those kind margin to business? Will know. will the things. and back in about us so get to best tackling way of the target And be be Don't the we

think said I not it's always carrier, pretty now I good season as I that, be a right think true. that's to but a legacy earlier,

to the industry will see so the we of rest best, out. what do just And how do shakes we'll we and have do which

Jamie Baker

the that. for Appreciate floor. yield Thanks I'll Okay. it.

Operator

And our Syth. from next question comes Savanthi

open. is line Your

Unidentified Analyst

Matt Savi. This on is for

talk exit X's? you what particularly First you're question, maybe how that just the year, embedded could high expecting rate trend rates the to in if are throughout XQ utilization about into

TedChristie

Scott, is start. jump This free to can I in. Ted. And feel

of won't expectations aircraft start on NEO the right which number engine we to but of to right divided ground current the So in a expect march issues, we've we utilization, aircraft the year that steady move total block would more number with me, have total our end And now, fleet hours the the excuse from or by normalized hours. is on Pratt. artificially penalized total which in aircraft. we're direction, along, because of fleet, a by fully block be about And based fleet been saying all to on a the be here remedied

on for Spirit, to in quarter quarter. in high So the utilization fleet XX's. full -- the in for year. utilization lower lower than average utilization a a the somewhere basis it's used be It's fourth But

So limited that's the XX.X we expect year. of per by to number hours pretty the back we're to direction right artificially hours number We're day. in get sort end of the XX.X, that close this per But XX.X, of that moving still XX.X and day, to mitigate by that catch help crew ground aircraft there on to will continue in expecting see us up. attrition And have now.

So the we're next recovery it, anything? do year, we'll add in some still direction. Scott, right have want in but you definitely to moving

Scott Haralson

right. seasonality would we Yes, Even lower, But QX. lower, call typically capacity point won't -- be reach QX be to just full we that's exactly QX is won't the said, full do which in if that back levels, generally we at historical is are like capacity. we what there.

would we levels. to will be happen expect enter that So to as historical utilization XXXX, close we but QX

Unidentified Analyst

the on you're maybe on to what Florida could And front, Thanks helpful. you again. in then both. ATC long And any operational you in just if you, how there. color an additional persist? Okay. maybe of seeing Vegas, That's Thank very provide also, update expect that terms

Ted Christie

Sure. Thanks.

that's have is us. how good the here we news we Florida excellent in progress some is seeing Florida. the given Spirit, for So to are news exposure And and important

centers actually in important down positive Center own data, the most FAA's the on based Jacksonville months this both Center, versus last fact, year, routing the the two first in two minutes Florida, the in year the Miami two of trend. delay of months a which is and first In

in by of I improving but suspect capacity. gently those is the fully staffed not having to less some centers, that have staffing, also reacted related although airlines

it's So the to effect. have beginning

that Northeast, a are the very bad the small challenging airlines have or good airports, in relatively seen to have we've however who the that, the there airlines FAA in I and operate This we're we is to volunteer in same because news, will asked not presence to that's setup. summer, positions The the of going So that very news. we're larger area. doing of know the partaking small some and a in slot the operate slot-controlled voluntarily

challenge. But that's staffing I what going And a to to is what believe was be of JetBlue half that XXXX. it or nearly expected there in be mention even heard they I

That's XXX%. not minutes set then not data That's for Vegas. that's while the same Vegas, Vegas, months XXXX of look of are which And in our XXXX% we in good are about two in So a larger driving to up represents Las #X the out when airlines at XX%. X,XXX%. compared Vegas, delay the capacity. And and versus is XX% up. problems real first we it not XXXX, That's the domestic of airline

there, going see So through right done, which the there's of move that's in runway And construction Vegas of will out summer. step and the challenges direction, a probably we're hope through once that, that's we in but to remainder the summer. the

so to government and that, a that across even actively the to And over the Spirit, I been doing at control I've prior thought, the and the for improve United know traffic have most will I or airlines for system. network, the decade good and lobbying premier been of of reduce me last environment we been it today. is this, States fuel is leads that efficiency significant kind which investment in the take air have increase back imagine utilization it position a burn, which slot-controlled into airports will because To the

stimulate which for competition. slot that those up areas. air say are things free very will the doing All system with not what improve room is just low-cost what And There does carriers, not at that because will that much an improved enough they're they aligned capacity airspace, yet. doing, they're but controlled control airports that. traffic they're but there's It's is in restricted

some we're then estate carrier, as get competitive hub well, their been carrier a said, large figure in better of real free can't Justice advocating inefficient And in no. where help legacy that. we've is airports. And if of way, of the incumbent that we These we we and to estate, hold and we're of us up Transportation, enhance help a industry we're the that Department and the on we estate routinely the that. the can so opposite way way that out hey, the very for And constrained told, use us airports competition so real real saying of Department to

We can't do anything there.

the So our scale way we well, in bigger then option, airlines we need control XX% best the us to go to that get dominant to States. for is the because guess I is, United compete of with which these third capacity

bigger stifle -- not So continue our it's getting over growth their They that decade, but something and effectivity our the it's dramatically enough. fast we've to day. so, use been try we that networks power every to tackle to their obviously, having and of

we was next the they're decided going which object we instead, that, to So we're another best and merge saying with airline too. they're thing, to to did going

It's not around say, up we've here us we quite where frustrating competition, stimulate and real trying to and come happening it's ideas with we're for yet.

So system think ways a And I provide for will I comments, will competitor, prepared the competitive a good still path towards which one create really fourth as competitor, that we a in of to the be but constrained start more I said balance the in looking actually to have access low-cost half But in successful lay fifth stronger can my be government and find industry. air out we very in case. the for improve think traffic to control airports. we'll the carriers the to meantime, size

Unidentified Analyst

valid Thank Very you, Ted. points.

Operator

question from Trent. comes next our Stephen And

Your line open. is

Stephen Trent

thanks taking very much Yes, good for morning questions. my everybody and

for or two one Just you, actually.

that your I you should believe. capacity to deployment that mentioned America be the back on percent versus where and view you XXXX? high-level any may changed have first, And were XX-some-odd weighting of guys how Caribbean, Latin the the of in So

Matthew Klein

very lot Lauderdale. Stephen, Late into Lauderdale our growth grow Fort of out it's we Latin a successful South the so started well. 'XX Orlando to Fort into and 'XX, heading today, Caribbean Yes, to of we franchise America our had America, say, Matt. South 'XX, as from, 'XX Yes,

relatively So a and throughout seen few Orlando then lot initially a we've the started increase last the of growth large in ourselves. for really years,

which and sort and of both And has it's -- what some would what VFR growth can call Cancun traffic, Rico, tourist tourist we of in you call other Puerto some call been to extent, you VFR. like leisure

lot starting we're the Puerto some that as routes into a month next summer well, well. Rico in grown really So continuing as growth we've with and actually new and

we're So and Low-cost lead us it that. them. have for well. as we works low our opportunities strong look especially there we so it's people where about can along do The traffic, not great, excited the VFR may well, model continues bookings advanced travel And fares all otherwise really great. for that and create for

Stephen Trent

some regard, the of of appreciate help regulatory-related steps attrition. and I regulatory there to the And really just use side you're help in you think it's there with situation. I'm this pilots an age necessary Do appreciate agreement be retirement that, in Matt. guys' on still comments pilot regulatory could think you. curious, know to the I kind And you your proposal that of also you reached for going else out kind a that the was supply? seeing raise know to of that anything the terms pilots I thing. Thank situation.

Ted Christie

Yes. Ted. is This Stephen. Sure,

have or act buffer And airlines the I which really two peaky one the as you going obviously, there. front, them, would age, think that are been short-term as retirement of is in on move next in here changes advocating years. mentioned a the for three industry the retirements for which be So to some

the gained X,XXX pilots. worth there's how minimum to the you the and hours, about X,XXX certain those of than other do the training with way has But experience are hours. more other discussion hours' And for achieve hours, is some

out you're time in than you airplane. engine a engine in worth dual those spend spend simulator you're airplane, if you doing hours Those So time Are or potentially if flying single a more a example, for tremendous that of things. because that types of pilots. we supportive demand there for see who to going that want kind are there think of thing debates be is certainly people we're I And on. and professional

that, we individuals the it's private think attractive their pilot, to career very out a individuals, become while less is more happening. not certification expensive. and avenues have pilots members are because seeing gain than of for I The career but the we that military is there of now private still are for to and considerably considerably takes a a it absolutely commercial and certificated come used military

want the use speed the which to government gain their there they certification so in gain either XXX of allowing for to that, application that who ways Programs pilots And their or for at are to ease the experience.

believe we're because, limited at the end what the are capacity level number talking much on being a will of the fares of about deploying. We, today things government how advanced we really industry and travelers. help again, an are There's day, for that at the is industry competitive we're as

are where to no communities are providers capacity because there small in actively regional serve. pilots it cutting seeing You're

because can more And getting for that fare great be for pilots good going be will the forward. now vacated, tremendous good would those a and expand expand be it us is for to we into so opportunity continue levels. consumer, are which probably And markets

Stephen Trent

that, That's super Really appreciate helpful. Ted.

Operator

from question Conor our And comes Cunningham. next

line is Your open.

Conor Cunningham

you a around a to context a know about them lot plan about for some you we what maybe a bit it on of time, size to plan August lost just as thank be again, stickier. growing would capacity of But your I fair year, the of mean, half you constraints so I fast that you if how think the bit. just feel growth provide helpful like of Everyone bit a as of think original are onetime next item. could be basically I grow exit when your wanted last you year, you some in these XXXX.

beyond. growth about just algorithm and we you. think So understand to trying your Thank as XXXX

Ted Christie

can where you correct I'll wrong. Sure, me Scott, start. Conor. I'm

with that constraints disagree I are So sticky. the you

over which by fleet get I them but consider remedied. horizon debate think our time, maybe the you the will

fleet maintenance fuel-efficient world, when the us youngest -- the that the side we most We do, of And will on next the in benefit fleet, will fleet youngest year. amongst fleet probably a with the the be provide will have in a which side. the the significant and over reliability full utilization and

think get experts in that's constraint business in active right one the frustrating side that that's that engineering throughput do that us, and I and It's of but that, problem. So very I now. obviously because remedy purely that, does for are solving that's think an those guys

to of was we've the a we're think preserve job during to all I is The capacity available regard. did benefits to the no And that. had majority all And wanted good secondary to a us for of that any clearly, who choices or in of to the And the keep labor. at reaping demand. forecasting travel that the generational made people constraint disruption limited that jobs have learned impact don't of when industry be healthy vast there was pandemic

and eventually working which through way who system. now things be will intersect. filing it's through work fruit, time. those We for take They of are want to There the a its considerable pilots. it to Supply people system, number the are licenses. some their is people need All bearing of demand of their and number see professional will way the who in

lot that have happen, a it retiring, a age, reaching pilots downward lifted. constraints they're don't maximum again, which is We two But of they're Don't pressure sticky. on think those the I exactly And rectify. when are does, will once that. know but they

Scott Haralson

'XX I regards to of we're really we've supply chain moved aircraft 'XX and they've about Yes. XX talking Maybe talked delays period, is a in the deliveries Conor, Obviously, relatively over aircraft. and period. in get that small. mean to third out component been of that, about

mean deliveries smooth deliveries So XX of will it take I XX, XX help we'll next does of for those bit. year XX a AXXX. which plan deliveries year, and this be

a of growth still to in fleet return year next capacity we'll see and terms So utilization. significant size

least but chain and full in things growth. or haven't a of be supply retirements, So calculus talked will significant or as to deliveries as smoothing that next time return that will those about we number be But kind help utilization and whatever year. all about capacity and we given considerable of 'XX next the yields think together, numbers return as full we the of supply those at chain a three think of well about a sort will about bit give we some call as will into growth But of yet, us aircraft of at the capacity our But will we all a be a year, predictable smooth little as next it reduction year. utilization 'XX. we think a XXX also component that

Conor Cunningham

Okay, bit. is sense. little this your the revenue I second relative a Matt. that's I quarter. this then totally for guide year. on to you're But helpful. That of get implied comp -- some to the unit mean the a I'm makes still a And peers, still I'm underperforming of surprised lot

network talked that factor you specifically? load of little But is was be the we that of about if should or anything Duane that you. could quarter Thank else is the impacting seal. aware kind second just unpack within there curious more, So I a bit the

Matthew Klein

Yes.

been we've I periods -- I think think strong. it earlier. past. shorter Really, touched seen The very are -- in no, the weaker a peaks on I little it's these bit have than

that. bit we're our that We little are below with So about. what comfortable talking recognize a all others guide is

we network by still of week. of have the day is way up the set Some that that

there, things is to will mentioned next of year. center we become quarter, Last like and some the about TRASM to to there, of of So had too, we These that with they exactly be the flying for the top be. Jacksonville of actually still for drag there of do be that it get little out end time not in quarter, that. we drags we calculate. with drag And we've we predicted year just to the X.X tailwinds is bit week for came there points to it in right this we constraints day still as had has a would will into some us in be number, the all on Ted of about of think a example, first the by seen that where out

our looking of last we're that as we're So with overall strength demand year, incredible last comping is part own strong. at bit, a little remains still really, what dealing we're And year just here well.

production last in So as a capacity very large as growth unit we year. revenue step-up took well

'XX XXX% second updated So quarter to we going versus airlines strong. other a our growth I'm for incredibly line that comping versus XX% be morning, up is period second but is that 'XX. are top reported this quarter not of

looks today, It there. industry looks metric, very -- there's to to behind go we're But the performing one we're like the growing well. revenues if are we you back it and So year-over-year. pre-COVID

Ted Christie

going the year. that that, really It's of screened last by because the where was QX important Florida screen and international did point most which we're That the -- Matt variant the that difficult ones. depressed QX is made and benefits of last thrilled one coming precisely of which Florida, Omicron I I are this nobody And we reaped to think where is biggest, last point way. it But think we yet? Ted. about, calculate. out

and So last those very well New quarter, going Northeast, do the second the to do in better. probably year they're didn't York, things

COVID seeing is I to to that starting you're work into just which it year-over-year. the little got of smooth normal exit the a what think way why of abnormalities more So you its seasonality, is than

Conor Cunningham

Thank appreciate Okay, you. it.

Operator

question Helane next And comes your from Becker.

line is open. Your

Helane Becker

of Thanks operator. of quarter Hey very this time, for Thanks everybody. how much much Can second for much, say is the team. Matt, how already you is booked?

Matthew Klein

and going historically, start well. have never We as that. on today to comment don't not we Helane, we're

about Sorry that.

Helane Becker

quite that's No, all right.

to an do. really And for opposed as issues. So And that sense get kind question to can again, they're and of you if a you you were supposed grounded you the give you having of quiet. Pat keep because talk of quarter to about the give that during then we'll just my delivering as when you engine second week the number aircraft is one plan complain this loudly, says, they then another if engine

Scott Haralson

Yes, Helane. Good question.

It's been three second the and it's to around date to we aircraft on slide from are quarter. forward that times those are So of engines occasionally our issues see forecasting quarter exiting. and of may Pratt the something sort have work volatile with engines through the we in VOD own bounced the expect. shop, six turn in drive Obviously, what and that to aircraft we

to five, looking it's about But quarter. heading comments. summer year. the the end we're at those variables and we It's what a all going prepared in quick the So the the see summer, that's be Fall as continue be after through the into mentioned in as going the we think something fix, number. going second aircraft not into the to create happens volatility six But to probably we'll of

next the we'll And nine, So end seven, see months. throughput shop to of where we'll Pratt visits we up. and have see where we'll XX have with production up, and probably from eight, dealing this be both of to ends sort for

Helane Becker

you've we Thank much. about where included already headquarters Okay. down complete? for question, first you percent the is to should corporate my think And given since got ask that Is in and numbers is up? shut spending very the how can I about I us? the shows new that it And that, what

Scott Haralson

Yes.

from about bought $XX-something is spent, in the we'll well. $XXX property. and clarify. perspective, as and this we spent a of sorry, So spend spend this million already we've CapEx CapEx year what We'll some XX% or -- year which in and we'll we're to XXXX Helane, so we're million And land probably spend total, on developed probably in including

than a So range, cost on we're that similar sort probably date. the that XX%, actually, of spill XXXX. some probably the in is a XX% into completion But number. spent and probably a more the that will of probably we're we'll the total to little spend $XXX in facility $XXX and million And over we million-ish in $XXX, of

Helane Becker

Okay, helpful. very that's Thank you.

Operator

Our Linenberg. Mike next question comes from

Your line is open.

Michael Linenberg

the of seems Good a the lot -- does and lower I cost Google see did few Matt, are given alternative out just being just your morning on would I sell be thoughts that are just any Any evolution seem of Flights, able have that great? I distribution it cost, I than bigger that guess, anything than it's guess. are we here guess platforms that price is these like on color and through a tickets. And Hey, to of early low the except, it forms be there What other one testing question direct. question seeing your everyone. a maybe maybe maybe I different here, guarantee reads to out, it program. you're airlines

Matthew Klein

Mike. sure, Yes,

doing their on algorithms is clear, that through their you're something referring be that's to product their the and own just own with So Google Google analytics. guarantee, to own on their

in then participating But guarantee. second that having their Google So not which we that into on this of distribution our and content, good own. partners there, your that, only like leads Google something capability, NDC, about specifically is question are ingesting they're and it and doing your is they're new is distribution our very the product our of and part in are ones. content, That not partners

that's in are on that this really has been eight recently. talk topic. progress COVID. made of going of airlines been to through lot progress This terms made all and a We and that years a starting made this for they've progress before a this other of lot of There's we've COVID about journey on seven, something

more we're works. how And of us in distribution for front of travel. our with comfortable advance great capability customers product in very new because this gets understanding out further it our So it's of

rates rates to they So on, take or to see not as say, the better it customer the charge will the fact line. upfront, itinerary the it then to for they're introduced seat add wants to their service that of right that to example, take the that better necessarily whether later more often add it's price but rates blended we big front better it, down or that call they it leads lead away,

are leads production. idea that for the better airlines better just the starting revenue the overall for to it's because other ubiquitous becomes more think which the that industry, to That's on and So to to we engagement up customers. which overall more leads volume, distribution should great yields, this better is catch more lead

Michael Linenberg

those it's a soda XX chips. the I majority of were XX, know, That first seem XXX%, of if you go bag I would point, don't the that at on maybe along to bought years and a what back, of sort lines, it airplane purchased was an XX%,

right? today, thinking revenue in not or guys second percent of like -- third initial to that's that I'm moving be actually car is cetera, away the to things you that et from got your that's just hotel, like shifting or fourth be but got purchased maybe what For rental, to right, Is transaction. ancillary,

Matthew Klein

you the on up how bring more introducing that That's just product apps brought important. just exactly yes a to it Well, the about customer. publicly about engagement following -- more is. why is up, great you The talk and distribution with airline that have only you're we the look, app, We This perfectly. point think ones. the more this don't and it you're specific is why are the metrics not Mike, engagement you we're and to your

that's investment it where and to up be guest-facing improving it's a as perspective we've day from amount spent And of years getting important for today a expect and speed on we ago, decent we front really think why our a was. where is move And to from technology say, were, more in lot we improvement six there technology we to night and forward. that technology do do five, from

-- as a progress as We of has still we great there. have capture lot still to we -- our have been, opportunity still

Michael Linenberg

for Thanks questions. Okay, thanks. answering my

Operator

question Dan from come the final will And McKenzie.

line open. Your is

Daniel McKenzie

well. network Florida. suboptimal to is contribute really -- two put going the there you the to normalization be sort questions my utilization just questions really last and shared that fine My traffic margins the this just throughout before. thanks And that asked Hey, in were summer was air going just point cost of it the the me past, to and a improving can Is year. some control of improvement two for ones for and given guess squeezing in. understaffing network the some driven? back I Or RASM as margin release And on in outlook the that

addressed guys that. You have

if America, I'm you embedded quarter going revenue second want where the -- revenue You the -- level. wondering Latin if the stands is get overall better if help any, what but evolves talked network of about in drive to to if where kind I this outlook? them, that's unit guess penalty, higher planes And just network later you the year?

Ted Christie

I on to can improvement in to feel is at basis This free as percentage Florida. we're of off. out kick Matt, it anything. percentages Ted. in to closer network you're getting I pre-pandemic a And But relates right, we're least and definitely Florida. you Dan. offer think seeing Sure,

given demand to and strength we more. want the probably However, forward, do

probably floor. point still And right way. out another now, are ourselves the artificially in so limiting margin It's on and of by we the

Fall. get relax allow have things And won't going we bit because operate how throughout out good summer Florida. the to And the course better start and in to the in team into we're peak. of it so signs, the will if And more little to that watch then the head immediately network we a of

So to there. there's definitely room still go

You about Latin mention heard Matt America.

a opportunities that about will to continue to there are tailwind We us excited be and as evolve well. that

question, we scheduled technology marginal unit new throughput So year, things the improving because is our and we certain the in make margins to to the of during while of geographies current it to a recover system ability the the had of is in your a was the first sure course of continued rest deploying on revenue. optimization cost that's our planning the overall hammered getting better COVID, kind which process. and view. of some it. which utilization, improving of that throttling the lot inserting the of spread processes us new is throughout all buffer network part in the just And were business that mix of But It a you're and of unit

pad the to which deploy of some systems So of and geographies start more out as processes, a working, can of a to that and gain and again, that, you and more right lot tougher block efficiency of turn be and lot and relax buffer of that in way. we appear lot learn a we pad

those all So it's utilization other the but in lever, meaningful, there. think biggest sort We amongst things are is too. of

Matthew Klein

took is run our that, efficiently, an even especially summer in would the try this to more to some add too, through maneuvering approach And air control thing extend I Dan, where order of traffic to one we to issues stage.

control we months and had that in little the stage can about we're traffic air overall from should unless stage out bit pushing a a through available produce seat departures six capacity, miles for us produce shrunk Our of or navigating little back better. so, kind the help so bit

find that an example example the much, of to we solutions of some to industry matter. are hampering that us that's that an more constraints the that hampering about that's creative and talk don't for So something of but trying

Daniel McKenzie

of are here have Yes. great the double-digit helpful. But in issues on resolution. to six point transitory, Very earlier detailing the going years, there, yes, back some pieces path get the that in transitory one loose a brackets three done And back job there you to around today year? staying question, two guys to margins to a margins months it an and possible are put double-digit transitory you how to is next just to they your

Ted Christie

are sure. So are fleet outside doing the our to partners side. that's issue. most we somewhat notably And are the frustration what don't know our encouraged of on because But for by remedy the part we they of control,

quarter. start to Although summer continue improve the to course fourth probably to right as penalty won't third Scott at expect mentioned fleet throughout we're have of the earlier, we it the or the seeing levels the now, and until really

And Fall input out spit seeing of executes for into are significantly which this is delay year, reason in to winter the that those But that shop. start well, we that engines the start more can assuming in the into and all of and gain But we a for improvement probably side. should some based at plan, expect bracketing job and do confidence XXXX on the it through to you. then this on current year we better that should

just more side of little can the Intel sure. a digest before going call pilot it, we or staffing to of broader side the to things, for have we're On things bit

do staffing in a natural here JetBlue, we actually think that We've will our accretive that a all which we had X.X face. shareholders. new months. And to think be any the deal about group have team we with our only constituents, when highly looming transaction place is to And be consumer going that's our members, uncertainty stimulus removed, and challenges for for I

And that there so well. of some there's probably as in

like exact wish terms call I back. it, put way feel our the next we over could year to I does as or it it's So but so

Daniel McKenzie

the for guys. much so thanks Perfect, time

Operator

hand at And [indiscernible]. there to over the I are questions this time. call Ms. no further will back

Unidentified Company Representative

thank have call Please today. for the forward you any contact Investor look Relations And investor.relations@spirits.com quarter. And everyone to if next further joining to at you Bailey. you questions. Thanks, we talking

Operator

This concludes today's conference call.

disconnect. now may You

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