Good morning, and welcome to the American Airlines Group Q1 2022 Earnings Conference Call. Today's call is being recorded. At this time, all lines are in a listen-only mode. Following the presentations, we will conduct a question-and-answer session. To ask a question during this session, you'll need to press star one on your telephone keypad. Now I'd like to turn the conference over to your moderator, Head of Investor Relations, Mr. Scott Long. Thank you, Catherine. Good morning, everyone, and welcome to the American Airlines Group Q1 2022 Earnings Conference Call. On the call this morning, we have our CEO, Robert Isom, and our CFO, Derek Kerr. Also, on the call for the Q&A session are David Seymour, Vasu Raja, and a number of other senior executives. Robert will start the call this morning with an overview of the Q1 and our priorities for the year. Derek will follow with the details on the quarter and our operating plans and outlook going forward. After Derek's comments, we'll open the call for analyst questions, followed by questions from the media. To get in as many questions as possible, please limit yourself to one question and a follow-up. Now, before we begin today, I must state that today's call contains forward-looking statements, including statements concerning future revenues, costs, forecasts of capacity, and fleet plans. These statements represent our predictions and expectations of future events, but numerous risks and uncertainties could cause actual results to differ from those projected. Information about some of these risks and uncertainties can be found in our earnings press release that was issued this morning, as well as our Form 10-Q, for the quarter ended March 31, 2022. In addition, we'll be discussing several non-GAAP financial measures this morning, which exclude the impact of unusual items. A reconciliation of those numbers to the GAAP financial measures is included in the earnings press release, which can be found in the investor relations section of our website. A webcast of this call will also be archived on our website. The information we are giving you on the call this morning is as of today's date, and we undertake no obligation to update the information subsequently. Thank you for your interest and for joining this morning. With that, I'll turn the call over to our CEO, Robert Isom. Thanks, Scott, and good morning, everyone. Thank you for joining us today. We're gonna keep our comments brief this morning. I'm a strong believer that results speak louder than words, and I'm confident in the results the American Airlines team will produce. I want to start by thanking our team. Day in and day out, they're on the front lines, taking care of our customers no matter what comes our way, and we've certainly seen a lot come our way over the past two years. The American Airlines team has worked hard to position us well for the recovery by simplifying our fleet, modernizing our facilities, fine-tuning our network, developing new partnerships, rolling out new tools for our customers and team, and hiring thousands of new team members. All that while flying the largest airline in the world. I'm excited to see their work pay off for all of our constituents, our customers, certainly, the communities we serve, our team, and notably, our shareholders. It's an honor for me to have the trust of our team and to succeed Doug Parker as CEO and to begin in this position as the industry rebounds and our company returns to profitability. I'm extremely grateful for the opportunity. It's a fantastic time for the industry and for American Airlines in particular. For the year ahead, we're resolute in achieving two key goals above all else, running a reliable operation and returning to profitability. Our team is up to the challenge, and we've already seen a lot of great progress. Let's talk about financials first. This morning, American reported a Q1 GAAP net loss of $1.6 billion. Excluding net special items, we reported a net loss of $1.5 billion for the quarter. Despite the quarterly loss and a difficult January and February due to the effects of Omicron, March results were markedly different. In March, we saw what's possible with surging demand brought on by reduced infection rates, relaxed restrictions, and tremendous pent-up demand for people to travel. Despite a sizable increase in the cost of fuel during March, American achieved our first monthly net profit, excluding special items, since July of 2021. Demand is as strong as we've ever seen it. American produced revenues of $8.9 billion in the Q1, including industry-leading passenger revenues of $7.8 billion. Domestic leisure travel continued to lead the way, far surpassing 2019 levels of traffic and revenue in the month of March. In addition, we saw strong QoQ improvement in corporate and government travel, with revenue for this segment as a percentage of 2019 increasing 27% from January to March. System business demand is now about 80% recovered, with small-to-medium business revenue approaching a full recovery and corporate revenue now around 50% recovered. Corporate bookings are at the highest that they've been since the onset of the pandemic, and we expect that to continue as more companies reopen their offices. We anticipate overall business revenue to be around 90% recovered in the Q2. Demand for international travel also picked up considerably during the quarter as travel restrictions were lifted in certain parts of the world. Long-haul international revenue was around 50% recovered in the Q1 and around 60% recovered in March. There's still a lot of revenue upside as business and international travel continue to return. The American team has done an incredible job of setting up the airline to take advantage of the rebound, orienting our network to where our customers wanna fly, establishing partnerships in more challenging areas, and making sure efficiency is top of mind. As a result, we're very optimistic about the continued recovery and expect to be profitable in the Q2 based on current demand trends and fuel price forecast. Turning to reliability, American ended 2021 with our strongest operating performance in the company's history. We committed to maintaining that momentum in the Q1, and we did. Two difficult winter storms in Dallas-Fort Worth. The team delivered a solid operating performance in the Q1, leading the industry in on-time departures and finishing a close second in on-time arrivals. They did so while flying a considerably larger schedule than our next largest competitor. More importantly, for the month of March, amid peak spring break demand and high load factors, we delivered our best ever combined March completion factor. Our operation in DFW and Charlotte, our two largest hubs, met or exceeded our expectations and delivered their best on-time performance and completion factor in years. As a result of our team's hard work, our likelihood to recommend scores continue to track in line with plan and are near the top of our post-merger performance. Running a reliable operation this summer will be critical to the continued recovery, and we have taken numerous steps to ensure we are well prepared to deliver for our customers. Our summer planning began last year as demand returned, and we haven't slowed down. American has 12,000 more team members in place to support the operation this summer than in the summer of 2021. We've already welcomed more than 600 new pilots this year, exceeding our goal, and we will continue to aggressively recruit, hire, and train across all departments to develop the best pipeline of talent in the industry. We're ready for the summer, and we have sized the airline for the resources we have available. Again, we've sized the airline for the resources that we have available. We've also made targeted investments in people, technology and resources that are yielding promising results for our team members and customers. Before I hand it over to Derek, I want to say that I'm really excited about the future of our industry and the future of American Airlines. There's still a lot of revenue upside going forward, given industry revenues are still off from their historical relationship to GDP. Barriers to demand are falling and business and international trends are promising. There are also certain industry constraints on growth in the near term, notably related to pilot and aircraft supply. At American, we have completed a $1.3 billion cost reduction program, and our unit cost performance will improve throughout the year as utilization approaches historic levels. No airline is better positioned to operate in this environment than American Airlines because of our fleet, our network, and everything our team has accomplished over the past two years. With that, I'll turn it over to Derek. Thanks, Robert, and good morning, everyone. Before I review the results, I want to acknowledge Doug for his more than 20 years as an airline CEO. Doug's leadership revolutionized the industry and laid the foundation for American's success going forward. I also want to thank the American Airlines team. Their hard work and commitment to our customers and each other is truly extraordinary. This morning, we reported a Q1 GAAP net loss of $1.6 billion or a loss of $2.52 per share. Excluding net special items, we reported a net loss of $1.5 billion or a loss of $2.32 per share. Revenue in the Q1 outperformed the initial expectations we outlined on our last call, despite flying less capacity than planned due to winter weather events that affected our largest hubs. Our Q1 revenue recovered to 84% compared to the same period in 2019 versus our original guide of 78%-80% recovery. Demand recovery from the Omicron variant was swift, and while leisure demand remains very strong, as more companies return to their offices, business demand is growing quickly. On the cost side, in addition to the efficiencies we spoke about previously, we remain focused on keeping our controllable costs down, ensuring we are a more efficient airline as we return to normalized levels of capacity and utilization. In fact, in the face of increased fuel prices, we were profitable for the month of March, excluding net special items, due to our strong revenue performance and cost efficiencies. Our fleet remains the youngest and most fuel-efficient among the U.S. global network carriers. This month, we completed our narrow-body fleet harmonization project, which covers more than 500 aircraft and will ensure a consistent product and better experience for customers, along with the improved revenue generation and unit cost reduction associated with the new seating configurations. In the Q1, we took delivery of nine Airbus A321neos and reactivated seven previously stored Boeing 737-800s. We also inducted eight dual-class regional aircraft and parked three 50-seat Embraer ERJ 145s. As previously disclosed, we made several updates to our fleet order book and the timing of future deliveries, allowing us to better meet the demand strength in domestic and short-haul international markets. We previously announced our plans to exercise purchase options on 37 737 MAX 8s. 15 of these options are scheduled for delivery in 2023 and 15 in 2024. Additionally, with the continued uncertainty associated with our 787 deliveries, we are now planning for the delivery of only seven 787-8s in 2022, all after our summer schedule, with the remaining six 787-8 aircraft being delivered in 2023. The four 787-9 aircraft previously planned in late 2023 are now planned to be delivered in 2024. With these changes, our expected total aircraft CapEx is $1.8 billion in 2022 and $2.2 billion in 2023. We ended the Q1 with $15.5 billion of total available liquidity, significantly higher than our initial forecast due to ATL build of $2.3 billion in the quarter. We generated operating cash flow of $1.3 billion and free cash flow of more than $350 million in the Q1. Deleveraging our balance sheet remains a top priority, and we're committed to significant debt reduction in the years ahead. Even in this volatile environment, we remain on track with our target of reducing overall debt levels by $15 billion by the end of 2025. During the quarter, we made $344 million in scheduled debt payments and completed $317 million in open market repurchases of our $750 million unsecured senior notes maturing in June. To date, we have reduced our overall debt levels by $4.1 billion from our peak levels in the Q2 of 2021. We expect to make $1 billion of scheduled debt payments in the Q2, which includes the remaining outstanding balance of the unsecured senior notes. With cost-efficient financing secured for all aircraft deliveries through the Q3 of this year, we are now beginning to evaluate financing options for the Q4 and H1 of 2023. We look at the Q2, we expect to be profitable despite the expectation of continued elevated fuel prices. Pre-tax margins are expected to be between 3%-5% for the quarter based on the current demand trends and our fuel price forecast. Based on current demand assumptions, we expect total revenue to be 6%-8% higher versus the second quarter of 2019 on 6%-8% lower capacity. That would be the first time we have produced total revenue greater than 2019 since the start of the pandemic. In fact, if we hit the midpoint of this revenue guide, the results would be the highest quarterly revenue in the company's history. On this revenue strength, we expect total revenue per available seat mile to be 14%-16% higher in the Q2 versus the same period of 2019. We expect our Q2 CASM, excluding fuel and net special items, to be up 8%-10%. Our current forecast for the Q2, which we pegged on Tuesday, assumes fuel between $3.59 and $3.64 per gallon, an increase of more than 60% versus the price of fuel in the Q2 of 2019. In the near term, the demand environment is strong, but margins are lower than they otherwise would have been, given the recent run-up in fuel. Longer term, this industry has proven that it has the ability to recapture increases in the cost of fuel and be profitable at elevated fuel prices. We believe this time is no different. As for full year 2022 capacity, we now expect to be recovered to 92%-94% of 2019 levels. The reduction in full year capacity from our prior guide is largely due to 787-8s delivery delays that I touched on earlier. This capacity guidance is of course subject to future demand environment and fuel prices. Consequently, with this lower level of capacity, we now expect our full year CASM, excluding fuel and net special items, to be up between 8% and 10% versus 2019. In conclusion, with the actions we have taken and the commitment of our team, we remain very well positioned. We remain focused on running a reliable operation and returning to profitability, which we expect to happen in the Q2. With that, we'll open up the line for analyst questions. Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from Jamie Baker with J.P. Morgan. Your line is open. Hey, good morning. I guess you're starting in the order of the biggest Q2 miss, you know, so great. Listen, we're all familiar- Not quite, but close, Jamie. You know, we're familiar with that relationship between airline revenue and GDP. You brought it up. You know, Doug had a good slide on, you know, in his deck last month. Have you looked at the relationship between leisure demand and GDP and what that relationship might be telling us? I know we could try to back into this with some of the Form 41 data, but I don't really trust it. There's a reporting lag. It just doesn't tell me anything. Hey, Jamie, thanks. I'm gonna let Vasu answer that, but, you know, hey, don't feel bad. This is a long game. We know you're gonna get it right over the long term. Vasu. All right. Thanks for the endorsement. Yeah. Hey, Jamie, thanks for the question, and it's a very good one that we've actually spent a lot of time thinking about. Look, what I'll say is you're right. Like, in aggregate, like, historical relationship between airline demand and GDP, let's call it industry demand at something around just under 1% of GDP, does largely seem to hold, and we're seeing that as things start to recover. We've spent a lot of time on this question about, you know, what is the actual trip purpose and how does that change? The reality is that it's changing in a meaningful enough way where we no longer think it's spurious, but the start of a trend. For example, historically, only about 20%-25% of the trips in the airlines were something that we call blended, where somebody was traveling for both business and leisure. Now, for about five or six months, about 50%-55% of the trips in the airlines are blended. As we look forward into the coming months, that continues to be the case. That's playing out in a lot of different ways for us, which are both opportunities and a little bit unprecedented, right? We are seeing different sales days becoming big sales days, different travel days becoming big travel days. The nature of what we call leisure demand and business demand is changing. The first thing is better understanding exactly how that is. So far it's been promising, you know. Those blended trips that we have in the system are coming in at yields that are 75%-85% of what were true business-only trips, but they're coming through lower cost sale channels and often negotiated discounts, so the net yields of them are very often the best things in the system. This is an evolving thing and one that we'll keep coming back to, but the relationship is indeed changing, as you say, even though in aggregate a lot of the trends hold. Just out of curiosity, how do you define or how do you tell that a trip is a blended trip? Is it somebody booking with a corporate discount and then bringing a family member on an adjacent PNR? Like, how do you know that? Yeah, you know, over the years of doing this thing, we actually come at it in two ways. One, we have a lot of models that go and actually predict whether the behavior is business or leisure, and we survey customers to go and calibrate the model. Over time, we got really good. Whenever you hear us talk about business, we are talking about, for example, somebody who traveled one person on the itinerary, no checked bags, things like that, right? It fits a profile, and we calibrate it against surveys of what the customer actually tells us. One of the things that we've found is that increasingly those surveys are starting to change because people are saying they're flying both for business and leisure. Or it's one person in the itinerary, but they're leaving on a Thursday, coming back on a Monday, and going to Pensacola. A lot of things are starting to change, and that's actually a pretty promising thing. Yeah. Fascinating. Thank you for that. Second, maybe for Robert, you know, as we think about the steps that you're taking to protect the operation, you know, heading into the summer peak, is D0 still the metric that American tends to focus on? I think it was in the past. The sense I got was that it wasn't, you know, hugely popular with the entirety of the airport staff. Just wondering if, you know, with your background, you know, Robert, and having ascended to the top seat, is that still the metric that you have prioritized, let's say? Jamie, I'll just start, you know, with this, which is, you know, the outcome, an on-time arrival, you know, we know is the biggest driver of customer satisfaction. As I've said before, it makes the food taste better, the seats more comfortable. Yeah. service more, service more friendly, all that. The best way to ensure an on-time arrival is to make sure you depart on time. There's no stepping away from it. I'll tell you know, we have, you know, evolved over time, and we really do wanna take into account, you know, making sure that the things that we do to get an aircraft out on time don't, you know, compromise other, you know, aspects of the operation. Creating congestion on the ramp or, you know, if we do have inclement weather, you know, at the end of the day, if we have flights that, you know, you may be able to get out on time, but you ought to hold for connecting passengers, we do so. You know, we could go into a lot more detail on that, but the answer to it all is, for the bulk of the airline, get it started right. You know, no aircraft out of service in the morning. Yeah. You know, on-time departure, a fast turn, and stay that way throughout the day. That's great. Thank you both. Appreciate it. Take care. Thank you. Our next question comes from David Vernon with Bernstein. Your line is open. Hey, thanks, guys. Swinging to the other end of the spectrum, I guess. Could you talk a little bit about what you have in the forecast for business travel recovery as we think about the summer months? What are you seeing in the booking trends? I'm just trying to get a sense for kinda what the mix is within the guidance that you're giving us. Hi, David, this is Vasu. I can help with that. You know, for Robert's comments at the beginning, as we close the quarter, system business revenues were about 80% recovered versus 2019. As we look at Q2, we anticipate that number will be about 90% recovered versus 2019. We have a level of confidence in it because indeed we're seeing many of those bookings start to come in from my comments to Jamie just now. Also, the gap between 90 and 100 is really largely due to long-haul international demand and certain pockets of domestic demand. We are continuing to see demand come in. Okay. Maybe just as a quick follow-up, you know, I remember having a conversation with Doug and Derek out in L.A. a couple years ago now around denied boarding, sorta involuntary denials, that kind of stuff. You guys have been working on some technology to help you kind of guys accommodate, re-accommodate customers, you know, work on this issue of not having enough seats on the plane, overselling, that kind of stuff. Is there any early indication during this period of demand here that those efforts are paying off and the denied boardings are coming in a little bit in line with those expectations you set out a couple years ago? Hey, David, we're gonna start with Maya Leibman talking about some of the things we've done, and if there's some add-on to that, Vasu will do it. Maya? Hey, David, this is Maya. Yeah, over the last several years, we've really improved our technology around essentially pre-removing customers. Either before they get to the airport several days before their flight, if we know that flight is at the risk of overselling, providing them an opportunity to bid or to either take compensation or even just move to a different flight that's probably a little bit better than the flight that they were previously scheduled on. Or if it happens that there's a last-minute schedule change, a last-minute equipment change, so we have to deal with it at the airport, which isn't our goal. We're really trying to deal with it before they get to the airport. We have some pretty neat option capabilities that allow the customer better opportunities to move around to other flights. All of those things together have really helped improve our denied boarding. I’ll only add to that, you know, throughout the pandemic, one of the hardest things to predict has been the show rate of the airline. Understandably, as the pandemic wore on, we would have periods of time where everybody showed for a flight and periods of time where the show rate could be as low as 70% of what was booked. What we're encouraged by, in large part because of a lot of the technologies that we've got, not just in managing overbooking, but in simply just forecasting show rate, we are getting to a place where we are a lot better at going and predicting what the variability is, and with the technologies that we've got, proactively moving customers off so that we don't have the same level of denied boarding expense that we had in times past, and indeed, we're able to generate more revenue through the overbooking flights. Excellent. Thanks a lot for that added color, guys. Thank you. Our next question comes from Savanthi Syth with Raymond James. Your line is open. Hey, good morning. Good morning. I was wondering, maybe, Vasu, could you provide a little bit of color on what you're seeing on the long-haul side across the different entities? Sure, Savi. Yeah, thanks for the question. Look, we're really encouraged with how long-haul demand has come back, but it is indeed very different across the three long-haul entities of long-haul South America, Transatlantic, and Transpacific. First, we are encouraged because indeed we've seen bookings from maybe this post-Omicron low point in January to what we're seeing in the last four to six weeks. It's improved by several factors. You know, in South America, that's a factor of 2-3x. In Transatlantic, it's something materially larger than that. In Transpacific, it's grown quite a lot too, but still, the bookings are pretty small and insignificant in the totality of all of our bookings. What we're really encouraged by is the manner in which demand is returning first in long-haul South America, where we have so much capacity. Increasingly, we're seeing not just more customers simply sign on for flights, but we're filling premium cabins at a better and better rate. The same is true in transatlantic, where so much of the airline that we've brought back there is centered around our partner hubs in Heathrow and Madrid. We're encouraged because to make those flights go, they are very premium demand consumptive, and we are seeing a lot of premium demand, even though we aren't seeing large corporate travel quite come back into international the way we've seen before. Transpacific is, it's understandably challenged because as long as there are entry restrictions, you know, demand remains pretty stubborn to come back. Like I said, we're encouraged that once those restrictions are lifted, the demand improves pretty meaningfully. That's super helpful. If I might ask, Derek, just a quick question on the fuel. Is your kind of fuel contracts based on kind of the forward curve then crack spreads? I think there's a or like spot prices, I mean. I think there's a little bit of confusion on what we're seeing on spot and this is not unique to American, but what's being reflected in fuel guidances. That's exactly. We just pegged it two days ago, so at a hundred. It was 107, and then we used the crack spread and where that was, and the crack spread had increased a little bit. The difference may be crack spread and then the dates that everybody takes the fuel peg. But we're straight off of the fuel curve, and then it's dependent on where are you buying your fuel. Are you buying your fuel more in the Gulf Coast, L.A., New York? There could be differences between each airline, just where the brunt of the fuel comes from. Makes sense. Thank you. Thank you. Our next question comes from Helane Becker with Cowen. Your line is open. Thanks very much, operator. Hi, everybody, and thank you for the time. Just two questions. One is on minimum liquidity. Derek, have you thought about where you want that to go, you know, other than get, I think you said, what, pay down $15 billion of debt by 2026? Then the other question is, I think, related to the pilot training pipeline. You know, you talk about a shortage of crew members and limits to capacity growth. How are you thinking about catching up? Yeah, I can do both, and Robert can add on to some of that. As far as minimum liquidity, you know, we're still in the same place as we were a couple of calls ago. You know, we're at about $15.5 billion right now. We are seeing this recovery. We'd like to see it actually be in the actuals, you know. I think this is a forward guide, which we think is where we're gonna get and be profitable for the quarter. If we maintain this level, what we have said is we would take it step down to somewhere in the $10 billion-$12 billion range, and hopefully that happens sometime this year, which can accelerate the debt paydown. Any further than that, we just haven't had the discussions through the board and through the committees. We ran the company at $7 billion of not minimum liquidity, which you know I define that was kind of our targeted cash level. Minimum liquidity is actually much lower than that. Our targeted cash level was at $7 billion. Right now we're holding onto the cash, and when we see the recovery and it's holding up and the cash is holding up, we will use that cash to pay down debt. I think we'll take it down to somewhere in the $10-$12 billion range as we look forward. Pipeline. As Robert said, we've hired 600 pilots at the mainline. It really is, you know, we have the pilots. I think the industry is about trying to hire 2,000 pilots this year versus the most we've ever hired in the past is 1,000. We have the simulators coming in, we have the trainers coming in. What it is is trying to get everybody through the pipeline, and I think we will be fully utilized and have all of our aircraft flying by the end of the year. The other side of it is the regional carriers, which we're working on, is that hiring is going well also. We're hiring there. Just the attrition is much greater than the hiring at this point in time or getting people through the pipeline. That has slowed, which is good. As all the mainline carriers have hired from the regional carriers, you know, we all have a backlog to get through training. The regional attrition has slowed, which will be good for regional capacity as we go forward. We believe that, you know, by the end of the year or through the summer, we'll be back up and having all the aircraft flying, which will be great for us from a utilization perspective. It'll be great for us from a cost perspective to drive down the unit costs as we bring back all of those aircraft and get the pilot pipeline moving through. Well said, Derek. The only other thing, Helane, the only other point that I would add is that, look, over time, it's supply and demand. You know, I'm confident that the quality of life and the compensation for pilots is something that's gonna attract a lot of people to the industry. It may take, you know, some time to work through, but it will happen. Right. Could you, in the short term, bring back pilots who might have retired at, say, 58 or 60 and just have them work for a couple of years to bridge the gap, or once they retire, that's that? I'm gonna say, Helane, I'm gonna ask David Seymour, our Chief Operating Officer, to weigh in on that. Yeah. I think the challenge with that is many of them have been retired long enough that they would have to go through a requalification, which would take one of those slots. You know, given that, as Derek talked about, we have the supply coming in, and the schoolhouse is really running at full speed here. We're hitting the objectives that we set forward to reach the goals he that Derek talked about for the remainder of the year. As much as I think that would be a great idea, it would just take away a slot for a new hire that's coming in. Overall as well, you know, we have a great relationship with the APA in making sure that we're getting as many pilots on board and creating as many captain positions as we possibly can. Anything that would, you know, alter, you know, something like retirement status would have to be something that they champion. Got it. Okay, great. Thanks very much, guys. Thanks, Helane. Thank you. Our next question comes from Michael Linenberg with Deutsche Bank. Your line is open. Good morning. Just two here. I guess my first to Vasu. You know, Vasu, historically, I guess sort of the rule of thumb is that, you know, the run-up in energy prices usually sort of finds its way into the fare structure with like a lag of three to six months. It does feel like it's getting recaptured far more quickly. I just wonder if it's any sort of structural changes and/or just by approaching this fuel price cycle, with, you know, a bit less capacity, which may give you some leverage in your ability to, you know, quickly offset that. Just your thoughts around that. Yeah, Mike, it's an excellent question. Much like Jamie's, one that we've actually spent a lot of time understandably thinking about. Look, it's really hard to tease out the different effects because you're right. There's high fuel prices, there's various limits on capacity as airlines try to size their airlines for the staffing that they can produce. Of course, demand, which just continues to accelerate at a pretty unprecedented rate. Look, what we look at are actually the fares that we American Airlines are out there selling. We're encouraged that indeed, month to month, we are seeing a greater increase in fares than certainly what we saw in 2019. Very importantly, one of the things that we've been looking at is how fares at large are—like, how is the rate of increase actually changing in 2019 to 2022 versus the last time the industry went through so many cataclysmic crises, which were, you know, big fuel, the Great Recession, changes in the industry through consolidation. Indeed, the pace of change that we're seeing is growing much greater than what we saw before. Short way to say it is, we are seeing a lot of strength in the fare environment with customers who frankly value the quality of product that we have and are willing to pay us a lot. We're encouraged by that. We see those trends going forward into the summer, and of course, that's inherent in the revenue guide you see before you. Great. Just my second, with respect to, you know, the NEA and I guess, you know, the Justice's concern about, you know, potential consumer harm, have you put out any numbers about what you have done from a consumer benefit perspective, since it's now been up and running, I think, for some time, or is that something that we just won't find out about until September? Thank you. Hey, Mike, I can start and others can add. Well, look, we can't talk about the consumer benefit of the NEA enough. Indeed, it, you know, you can already see it in just what's published out there. In the Q1, we brought the Northeast back faster than any of our competition, and arguably through bringing it back, have encouraged competition where there frankly wasn't any before. You know, we're doing things like we have full flat beds on all of our Transcon markets, which is a thing that American Airlines has long dreamed of, but now through this partnership with JetBlue, we're able to make happen. We've brought JetBlue into LaGuardia, a thing which they've longed to make happen, putting, you know, a new level of price competition on the incumbent carrier there. We're encouraged by the structural things that's there. What we're really encouraged by is the way consumers are responding to it. Right now, you know, for the first time in as long as we've recorded it, AAdvantage enrollments, our loyalty program enrollments are growing in New York and Boston at greater rates than anything in the system, and at an absolute size which is greater than anything in the system. New York is on a percentage of 2019, we're acquiring more credit card customers there than we did in 2019 at a greater rate than any other parts of our system. All of which is to say that the consumer is clearly responding to it, and we see those benefits and we keep rolling things out, you know, there's a lot that we've kind of worked through as we kind of try to staff up a connecting operation at JFK. We've endeavored to go slow in order to make it happen. I won't for a minute say that we are all the way to achieving what we want there to be. We are really encouraged by what it's doing for consumers, the level of competition that it's bringing. Indeed, I mean, we can't talk about it enough, and maybe we need to talk about it more. Great. I'll just add, and I know our Chief Legal Officer, Priya Aiyar, will agree with me. Look, we welcome, you know, scrutiny. You know, we know that this is producing the benefits we said it would, and it's doing exactly what we had hoped, and we're confident we're gonna prevail no matter, you know, what we face going forward. Priya, you agree with that? Absolutely. Very good. Thanks. Thanks, everyone. Thank you. Our next question comes from Dan McKenzie with Seaport Global. Your line is open. Oh, hey, good morning. Thanks, guys. A couple questions here. First, a clarification, the guide, maybe for Vasu. What level of restoration in international flying does the revenue guide embed, you know? Does it include the relaxation of the 24-hour, you know, testing requirement in May sometime? You know, what conversations is the government having with you about the travel restrictions internationally? Vasu, you can handle that first part, and then let's have Nate, you know, cover, you know, rundown of testing. Yeah. Thanks for the question. Look, we at international at large broadly anticipate to be 100% recovered. Indeed, it's not far from that right now. To the question earlier from Savi, international is in a lot of different states of play right now. Never forget that for us in second quarter, roughly 90% of our airline is flying in the Western Hemisphere and Heathrow. A lot of our recovery is due to the fact that our short-haul international network is recovering at rates that are probably greater than what we see in domestic. Those markets, such as London and long-haul South America, are recovering pretty quickly too. That's where we have all of our capacity. Hey, Vasu, just one note there. International revenue, not 100% recovered. Doug, go ahead. From a long-haul perspective. Correct. Yeah, correct. Well, so yeah, all would say that the long-haul revenue isn't all the way there, but total international is, and that's okay. Exactly. Okay. Yeah. This is Nate. I would just say on the regulatory side, obviously the testing is something that we continue to engage on with our industry partners. We believe that the U.S. can safely follow countries that are progressing through the pandemic, including Canada and the U.K. and Ireland, which have, you know, we think, safely evolved the scope of their entry requirements and moved away from pre-departure testing. We've learned by this point in the pandemic, however, not to speculate on what may or may not happen, so we don't have you know, specific timeframe in mind. It's just something we continue to work on. Obviously, the decision is going to be up to the federal authorities and public health experts. Okay. Hey, for everybody, that's Nate Gatten, our head of Corporate and Government Affairs. Thanks, Nate. Yeah, thanks. Second question here. Looking at slide five, you know, the simple math is, you know, it looks like there's roughly $7 billion of revenue that was missing, you know, on an annualized basis, you know, relative to the Q1. You know, but I believe the headcount is already in place, so we're left with variable cost, I think so. If you could flesh this out, the fixed versus variable costs as you add back, you know, some of this higher margin, international flying. Yeah, I think Dan is there. As we have talked about, we have the airline and the costs in place to run a much greater airline. As we go, and as Robert said in his comments, you know, our CASM will, you know, get better and better throughout the year as we add back to flying. An example is our salaries. I think, you know, they stay pretty flat throughout the year, even though we're growing ASMs throughout the year. Most everything is in place to fly. The example is the 787s. You know, we thought we had the 787s coming in beginning of this year. We have the pilots, we have the crews, we have everything ready to go. We're not gonna train them back down to, you know, 737s or other aircraft. We're gonna leave them there for when they come. Our expectation as we move forward, and we bring back the aircraft and utilize our fleet, and get us back to 100% of 2019, that it comes at a significant reduction in the CASM calculation as we go forward. Thanks for the time you guys. Yep. Thank you. Our next question comes from Duane Pfennigwerth with Evercore ISI. Your line is open. Hey, thanks. Good morning. Good morning. Congrats, Robert, on the formal handoff. I wanted to follow up to Mike's question, just with respect to, you know, JetBlue's bid for Spirit as it relates to the NEA. You know, do you see any relationship between the two initiatives, and what is American's perspective on the proposed acquisition? Steve, do you wanna comment here? Sure. Hi. Thanks for the question. This is Stephen Johnson. First, I think it's important to recognize that JetBlue's acquisition of Spirit is not a foregone conclusion. JetBlue and Spirit, as near as we can tell, are discussing that now, and you know, we'll ultimately find out which direction that's gonna go. I would say that you know, Joanna and Robin were very quick to call Robert as soon as the story leaked. They were steadfast in their view that NEA was you know, extraordinarily important and a priority to JetBlue, and that they intended to do everything that they could to maintain it, and that part of their bid for Spirit contemplated keeping and even strengthening the NEA. Thanks for that perspective. With respect to the RASM guidance, Vasu, can you just contrast for us maybe how leisure fares are tracking versus 2019 versus close-in business fares? I understand regions, et cetera, make that more complicated. Maybe if we just look at it on a cut per se domestic, is the close-in zero to three getting better yet relative to 2019? Thanks for taking the questions. Hey, thanks for the question. Indeed one that we look at very closely, because it is kind of interesting. We look at it both in what is out there selling, but importantly what is netted back to us after we deduct the cost of sale from it. We are seeing first and foremost, we look at it really outside of 14 versus inside of 14. Outside of 14 indeed there is a significant level of fare strength, across any competitive O&D grouping there might be. Inside of 14 we see the same level of fare strength. As we look at it right now, leisure trips or blended business leisure trips are coming in at yield levels that are anywhere from 75%-80% in aggregate of what inside 14 corporate negotiated trips are coming in at. That's a really meaningful number because that means that on a net basis, sometimes these fares which are coming to us, oftentimes through our direct channels, through some pretty unprecedented sources, on a net basis are actually really valuable to us and really valuable far from departure. That said, though the fares are high, what we are encouraged by is as we have rolled through March, there's simply more demand inside of 14 and more business and leisure demand. Yes, we see a lot of strength in the fare environment, a lot more strength outside of 14, but progressively greater strength and greater demand inside of 14. Thank you for that. I guess maybe just to put a finer point on it, do you think zero to three is still an opportunity? Thank you for taking the questions. Yes, it is, but not in quite the same way that it was before. Thank you. Thank you. Our next question comes from Catherine O'Brien with Goldman Sachs. Your line is open. Hey, good morning, everyone. Thank you so much for the time. So maybe just one on the 787. When we think about your CapEx over the next couple of years, as the 787, you know, rolls into future years, should we just be thinking about rolling forward that associated CapEx? Or are we reaching a point where we should be thinking about maybe some late penalties potentially lowering your overall CapEx profile as we look across, you know, the next couple of years on a aggregated basis? I think you might have mentioned that Boeing was already paying you penalties in prior years. Just trying to get a sense to the read through to, you know, American free cash flow in future years. Thank you. Yeah. Catherine, I would just from a CapEx perspective, I would just roll it without a doubt. Any kind of settlement that we have will be separate. The Boeing management team have assured us that they will cover us for the damages on the 787s and the deliveries of the 787s. How that comes, I don't know, because we haven't talked about it. There's no reason to discuss damages on the 787-8s until they deliver and we know when those are gonna be, so that can be calculated. In the models today, I would move the CapEx and just shove out the CapEx. I would put there is upside to the cash flow or something for a settlement. Boeing team, as they've said, they will cover the damages that we are incurring for those aircraft to be delayed and deferred. Okay, got it. Then maybe one for Vasu, just kind of a little bigger picture here. Can you just update us on the hub strategy you were working through pre-pandemic? You know, you had growth opportunities out of DFW, Charlotte, D.C. As you add back capacity, are you adding proportionally more flying into those hubs than you had in 2019? Or do you need to first restore the pre-pandemic network overall and then you look to those growth opportunities? Just trying to get a sense of, you know, I know those are your most profitable hubs, so are we already, you know, starting to blend in that higher proportion of of more profitable flying or is that on the come? Thank you so much for the time. It's a great question. Yes, we are absolutely blending it in now. As we said through the pandemic, we had no intention of wasting the crisis, and we didn't. You know, we massively simplified the fleet, reduced frankly the number of long-haul airplanes that were deploying some of our most unprofitable routes. Launched new partnerships where we can create more value for the customer, offer more network in places like the West Coast and New York, where we're weaker. But very importantly, we've put a lot more capacity into our hubs in two ways. One, we've concentrated more flying there, but we've upgauged the airline as well. You know, we're 8% more seats per departure than, as we go forward, than what we were at the same time last year. For us, like the changes are indeed quite meaningful. You know, right now, if you go look in published schedules, about 65%-70% of the airline is flying really what we call our Sun Belt hubs and short-haul Caribbean kinds of markets, where the airline has unique level of strength. Just to, you know, to put that in perspective, I was reading through everyone's prints last night that in Q1 our four Sun Belt hubs, DFW, Charlotte, Miami, Phoenix, were somewhere between, you know, 70%-80% of our competitors' full network, but were producing unit revenues between 5%-10% greater than those networks. Very much that is a major thing, a big part as we've talked about here of returning to profitability and frankly running a better operation is focusing hard in those markets where we create really unique and disproportionate value and really getting all of our assets working there. Thank you so much. Thank you. Our next question comes from Conor Cunningham with MKM Partners. Your line is open. Hey, everyone. Thank you for your time. I know United and Delta have talked about, you know, generating a profit in 2022 just given where demand is. I realize you guys have stopped short of saying that today, but you know, the question that we're getting is just around the sustainability of like RASM production. Do you expect to generate a profit for the remaining three quarters of this year, assuming like no massive change in, you know, oil or anything like that? Hey, Conor, I'll start. Derek can add into this. Look, you know, we're really pleased to be here talking about record revenues and producing a profit in the Q2, but those are forecasts. You know what? Our job here is to make those forecasts a reality. We're gonna get to that business and, you know, to achieve profitability for the year, I guarantee you we need to be profitable in the Q2. We're gonna get started on that and we'll update you as time goes on. Derek, anything else you wanna add? No. I agree. I know you said you've sized the airline to the resources you have, but you know, there has been some struggles with operations as demand surged you know, last year. Do you assume any incentive pay above and beyond what you've historically contemplated in your 2022 CASM ex fuel outlook? Have you viewed incentive pay any differently than you have in the past, just given some of the staffing issues the industry has faced in general? Thank you. Hey, Conor, thanks for that. Hey, I'll start with this, is that, you know, just like the rest of the world, you know, we're all getting back up to speed. You know, fortunately for American, you know, we did what, you know, the government asked us to when they provided us with the Payroll Support Program. We ran the airline, and we ran it, you know, to serve people that, you know, had to get to business and leisure activities and you name it. As we go forward, the jump that we have to take to get to the kind of capacity that Derek has mentioned in our forecast, it's not that sizable of a jump. We're way ahead of it. We've certainly learned from, you know, issues. We're really focused on, you know, other parts of what I consider the airline supply chain, and that's, you know, our partners. But we're very well prepared. We have 12,000 more team members who are ready to fly the spring and summer schedule. We feel really great about it and, you know, very confident that we're gonna fly a reliable airline as we did, and we proved over the year-end holidays, you know, better than a lot of our competition, and as we have the first three months of this year too. Great. Thank you. Thank you. Our next question comes from Andrew Didora with Bank of America. Your line is open. Hey, good morning, everyone. First one is for Derek. Just to confirm the updated CASM outlook, that does not include any new labor deals, excuse me. Then just kind of a follow-up to that, given the labor market and your operational plans. Where do you think kind of CASM eventually shakes out relative to 2019 once all is said and done? Yeah. One is yes, our CASM guide does not have any new labor deals in it. You know, we're in negotiations with a lot of our unions at this point in time, but we don't but we'll put those in a CASM guide when they occur and when we know where those are, but that's not in the CASM guide for the rest of the year. You know, getting back to 2019 levels depends on growing back and when do we grow back fully from a capacity perspective, and also as you alluded to, when do those labor deals go into effect? You know, in 2019, we did the mechanic deal, and we completed the mechanic deal during 2019, so that year-over-year is now into our numbers. I think, you know, as we grow the airline back, getting ourselves back to 2019 CASM levels will take us to get our utilization back to where it was before and get all the aircraft back flying, to get closer to that 2019 level. Got it. Thank you. Vasu, you know, I fully appreciate the historical relationship with GDP in response to one of the earlier questions. I guess we get a lot of investor questions on inflation and the health of the consumer. You know, do you have any historical perspective on consumer demand at these levels of inflation, and at what point do you begin to anticipate some sort of consumer slowing, if at all, in this type of environment? Thanks. Yeah. It's an excellent question, and look, there's a lot that we're seeing today which is kind of breaking from a lot of historical trends, much like the question earlier about how fuel prices are bleeding into fares. It's right now really difficult to tease out what is causing what. Yeah, as an industry, there hasn't been a great history of how inflation has turned into changes in demand. We're so far encouraged by what we see right now in two ways. First, demand continues to grow and grow at a meaningful pace. How long-lasting it is remains to be seen, but if we've learned anything in the last 20-24 months, we can adjust to just about anything and do it pretty quickly. The other thing which is really encouraging is frankly spending on our co-branded credit cards. That is one where you know, throughout the pandemic, even though airline revenues fell, our co-branded revenues never fell nearly to the same degree. Indeed, we're encouraged right now because our acquisitions are higher than before, and our spend on the cards is keeping pace with inflation. Indeed on our card with Barclays, our spend is growing at a greater rate than inflation. We are encouraged by that. There's clearly a level of demand for our product and, future anticipation of travel, which is very promising, and we'll just see how it plays out. Great. Thanks, everyone. Thank you. That's all the time we have for analysts. We open the queue for your media. Again, if you would like to ask a question, press the star then the one key on your touchtone telephone. Okay. Our first question comes from Alison Sider with Wall Street Journal. Your line is open. Hi. Thanks so much. I'm just curious what you're seeing, you know, any response to COVID cases starting to rise again. You know, are you seeing that reflected at all in consumer demand or, you know, in sort of your staffing? Are you seeing higher rates of absences, and is that something you're kind of planning around? Yeah, Alli, it's Robert. The answer to both is no. Okay. I guess I could follow up on the masks. I guess, you know, in the couple of days since that policy has changed, have you seen any evidence of any kind of shift in bookings, you know, increased bookings or decreases or any evidence yet that there will be any change to demand as a result of the mask mandates being lifted? Hey, Alli, this is Vasu. You know, it's still very early to tell, and really difficult to draw very much of a conclusion. So far, there's nothing to indicate that it's materially up or materially down. Okay. Not like when, you know, other international travel restrictions get lifted and there's an immediate response. Certainly not on that order of magnitude at all. Got it. Thanks. Thank you. Our next question comes from David Koenig with Associated Press. Your line is open. One moment. Okay, David, your line is open. Yes. Hey, Robert and Derek both addressed this on the pilot. You gave pilot figures for pilot hires. I was looking for a net number. Is 600 enough to offset the age 65 retirements and other attrition? You know, what's the net number? Bottom line, are you gonna have enough pilots to fly this summer? Let me start, and then David Seymour can join in. The answer is yes. As I've said repeatedly, we're sizing the airline for the resources that we have. From a pilot perspective, all of this hiring is meant to match up to a schedule, but also a schedule that we are making sure that we've built in safety factors, so we have tremendous confidence that we can fly. In addition to that We're scheduling the airline, employing tools that are different than we had before. You know, my confidence only grows as we make our way in the year. David, do you have anything else you want to add? Yeah. Robert, let me just add to that. I mean, I think the numbers Derek talked about, the 600, that was this year alone. Last year we had a target of hiring 350, and we hired over 500. The 600 is just for this year, and that's well ahead of pace where we set our expectations to. In the pilot training right now, we're actually hitting our goals and our throughput that we expect and don't foresee any problems going forward of making those numbers so we can hit the goal, you know, to fly all of our aircraft by the end of this year. Thank you. Our next question comes from Mary Schlangenstein with Bloomberg News. Your line is open. Hi. Thanks very much. I had a couple of quick questions. One, Robert, you had said this morning, I think, that you're not doing as much regional flying as you would like to be, and I wanted to see if you could comment in terms of, have you got planes parked? Have you suspended any routes? And is that all related to the shortage of pilots on the regional level? Thanks, Mary. As Derek noted, you know, we're not flying the full regional schedule we'd like to. We're gonna get those aircraft back up over time. But it's related to pilots that are being hired from the regional airlines, so an increased level of attrition, and the time it takes to actually backfill those pilots. So while the regional carriers are able to, you know, source pilots at this time, we just can't get them up to speed and into position fast enough. Over the long term, we do need to work on regional pilot supply. You know, we're out in front of that with our cadet program and, you know, trying to incentivize people to come into the business. I know, I'm confident that over the long term, the prospects of quality of life and compensation are something that are gonna attract people to the business. It may take some time to work out, but as Derek said, over the course of the next year or so, we anticipate being able to get not only mainline back up to full utilization by the end of the year, but regionals, you know, sometime thereafter. Derek, did you wanna add to that? How much down is your flying, your regional flying? Departures in the Q2 are probably down about 20% versus 2019, where the airline mainline is down about 5%, so maybe 15% different than more than what the mainline is. Okay. Mary, I wanna note on that. Look, while we have aircraft that, you know, we're not flying as many aircraft as we'd like to, we're not chasing that. We're simply, you know, sizing the airlines for the pilots we have. Our confidence in this summer is rooted in we've already taken a look, we've already made sure that we have appropriate, you know, confidence levels in what we can do. No need for any type of concern over, you know, the summer. Okay. The second question I had, if we could go back to the NEA for a minute. If the government tells JetBlue it can acquire Spirit, but it wants big changes in the NEA, you know, what's the prospect for American at that time? Is that something that you could have to walk away from with JetBlue? Hey, Mary. Thanks. That's speculation on speculation on speculation on speculation. Yeah. Vasu was, I think, really articulate in his comments about how pro-consumer and pro-competitive the NEA is. I mean, we could go on and on about that. You know, if you assume that JetBlue actually figures out a way to acquire Spirit, and we get to that point, a JetBlue Spirit combination doesn't change the impact to consumers of the NEA. It's not gonna change one bit, the value that we create for consumers in New York and Boston. I think, you know, it's, there's a lot of water to go under the bridge, obviously, with respect to Frontier and Spirit and JetBlue. I think there's, you know, that kind of speculation is probably premature. We feel really, I think, excited about the prospects of winning our lawsuit with the DOJ. You know, we're looking forward to continuing with the NEA, you know, just in perpetuity. Yeah. Steve, are there any discussions underway on settling with the DOJ over the NEA, or do you expect that that's gonna go to trial in September? I expect it'll go to trial in September. Thank you. Thank you. Our next question comes from Dawn Gilbertson with USA Today. Your line is open. Hi. Good morning. Two questions on masks. Do you foresee, you know, given the DOJ appeal, any scenario in which the mask mandate on plane is reinstated as swiftly as it was removed? The second thing is, how is American handling traveler requests for refunds, you know, given how quickly the mask mandate was lifted? Are you know, if someone doesn't wanna fly, they're immunocompromised, just giving refunds? What's your policy? Thank you. Nate, go ahead and take the first. Yeah, I can take the first part of that question. This is Nate. Obviously, we're aware that the DOJ is appealing the Florida ruling, although they have not asked for a stay of the district court judge. Beyond that, as I mentioned earlier, we've learned throughout the pandemic not to speculate on what the government may or may not do. I would emphasize, though, that in keeping with our commitment to create a welcoming environment for everyone who travels with us, customers and team members. May of course choose to continue to wear masks at their own discretion, and we expect that many will continue to do so. You know, especially considering the steps that we've taken, you know, for the last couple of years regarding cleanliness and airflow, we don't feel that, you know, reinstating of the mandate is necessary at this time. Dawn, thanks for your question overall. Just right off, you know, we haven't had, you know, much, you know, interaction with customers that have said that they wanna do anything different. Like we do in all these events, we're taking a look at our policies and we are certainly, you know, with customers open and, you know, asking them to get in touch with our reservations office and we'll make sure that we accommodate them in an appropriate fashion. Thank you. Thank you. Our next question comes from Leslie Josephs with CNBC. Your line is open. Hi, good morning, everyone. I was wondering how you guys are thinking about IROPS during the summer and if you have enough capacity and spare capacity to handle rebookings and how you're addressing that and just kind of how the overall labor landscape looks, not just pilots, but customer service, grounds, and other employees? Yeah. Appreciate the question. Certainly, one that we spend a lot of time thinking through and working on. What I'd tell you, we've actually implemented a number of tools knowing that loads are gonna be high as we go into the summer, welcome back a lot more customers. Those tools we've actually been utilizing, you know, and have shown good promise here in terms of ensuring that we're not canceling and working our airline through a delay as this weather does develop and we work our way through it. That's really the key for us, is making sure that we're canceling as few flights as possible to allow the traffic to continue to move through. Again, we're very focused on that. We know that the weather's gonna be out there. We're certainly not taking anything for granted. Hey, David, I'll just add. Look, we have 12,000 new team members, and so that's a lot more than the 600 pilots that we have. Actually, you know, that 12,000 is net new, and we've hired, I think, almost 20,000 people. But those people, team members are working in reservations, they're at our airports, you know, they're throughout the system. So, we've beefed up our capacity to be able to handle. Then, Maya, did you wanna say about anything more about, you know, other technology that we're using? Yeah. I think David hit on it. You know, the goal is to prevent the cancellations in the first place so that we don't have to reaccommodate people, given the high loads that we expect this summer. We've got some pretty cool new technology that really focuses on how we manage to do that. In addition, really helping with improving our technology around crew recovery and some optimization technology that will really help reduce our taxi times, our turn times at airports, and all of those things together are gonna be in place for this summer in order to ensure that we have a better approach to irregular operations. Okay. Thank you. Then my second question, just really quick. Does it still make sense for American Airlines to have an award chart, just given where demand is and kind of how hard it is to find seats with awards these days, with miles these days? Yeah. Hey, thanks for the question. Actually, what's been really interesting to us, even though we are seeing an improving fare environment, is actually our redemptions are up, both in March and as we go forward. As far as the award chart goes, that is certainly something which our top-tier loyalty customers very much value, and they see a lot of opportunities for it to go and secure travel, which many of them have been long anticipating through the pandemic. As it stands today, we're still really encouraged by having an award chart and encouraged that, frankly, even though we are in this rising environment, we're creating the right level of availability for redemptions. Thank you. Thank you. Our next question comes from Niraj Chokshi with New York Times. Your line is open. I think most of my questions were answered already. I guess one question I had on masks was, do you anticipate it affecting hiring at all? You know, maybe potential people you might hire might be nervous about sort of the shift, the drop of the requirement. Hey, Niraj. The answer is no. Just so everybody's aware, you know, if our customers and team members, you know, want to wear masks, we encourage them. We welcome that, and we see that as a practice that's gonna continue forward. Thank you. Thank you. Our next question comes from Kris Van Cleave with CBS News. Your line is open. Hey, guys. Thanks so much for doing this today. I hope this is the last time that we have to talk about unruly passengers, but do you have a count on how many that American has banned? What are you gonna do with those who are banned? Are you gonna do what your competitors are doing on a case-by-case basis? Yes, this is Nate. We don't give a count for how many passengers we've banned specifically for mask noncompliance. In most cases, the passengers who were added to our internal refuse list as a result of mask noncompliance will be permitted to resume travel at some point in time. In cases where an incident may have started with face mask noncompliance and escalated into anything involving, you know, something more serious or certainly an assault on one of our team members or customers, you know, those passengers are going to remain on our permanent internal refuse list and will never be allowed to travel with us again. I would just add in this vein, we're very grateful to our partners in the federal government who have prioritized the safety of our crews, both our ground crews and our crews in the air during this period. We are really appreciative of the announcement yesterday from the Acting FAA Administrator, Billy Nolen, who said that the zero-tolerance policy against unruly passengers is here to stay, as we anticipate, you know, unfortunately that these cases will continue, although, as Robert noted earlier today, hopefully with fewer incidents. Thanks. Thank you. Okay. Thank you. All right. That's all the time we have for Q&A. I'd like to turn the call back to Robert Isom for closing remarks. Thank you. Hey, I'll just close with this. Look, we've worked really hard as a company to get to this point, to be able to take advantage of an environment where demand is improving. The airline's structured in a really great fashion. I wanna thank our team members for working so hard to get us through the pandemic and to be in a position to actually realize, you know, everything that we wanna make about American. You know, in terms of the transition as well, you know, this is my first earnings call. I wanna thank our board of directors, especially Doug Parker, for making things really work smoothly, putting us in a position to be talking about things that are very favorable. For our team, you've heard from a lot of players here today. I couldn't be more proud and confident in the team that we have from a senior leadership perspective. You're gonna hear more from them as time goes on. Our job right now is to make the Q2 forecast a reality. That is what we're focused on. We're gonna get out there and make it happen. I wanna thank everybody for the time today. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.