Frontier (ULCC) 14 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Susan Donofrio	IR
Barry Biffle	President and CEO
Jimmy Dempsey	CFO
Daniel Shurz	Senior VP, Commercial
Ravi Shanker	Morgan Stanley
Mike Linenberg	Deutsche Bank
Jamie Baker	JPMorgan
Hunter Keay	Wolfe Research
Duane Pfennigwerth	Evercore ISI
Brandon Oglenski	Barclays
Helane Becker	Cowen
Andrew Didora	Bank of America
Savi Syth	Raymond James
Myles Walton	UBS
Stephen Trent	Citigroup

Call transcript

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Operator

Hello, and welcome to the Frontier Group Holdings First Quarter 2021 Conference Call. My name is Cherry, and I will be moderating today's call. This call is being recorded, and a replay will be available on flyfrontier.com in the Investor Relations section. [Operator Instructions] It is now my pleasure to turn the conference over to Susan Donofrio, Head of Investor Relations.

You may begin.

Susan Donofrio

welcome, traded Frontier's company. and as earnings operator, publicly a you, everyone, first to call Thank This webcast. is call being recorded and simultaneously of be can this our replay found website. A on call

with and Chief the Instructions] reflected to factors significant that XXXX company's management With call the the Officer; the for that, Frontier's items. call remarks. turn that results On as discussion Barry VP, Shurz, are team. We on Financial not based statements today members guarantee actual There In well file by on Jimmy uncertainties website, expectations of everyone EVP opening CEO; including measures. today, duty future special undertake non-GAAP on exclude reports statements. remind will available which over [Operator to our as it those and discussed all Biffle, for to other cause the Dempsey, President the a our the current me Senior and update wanted first Commercial, Daniel be statements, also our risk SEC. with earnings our Please are contains I We to comparing the we to no forward-looking on today's to are risks is and his performance. forward-looking that results materially differ of could and be release, reconciliation forward-looking in any from periods refer Barry quarter will adjusting of

Barry Biffle

and through Jimmy expectations everyone, company. you the a first call public earnings you, bring for In first of forward. the the going our attend and Daniel as Susan, taking quarter details Thank and time our thanks, to moment, a will

and us an vaccine with our leisure in our this are strategy, coupled we're positions for Done bookings focus believe Low Fares demand industry foremost, anticipated, on getting as is everyone and the in demand what travel. every seeing recovery. We stronger the Right unlocking pent-up week. truly The pleased travel, First leader we're with

all this the Team to While members the ensure in their across to to have for pandemic, of our challenging positioned recovery. through very thankful successful well the diligence they leadership are and I a from to a partnered help is been us they thank have Frontier helped stronger want navigation and customers has also we than our as our safe year range succeed thing union ensuring our over industry, year. we're us past employees as solutions this on the with certain, we and crisis. keep to One emerge Frontier Team ever is commitment of

position and rebound and routes As our to business the our we the maximize opportunity, growing domestic in new cities footprint network network as well. international adding to near we're existing both

we Rica Maarten. new example, Guatemala Salvador our City, AXXXneo America's Nassau, additions We've the Denver, heels America. added XXXX. on an St. quarter new was in enhanced to to added X addition during new the of the greenest Central fleet Dallas, Atlanta, from the by airline Las aircraft that first commitment come leisure Salt and nonstop and Jose, San summers as Lake Further, City. include being also destinations of Vegas As Costa added the routes already San for service These introduced to well of

enhance as on positive second moving XX% beyond to engines, our and the more new next XXXX. we Recaro in at efficient In addition becoming We March March there's in seats seats, considerably and IPO existing than Team to full our to COVID. positive our profitability lightweight aircraft during and now milestones getting quarter, XXXX the in including our in the lighter the fleet feature executing of achieved fuel liquidity, back utilization comfortable. back cash significant Frontier in are departures to Overall, XXXX. We're to they operating were XXXX year an XXXX move our the half first levels business energy which focused across

Our and over momentum our Daniel, more growth fleet recovery aligned with now for the value the performance maximize trajectory provide it to quarter. turn I'll who ahead. will to of details position the Frontier on the shareholder

Daniel Shurz

customers. first you high our price we Thank have join to believe on and for also to has shouldn't all pay each get well so right our our you I to you, care a to Team family-friendly travel continuing travel in that of are model experience. We other want resonated want take with thanking a firmly Barry, pleased high-quality how reiterate to all Frontier of good such I and customers.

by foremost to have card Airlines Frontier attract customers model loyalty reasonably continue content offered out to initiatives been The were Our airline make initiate to safety card -- on in exclusive we This bundled members. early the benefits continue offers unbundled health operational performance. XXXX. and we even as among listen pandemic, best and to first variety and Money.com roll lowest to safety low-cost and has to new and subscriptions our priority the to fine-tune and our partner, a available the the to Mastercard with offerings. recognized our customers members heightened access more continue allowed priced with providing with some grow. one us these launched already we will by Frontier's options, comfort, respect And World fares our just Working of we of to Barclays,

the additional the the X we increase Latin We're new to including schedule, for years. growth expected America our to adding also also our this As footprint. few capacity. our Caribbean Alaska. domestic summer international summer, XXXX excited return cities to to account and over to service Frontier XX% of And next Barry be mentioned, region over is targeting continue new of We're

due to decline quarter, revenues. our to saw XX% and the operating Easter $XX.XX. results. XX% the a significant which are United other the demand. for a third airlines, Now wave saw was Similar we declined improve March into passenger trends while impact spring COVID other in within quarterly demand Day, declined saw booking the a at capacity President's break moved the with our and in for revenue we revenue basis, in revenue impact ticket Operating March revenues XX% nonfare as restrictions. January XX%. of declined quarter per COVID, to revenue overall window, travel new led travel reflected States step-up We for per the year-over-year, we After and on the to and performance strong per February in causing across quarter On other remained the year-over-year our passenger a decline passenger, nonfare our $XX.XX we and total seeing the the of and

the provide levels turn to the trending for and as coming Our are We're we it recovery load moving XXXX or seeing capacity levels returns demand above factors into to continues I at summer as on over progress in months. financials. the our will Jimmy more months. that, travel appetite through detail With a

Jimmy Dempsey

recovery air seeing. the thank times sleeves I of travel. you, want at Frontier Thank share Frontier all the the Daniel. the who to the members rolled Team Barry we and put and recovery challenging forefront in in of on pandemic are their optimism during I demand Daniel's up

begin hiring were projects confidence growing us restart pilots as and that in managed paused enabled February recovery we COVID. Our and in to flight attendants through the

our a COVID from in us enabling addition, strong to with liquidity and emerge incremental position, strengthens In IPO Frontier debt. our limited sheet puts balance

quarter. to turning the Now

was GAAP Our loss net $XX million.

AXXX the held net related $XXX the to the of special excludes early leading million a enabled adjusted to with U.S. cash $X.XX by to of capacity lease in million Our include credits, our remaining our or warrants quarter expectation of associated loss to deployment $XXX receipts liquidity on of share quarter of a recovery revenues of spring strong up CARES This the air revenues aircraft. items. per to break. mark-to-market the a Act million our take number and progressed termination our With and and position, These $X travel timed finish our respect note. $XX we Treasury a advantage million as a cost

total XX, April closing. under proceeds loan the of liquidity March the undrawn XXXX, million $XXX The Treasury given we its $XXX XXXX, $XXX facility. of amounts March of liquidity, IPO net inclusive the As had million million of excludes X of of XX, available as

of the was PSPX million liquidity and in by Our funding in from X. support $XX payroll receipt April enhanced

We payment expect million strong relating Frontier a in position. receive PSPX puts This of quarter. final $XX the very second to to in liquidity the

As to such, unlikely facility. Treasury draw we are further under loan funds the

brand, brand a of ended program, unencumber the the are the existing current provides assess new subscription loyalty our program co-brand an liquidity. and together discount currently receivable addition our were have with leaseback loan outstanding currently liquidity collateralizing million generate without could program, that should our substantial AXXXneo us quarter through financed the Treasury our co-brand Treasury the March under $XXX transactions. that other The facility. with Airbus in send We million loan believe opportunity, repayment card We that repayment of We related our received, tax when arise. aircraft and X the of card our will fleet with aircraft after Frontier XXX credit assets utilizing the that of credit den to encompassing need $XXX

aircraft will more the contract year, of into early second XX third exit an X XXXX, executed all during the will and XXX fleet remainder the aircraft X Frontier's of AXXXneos X and the from larger quarter second of carrier fleet early XXX delivering return in in anticipate by the third we the during of in company's aircraft of fuel-efficient quarter our fleet. spare the aircraft We one remaining engines of a delivering the transformation of objective the aircraft. AXXX addition, aircraft This quarter. with to AXXX and completion the X fourth of X with during replacing Frontier accelerate May, quarter the is of low-cost an AXXX with aircraft ultra and and In the exit lessors XXXX. the

minus our fuel quarter As XX%. forward into excluding per tax average $X fuel, gallon improvement look between we reflect total of operating and adjusted demand, second the expect million, of expenses, an ranging reflecting in the net and minus on and cost between $XXX rate margin an income and XX% effective to million range XX%, $XXX we

well the operation discipline us demand spikes years, some the Barry pipeline. the strengthens closing that growth position it as and I full remarks. caused to continue back coming Our utilization business we To expectations XXXX. has airline focus cyberattack on for in the successful to or for positioned year QX Right as Colonial the ourselves on Done enter the the to hand our we for in the will for XXXX exclude fuel travel invest any back strategy recovery of Fares is adverse with our impacts by and Low close, the immediate price recovery With that, returns. financial getting

Barry Biffle

got right our for the members beyond change and place cost what's right enormous please of the we the for year above and to a with fare going open for product. company, in ahead, With We've been low navigate right of to It's our them. of structure up that, along all expected was Frontier continue Team the operator, Jimmy. questions. Thanks, thank and team call what

Operator

first Ravi [Operator from question Stanley. Instructions] the comes line Shanker of from Our Morgan

Ravi Shanker

A traffic on incremental the see coming are Or environment the you now, airlines at just new to right travel, the in you now you're like legacies? When traveler couple as seeing current you of other it. data pie expanding you ULCC will? taking from share if on on that and have are questions and whether any they're do right the you you are look air

Barry Biffle

Daniel, this why you take don't one?

Daniel Shurz

Ravi. Thanks,

pent-up I of seeing we're think travel in a the now U.S. return is right what

think to low model, we costs our as because low extremely our fares new allowing And customers do think, a the frequently customers us are combination offer of of continue fares deliver to come stimulate to I ULCC customers the key key travel. we're flying lots because demand. seeing can that's And always, I and back to in they lower and is marketplace. model afford also more to so to

Ravi Shanker

Got it.

share the you gap Europe, up have you the takes -- meaningfully direction? in that share like the do ULCCs and market little while you their an of go or ULCC environment for Just to feel the a it where kind in to there's a can maybe longer have to grow of that in think that, do mean close kind I follow market that

Daniel Shurz

ahead. Go

Sorry.

Barry Biffle

approaching getting our the ULCCs you at I half XX% look we're look, United to of share if Well, just States, We're all in in Europe. mean Yes. at I started, right? the over compared think

ahead. more yes, So there's a lot room

Operator

next question Deutsche the comes Mike line Linenberg Our from of from Bank.

Mike Linenberg

what I than guide maybe and the you would right seem sort saw were suggest or you're X, we're later, better ago, acceleration would on when you positive price, first seem the -- And they seeing I road like yet, it -- the argue I deal, right have gotten interpretation? fuel road? outlook. trends the more think and even X mean here. ago. ago X are as mean recently the you X on Is that I yet things weeks job things than here quarter a like that Good maybe we a weeks the the X that what, interpretation you a seeing that X, X gentlemen. I here, you guess had weeks here. encouraging direction Barry, couple on guidance moving does some were margin what were a we on look that Is weeks when higher -- the much it Because a or pretty and mean in I good. X have favorable were of as right

Barry Biffle

it You're is free. the right, the slowing I were day. probably feeling think what's I this that's about I I seeing vaccine did last is Look, when I it's -- better mean and are better is better yesterday, than Mike. I feel did coronavirus, loose I the I demand feel look slowing talking January the I I of since, I people than from than week. we vaccination. think happening last today I mean let It's guess, mean right? And and first being feel question, real, last The heard have every right? But just stimulation. I cases. hospitalizations,

it better. keeps getting So just

the so about And recovery. and the couldn't world really excited about feeling yes, be good we're more

Mike Linenberg

away Great. I to the getting And then Daniel. get story question just my AXXXs. second Look, from about the whole

into that smaller into a It's now. gauge. other, on ability higher the have argument I of help precludes your costs to maybe fly there's to your the an lot right guess then it You'll of And smaller some fly going one you on But unit markets. hand. do cities

whole don't your to do look competitors, at you that? a slew as than out that either XXXMAXs your that response moves to just case in some the the of gauge there's a city going and maybe or strategy? up, gauge, that whether AXXXs they of smaller it's You you How less daily be Just of work pairs even your it's about think Do that that. think Southwest. stayed have or the with getting and of

Daniel Shurz

Thanks, Mike.

absolutely right. You're

and frequency low higher gauge, we we lower We already get that the As strategy a markets. right our today And We of go fly bulk markets AXXXneo, we we general fleet small lot a of worked. our our frequency And of costs. to We have to some applying the low markets today. frequency is on smaller at which -- today fly the fleet market. right the on found in that worked. the XXX find majority fly

We lowest have the cost.

of many right markets -- to We the we a lot strategy are can. be opportunity. And that's us enables and our fly leader, to as low fly to to think cost I going maximize that a as

Operator

Our of JPMorgan. next line Jamie question from the Baker from comes

Jamie Baker

a various But do future aircraft on with I the I in name, leases. deliveries order a big know you've Question have XXXX. order AerCap came sale at rate, could I don't for to to Or it? aircraft be from lease engaged the more back pipeline, lessors. if sourced the for like, take the somebody know, you you pick -- -- mean pool? from Indigo attractive leasebacks

Jimmy Dempsey

contracted joint in aircraft, part delivered the in the portfolio, Jimmy airlines that we for portfolio. it's the We other like aircraft Yes. XXX Indigo were all like our No, initiative here. Dempsey airlines in separately. of a Jamie, purchasing Yes. XXXX, into

deliver of XXXs at And up -- manufacturer And to could order XXX opportunities, look our aircraft. if can. off contracted pop potentially those next come or they airline to at certainly the at and either they adding directly look are are could other looking we aircraft, And companies. committed years We leasing there through it. We're Frontier for so incremental fleet, over so. the and beyond XXXs kind X like any book or that that aircraft we'll

And do so absolute to flexibility have yes, that. we

Jamie Baker

helps. All basic question, your much you? be you you Given track think have right. as idea That allocating also have much to economy in less markets might strength those just said trends I And against than second they'd usual, how as and call. if would wondering how to to do in United competitors are had that Okay. ability it and on summer putting any if the I'm you its measure way look. demand, actually any a

Barry Biffle

basic think mean if lot a at there. I out economy, I Look, I confusion there's look you of Yes. think

there. they're And points, -- going Load mean are is they're of demand right? economy and it is is up. product, going The how you So out ATLs it up. that economy than slowly basic matters product It's -- the how there. of I points, I is a back. the the you, much fares I prices revenue less right? up. price the many will work, mean moving There's management then on factor But was. coming report it What matter charging. tell basic up. mean as So price there's I less are filling just out doesn't both is is

in the supply. outstrip And is so next your demand at going and looking I think everybody few this realizes is to months,

Jamie Baker

for in in fares sold? inventory just much if have trying would you I'm that actually I a and you we if in close it. I to $X, much We're have I the the get the could been even fingertips, break of higher your don't quarter? be hasn't And get to are But now might at to inventory feel remaining a you end May June, Between $XX? of how middle sneak how that third. just on talking for now. how And get. mean

Jimmy Dempsey

sure we not algebra. calculate that. we it's disclose Well, would can I'm real I'm fast. it sure

Jamie Baker

enough. Okay. Fair

Jimmy Dempsey

will the said But year remarks, and we feel you, will in very with of confident feel we the half the be profitable about that tell look, opening we the pretty I trends it in good it. second

Operator

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

Hunter Keay

top a IPO. think X it Just what as business -- next -- financial the the would Barry, about of years? couple is the X your the running term, you just for would to raw you targets say Congrats you The trade more you long Would or the are profits? to what X it's the to years? dollar next bit obviously, year balance. X going But are a top I couple drive mean margin EPS? little the of prioritize or of over of

Barry Biffle

profitability Well, right? and all costs,

Hunter Keay

-- yes. raw Just

like raw profit Just absolute dollars.

Barry Biffle

expand Well, and actually X it, would I say there's I would X. I mean and

So profitability, which is profit, cost, EPS. and in those and there's margins drives one; within aggregate #X. levels; Xa, which Xb is profit, a themselves But

Hunter Keay

said Cool. Or are in that going of then Okay. utilization full you here. script actually And you are to you you're of hit the hours day? quick XX.X the over your talk a you're you course year? talking couple -- at one in to average ones about When point, about per XXXX, going

Barry Biffle

end by a full the 'XX We utilization. to at the year of operate of expect begin to all and be in position

Hunter Keay

Okay.

So you'll utilization at saying, what be you're full is basically? exiting 'XX

Barry Biffle

hiring we're -- full so and year, be 'XX. operating investing we investing the be that today of end no, such No, XXXX full the everything no. will by ramping utilization in can to that year. a up up We're ramped today, and

Hunter Keay

got I you.

thoughts PSPX potential are your program? that support? Okay. something And one quick Is a here. then on you What would just

Barry Biffle

to doubt necessary. I it's be going

Operator

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

Duane Pfennigwerth

answer from we're on leisure perspective recovery. to leisure characterize I'd in hear what your you Could domestic recovery love think a you -- inning --

still even places back suggested part revenue to have the are in there's like kind more of view It the York. is like going bookings how XXXX. upon all managing. table recovery on New here, of here of in certainly are that folks depend And feels to way U.S., Some course, the

low opening Jamie's on do you words, say, the more up versus, inventory question, price how how industry industry are is? you now at just XXXX? managing now And is to points? inventory future In So think maybe to this follow in time the relatedly other

Barry Biffle

Yes.

to build. recovers, We're So second The capacity what demand trickling February, right? now accelerated there's -- about you're So I pent-up to we up started Everybody third starting also But pent-up look, inning levels now recovers, seeing somewhere is another is them and demand, don't factor, in what the as we've I I know but capacity. the -- to right? just Duane, they pretty that, guess, continue inning. They're started And accelerate then through by continue and XXXX talks would there's summer. between, through March. April. mean reach this news you're close to good bookings

demand see to now probably the going you're to so going And continues to -- outstrip you're go, supply. if demand

X go to, And that's or so And us go know, and to that's to and X, fares to that move will yields revenue don't I what's up cause inning management. up. going

probably you get don't And year. year, going have think it so you're I So -- to so Christmas going than demand get many you're have more probably towards you because and aggressive have way just missed And inning last you're the of you to Thanksgiving end people pretty seats. to the until going right? #X to

to last there year inventory compares X management. it this time, was at well, As

Duane Pfennigwerth

basic point Sorry, being… The XXXX.

Jimmy Dempsey

XXXX.

Duane Pfennigwerth

versus you May doing in what you Exactly. inventory have May XXXX managing in XXXX? been Like might your how are

Barry Biffle

Yes.

just also big few today, in even well, that's if at news. your think I CDC, curve certain hours also off their recent that announcement, look you from There's segments think be and have booking if aren't there. think we're aren't certain completely, still quite has there. behind Order because I But last now leg you're there's reflated you quite if I but I mask great, of mean another not may cities this demand. still can the indoors, everyone

XX- for today eligible now the XX-year-olds You've vaccine. to got

you think next it, they you soft weeks, right, the a X think back to in where XX versus I few should still start I because were, the seeing innings, again, to call I next that. were XXXX. there's fares we little where the if come, but in more So we're will, to think But bit aren't

Duane Pfennigwerth

follow-up, when didn't Makes a the answer I'm on my just of sense. your sure for And lot then hear were asked this question to lot great. it. got you get you a to That's road. I

I'm the you that your how sector? low likely consolidation, specifically share now. cost curious on you So views is, it Can if could provide industry in

Barry Biffle

Okay. second and we're shareholder to now, that the profitability. focused and half right value. in hit in itself. to we're we're Well, any look, on And that that and starting focused opportunity industry, profitability on reason, returning focused for look obviously, the we'll at presents But on leaders

Operator

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

Brandon Oglenski

Congrats on the first here. public quarter

that year, think Barry, are is it? target can end full right? managing I to where profitability this up? you at up in following be we do the you So half of we way the towards Is in right that readjust to utilization, guess margins the it black from the think, now? the I in the just reaching certain target I Are towards a question have about year, managing that goal by a focus of XXXX Or second of is -- and right mean on but be profit getting and you

Barry Biffle

given and it, I to the away, if yes, half. got focused expected over is profitability. on we're cross that move in that to excited previously and second we're But the margins first to look, the from you And be we starting then. and in happen just of that start I now, line is last before black I like like maximizing just on a shape answered as will, kind yes, we're of feel demand still that question. across But in you it a mark, that to and right recovering of on eve there's eve mean like positive way getting on and really feel of but the think ways back 'XX. Well, the the 'XX the you've things lot we'll up. drive it, will levels, focusing increasing We then And to

Brandon Oglenski

additional of helping you I Okay. the take going And XX fleet year. you So with to think you're Jimmy, changes delivery announced? aircraft do this mind us that

are fleet is right? the So about of with the you to end a in year XXX, going like fleet that

Jimmy Dempsey

No. quarter that the just the and this There's X no for out the real total fleet laying in X in count We're quarter. year. following in change there's

So for is of we the for to at be 'XX, year. just to rest recap end the the XXXX, aircraft. that end XX the business Barry the end XXX the had We'll you aircraft. with year XXX of focused things on aircraft. XX about what said, we'll And At our of one of got have

So the between size. significantly and is post-COVID pre-COVID bigger business

sense them. to was we're some the and fleet full associated removing So the whole XXXs I fleet with just accelerate part remove the at with summer want no, months now. them the plan fleet from the no year we aircraft make the or of -- towards of from end return stage year right maintenance this But our and service early What at there's into to did change storage of across redeliver them bringing lot a them effectively to to point out. that from Clearly, redeliveries back it the didn't service. suffer And to costs our now. those next of to was view

So something remove early, advantage took actually from fleet sense we something of them that that to up cropped and that's it and made very did quickly.

Brandon Oglenski

And that. appreciate then one I Okay. guess I the for last me.

You new domestic the at is Is international more a kind international here? this opportunity equal that in Or an did future announce point? and destinations. couple lucrative looking guys of of

Barry Biffle

back the and and not 'XX we Look, had were years, going go in 'XX, at -- period several if to and considerably Yes. seen the pandemic, look versus in prior higher, last let's begun the international international. over mean yields you domestic investing the that I we had

back And will our actually landscape looking near again to will, the we be in better pre-COVID because the are international recovery the but just fact cost the we also and just advantage of recover, So domestic. delayed, from we as a think dynamics is making you happen. compared the competitive the even that than at relative being international, that if

a with it's from does it when so we back think back perspective, come vengeance. a And demand going come to

'XX. position lot we're can than this positioning a stronger that our was before. we So think what in even and to so really ourselves lot 'XX does that, exploit revenue backdrop to we that it And a be

Operator

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

Helane Becker

rate? Let's cash that same that see. is say in When it you -- at that that at in did talked burn continuing you is April rate continued it that, did positive about accelerating? and same May? March, Or being Or

Jimmy Dempsey

a Look, well started just The as continued. performed big Thanks, cash That's airline It's Yes. March, ATL we turned forward to and post Day. through the reasonably Really, bookings. bookings to out here. March. Helane. started Jimmy turned we improve, positive into fill for change President's

cash Our positive up we're full and the anticipation back utilization. is the quarter into from through to getting liquidity back moving airline a discussion on and really really that

Helane Becker

Perfect. partially when -- a next that? you there you is partially Is time a fleet would fully is question to consider there fleet? -- switch to leased or for a from when make it choice there is, a you Would my a leased fleet would sense owned and

Jimmy Dempsey

position to found we of sale-leaseback commercial aircraft. what can how all a like the We to left decision and us. this actually an commercially, lot for at were as us, commercial sense is we've tax, anything like of the year. We've for We And we doing something you basis, at the it cash IPO. equity whether any to we aircraft the haven't develop really the QX. -- that we X we across chosen It's terms at put aircraft talked when of use we going operating end Yes, the NPV can operating It's this makes way delivery leases at on the finance would. an around have into a look in year, shape of about and that this forward. transaction point look

it forms And at leases benchmark and do we so operating like the business to financing. particularly the not you're growing the a with the quite we'll sense, continue cash But dramatically are funding growth. of in business burdening when flow other against moment, and of lot make that

portion a the our funding delivering been aircraft. in have into We PDPs of these big business

our manage itself. has or to actual of years focus of that's the payments our as delivery to over like pre-delivery so opposed X flow the And that's the managing some last to X Airbus cash been

so been for quite us. it's And successful

Helane Becker

to sure now. makes not I'm does own Right. come it but an -- question that aircraft, up ever Right. sense

-- other you some ETOPS point is And realistic your Hawaii future? for question your is, aircraft in my are last at certified? option The a

Daniel Shurz

current our business. of that but And they look other it result. flying not when we no No, may a part on don't at There's fleet that Hawaii airline. join it's at for have aircraft the few And will years, short-term certified across Daniel. the a not are we not we're Hawaii, network load. aircraft. with AXXXXLRs a We full deployment order. be to do of to as the capable time, ETOPS passenger possibility the it's Helane, become amongst And need therefore, opportunities, -- in a for

Operator

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

Andrew Didora

so. Is your was Congrats like XX% on high margins do the below question, guess business? your IPO. Barry, some at I a go where level you a thoughts think that? Or are think can there? period? growth to I Is or this teens first pretax What are you pretax XXXX -- mid- over this your

Barry Biffle

right where get advantage we Well, And headed. is our can and and bigger. to think to if we XXXX levels, I that's back it the look, we X we our to back then now mean cost we get to just But next when over expands that year think good I focus feel about XXXX, focus will years. make relative

we talk probably feel to getting we we can we it. exceed if get once can good And so about then it. And about 'XX,

Andrew Didora

prepandemic? recovery, Or the maybe And leisure that, that. we're you this environment pent-up in I change say, Okay. of rates you get some growth there your there's passenger? leisure believe the think think here extending reverts on seeing We'd from do positive beyond you're is about going look, seeing, guess forward -- clearly, when structural you about Fair leisure holiday that kind of see more when something you to kind into the that love enough. or demand to thoughts period. you think But the think then, you

Barry Biffle

Thanks. Yes.

same President's almost you're It's thing have all Thanksgiving -- get best even So to are year, to going for thing And in see same for think will this that we and we X they judgments for and look, break Thanksgiving Year's. to the there is the all point, break. a for in thing be mentioned ever next anecdotes time, And Day X the industry; missed didn't about I I of a break the the look, I time spring listen, years. we have talk New By going people row. views. to and basically, think bunch some spring are but Christmas and we've starting this had been on at go form spring people same

see you're people and XX caught on friends. at for vacations, least think the to I surge XX to months seeing caught until family going up continue So up get

North then XX, very about I feel this then about more parents' so the seeing of get cities to good off think And on, pent-up and is last going component in kind more new week, California. next I couch really XX translates of in then traveling And that it. -- think that's work-from-anywhere. demand you people this and we're changing which all this past you and work-from-home phenomenon their the they're getting working when Carolina to And And week. midweek, months,

we've -- the days. has, additional and the just that Europe, plus and travel have at that more. Ryanair American, with is they the the flexibility, segment literally have more that's And travel they and compare when can carriers when in much year, vacation vacation so days and look the than double European past. look that new didn't and have, we And double you to all Wizz this I, have, per we people Jimmy you how we many whole those, easyJet And debated off average average the in like how a at

does all just And to this going what much to us of I travel. for at that's terms so leisure in going that more create look that are people flexibility have, additional

can I for years. this So think last several

Operator

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

Savi Syth

IPO. on Congrats the

the me for Are down correctly? for year-over-X-year is if you implying question math revenue is on math a I'm question. that doing XQ a basis, First actually about XX% maybe around

Jimmy Dempsey

of come minus revenue and that. not you you operational of outcomes you Sorry, Savi. the XX We'll a costs stage. to nice math have range We're a the we this income gave Like that. minus XX, on at exact of exact associated numbers guiding on to with the back gave

Savi Syth

we to mean unit had And to cost? than just then cost that unit back about precrisis about Understood. the back on your of comment by utilization Okay. to And I maybe from how year, what get that's ability that kind anticipated, the trend getting trend? end faster on think of should this does

Jimmy Dempsey

the we Yes. about Look, we the during some our costs. focused across deal view to -- We're very talked costs. had hasn't changed when or since total talked on is we with. inflation unit industry that the about IPO our There

net airline interest, to of CASM we're fleet, the in invest other our heavily so the And airlines terms in very continue we leases. how plus operating to XXX% and very we through finance different

And the again. fleet. from neo the gets rent And therefore, a By down aircraft XXXs our to that that fuel ownership inflated fact costs year, huge efficiency the get then of interest delivering delivering so next into ex benefit the having slightly line. to as CASM we midyear in time start some by the get fuel we we you pay opposed the the is

that start happened up They XXXX. will the and you is XXXs 'XX And years X beyond moving into time XXXX get our 'XX fleet become than by years 'XX fleet so the so XXXs operate actually half in to or has the business fact in we terms the and less back the a have about as to or that of 'XX, you of XXXX, fleet. a as get change or progress -- percentage about in and of the last X XX%

we them utilization talked And Our there's our real a process. into anticipation change thoughts is went ago. weeks that no the our our few during unit that costs about in are similar to where IPO

think track we we'll for be So on that.

Savi Syth

improvement, seeing where with that. what SME seeing with I on know be that appreciate the Curious faster. and term. some you're front leisure is one seeing I demand tends And the big if improvement I near here do and think component, business, business just I question to last along ask recovery you if -- might any is but carry you're a on not it you're

Daniel Shurz

take I'll that.

Barry Biffle

ahead, Dan. take I'll -- go

Daniel Shurz

lot a industry. portion be couple months. don't traffic. seems we've it's in the got, We in trends very bit data Yes. Yes, of to we've a a a seen of on bit. definitely, last our Savi, We've an the small Yes. recovering of in the the the that from seen little of improvement of it obviously rest data have

is So is what a obviously, recovery I our better the than of much But else's. And any recovering. it portion take. story demand much don't know bigger anyone is small we if leisure the how is

Barry Biffle

I'm they'll go not lot, this in case, But it's be you back to managed. reopen add just to going weeks. this other almost every It's more And I X going you one more do about our are or to as do week -- I've I discussion you for starting this. at think see thing is of would business. calendar, business will -- to just offices be really I cube the return. think on joked corporate -- And travel hear business a but my I'm and to look traveling next people a think sitting Marriott? in small and And

Operator

Our next UBS. question Walton comes Myles of from the from line

Myles Walton

you wondering of if you given towards by that could end on of maybe to adjusted towards I the the an in the in the you XXXX ATL ATL expect touch the year? expand breaking was we quarter. sort perspective, curve, recovery about talk to when fleet the million performance were normal from And larger maybe $XXX where should upward

Jimmy Dempsey

normalize year. our the across Really at to difficult year recover of to the this to ATL would expect to still a and progresses, year stage, December, lowest effect its certainly here. it it has seasonality March ATL it's and of the where Jimmy go accelerated but is there's break. been -- the also And it the the recovering. end is run-in been the COVID. expect ways Look, slowly it's hit you'd as predicting At It end at spring improving. in you but do our the point and given And Myles, of somewhat that. on gradually the to Yes.

Myles Walton

Okay.

line the end the who sometime guess that year innings, XXXX. pricing I towards towards filler you recovered? put but don't Is yields in baked was think Barry, when where I the that to -- And around Okay. question the in of have is know and seventh normalized asked inning -- has the I --

Barry Biffle

for United will think lag mean States that. I I obviously, in I Yes. The domestically, sure. think, the international

going about out risk peak looking when And the wanted by control to it's be take think the back the depending just your I'll In I'm to I regions, they're think certain to probably towards you to cause or for think consumer going to shut Thanksgiving, go year. fly a and back they they periods. should coronavirus. book the But to to for even question go the domestically, next mind, few earlier even ATL. you X I And of or how day they there's mid-'XX a able my later or I upon they're think 'XX them of for till of I holidays may get earlier to or burned. the and where that further get out that's going to have end

fares to It's look, going are it's likely because to they not a may thing get is to fare when they're able another -- thing there one rise. to even be not I to so well, there's mean say demand more say, And supply. than

they that they're going going to next start sooner the I want holidays, rather you're this going then booking And and thinking traveling, So holidays. to to if happens booking break. than And when the when do about to later. start spring think get the at you're they're it summer, burned summer

industry, just the you from to So can the on the And industry. takes you the But up that be firming I for price. phenomenon. think think that see got the all takes full focus industry go year to look, up, far for think as pricing to across part I as -- I before can ATLs that of latter you

Operator

line from from Trent the Stephen Our of comes next Citigroup. question

Stephen Trent

Or massive me. in issue the country, the Just in two it the saw disruption you your of you? operations? guys gasoline guys to of with did quick parts But don't any for feel have that a an any for supply the ones of was know I given we you really exposure Southeast. not

Barry Biffle

Yes.

-- tech didn't had we do we -- now. but resolved some going to tankering, think stops, but -- and So looks to any We did have we be like it's it's it largely largely and challenges. some

Stephen Trent

further during were what are. And see co-branded than push investors how number when the card of IPO, to revenues you high and have news. quickly, opportunities you mentioned you just of intrigued we the even of very Barclays Do forward, And envelope go you. ancillary kind a have? Great Okay. by your the kind additional

Daniel Shurz

on work and to on This looking is on focused the value we're gets Daniel. with And the Discount sign opportunity. we're We then relevance -- with as the result, continued of it. our enhancements continue on build to focused Barclaycard to said a do increase making card increase there's to highest opening the benefits. it. up customers We're the offerings. advantage of continue -- we And offers. of with Barclays, program Den, as more both ancillary program discount and to look, to credit better, to continuing in the the on a opportunity number improving program ancillary And see airline the a the opportunity our continue get profit more remarks, lot of we good as program, it's very for a to we margin see loyalty who and take paid the It's offers, bigger, to with routes, more customers, our

Operator

remarks. no further this over I to for to Barry closing showing questions. would like time, the call turn I'm Biffle back At

Barry Biffle

want thank our everyone. updating today, we and joining us forward just to everybody look quarter. I next on for Thanks, you to

Operator

for This Thanks conference call. concludes participating. today's

may You now disconnect.

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