Southwest Airlines (LUV) 27 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Julia Landrum	VP, IR
Bob Jordan	President and CEO
Tammy Romo	EVP and CFO
Ryan Green	EVP and Chief Commercial Officer
Andrew Watterson	COO
Linda Rutherford	Chief Administration and Communications Officer
Scott Group	Wolfe Research
Savi Syth	Raymond James
Duane Pfennigwerth	Evercore ISI
Jamie Baker	JP Morgan
Conor Cunningham	Melius Research
Sheila Kahyaoglu	Jefferies
Alexandra Skores	Dallas Morning News
Mary Schlangenstein	Bloomberg News
Dawn Gilbertson	The Wall Street Journal
Leslie Josephs	CNBC
Alison Sider	The Wall Street Journal
David Slotnick	TPG

Call transcript

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Operator

Good morning, and welcome to the Southwest Airlines Second Quarter 2023 Conference Call. My name is Anthony, I will be moderating today’s call. This call is being recorded, and a replay will be available on southwest.com in the Investor Relations section. After today’s prepared remarks, there will be an opportunity to ask questions. [Operator Instructions]

like President the of I’d Julia over time, Vice Landrum, Investor this to call turn to At Relations. Please go ahead, Ma’am.

Julia Landrum

and In we Thank XXXX into Q&A. remarks operator, welcome, our jump to you, second and conference then call. share just will moment, a our prepared everyone, quarter

Watterson. On with Officer, Operating Vice Executive President we Chief Commercial me have CEO, Chief President and Romo; the Jordan; CFO, Executive Andrew Tammy Green; call Ryan Officer, and Bob Vice today, our President and and

quick will expectation reconciled are future our in results A we our based which special on expectations. performance, release. actual non-GAAP press which that forward-looking statements, reference exclude from items reminder make our we GAAP materially our of could and that to results will results, out Also, are current differ and called

refer please visit and information. Investor So, press our the in this to release for morning from Relations more website our disclosures

Bob, over I’ll to With it you. turn that,

Bob Jordan

all-time our joining good Thanks report travel, morning, and for we income pleased quarter very I a Julia, and XXXX of appreciate solid season. to to for excluding The with especially demand resilient everyone. you record earnings million, leisure busy $X of bookings quarterly environment, over items, just as throughout solid have special billion. am net travel call. seen us second $XXX be the I quarter continues revenue summer

XXXX contribution margin quarter number a in expect last and current full at we XXXX year-over-year number our to their $X XX want on customers the in people outlined operating second year December. continue record of flight a billion year bags expect pre-tax the past billion third get full to profits fantastic continue and of record we in to on we for a thank experienced profit such to our years. destinations, flights $X.X outlook, Based Further, our Day quarter solid XXXX. that revenue strategic They as record and to cancellation for Investor a of expansion our we helped rate I number record us job. initiatives lowest doing for especially successfully of

wasn’t lot challenge that, reliable of weather, in going operation continued a to weather to to despite they so the the our here our have related and From It just a solid worked have to continued ops our very cancellations has a July. together network center go, We minimize trials. control on be to getting deliver employees people without had very extremely operational need in performance. front them to Despite operation, challenging environment. where customers I’m proud line, and produce our well for and a a

agreements. driven cost our wage the While very It’s while making bargaining updates negotiation has to dedication progress. is for market And change open by accruals collective appreciative for year, work we’re of the involved fluid, the very in process. obviously outlook just hard increased I’m primarily of everybody rate our and the

the have recently, and planning and fluctuations is predictable growth. fall thinking very uncertainty faced our chain challenges the with off, that deliveries. Boeing of do with the stress from supply of issues, way is XXXX, so of swings the significant about we disruptions the since demand with challenges where The from out due from XXXX post-pandemic business, the to most a best staffing, seen smoothing MAX, smooth aircraft we with Now, then employee we grounding course, demand, difficult, made COVID, and to have since are resurgence have capacity must,

for and in that of much measured planning schedules, still growth, we the our get for at working just some remain We book flying deliveries MAX stable. but be are confident if as year-over-year. and finalizing told for April Where to for leaves point Boeing, back you order details with we’re doing X be next that year we a year X take assumed the now. that the that we we to XX is to XXXX allow currently were we should in not, up will are full reflowing XXXX build are published XX% us to We that at our instead we’ll and capacity are XXXX orderly more MAX this plan year, but unchanged that XX%

revamping this schedules. As our we our XXXX shared are release, in morning we flight

is in maturation the end of the markets at network next by we shifts the profit for flight this of development pre-tax restored efforts complete levels post-pandemic and the will reduce optimized, the of and will development network especially point, incremental largely March largely it XXXX those is continued more and returning changes be pre-pandemic than XXXX. Those business in our to $XXX also schedules, an to half, While by million percentage in adjustments by system The not travel. normal to capacity generate expect year.

XX% our have XXXX already be of and currently basis. published first quarter schedule X, XX% We year-over-year to a range March the on to through expect capacity in up XXXX,

year-over-year Now, XXXX. from mind is nearly keep that in XX% growth of that carryover

work of in planning our long-term mid-single-digit the our of year-over-year growth way remainder we in XXXX, for are a growth each quarter For year as goal back next deceleration sequential year-over-year. we to

several operations are lot in and a developed XXXX, of the for We track half plan. completing on milestones. quickly our progress of major We’ve first made winter

restored of network to travel us and to believe the of network our have more going We next quarter fully share yet the we year. post-pandemic utilize things to in deliver works have on staffing end of But Again, by the will contribute to help the the margin not plan of third and results year that XXXX we clear, lot patterns. exciting based expansion the going another adjust on have are to we’re financial end a and year. how our by Ryan the the fleet optimized, place restored in it’s but be

to say proud just and are operational operational our this out for I’m our Airlines, in financial through enough, service the industry-leading people. advances our of restoring other boost and in for a make performance, closing, I our can’t lay foundation In accomplishments resilience, a on to customer digital our focus XXXX of they for us industry-leading our shift heart day customers. Southwest and so each just in and our and They day deliver focus hospitality.

And turn I it will to with that, over Tammy.

Tammy Romo

everyone. you, and hello, Thank Bob,

financial a despite efforts quarter, improvement the hard labor I’d their pressure First, our many our year. operating like from profits a operational record. had this Overall, earned revenue produced accruals. an line expectations, from with really to where despite solid all-time in performance, quarter. completion for we weather extend to a We in bottom we line factor, employees market-driven another thanks we great resulting and solid had Operationally, commendable challenges. were quarterly Financially, began

generated also margins each double-digit month We during operating quarter. the

of All of thank I hard this and just incredible enough. was them made work can’t our possible employees. the by drive

and trends to our Andrew Ryan will and speak performance. operational revenue

So, I sheet. fleet balance will jump right and to cost, then

quarter fuel, most barrel. price with Throughout gallon, oil per previous our the Beginning $X.XX reasonable per our within hovering around guidance. slightly fuel was for second second range, a part above jet $XX crude prices stayed quarter,

that similar estimate We to quarter $X.XX are to And dime of of includes and in range, price gains. third fuel a an our XX% our including $X.XX to quarter price. now our for our price estimated $X.XX estimate hedging guidance be gains. We hedged second per the quarter hedging third be gallon full year $X.XX refining is higher XXXX to fuel previous up from margins. This to due fuel

hedge. heating volatile, course, which Of why is can market cracks we oil prices be and

and hedged in XX% fuel XXXX hedge currently $XXX XXXX portfolio. million. portfolio the few XXXX, meaningfully The are We added months, XXXX quarter is last and portfolio third market total of building fair began our we’ve to for value our over through our

to effective with seek roughly goal protection our hedging each opportunities hedging We to see year. get continue cost will expand XX% a continued to to portfolio

quarter our second unfavorable Moving towards for to to accruals labor X.X% guidance incremental open agreements. of market increase to of was end wage non-fuel the year-over-year rate due CASM-X cost, range our adjustments our

from been this dynamic. in beginning, market said the labor and environment based are but has have our this obviously on We market, accruals

eager and compensation our are We with award groups work planning to increases. well-deserved

our the costs. to currently quarter quarter. increase cost by ahead, range This driven year-over-year. quarter second consistent third We with in X.X% our largely CASM-X fairly higher labor third to Looking again trends nominal X.X% is increase remain estimate

We more engines incur as -XXX continuing additional half due come cost to XXXX for also maintenance fleet adding heavy are our expense further inflation. maintenance, relative our for to second to pressure

year-over-year guidance to X% cost X.X compared as with to due The For increase in our I’ve previous X% to we covered. of full X% to now X%. estimate pressures year higher labor already our range XXXX, the CASM-X decrease primarily estimated down is of

the ending a our deliveries total aircraft. -XXX second aircraft fleet, aircraft, XXX quarter XX during Turning received and of with we to retired XX over quarter,

We Boeing. reflow order book our with are to working

plan XX the to deliveries However, our at spend. approximately for -XXX continue this XXX CapEx which year-end. at fleet in to for assumes billion, Likewise, aircraft approximately XX year, approximately unchanged -X outlook retirements, remains billion $X.X $X.X aircraft takes capital we which and

remains guidance capacity XXXX unchanged. also Our

XX% year to up tightened year-over-year. guidance XX% we be We continue XX% to have year-over-year, approximately to full expect approximately capacity be to XXXX capacity and our up quarter third

quarter we for As planning year-over-year. grow capacity first mentioned, to XXXX XX% are to Bob XX%

mind, in that of XXXX, quarter year-over-year growing XX% in drives XX% XX% are that first we keep Now, alone nearly to and growth.

long-term capacity we quarter first mid-single-digit remains this are driver year-over-year goal the So, But, year-over-year the adding annualizing of year. that our primary is additional growth. growth

sheet million our all year. Lastly, first $XX.X with U.S. cash investment-grade debt agencies. we remain $XX only investments quarter rating in and ended an repayments and with short-term three by pristine net of for of of rating the remains balance billion, half second the the airline We

expect the million currently, expense. net continue still the And a cash income repayments than in $XX be XXXX We interest in is remainder interest expected a offset modest to scheduled for more of debt and XXXX position year. to

us inflationary the return the plans, return includes measured we these performance, optimizing do another accomplished weeks was help pressures, we year. We second just both as to on combined reflowing Boeing am in markets first network. the our still with managing of declared of to and on believe ongoing with our to paid financial year. as This support growth, we through existing XXXX orderly, said, with book cost couple compared and our for industry-leading a in plans development I is expand which invested initiatives profitable proud have of our which what margins ago. next quarter rebalancing will our year. maturation We this and order That capital to our the work work half and have and dividend of priority

it by me and Airlines over Southwest to success. by their close and is turn achieve And our ability inspire financial that, anchored to to my people belief ability goals operational Let and of Ryan. the in I my our saying confidence with in will create

Ryan Green

Thanks, Tammy.

through you this on our performance, provide update I’ll revenue walk I’ll additional revenue you point third of to on for results, commercial morning’s quarter priorities. outlook and And our our you context detail second quarter some release. earnings for our

Starting to with the all-time fact, quarterly $X for remained every first half the record revenue leisure continues revenue Overall steady of in Operating an quarter had second pre-pandemic consistently with billion. of be resilient, operating have revenue for XXXX of over levels. was we for operating above And record XXXX, quarter, in trends especially well month quarter. demand travel. second just

date, from or RASM higher-than-normal X-point issued in the capacity while of still which from recognized during expire as from that headwind year-over-year set on to highest later a our XXXX the our increase breakage revenue decreased that year-over-year of to credits second approximately second to second tough of quarter Second a resulting million the X.X% a flight up eliminate dates. And credit to were it’s year-over-year it’s comp expiration a year. on impacted last points quarter XXXX, policy decline, unit was basis change revenue were a reminder, by quarter against And we flight to prior was pandemic XX.X%. RASM RASM $XXX

Overall, second close-in in revenue of held quarter came leisure as strong. end our expectations at favorable the

from have revenue. growing travel frequency in came pre-pandemic business segments contract. as we space. reduced expected, under levels, very managed pleased medium and we the and have realized in And as from of travelers year-over-year their are with business we Second gains the of we’re we their largest our educations some number businesses, government business and for while to us, quarter accounts and corporate the continue sequential improvement strong of Small largely trips points managed from revenue are make in

for quarter continue All business travelers this than to passenger seeing of quarter to the us travel. We unique flying share more has in exited pre-pandemic. managed the grow share our allowed and gained business we the of second market additional saw

July we’re yield summer to to third season continue travel expected with leisure the be also essentially and throughout record. Moving booked, which seeing a is the quarter, revenue, booking strength

record but course, to by for Of fare the fall much what booking three we’re for comes with the our leisure suggests bookings and of booking Day day very all-time encouraged taken. XX were the Labor top days fare week curve sale that June travel closer bookings ever continued had all-time We demand. post that record sale our most in of off-peak our included and response records the for

In this than the time we have point third point more did for fact, quarter we same quarter. at passengers at booked curve in for the in travel second

Southwest but typically strength basis, on nominal in are yields the the versus demand Airlines. to for third course, revenue a sequentially points second Of weaker passengers quarter quarter continued

and have gains travel demand we than foreseeable to particularly leisure travel corporate will lower compared the overall for share. we improvement, remain industry with expect corporate currently in expect Overall, market trend a however, modest our underlying continue pre-pandemic. expect We future, to

look So our as the of it opportunity with us mix, traveler remain our higher leisure to current an at gives a number frequent design. business network taken customers, and most down for trips per

frequent had of travelers short-haul assuming network those return. travel travel, midweek and trips current skew travel and also more would with our more those Pre-pandemic, is patterns a designed

be network with revenue Moving continue X% leisure X% leaves new forward, to surge. travel to in normalize comparisons of and of post-pandemic growing our to capacity unit up revenue adjust expected expect year-over-year Ultimately, and by a as year decline on unit capacity mix business a the as revenue from typical the year-over-year our tough is to to patterns customers. the from XX% seasonably on to down opportunity fleet quarter again there see demand the us basis. is this third we to The as we year-over-year than driven prior the roughly well domestic faster utilization network restore adapt

this room optimize guide quarter unit our record So, efficiency, revenue to while revenue. for third there a operating still is implies

of travel we XXXX again, mentioned. the imperative of of our behavior the we’ve Starting our So industry-leading such made supports network are the to customer in the it financial just changes changes that adjusting composition January network the performance. process schedules, to support with I

We this made complete of that where week, XXXX. when optimization will time are reflect be largely and changes customers they’re spring traveling of traveling, in and and day of our including day

XX% normalize development, over more will levels closer the months. In of to than addition, to under next we XX pre-pandemic have our XX markets which

revenue So, of growth expect Bob our and And and as we revenue the opportunity said in substantial. contribution the continued release fully initiatives. implemented from existing is as we also mentioned earlier, course, revenue the go-forward network from

Finally, service deliver hospitality at we customer have consistently and to here hard always best the Southwest. worked

our overhead on legendary, Our and And including course, customer deploying are our customer service are initiatives, policies we of industry-leading. power. upgrades, track in larger and in-seat Wi-Fi onboard is, product bins

digital customers hospitality to serve on customer our improve in initiatives of cases. through will widening a allow focused and most advantage are themselves now We our series prioritizations that of service our

provide details all airport but most there, best goal next-generation help our and the to more. tools, and will us the the ready to you initiatives layouts achieve deliver hospitality efficient aren’t We with

And now, turn with Andrew. to I’ll it that,

Andrew Watterson

Plan. you, I’m Winter going provide Preparedness and update additional performance a Ryan, on Operations our Thank brief everyone. operational our some details hello, to and on

operational and performance Well, they operationally for warrior quarter. I’ll employees an challenging their our in solid by spirits just the start commending delivered

activity, record record But bag had Bob we staffed were ready. As prepared. We and we mentioned, counts. were and flight up we record were customers

the the quarter. their weather of June, had tough XX had the the a getting despite pretty customers disruptions. reset delays, quarter on which second with continuous remarkable. managed sign with is first to some the system the but quarter factor was in track It reliably factor management a across that than And our highest so Our more next events, had priority, bags. the we morning, by achieved second and people. past regular And operations flight particular, we was Safety always excelled XX% is much issues performance weather avoid is pretty years. really the to right completion challenging in be our second in We We of environment. good back when we the in couldn’t really are operating through in and we flight destinations completion entire conditions.

we all operations. are broad-based improvements. year-over-year two showed Underneath as backdrop that against Denver, Vegas early Promoter the and Net our headline, of which saw improvements Score, operating in was in metrics This Las booked morning compliance, on-time delays, originators, our trip long turn performance, largest runway closures as of solid and flown

dropped block execution our as people. of testament the rate, to year pilots more time broad-based take The by was last headwinds which drag solid because our X quarter a had to is our circuitous relative against hit to improved these over second weather. Another performance points routing

Looking our our Winter of implementation forward, we’re progress also with Preparedness really pleased Plan. on the

plan through we as detailed be completing walk on site, website. in is all well in say reminder, a delivery available XXXX I Just plan everything micro winter of won’t implemented infrastructure really the today already and since the of on new The which season. and I our to is our as fully software on accepting though track will is storm advance equipment details fourth quarter a the site. that it’s you implementations. on But are going well, micro is

school We ramp deicing trade on are to all new on ramp conducting and train agents equipment. agents summer new

been bargain we while. negotiations negotiations couple last get thank make rates. and to ratified and on a able of agreements do as for do possible to that we have X know I’m to agreements. get parties to thing have to the as both new who negotiations, to other committed so months, with I to diligently, we’ve we collective to in going well as have sides more want many but We work we wage emotional that is the continue as in Obviously, negotiate but market where place we all employees progress. been faith amenable are work the labor could be these a continue with compensate still grateful to our good the complicated, quickly hard

I’ll all I’d with them. back their an for over of So, to team and It’s to thank have to be like employees closing, to hard that, support opportunity it the honor in our part Julia. to of this turn work. And

Julia Landrum

Thank you, Andrew.

queued please to one reminder so go questions, follow-up, a please questions We and to needed. begin keep have and up a analysts analyst your ahead quick Q&A. for if Operator, our

Operator

Our question will Group come Instructions] [Operator Scott with from first Research. Wolfe

You may now go ahead.

Scott Group

Hey. Thanks. Good afternoon.

given factors QX So, load quarter? have further, a QX that, as some on lot guiding any color you wondering And then, of pressure? pressure expect pressure to in on With further we accelerates. you in on you growth? if capacity do expected moderating about maybe the the do accelerate RASM capacity the And capacity think to should of RASM think

Ryan Green

Yes. Hey Scott, it’s Ryan.

quarter there. back with second stepping quarter in quarter, record was for -- the facing we when good does That plus it quarter quarter. just just that the I each from think that revenue period second which, operating there revenue persist the to pent-up performance, taking the by the prior not is record for about think headwind a going you about and in think way, the isolated the And forward. the operating points, to relative adjustment X second the overall, the of I that comparison a is at were I breakage the look compare on think year, really demand months of

And of at or that, year-over-year, really, all benefit because revenue you that second second is performance the quarter revenue, The environment, good. really over second fare comparison out passenger actually isolate quarter. the that think XXXX gets adjust breakage X%. gets from the year-over-year booked there quarter fares into average if breakage that if in the quarter are in you spread up I

compares we’re here of pressure I factor compare which performance environment, optimizing strong -- an bit look saw And think domestic revenue the a in that in line a or in really where little fare -- managing load it’s as on quarter we’re our the we’re -- well. does So, our have second at typically loads. in you the load quarter, with environment if factor second the competitors and

quarter, So, all I feel the taken account on the of really that. second on second -- that about good into

about booked. is fare almost think you forward, As here the going environment July

think to tell, persist. environment far can fare I we as the as continues

I demand revenue July, July, in record in periods compare think, we last another a tough Here again, year. prior from pent-up expect on the with

here typically where of in think comes I environment, that just factor are with environment points fare strong revenue very couple we we’re an and a a So, we’re -- there. managing optimizing in of load adjustment where

Bob Jordan

Bob. it’s Scott,

think in. it one, things number on the new new in be thing the that -- system got And we we’ve thinks And will as been it in this to we’re close-in we’re We fall. itinerary. able got we’ve about that fully terms other one -- demand. -- it of network that The the happy this I’m happens, pricing get maximizes -- obviously, management is in whole of revenue your too, well but taken I it time, over

doing did again, wouldn’t testing. here, system, be load a you a known little new was especially it bit that that learn a all as we that of the lower we and see might as So, surprise

proud the in environment. thing a here. team as we suboptimal brought our flying. we I’m Second restored know We very we’re back is capacity quickly of

is will all of next ahead it’s which everything work of in first our we’re year the air optimized. why the the in third network flying but of be and all our quarter aircraft actually We the get end around quarter, the unconstrained optimize. plan, to of That’s doing at the not here

into across to we in fare, XXX percent our are Hawaii development. a more pandemic. this, or still that average I just system quarter in The about XX%. normal We total normal from by and think, now. of just this across $X of will those normal markets you if those the the kind excessive pre-pandemic fair be of added Tammy, network drag I and each right of cities. you development during normal the put to Ryan year grew It’s over fares, large our new to in mature XXXX. about of development, associate And average next We percent about last year. We thing, sort investments, have aircraft talked sort as those be is to to that of next compared end and fall development And that expect think

it a So, in of fare about gives as you terms thinking just ballpark average well.

Scott Group

Helpful.

I just I of follow-up, like if do next that. capacity single is network ultimately, year? more CASM cost The high is guess, optimization, a down guess, we next to that like So, a I’m quick figure opportunity opportunity? out or or revenue to year, is up trying up think

Bob Jordan

to Do that, take you Tammy? want

Tammy Romo

helpful we Yes. and look well our as to tag helping on driving cost that. revenues and it staffing the we -- beneficial will our ahead network to next to our are redesign, should our fleet in align as network that there to opportunities to year, us the And our to side. our on No, unit both that network network certainly, We’ll team be we be believe as the our goal. committed cost And down. design achieve absolutely

Bob Jordan

on particularly the aircraft quarter. the to this because the again I think of away pilot with just a in just about the to all getting in -- XX we’ve produce year, side, third still you which capacity we a about, so I goes reminder, capacity capacity. it’s quarter constrained, restoration talked that the large just lot talked first as add, doing going just It’s But XX. flying And were Yes. would that the too,

So, early carryover, into it lot a produces especially next of year.

first XX% XXXX. that So growth from the here quarter simply is in adds of in carryover back

travel optimization, on think Tammy network they it’s the were yes, what the post-pandemic a -- not sides. play both travel But it’s the said, clear, As as patterns are you about patterns pre-pandemic.

the Some to that for trail that I is business of I while. it’s expect is lot back, continue come business. of restoration to think a here leisure, going but a leisure that of to

Tuesday a -- Normally, Monday. but So, would into from more schedule things Ryan a a X like on a Wednesday aggressive fall and talked example. reduction about about this, for much points that it’s

fall I the about X think it’s to optimization of network. with the points going

of on much, late and really managing penalties those. obviously better really RASM have We’re early much management which flights,

it’s post-pandemic patterns So seeing meant the just anyways, definitely travel to the and what really but we’re demand revenue a match to network. it’s to play,

Andrew Watterson

Yes. the doing. on buckets, it’s of this, network To we’re give kind put in some color changes the X

mostly long-haul The shift and business more business with a routes medium short-haul routes to first is from heavy mix. a lower frequency

Tuesday, are second X% Friday, the versus reductions, Wednesday is to The down depending XX% Monday, season. Thursday, on

third the day. the shoulder is The of

city Hawaii typically moving bit as So earliest the be adjusting we’re worst the a we then performers will flights, demand little latest fourth And as the in. which and is result. and them understood are seasonality patterns, our new in a markets, we’ve their shifting

XXX frequencies. departures. Midway. year, March little one bit are of we’ll give changing In X to ‘XX, In some XX color that take -- Now we’re pairs XXX, just Underneath trips. have city this of that, on have a of you let’s so, first we about down how shifting had March that frequencies, you the

thing Xx the and are And from Phoenix losing Tampa. in to Sarasota frequencies to Those replace Columbus, up Midway say Xx, Columbus, from You down same going to frequencies. X then not X it. X frequencies they’re and Midway frequencies Midway to

so And so, everyone to composition their bit. kept departure, so the moved speak, little a

Sarasota Now combination is leisure, Tampa and business. is leisure and a Phoenix but pure-play a of

margin, So, speak. like a shift together it’s mix guardrail, not the so going at kind of to

one this each all do modest. itself -- you to our a change, up leads is go network, substantial So through all but these it of

Operator

Syth James. from with come Savi will question next Raymond Our

Savi Syth

EPS, can high-level different back it think not Like, profitability, when of I it Can you to do level? get to to maybe there? question get the take pretax a but does does take get tying And how afternoon. and XXXX there necessarily you on? type kind ask things in long of Good all just what level kind of working income that you’re

Tammy Romo

Yes. Hi Savi.

a working in environment detailed current current our a part, our you, are midst to to on we’ve And plan. shared is goal. XXXX plan business certainly getting with of of network back the levels and adjusting and that We environment part of pre-pandemic as the is demand significant our profitability

to obviously, guidance of certainly but goal. levels ready, year, those not to is back for profitability next We’re the getting provide

certainly, the optimize that, that and our of to contributions continue get So, And first plans. addition order through. fleet our taken levels network. the from fly to flying our as we initiatives is from all grow priority in staffing to to we’ve our ongoing to you fleet network continue of adjustments And and modernization that to contributions got we’ve ongoing the we’ll

we messy obviously a a soon, of pivoting will restored little expansion our So, and are efforts XXXX. as year-over-year good will putting we and here. for work moving on we here been that parts -- pandemic. certainly lot fully margin producing rebuild almost is be But It’s and news the be certainly we’ve the to following

Savi Syth

labor also what kind you is That’s catch-up I of Is it last was think ratification year’s the has of labor kind the of a historically just just bonuses? ask the to in accruals. include that any of helpful. been or cost are? or kind of you market I prior labor on So, if And to could might rates kind kind in the this Does question case, XXXX be accrual, lower? your that year’s where wondering of getting what anything to included part the April

Tammy Romo

quarter, market Savi, been rates we certainly, third there’s into as cost adjusting we it that along quarter as been adjust guidance, here, third factored and the rates. obviously, we’ve our as been And market our we best have moving of best estimate. our attempt for current to go. is all to we’ve And can changes

I and Savi. -- that’s important think So an point,

as So, all as we’ve -- -- along, we’ve accruing know you you got been know. here

industry. in that some of guys to as keep in other And so, the mind you compare Southwest the just maybe

Bob Jordan

mean I just know, you accrued moving. market. we recent And the market’s short, fully Yes. for most yes, what in as is been are though,

In fact, cost full our was that the moved. the down basically made we X% quarter market That X%. across X%, change change down for to guided year because entirely updating X% we the to accruals

Savi Syth

labor pilots that’s and And all that’s groups…?

Bob Jordan

all. It’s

Savi Syth

pilot of driver of increase, this of the you’ve up that all driving labor pilot… mean I And because it more quarter or it groups -- seen some kind was

Bob Jordan

we’re that so it’s our in where still an -- the anywhere have accruals. moved, updated we contract we if saw you negotiations, an It’s increase on anywhere open market

market. a that we we little And we mind, and ratification had our had just notice some fully news mechanics are a related employees with my of new in note, morning. got that good this I agreement mean, We just accrued a in -- just -- on have we just the to So, side, AMFA.

So, four ratified extension contract they through just morning. XXXX years this

another So, there, bit good news one. a little of

that think last I so. the months, makes So, X X in

Operator

from Pfennigwerth Our ISI. next will come question Evercore with Duane

Duane Pfennigwerth

reasons What then, there that about comment some think it that geographically, And -- we If kind Just that? start is need noted U.S. need just are don’t what and to of why the look in Coast, the or internally, happen, the you on variation could East not network. January? to you mean, quarter? maybe Midwest, do in practical on network maybe is the weaker? But tweak how guidance, not as I the third changes the that much fourth the changes versus quarter is why you stronger across to what you’ve know at broadly, West September on identified start I how you of reasons Hawaii, Coast,

Ryan Green

it’s Duane, Hey Yes. Ryan.

the geographic is under are itself, weaker. that’s franchise -- markets we that on our are now The versus elements that’s stronger part Just that of kind what’s development. Hawaii and of what seeing

so Hawaii Yields lands that, factors is element And with the franchise element been improving. development are are pleased Load main especially overall, there the of that franchise. we’ve of but of Hawaii, very the high. very

Hawaii with very, So happy we’re very how performing. is

changes network just made we little come -- intra-Cal a changes, back on Intra-Cal to the To Coast some being to West slower why despite that and in bit your have network itself, comments the the this continue in in us well, for well Intra-Cal performing environment is to the itself perform Florida strong performing typically very markets Leisure-based well. strong in leisure is environment. recovery, markets, leisure

that So gives a of well. flavor kind for what’s you going

are obviously, there have brought -- the there and we you back. we capacity geographies opportunities, the have of The as restored the And bring to market. are different to network into comes the work we that of levels it as those back different absorb as network, capacity cities markets kind

working growth, we’re outsized and largely relatively parts of But, our of some weather have Southwest that cycles, better on things benefits there’s a country of those And focus the of kind go through we’re able to as domestic is to been from one of economic where we’ll diverse different we footprint. Airlines maybe little peers. and So, markets respond the than bit differently there. a capacity kind different have that continue

inherent an that’s So, advantage for we us go forward. as

Duane Pfennigwerth

I go ahead. mean --

Andrew Watterson

changes. kind sorry. make I’m understand your want to -- Duane, network, fulsome of when you add change make it’s Andrew. want to I’d you before we also to you that

been have we making So, adjustments.

schedule as January. aggressive we have Tuesday, September started we in on the have not in Friday, versus Thursday, Wednesday Monday, so it’s -- we as modified capacity So, first as

to we we -- want making stepped made some the then the full that have QX. there forward changes what We also starting course So we’re we understand into and that doing, of how the to of saw through kind September network in see and out we before of bookings so on adjustment that them both like we changes fourth over the quarter. and started

So, talked obviously will it’s season that adjustments happen seasonality rolls essentially done around. by March, except as I type the for about

Bob Jordan

Well, Duane, our changing holidays, disruptive the are typical of published, you more especially for Wednesday on a an from to change also if for just the Monday, moving example the reduction X% the just it’s that schedules customers, our super already about think customers. Tuesday, to

of schedules do in to not you’re then. we’re wholesale tweak coming make we changes, of we that terms pandemic But if And in to that. now and fall, so, go and not committed the wholesale to customers. to out doing there the changes our our Obviously, going to committed

to really described, changes. opportunity published the schedule So first did was January but a the things, a in lot January of as -- new really some enact Andrew obviously, we

Duane Pfennigwerth

I my wonder that know. of give of next the can bigger, a But, willing reoccur wind Okay, would investment investment, follow-up, think guess you then I are for training year? reliability unlikely for if the kind to down actually or maybe us the you’d sense excess great. to kind and of those be magnitude And is quantify just which I you

Tammy Romo

Hey Duane, I’ll take that.

this In ops disruptions, we million have costs But to our fully are $XXX we believe solidify terms of capacity you I with related the training, help onetime we’ll provide to and and incurred year plan baked the our that’s more million. we’ve et regard once here that about can cetera. plans, $XXX that to details

that comp So, that’s won’t kind onetime next year. repeat of

we details lay out Beyond for XXXX our that, additional we’ll share plan you. once

Operator

question Jamie will come Our Baker from next with JP Morgan.

Jamie Baker

First question is a modeling of variety.

and similar we wiggle third fourth realize So, X% guide room the look than to CASM to terms quarter. fuel at of there’s third the year it quarter a X%. pretty implies in that’s here, usually fuel third outcome guide than closer Fourth some the but quarter I quarter Tammy, absolute at X sequential of usually case. least X down what’s full then the And if CASM quarter higher is

Just address you’d that. wondering how

Tammy Romo

mind, as add in is a in capacity keep capacity. back continue be Well, factor going to Jamie, that that to we

that’s primary So, think the I driver.

Jamie Baker

And off last of Okay. second, I quarter. then, and asked sort you builds this about what

very it’s the shifting December. I that airlines a from damaged you You mentioned curious, this. it flying. revamping changes about the how factor? least that value that customers just post-pandemic all the possibility consumer changes like of and overall those also have well sound dispute reflect but last place. the And fault spoken maybe separate to be year you of Other demand, to contributing schedules was consider I don’t how you have Southwest be at may stagnant make might mean, proposition corporate travel the do preference to next maybe patterns I’m changes something are somewhat it brand have in taken Southwest

Bob Jordan

factor all and we good. heading and Yes. look a right think markets and trying mentioned the direction things, I’ll I terms about preferences the I on. line those in there to in brand you all specifics, of We really things. flights, just Ryan To we lot a our to all just effect. mean, of you is record demand just revenues, for believe operating top, record are the top the the mean, and is this each again, strength had, start I’ll of about quarter. hangover But record trust and early thinking in we tease me, let highest had the those -- fall in customer as any tremendous was our history. I obviously, We those that had booking days track passengers, talk record and sale, day apart. our and they’re at

haven’t business can talked demand lot more side. talk a Ryan about on We the about,

since the really way on share our Day significant side. we’re business business. time, seeing market say, of gains about piece share that shifts would I at seeing, We in market in talked We’re our terms And that December. meaningful the of Investor in

for demand any that we’re up, seeing So, sign in as the you just demand bookings, brand, think Ryan? product not about shows obviously, weakness. for the of

Ryan Green

disruption. weekly in last like place tracking quarter, following the mentioned of I in get Airlines, are want we brand those rebounded they -- normal their we’re them post ability I confidence in say our No, back basis. of terms where Yes. Those event, scores have on of ranges, we’re to think we tracking would trust research past all in Southwest -- where course, sentiment certainly. a to And those to go, have

indicator the Southwest single for I’d Airlines Bob what biggest is demand overall. said, echo

third quarter, record acquisitions Reward in forward Rapid performance second you engagement just in the off third quarter a expecting in customer We second record an had to indication came quarter, quarter. I quarter. as in another revenue the is record which look spend, think of the record co-brand revenue second

think, our points Airlines, disruption that I fact to in the for the of is continued that all there So, Southwest demand and strong is past.

point just travel also will I the fact patterns the to changing.

look individual began December. to business plateau basis look especially at an of you that travel, to prior last and for If customer at their frequency you the trips,

beginning disruption event terms step frequency to and down overall. Those of prior trends travel event. the to of year Airlines emerge no were in post on been last Southwest there’s So,

we’re whole, business Now, as on up space. market pick managed continuing the in to mentioned, Bob share the

we’re business and earning -- passengers. the of incremental we’re winning winning we’re more So, business

adding more out contract. under accounts and going So, we’re

or more of as the the pandemic on traveler of of was an we December. business just the prior disruption taking place structural winning on the to impact We’re again in business that their frequency trips individual It’s persists forward. move

Operator

question Melius next will Our Research. come with Conor from Cunningham

Conor Cunningham

capital invested return guys on centered capacity you XX%. hit growth that your until minimal like XX plan around ago, a years was established

growth, During is today exploded. time not that same. realize earnings I the slow frame, exactly your

you’re stuff. you planes not of taking You Southwest growth Like, you plan? number open just labor and retire. for into that large step Thank that right capacity do why mid-single-digit why a But fleet trying have contracts, lot your accelerating a order now? a back understand have you. book, is the I’m could ‘XX, to all slowing right

Tammy Romo

grow amount pandemic network. And in I’ll if markets. not have and to just capacity trending start. did progressing that And make as remind I’ll they’re we first we investments well, But our in a reported, route our we than higher opportunities. growth expectations. during you have of the do our all, -- line, those of again development And normal are than believe we we larger

our believe those So, we we the we’re so pleased over because of no And really plans the we’ve with that And have Southwest on strong on seen have pull long development those hold are markets growth. far, additional we market. believe opportunities good based to we in back markets term. what for

our supports based now, So, our said, mid-single-digit we that assessment opportunities, of on believe that growth. ASM growth

build we plan the we the always, are ample remember determined And invested we always, proud our can of very opportunity. Southwest one of. at as and returns well, on about end drive to be of all Now, the very that as as that plans day, wonderful the with capital I Airlines things

to that if we and plans, next that we adjust, we year changes with point, we’ve don’t based exactly we we desire. right. book we we we given not network we everything we’re revenue flexible so. that seen, do on If got all the the levers But, should you these And have that you’re have could point, at plans. flexible to can we’ve -- performance drive believe could order this we’ve but our your -- a So fleet need --

again, capital. of a expansion we to plan lot well busy that next return moving ahead will plan. So, look expansion very delivering deliver as we focused on on and year, a XXXX work and as as and parts are we’re our invested But margin here, at XXXX on

Bob Jordan

doesn’t the open But third efficiency. just a period the optimal. optimized, year. got not And too. again, how the optimal resource, all think we and not of we’re quarter, restored the network. end in and we our about proud not we’ll just our I’m really terms you’re fact it by flying the of our the of It’s where mean aircraft Conor, have that here in usage network here in it’s

attack and growth product. Nashville the mid-single-digit for very the XXXX. the you And demand we’re just quarter me, for talking in and the the biggest supporting. And aircraft the that and a of in would so like first place, we’ll opportunities aggressively, that, we’re do about, and Austin on, attacking on and have Past to Southwest network have here question that on name we significant where Denver opportunities just there’s huge be,

We know coming the have not next where to the would That’s gates here don’t put I on sitting going, aircraft. line. case. I you’re worried if be

demand tremendous for the brand. have We

our we like large We said, absolutely, to strength And in returns. to cost, and have a work out the continue do to there’s then cities, optimize have focus actions the lot Tammy again, lot in boost brand obviously and as yes, our others boost our cities of here. flexibility. of and demand airline, tremendous And wring network to things a revenues

Conor Cunningham

far, just you’ve And or a think That’s to the added finer just as we so XXXX maybe Okay. implications about for then helpful. put what point on ‘XX.

like capacity implied the If you ‘XX, X% through just -- think I pull capacity fourth year-over-year. quarter it’s is growth

So, the have I’m trying with understand now. we that’s again, of next measured is just to going and orderly Thank low context parts these this number just your that other on year? watermark you. all right you -- moving and should expect the that

Tammy Romo

the just is probably, to next year I the carryover So, would of X impact points. say,

Bob Jordan

Yes.

Operator

time question. question We’ll take more Sheila one Jefferies. We with have our from last Kahyaoglu for

ahead. may You now go

Sheila Kahyaoglu

Hi. everyone. you, Thank

very So RASM a just obviously pieces of moving on and lots hot topic.

earnings will likely from to be pieces. out RASM, XXXX, of you but have for about you down million look up. network lot As we and CASM-X moving a we it given How benefit $XXX most do us XXXX, be optimization, think growth could gave

EBIT earnings possibility next a revenue there flat growth is for or -- So, year?

Bob Jordan

at our initiatives to $X as billion is Investor Well, Sheila, obviously there, the we we talked got $X.X billion from EBIT. Day, have which contribution about the described we we’ve -- the in that

that. of got we network we’ve have $XXX relative by we’re here described in The first the opportunities. the in talking are things You of place value million to top and that occurred on some quarter other that about during March, that the again changes

goal. add yes, So, margin all you the we’re plan want expansion obviously, But don’t don’t share working lead We But, That’s that I in absolutely later, on you know again coming in to you yet. is a if is plan. obviously here Tammy, a with expansion margin anything? to fall. the XXXX. our to desire to have

Tammy Romo

think covered you it. I

Julia Landrum

call. concludes the joining. portion That great Okay. everyone analyst day. Have a of appreciate our I

Operator

introduce will Communications Ladies our and Administration call. media and Rutherford, Ms. Linda of like we first begin today’s to now gentlemen, Chief portion I’d Officer.

Linda Rutherford

media and We’ll Anthony, the you, call go members ahead and our media welcome our Thank get of with today. Q&A. to our on started

So queue Anthony, if would questions. asking folks you up to begin

Operator

go [Operator Instructions] You may now ahead.

Unidentified Analyst

is meet that if much Hi for we to you because at everyone. committed benefits. those standards to earlier the come agreement, benefits today. back and with try the the meeting obviously, Wanted and Southwest to pay revisit where if all pay update those that. table ask contract, Thank there’s and out there and you the saw conversation ultimately of American new wanted about an to are kind and standards to brought negotiating tentative time and United with I so pilot their

Bob Jordan

the can too. you chime Andrew, for Thanks question, in,

negotiations obviously, So we complex. -- are are

all with to that opened of right are have our We eager reach groups agreements now. contracts

We’re new regularly report. there, nothing with to and but for progress very hopeful SWAPA very meeting

NMB strike process. is the defined a authorization Obviously, that about vote. process, mediation heard defined You’ve a is

certainly that No, want get all many, strike. to of pilots would So, a and up or that want there. do our we fantastic like taken to we it’s -- there’s of an lot have ahead progress would them a no strike steps of have care make are any of imminent that They I’d desire strike say job, progress or lead our there many first. to well but including There that. obviously, an get threat up, anything And that. occur contracts steps those, no a with is obviously, closed we of. of are to to imminent There

Andrew Watterson

I’d -- say that if you a strong look it’s pilots market.

wage a reflected be so I the think see what’s And in pilot. agreements often the far which it’s characterized great But you the a the company. is headlines. the by for and it’s It’s time all So portions the of which that I’ve seen costs so quality the non-wage such, not or wage increase rules rates, to so life also the rates. scheduling gets the for much can increases pilots, other

And difficult. so be complex those rules and can

through go but So, -- to then it. out is time model the you spend implications write rates and longer defined it. of out Wage upon that, rules scheduling defined and know you a to and take lots is matter, to agree

makes with So opinion, to the what would longer regards like my in than current our timeline that’s you negotiations.

Operator

next Schlangenstein News. will Our come with Mary Bloomberg question from

Mary Schlangenstein

will of that you have disruption, Is earlier, in your I was everything to planned place? disruption. for all everything everything just cost wanted result to $XXX as winter when clarify, that million right? have $XXX a you million will when you plan, that mentioned post was And of the under that the

Andrew Watterson

the handle timeline. I’ll

get have So is ourselves everything deadline ready. given -- October we’ve to we the

internal to actually is expect deadline We after that, winter but be our October. storms

comprehensive our review and where track, results. the taking and we’re when go so by so And third later and status we’ll October, far, on earnings, update encouraged make on sure that have But will it be are in and to are that. be report we a we quarter and delivery things through will

Tammy Romo

the Yes. million million, $XXX And Mary, on repeating that? your to $XXX question would you mind

Mary Schlangenstein

if asking cost to for costs earlier that’s place a everything disruptions Yes. of additional just as that workers. related was that of I ramp was for put result in the the training or if mention the you’ve

Tammy Romo

may that be that’s next sticky year, to our guess right best investments. year this are. onetime of in of our the -- investments of some prove our so made estimate some just some some that including best But our technology of what of what we onetime may costs into of -- It’s -- somewhat now our didn’t. costs it cost, there No, those the we

Bob Jordan

we show year things includes in And some to think had we Tammy, gratitude and up are did disruption related things it like like reimbursements customer did we incremental that don’t -- And really this pay. ‘XX. the also I a that onetime again that

Tammy Romo

our the more even -- event, -- -- just we had just Mary, plans before remind want thing, had you one modernize we just to to operations. I that we

and investments continue already the those that’s place in earlier. in So, of referring contemplated that will I are our to been all guidance. those was some Those obviously, were and

Operator

come from will Journal. Gilbertson Dawn The next Our question Wall with Street

Dawn Gilbertson

A quick here. question

again about more leisure has than how now a for over competitors year over everybody forth. paying seats have travel surge the talking and up Your been for and premium so

that. recall Thanks. to that A-List now -- You curious, past. I’m one Select? buy And has, don’t I I a of purchase could Business guys boarding, really upgraded upsell status. how on this EarlyBird if the of demand have lot to. you’re wrong, a but itself, any details don’t has even question I lot can to making noticed manifested of at to for pitches I it mean, you But in related Southwest? anything travel leisure be boarding, share

too. I’m So, strategy curious you. there, the Thank about

Ryan Green

to right. Hey Dawn, to talk you. you’re Ryan. it’s Good Yes,

think while being to in that now RASM their performance degree that impact of just that talking don’t and about their to model for participate they a that our have premium I do. probably been Some of premium revenue stream on any And a that performance. it RASM competitors business the revenue material our tailwind has we a same

quarter said it second recovery, your boarding, example a third that, have performed mobile had good added point. the the quarter but last on a EarlyBird having since quarter. Take very to It quarter EarlyBird, well the ability EarlyBird. revenue the device. -- in upgraded year lagging rates a been ancillary we as second bit pandemic in of very record. for our Upgraded that on digital purchase boarding the in tripled an little was However, was through

actually the course we’ve And upgraded year. upgraded some and on we’ve maintain and revenue to boarding very price price been the of so, EarlyBird the And as had the grow strong able last well. over boarding

we in So, our the high is premium don’t the as participate competitors from same just standpoint revenue definitely at ancillary revenue for of some a us do. level a quarter. point It’s

and done -- historically past the recently Related points top some run off to we to but we’ve run A-List off buy your those as pay a bit ability your on have of little nothing the last we tier those call question in qualifying those We’ve qualifying Preferred. tier we top points, to get to A-List, historically campaigns, the campaigns, kind of status, ability to new. A-List well. That’s --

Dawn Gilbertson

you figures Can and/or Can -- now years, that have revenue. -- you have you think, you Thanks. Can at one I revenue that follow-up. quantify give put been on it’s dollar upgraded guys any since please? you EarlyBird any all, boarding

Ryan Green

had millions products basis. Yes, boarding on from those dollars I here of in annual And of the a like record second we generate just an said, hundreds we quarter.

continue revenues to those grow. So

Tammy Romo

excess And give $XXX in Yes. just quarter, of million. second for to just EarlyBird you a little, was alone

Operator

question Leslie with Our Josephs CNBC. from next come will

Leslie Josephs

and a sharp are and drop-off And maybe going like and compare for like does that up? flying Thanks. return off just more season? is any with people decline capacity the were that on QX, XXXX say, kind how mid-August, seeing of curious seasonality to Just RASM you after,

Ryan Green

Yes. Ryan. Hey Leslie, it’s

headwind a in is capacity growth that’s there with or certainly, the little So seasonal RASM above the -- a third norms that’s bit quarter.

where headwind very definitely the encouraged take the sits by place, on But just look third there. at if demand a you in quarter I’m today. quarter there’s So, and third balance

anticipating months. revenue couple here are the record a quarter next of over We third

all-time our including bookings And than for other and schedules in have that summer in -- record at compares quarter top a same we single had We day at the sale record this the all-time holidays, second in We history. for fare during more have point or actually for any place in booking even travel. quarter. in curve taken during point had the than fall We had more up same time the bookings fare sale took sale curve that fare in an XX for bookings day. for the to the for open in for -- time we fall we days our June when our the third we

a got place base tremendous we’ve of in the fall. So, bookings for

that a call. we’ve that on Southwest talked think demand Airlines shows I of the the for lot about product, like

point quarter is persisted July. the booked and roughly at July And the from standpoint, fare second a from into this strong fare has environment here

third favorable. think compare RASM here decelerating the shaping you capacity we’re I while domestic the in RASM when looks is our we that up have the peers, the So, of quarter, do headwinds. But think I some that way to of

Operator

from Our will Wall with Journal. Alison question come next Sider Street

Alison Sider

at months. a I have or unusual a level in been if of pilots a that’s do you’re a talking sense last I’m or when sense your why? guess, in are leaving then, their pilot it’s attrition guess, And of lot something so, concerning? data, curious about you careers the have couple if seeing of that’s I in like if the

Andrew Watterson

definitely a hot It’s market. pilot

And so you as market -- guess, employee I well. hot

You extra work to have to and people hire to keep people.

record pilot sufficient pilot not that a year to plan. a so, for it’s modest also year our our And is actually number attrition, it’s hiring. but change from It’s record a

kind We year. is not as we industry, the by So, job this this kind hop affected we bit little a the attrition all little once becomes this, it have their flying our amount lifelong don’t kind and seniority the what see begrudge them a airline commitment a that it’s do -- them the of next of, pilots while trying of to appeals start around for personal game, because at you of in system. because maximize best. it’s there to I a year main And with uptick -- line,

tail now we leave of some in who and think a come bit. starting And people here it I -- kind spiked second but the and so kind of see to do off even little it’s quarter away, it’s right

Bob Jordan

pilots it’s history. definitely impacts XX business, we hire pilot to in again, our normal, hottest that the sense context mean plan was mean, of than said, Yes. as and the higher the where think year. I -- I this -- think X,XXX Andrew But completely makes market I in I net

get aircraft the We’re the up course, year. was actually the do quarter, which -- ahead still plan, of quarter our area, the all third to of And whole fleet, of fly that of fourth of In the we’ll by on end plan. was in the our that intended original back quarter. that, third the

for that this. is the the market I bit feel in And not pilots, I yes, up given is all of hottest this surprise attrition So think history. fact the about a is a believe, good I

Operator

Slotnick We take question. have with one question for from We’ll TPG. last time our more David

David Slotnick

fall? stay is fall Following think to staying to that, come -- I you they or really headwind pricing -- up are any growth, then, the a of we kind little power the And just pre do would pandemic, into you the the return to travel leisure capacity asked. that bit in Thanks. down? really a that considering you But just to you season understand what Leslie little think see seasonality to going at secondary It’s seeing are fall? expecting had study going are that just shoulder Do similar RASM or considering bit on where be. levels the

Ryan Green

demand leisure of the a as the fourth quarter environment, environment, point. be David. and way. for don’t just the We Yes, characterize this at I visibility into ton that it strong that especially I’d have Hi, think demand continues to

as quarter. bookings July, travel admittedly, as as strong really taking the but place. we’ve still comment look summer a in ahead quarter, of season And much at too fare continues. wouldn’t look and certainly, the at you environment, very mentioned, what strong I got But the in environment in I So the fare here we’re base here for I we’re third in July, fourth that

that’s another as you the quarter-over-quarter, but third in record third -- that for to all third give the are versus expect we weaker quarter. second -- us normally normal. As look But as quarter revenue for second quarter setting be case at go to quarter, I is and we this quarter, yields quarter look up of

Bob Jordan

second year-over-year the but change think that mentioned probably performance just $XXX you in quarter calculation. look several sort we this about this fare our to last if year, the at fare and impacted breakage run of from impact have be you aware of I through, that million And times,

you just X.X%. year-over-year, down look they’re So like it if think fares average I at looks

X.X%. actually for they’re that breakage last the impact up. normalize up you this They’re actually If year, year,

that, just our you up about year-over-year. they make know I fares just to because and that -- So want sure think extrapolating actually you as are

David Slotnick

that Thank is have, you. shoulder And going is the come or for of to the this then do just that in from fall, you back what thing season a visibility you sort past? do think

Ryan Green

I tells just would have terms of we -- that third strong in in me that that and demand of we’ve would I for we’re the think characterize bookings here. seeing place got the us that ahead what quarter fall a

Operator

conference the Ms. over This like to to any concludes remarks. Rutherford would closing I for session. question-and-answer back turn our

Linda Rutherford

Anthony. you, Thank

have can our If website www.swamedia.com. at our Thank so communications media follow-up team portal all questions, you reach XXX-XXX-XXXX you through all any other or you at much.

Operator

has conference attending The you today’s Thank now for concluded. presentation.

disconnect. now may You

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