Thank you for standing by, and welcome to American Airlines Group's Q3 2022 earnings call. Today's call is being recorded. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. Now I'd like to turn the call over to your moderator, Head of Investor Relations, Mr. Scott Long. Please go ahead. Thanks, Latif. Good morning, everyone, and welcome to the American Airlines Group Q3 2022 earnings conference call. On the call this morning, we have our CEO, Robert Isom, and our Vice Chair and CFO, Derek Kerr. A number of our other senior executives are also on the call for the Q&A session. Robert will start the call this morning with an overview of the Q3. Derek will follow with 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 one follow-up. Before we begin today, we 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 ending September 30th 2022. In addition, we'll be discussing certain 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, and the information we're giving you on this 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 us this morning. With that, I'll turn the call over to our CEO, Robert Isom. Thanks, Scott. Good morning, everybody. Thanks for joining us. This morning, American reported a Q3 GAAP net income of $483 million, and excluding net special items, a Q3 net income of $478 million. We produced revenues of $13.5 billion, which sets a new record for any quarter in the history of American Airlines. When I took on the CEO role in March, I told you American was going to do two things this year, run a reliable operation and return to profitability. It's taken us a bit longer than we would have liked to get where we want on the operations side, but we're pleased with how the airline is performing today, and we know we're on the right trajectory. As far as profitability, we've now delivered two profitable quarters in a row, and we're forecasting a profitable Q4 with continued strength in demand. We could not have made either of those commitments or ensure we delivered on them if it weren't for the hard work of the American Airlines team. They do a phenomenal job every day of taking care of our customers and each other. Their teamwork, resiliency, and determination allow us to continue our focus of running a reliable operation and sustaining profitability. We keep that focus because in our business, reliability is everything. It's the foundation of the service we provide our customers. A predictable, solid operation changes the entire work experience of our team. Reliability also enables our long-term profitability, and achieving sustained profitability is how we will meet our debt reduction targets and continue to invest in our team and deliver the network products and services our customers want. With that in mind, let's talk more about the Q3 specifically. Our record quarterly revenue of $13.5 billion is a 13% increase over 2019. Notably, we achieved this record revenue while flying nearly 10% less capacity than we did in the Q3 of 2019. We're pleased to have exceeded our initial guidance on both revenue and pre-tax margin in the Q3, despite constraints still facing American and the rest of the industry. American's Q3 results, including our record revenue performance, are significant considering the macroeconomic uncertainty facing so many people. Demand remains strong, and it's clear that our customers in the U.S. and other parts of the world continue to value air travel and the ability to reconnect post-pandemic. Importantly, many of the demand trends we saw emerge during the pandemic are becoming more consistent and shaping our commercial focus for 2023 and beyond. Leisure and business revenue remain incredibly strong, again surpassing 2019 levels in the Q3. Demand for small and medium-sized businesses and customers traveling for a combination of business and leisure continue to outpace the recovery of managed corporate travel. As that revenue continues to build, it'll be additive to an already strong base of business demand, led by small and medium business and blended trips. That, as well as the return of long-haul international travel, leaves us very bullish about overall demand, even in an uncertain economic environment. The changing nature of demand provides an opportunity to rework our commercial offerings to better meet the needs of all customers and create a more resilient and profitable business. We continue to develop the most comprehensive airline network in the world. As we have shared on previous calls, over the past few years, we have made the decision to greatly simplify our fleet and network, focusing on our flying on where we can create outsized customer value and working with our partners to create choices and value in areas where it's cost-prohibitive to do so ourselves. This means prioritizing the flying that can best generate a return today, not bringing back flying that was only marginally profitable before the pandemic or that we had hoped to would one day re-generate a return. It also means using our partners to fill in the gaps and deliver a seamless network to our customers. That work continues, particularly with our Northeast Alliance with JetBlue, our West Coast international alliance with Alaska, and our Atlantic and Pacific joint businesses. To better match our product offering to customers and network, we recently announced enhancements to our long-haul fleet that will give American an unrivaled premium experience among U.S. carriers. Starting in 2024, customers will see new Flagship Suite seats on our Boeing 777-300ER aircraft, as well as our new Boeing 787-9 and Airbus A321XLR deliveries. With these new interiors, premium seating on our long-haul aircraft will grow by more than 45% by 2026. We're working to give our customers better choices and more access to the world's largest and best travel rewards program, and that's AAdvantage. It's clear that customers want more when they shop for travel, more choices, more ways to earn and use miles, and more incentives to earn miles even when they don't travel. Turning to our operations. As I mentioned at the outset, operating reliably is critical to everything we do. We have the youngest fleet and the best network and partners in the industry, but we can't take full advantage of those assets if we aren't running reliably. That's why we continue to invest in our operation with additional resources and new technology, and those efforts are paying off. Despite a challenging operating environment with hurricanes in Florida and the Caribbean and flooding in the Dallas-Fort Worth region, we restored our operating reliability to pre-pandemic levels in the Q3, and we did it while flying a schedule that was 25% larger than our closest competitor. We have delivered record on-time arrival rate and completion factor so far in October and expect to carry that momentum through the upcoming holiday season and beyond. Hurricanes Fiona and Ian were devastating for so many, including the communities we serve and the places our team and customers call home. The American Airlines team stepped up in amazing ways to take care of our customers and each other during very challenging circumstances. Through our AAdvantage program and the partnership with the Red Cross, almost $4 million has been raised to support victims of the storms, and American continues to support our team through the American Airlines Family Fund. The storms moved through quickly, but they had an outsized impact on American, given the size of our operation in Florida. We had to cancel more than 1,500 flights the last four days of September, given the impact of Hurricane Ian. We estimate right now that these storms reduced revenue by about $40 million. As we close out the year and look to the first quarter, we continue to size the airline for the resources we have available and the operating conditions we face. This approach and our strong operational performance in September and so far in October give us a lot of confidence as we head to the busy travel holiday season. In closing, we remain very encouraged by the continued strength and demand and the trends we're seeing across the business. American has the best team and most efficient assets in the industry, and we have built an airline that can be successful in many different demand and economic environments. Looking ahead, we're focused on investing in our operation, our network, and our partnerships to ensure we can continue to deliver for our customers. Of course, we'll do so while remaining focused on achieving sustained profitability and reducing our debt. With that, I'll hand it over to Derek. Great. Thank you, Robert, and good morning, everyone. I wanna start by thanking the American Airlines team for their efforts during the Q3. Our airline's success during the quarter was only possible because of the hard work of our team during a challenging summer. This morning, we reported a Q3 GAAP net income of $483 million. Excluding net special items, we reported a net income of $478 million. Both equate to earnings of $0.69 per diluted share. Since the beginning of the year, we have been focused on returning the airline to sustained profitability. We are pleased that our Q3 results build on that progress we made in the Q2. We beat the high end of our initial earnings expectations due to the continuation of strong demand environment. The Q3 was our highest quarterly revenue in company history, beating the Q2 of this year. The domestic and short-haul international entities continue to lead the revenue recovery, and we expect further improvement in long-haul international as we continue to grow back our capacity. The investments we have made to renew and simplify our fleet position us well for the future. We continue to operate the youngest, most fuel-efficient fleet among U.S. network carriers. In August, we began taking deliveries of new 787 aircraft from Boeing for the first time in 15 months. In the Q3, we took delivery of four 787s, and we expect to receive five the remainder of this year and four in the first half of 2023. Our Boeing 787-9s are still expected to be delivered starting in 2024. During the quarter, we also took delivery of three A321neos and reactivated six 737-8s from long-term storage. In the Q4, we now expect to take delivery of eight A321neos, three E175s, in addition to the five 787-8s I mentioned previously. Based on our latest guidance from Boeing, we now expect to take delivery of 19 737 MAX 8s in 2023 compared to the 27 deliveries that we were previously expected. This change in timing will shift planned CapEx out of 2023 into future years. Our 2023 aircraft CapEx net of leases is now expected to be $1.6 billion. We ended the Q3 with $14.3 billion of total available liquidity, which is $700 million higher than our initial Q3 forecast due to continued forward booking strength seen throughout the quarter. This level of liquidity is more than double the amount we had at the year-end of 2019. Reducing total debt continues to be a top priority, and we remain on track with our target of reducing overall debt levels by $15 billion by the end of 2025. As of the end of the Q3, we have reduced total debt by $5.6 billion versus the 2021 peak. As I mentioned last quarter, we expect further benefit from a reduction in our pension liability that will be reflected at the end of the year. In the Q4, we expect to make approximately $540 million of scheduled debt and finance lease payments, freeing up additional collateral in the process. We maintained our elevated liquidity position throughout the Q3 and continue to balance appropriate target liquidity levels with the expected recovery, debt reduction opportunities, and investment in the business. We'll continue to target $10 billion-$12 billion in total liquidity in the medium term and intend to utilize excess liquidity above that level to accelerate our deleveraging initiative at the appropriate time. Looking forward, our next term loan maturity is our $1.2 billion term loan, which does not mature until December of 2023. Looking to the Q4, we expect to produce an operating margin of between 5.5% and 7.5% based on the current demand and fuel price forecast. We currently expect to produce total revenues that are 11%-13% higher than the Q4 of 2019 on capacity that is 5%-7% lower than 2019 levels. This continued strength in demand is expected to result in total revenue per available seat mile that is 18%-20% higher than 2019. Our Q4 CASM, excluding fuel and net special items, is expected to be up between 8% and 10% compared to 2019. These higher unit costs versus 2019 are primarily driven by inflationary pressure and lower relative asset utilization. Our current forecast for the Q4 assumes fuel between $3.51 and $3.56, which is approximately 70% higher than 2019 levels. Finally, while we are still in the process of building our 2023 operating plans, I'd like to share a few thoughts on our approach. We continue to believe that 2023 demand for air travel will be robust. We currently see no signs of demand slowing as we move into the new year. As always, we will continue to keep a close eye on the macroeconomic environment and will adjust our plans if necessary. Importantly, we will continue to size the airline for the resources we have with a focus on reliability and profitability. As we move into 2023, the constraints facing our business today will remain. Those constraints are slower than planned aircraft deliveries and lower utilization of our fleet, largely driven by regional pilot constraints. Therefore, based on our preliminary plans, we expect our 2023 capacity will be between 95% and 100% of 2019 levels. We believe this approach to capacity will produce strong profitability and free cash flow, reliable operating performance, and allow appropriate levels of flexibility in this very fluid environment. In conclusion, demand for our product is strong, and we remain nimble in our planning and execution to ensure we optimize for the environment we are operating in. As we close out 2022 and move into 2023, we're confident in our ability to continue to deliver on our stated objectives of operational reliability and sustained profitability because of our world-class network, efficient fleet, and incredible team. With that, I will open up the line for analyst questions. Thank you. Again, to ask a question, please press star one one on your telephone. Again, that's star one one to queue up for analyst questions. Our first question comes from the line of David Vernon of Bernstein. Your line is open. Thanks for the time. I was wondering maybe if you could talk a little bit about how the fleet changes you guys have made through the pandemic are sort of impacting operational performance. Obviously, it's gonna have an impact on reliability, but also when you think about sort of scheduling the network, maybe getting better utilization, maybe taking some peaks out of the schedule, being unconstrained by the directionality of some of the equipment constraints that are in there. Can you just talk a little bit about how those fleet changes have impacted overall productivity and the early signs there? Hey, David, how are you? Thanks for the question, too. Hey, we're really proud of what we were able to do over the pandemic. You know, a bunch of different projects went into place. You know the story about, you know, rationalizing the fleet, getting down really from a mainline perspective down to you know, two types of narrow bodies and two types of wide bodies. We did the same thing in our regional fleet as well. During the pandemic as well, we accelerated our, you know, cabin consistency project, that Oasis Project, where we were able to upsize the 737s and then also make sure that our A320 family were consistent in terms of seating as well. All that work is done. You know, it's freed up a tremendous amount of resources. It just in terms of operating, you know, think about everything from not having to carry as many part pools in inventory. Think about p ilot training and what's required from going from, you know, an FO on one equipment type, to another, and the simulators that are required for that, the training that's required for that. Look, as we get back to full utilization of our resources, that's gonna be something that I think pays dividends. You'll start to see it as we get back you know, really, to full utilization. I think that that's something that plays well long into the future. We see it already. I know it's producing, you know, better reliability. It's easier for our team. From a revenue perspective, you know, I'll hand it off to Vasu. I can tell you it's making his job easier. Yeah. I'll pick up right there, David. I think it's a great question. You know, as we went through the pandemic, a major principle in how we've been planning the airline is to build it in a way where it is as nimble and responsive to demand and as resilient in the face of crisis. As you look at that over time, really the wide body fleet for American Airlines was a strange kind of liability because that's the most volatile part of our business. It's part of our business that our customers have just valued a lot less than our short-haul network. For us, as you look out there, you know, we took jets out. Look at the Q4 schedule, we are a 15% smaller long-haul airline. But very importantly, what we've also done, right, is when we have such a big fleet of narrow bodies, we have a lot more flexibility in how we send them. We've changed our capacity mix pretty materially from pre-pandemic. As we were entering the Q4 in 2019, we were about a 70/30 short-haul, long-haul airline. As we enter the Q4 now, we're something a lot closer to an 80/20 short-haul, long-haul airline. And that airline that we have is something which is a lot more dynamic. There's fewer fleet types. Like Robert said, if demand changes, we're much more able to adjust. Quite frankly, the short-haul business is and has been for the last 20 years a much more durable part of things. Frankly, you see it right now. Right now, long- haul is doing well. At some point in time, it'll come down, but short- haul remains pretty consistently strong across the business cycle. As you think about that plan to get back to 95%-100% next year, is that gonna get you the full benefit of utilizing the new fleet, or are we still gonna be carrying some additional sort of productivity headwinds from training or resourcing or just underutilization from an hours per aircraft per day kind of thing? Okay. I'll start. Derek can chime in here too. It's a good question, but we look at it as upside for the airline. We know that we can find more out of the assets that we have. There are constraints out there, you know, notably, pilot constraints both for the regional side and then, just the massive amount of training that we have to do on the mainline side. Those constraints are gonna be out there. Over time, they'll break free. We're confident that we can actually get more utilization out of the current fleet to actually get us beyond, you know, flying at 100% of 2019 levels. That's where I think the cost story at the airline gets really interesting. It's gonna take a little bit of time to get to that point. All right. Thanks a lot for the time, guys. Thank you. Our next question comes from the line of Savi Syth of Raymond James. Your line is open, Savi Syth. Hey, good morning, everyone. Could you please talk about a little bit more on the hiring and kind of training side on the mainline, you know, where you are on that and again, expectations as you head into 2023? Sure, Savi. I appreciate the question. Look, we're hiring more pilots this year than we ever have, you know, in our history in a given year. We're looking at hiring almost 2,000 pilots. We're on track to actually, you know, accomplish that from a mainline perspective. I feel really great about that. Let's face it, you know, training that many pilots is something we've never done before. Coming out of the pandemic, we've had to make sure that resources are all in the right spot, whether that's additional, you know, simulators and resources like that or even, you know, things like instructors. That's all working its way through, and we feel very confident that over time our pilot pipeline for the mainline is very strong, and our training resources are absolutely gonna match the need that we have going forward. The regional side of the business is a little bit different. We didn't hire, and let's face it, well, we didn't hire for two years during the pandemic at all. Then not only that, you know, people didn't come into the business. We've got to work our way through that. You got a supply issue that I think is coming back online. I feel really confident about it. We're facilitating that through things like, you know, our cadet program and creating, you know, financing vehicles, you know, for people that wanna get into the business. That's all going well. But then the other issue is once you run, you know, short, you actually have issues of getting pilots from the right seat to the left seat, and there are hours requirements that you have to fulfill. We're working our way through that. That's gonna take a little bit longer, in my opinion. That's maybe, you know, two, three years to work out versus the mainline side, which I think is something from a training perspective, you know, we really get fully caught up over the course of the next year. That's helpful. If I might just following up on that, so I appreciate the kind of thoughts on where capacity could be next year. Any way you could help us think about the cost side of things and, you know, how much of the headwinds that you're seeing today we might see kind of go away as you kind of get through next year? Well, Savi, I mean, we're still going through our planning process. You know, we gave the guide for the ASMs, but we're not ready to guide costs yet. You know, we will on the January call. You know, we're working through our budget. We're in that today. You know that the CASM will depend on what we fly, but we will go through that on the January call. Understood. Thank you. Thank you. Our next question comes from the line of Jamie Baker of JP Morgan. Jamie Baker, your line is open. Morning, everybody. Two quick questions for Derek and then a follow-up for Vasu. Derek, why the pivot from pre-tax to operating margin guidance? Second, what's the increase in interest expense year-on-year at the current forward curve for your floating rate debt? Okay. Two, just no reason for the pivot. I mean, we're just being consistent with the rest of the airlines from an operating perspective. That's what we're focusing on. Then on the interest rate, I mean, our cost of debt has gone probably from about 4% to 5%, and our fixed floating is 70/30. As we look into next year, our interest expense this quarter was around $494 million. Does that go up in the Q4 to about $530? It's probably about $40 million from the third to Q4 on an interest expense basis. That's totally offset right now with the cash levels we have on interest income. It was offset in the Q3 interest income, depends on where cash is in the Q4. You can see that our guide for non-op is pretty even quarter-over-quarter. Yeah. Okay. That's why I asked. I appreciate that. Now, Vasu, as I continue to think through, you know, how American needs to adapt to new travel patterns, and look, maybe you don't, aside from just shifting some, you know, capacity to certain days of the week, maybe Thanksgiving return peak shifts a bit. I keep thinking there's more that can be done, you know, fare fences, promotions, advantage, you know, just to better capture these new travel patterns out there. Is it just as simple as adjusting the flexibility of schedules? Not sure if flexibility is an American term, but I trust you know what I mean. I think you just made a term, Jamie, but that's fine. Keep going. Well, we used it at Air Mic, but that was a long time ago. Just really wondering if there's more than just pure scheduling nuances to best monetizing all these new travel patterns that are emerging, certainly much to my personal post-COVID surprise. Yeah. Hey, that's a great question, Jamie. Let me start with just some context setting for just how indeed the world has changed. You know, first of all, we are in general, really encouraged by what is happening with aggregate demand. As we say, the demand for travel and for air travel in particular has never been higher and remains strong in a kind of all future periods. The shape of that, the composition has changed a lot. You know, now we're in a place for the quarter where 45% of our revenue came from blended trips, about 30% from discretionary or what we historically called leisure trips, and the remaining 25% from non-discretionary, what we've historically called business trips. Importantly, within business about 17-20 points of that is coming actually from non-contracted unmanaged businesses. The remaining kind of five, 8 points are from contracted corporations. That's meaningfully smaller, call it four, 5 points smaller than historic. That is the thing that is actually really encouraging to us for a couple of reasons. That big category of blended demand, which is growing, first and foremost, that and unmanaged business is coming in at yield values, where their gross yields are similar to the corporate contracted transactions that are not there, but very importantly, their net yields. None of their cost of sale is actually very often higher than what we see. Two, and kind of more directly related to your question, what we find is that indeed this blended demand uses our airline network in a very economical way. Almost half of that demand is using O&D markets in our system where American's network is uniquely advantaged. Additionally, we've seen across our system, not just for blended demand, 2 points of traffic shift from what we'll call the peak business periods in the day. That's pre-8:00 A.M. and post-4:00 P.M. and into the body of the day, the 8:00 A.M. to 4:00 P.M. window. If you think about that historically, we've done a lot to kind of peak our schedules for the ends of the day, but now we're seeing a lot of really high-yielding demand in the places where it's most economical to frankly go and run the airline. That takes me to the third point, which is where you're starting to go, that as we start to abstract, and we've done a lot of this, when you don't look at the transaction, look at the customer behind it. What we're finding is that a customer who has a blended trip in their profile is twice as likely to go and enroll in the AAdvantage program. They are 3x more likely to sign up for one of our co-branded credit cards if they don't already have it. Those who have a credit card spend 40% more than a typical business customer. These customers are overwhelmingly going to aa.com because it's frankly the only place where you can go and price and shop for a blended trip. That is very much influencing how we're thinking in a couple of meaningful ways, as you say. The first and foremost, the value that we can deliver to these customers through our loyalty program and our, as we call them, our currency partnerships with people such as Citi are of paramount importance to our customers and therefore to us. There's a lot about the selling and distribution model that the airlines have operated on. Surely, that we've operated under the premise that warrants some change that we can go and serve the customer demand. That's super helpful. My wrist is aching to write things down as opposed to typing them. I hadn't thought about the loyalty angle, so thank you very much for that. Appreciate it. Sure thing. Thank you. Our next question comes from the line of Duane Pfennigwerth of Evercore ISI. Duane Pfennigwerth, your line is open. Thank you, and my compliments on that pronunciation. Better than many earnings calls. On the 95%-100% for next year, I wanted to ask you how that might compare to a theoretical upper limit. How much of this is conservatism just given fuel and kinda macro uncertainty versus just your modeling of the staffing constraints? You know, if you really wanted to step on the gas, if the environment warranted, how much higher could you push than that 100%? Hey, Duane, thanks for the question. Look, for us right now, we're gonna size the airline for the resources that we have and the demand environment that we face. There's a lot of variability in just about everything that we deal with right now. The thing that I think that Vasu will tell you, and you know, Derek and our finance team will tell you, the best thing we can do is make sure that we have a predictable, stable airline, something that we can point to in the future. That's what we're trying to do given all the constraints that we face right now. From the perspective of what is the limiting factor, I'd probably try to fly a little bit more, but you know what? We've got pilot constraints that are gonna take a while to work their way through. You know, notably, we talked about what's happening on the regional side of things. You know, in terms of an upper bound, I don't have a number, Derek, and I don't know if we've actually gone out and calculated a max level. No, I think, Duane, as we talked about on the last call, you know, we do have some, you know, unsupportable aircraft at this point in time. You know, as things change, you know, on the regional side, it's all dependent on pilot hiring and how much the mainline hire from the regionals. We're just trying to be prudent in what we do. As we saw in the summer, making some of those kind of assumptions was not easy. I think we're being prudent on it. If there is more capability for us to fly from a regional perspective and a mainline perspective because those constraints come down, then, you know, we'll be able to. We could fly more with the fleet that we have, put it that way. Is that a couple percent? Probably. If we flew the whole thing, you know, we could get, you know, somewhere in the 5%-10% range from the fleet that we have. I think those constraints are going to be there. As Robert said, the regional constraints are going to be there for a longer period of time. We're working through them, and hopefully, there's other options that we have to bring that flying back up. That's helpful perspective. Just for a quick follow-up on ops, can you quantify the savings or the assumed savings from running a better operation, in your 4Q guide? You know, it's an American question. Frankly, it's an industry question. You know, what have we learned or institutionalized from this summer, that gives you confidence that sort of these ops, you know, better ops will sustain? You know, maybe in Q4, frankly, it's just, it's less peak. It's... You know, fewer ASMs. Maybe that's the driver and the confidence. You know, if you can help us understand what's been institutionalized from this summer, that would be helpful. Yeah. Hey, Duane, that's something we talk a lot about. Look, you know, we talk about utilization and getting more out of it, but there's always, you know, an offset to that utilization with, you know, running an airline that is, you know, potentially less reliable. What we've done right now is we've taken a look at, and given that the pandemic brought so much variability in just about every input to the business, okay? Everything from partners at the airport to airspace limitations, to, you know, Boeing and Airbus, you know, delivering aircraft, our pilots and flight attendants. What we try to do is build in at least a little buffer in a number of areas right now. That is absolutely something that we're carrying on into the Q4. Where does it show up? It shows up in higher reserve levels for pilots and flight attendants. Where does it show up? It shows up in terms of maybe not running even some of the aircraft that we have as hard as you would. It shows up in terms of making sure that we're trying to take into account restrictions that we have in airports and with airspace as well. We're putting that all in. My hope is that as you know, the airline gets up to speed and our other partners and vendors get up to speed, then that's something that we can slowly take a look at. To the point that you know you brought up, this airline, American Airlines, the industry as a whole, we need to get back to reliability levels that we had pre-pandemic and even higher. That's the focus, and you're gonna see us invest in that, whether it's through you know putting in the degrees of safety factor in things or you know just making sure that you know we fly the airline appropriate for demand and operating conditions. Okay. Thank you very much. Thank you. Our next question comes from the line of Michael Linenberg of Deutsche Bank. Your line is open, Michael Linenberg. Good morning, everyone. I wanna kind of touch on this is sort of a follow-on on Jamie's question about sort of structural change here. You know, I don't know if it's to Robert or Vasu. Robert, you talked about 45% more premium seating in your fleet. When I look at some of the numbers, you can correct me if I'm wrong, but it looks like you're like 78, 79. The premium seats are gonna go up by 60%. When I look at where you will be on an absolute basis post this new product rollout, you'll be pretty well ahead of United and Delta. It feels like it's a bit of a bet, and it is maybe more of a secular shift to have that much premium seating. I'm thinking, you know, what is, you know, the potential downside risk, you know, sort of how you think about that. It also looks like, I guess, we're gonna see the retirement of the first class on the triple 7s. Is that right? Yeah, I know that, Vasu. Go ahead and start this one. Yeah. Thanks, Mike, for the question. Very good one. I'll answer your second one first. Yes, the first class will not exist on the triple seven or for that matter, at American Airlines, for the simple reason that our customers aren't buying it. The quality of the business class seat has improved so much. Frankly, by removing it, we can provide more business class seats, which is what our customers most want or are most willing to pay for. Look, a really important thing to your first question starts actually with the structure of the network that's here now versus what was there pre-pandemic. Though we've talked about it on a lot of calls, it probably can't be emphasized enough. It's something which you can see through all the successive schedules on the quarterly schedules through COVID and even into what we published through the rest of this year and early next. Again, remember, for us, we're running a long-haul business now that is 15% smaller than what existed pre-COVID. Mm-hmm. Furthermore, of that, about 70-ish%. We presume we're an 80/20 short-haul, long-haul split. For us, very importantly, 70% of our capacity, almost 70% is in our core hubs. What's not there is really in some really strong international markets that are very premium-heavy. Heathrow, long-haul South America, eventually Tokyo, places like that, or else in really long-haul markets, where frankly, through the strength of our partnerships, we're able to go and make a larger premium cabin work. Because of that, the airline has actually arced itself to a place where there's a lot more demand for its premium seats. The last thing I'll say, and this actually picks up right where my answer to Jamie left off too, is that what we're really encouraged by right now is actually long-haul profitability for American Airlines is better than what it's historically been pre-2019, on a margin basis, in some cases on an absolute basis. What it's being driven by is not just the premium cabin, but interestingly, it's being driven by blended customer demand there. I mean, it used to be that that large contracted corporations were as much as 50% of what filled those seats. Now between 40%-50% of it is blended demand, and the rest of it is actually leisure demand that is willing to go and pay more for the quality of the business class seat. All of that is coming at higher net yield values than what was there before. We're really encouraged about what the future holds. That's a lot of the context behind some of these bets we're making with the long-haul configuration. Very helpful, Vasu. If I can one other one, I just on the regional side, you guys seem to be doubling down on adding more regional service, including 50-seaters. I know in the past you've talked about how that historically has been, you know, those markets have been fairly high yield. But how does that square with just the rising cost that we're seeing on regional labor, other input costs for the regionals? Is maybe the offset that you have this, you know, sort of unique, from a network perspective, you among all the carriers may be the only game in town in so many of these markets that you're still able to make it up in revenue. How do you square that? Thank you. Vasu, let me start, and then you jump in. Well, first off, look, just in terms of the 50-seaters that we have, you know, we've reduced the number of 50-seaters that we've had in place, you know, over time. I don't have the exact number at hand. But you know, what we have is a network that's ideally suited for you know, servicing a number of regional markets. And you know what? 50-seaters are gonna have a place in our system. But right now, the big focus is getting the aircraft that we have back up in the air. There's not a doubling count. It's, "Hey, this made sense before. It makes a lot of sense now," especially given what we're seeing with the rest of the marketplace. Vasu, go ahead. Yeah, that's right. I'll just add a couple of doses of facts to that too. You know, what we, especially what I was really encouraged by, is when we crossed over from the summer into September, which is historically a weaker demand time for the airline. What we found is that historically in let's call it September of 2019, only about 20%-25% of our revenue was coming from places where our O&D markets where our network was advantaged. When we got into September of this year, it was somewhere between 30%-33% coming from places where our network was advantaged. Indeed, we see this over and over again, that we make 30% more O&Ds than our competitors, 30% more O&Ds in markets that we consider to be an advantage, and by that I mean either O&Ds where we're the only ones who serve it or we serve it with the most convenient schedule. For us, there's a way we see that very much. I mean, the way our network is just structurally built, we are the very best at serving all of the small cities of the Western Hemisphere and connecting customers there to the global marketplace. Others are a whole lot better at flying long- haul to Asia or whatever the case might be. For that reason, there are some really unique things to American Airlines where we have a lot of value in a range of equipment types from the smallest 50 or 75-seat RJ to a 200-seat narrow body. Whereas for a lot of others, a lot more of their value may be in having multiple flavors of a 300-seat wide body. Great. Mike, go ahead. Go ahead, Derek. No, Mike, the only thing I was gonna add is, you know, Piedmont, we have three wholly owns. Piedmont is gonna fly 50/50 seaters. Yep. That's what they have today. We're growing those back for sure. Envoy is getting out of the 50- seaters over time. We'll fly some next year. They're gonna move, but I know you're referring probably to the Air Wisconsin transaction. Yep. You know, in a market where there's difficulty in pilot supply, Air Wisconsin has a great network. We've worked with them before. They have a very good pilot supply, and can fly out of Chicago. I think it's an opportunistic transaction to do that in an environment where there's a pilot constraint on the regional side. Great. Thanks for the explanation, everyone. Thank you. Our next question comes from the line of Conor Cunningham of Melius Research. Your line is open, Conor Cunningham. Hey, everyone. Thanks for the time. Just on Savi's question from a hiring standpoint, I don't think you actually gave a number on 2023. Is there a stated goal from a pilot standpoint? The only reason why I ask is your headcount, I think, is down 2%. You're talking about capacity being slashed to down 5%. Basically you're there from a hiring, from an employee standpoint. I'm just trying to figure out, you know, what we're talking about until into next year. Derek, go ahead. Yeah. I think, Conor, we're gonna have the schoolhouse full all next year. My assumption is if we, you know, hired 2,000 this year, we'll be hiring the same amount next year, you know, as we bring back the mainline fleet. I would expect the schoolhouse to be full and us to train about as many pilots in 2023 as we are in 2022. Connor, I'd just add that, you know, some of that as well, we still have, you know, considerable retirements due to age 65. We're at the peak levels, so while we're hiring 2,000, it doesn't mean that there's a net incremental of 2,000 pilots by any means. Yeah, I think we retire somewhere in the neighborhood of 700, 750 pilots next year. That's a lot of that's retirement. Okay. Thank you. The progress being made on profitability is obviously great to see, but I think the question a lot of folks have is just around profitability with new labor deals. I'm not trying to get you guys to discuss any of that publicly, but just how do you think about profitability into 2023? Is it just more of like the demand picture is just so much better that we can absorb a lot of the pilot pay increases or labor deals and all that stuff? Just any high-level thoughts that you may have, that would be great. Thanks. I'll start. Like, certainly anything that we do with our pilots or flight attendants or any of the other team members that we're currently negotiating with, we negotiate with a mind to making sure that we take care of our team and that we take care of the company as well. When we think about the deals that we have, we're going to make sure that they fit with, you know, an economic perspective of making money. I'm confident we can do that, and it's the best interest of our pilots and flight attendants and mechanics and everybody in this company. There's win-win deals that'll be had out there. I'm confident that we can do it. It's in an environment where, yes, you know, we take a look at travel coming back being something that just in terms of where people wanna spend money is a change from prior to the pandemic. We take a look at the amount of growth that the general economy has had, and yet, you know, the airline business is still, you know, American Airlines is 10% smaller. And then on top of that, we know that travel's a bargain still. The general inflation is running about 5%, and ticket prices are up since 2019, you know, about 3%, or less than 3% on an annual basis. I look at all that and think that the kind of momentum that we have experienced in the third and Q4 carry in. Certainly there are offsetting costs that are built in in terms of redundancies that we have in place. As we get the fleet back up, and as Derek mentioned a little bit earlier, it may take us a while, getting the regionals back up and maybe, you know, through 2023 to get the mainline fully back up as well. We will have efficiencies that come with the upgauging that we did—we've done. It will come with the incremental utilization that we can get out of our aircraft. You know, quite frankly, some of the things that Vasu has talked about in terms of network, in terms of marketing, and then also in terms of engaging our customers in a way that they, you know, will pay us for things like, you know, credit cards. The relationship is deepening. On all those fronts, I feel really confident that we can put together an airline that can cover any increased labor expenses and still make, you know, margins that we think are appropriate, you know, positive for the airline. Appreciate it. Thank you. Our next question comes from the line of Helane Becker of TD Cowen. Your line is open, Helane Becker. Hey, Helane. Helane? Helane, your line should be open now. Please go ahead. Thank you. Can you hear me now? We can. Yes. We can hear you now. Okay, good. I'm not sure exactly what happened there because I was not on mute. One question for clarification. What's the paid load factor in business versus upgrades in business class? Hey, Helane. This is Vasu. Look, off the top of my head, I don't know it well enough to go and tell you, but I will say this, that our paid loads in business are growing as a percentage of what they've been historically, but it changed a lot between July and September as things shifted over. A major part for that is simply changes that we've made with our upgrade program. That, you know, we used to have a lot of different, what I'll call cottage upgrade concepts that could be had through different certificates, through our loyalty programs, through things like that. We've been trying to go and simplify that for our customers, digitize a whole lot more of it, and frankly, offer more fare products to customers. We're now getting to a place where it probably at our lowest of times, as little as 60% could have been paid. We're at a place where indeed, like in the domestic system, something closer to 80 or so. Okay, that's very helpful. Thank you. If I could follow up, a question on the aircraft deliveries and the schedule. Derek, you talked about the under on the number of aircraft you actually have on. Yeah. For delivery schedule for next year. How are you scheduling the airline? Are you assuming, I suppose, a lower level of deliveries or are you? You know, could you just walk me through how you plan the network, not knowing how many aircraft you're actually gonna have available to fly? Yeah. I think as we look into 2023, you know, we didn't have a lot of deliveries anyway. We probably had 32 deliveries. What we've done is we know the four 788s are coming in. We know what those dates are, so we can plan that. The one Neo coming in, we know that. The MAXs, we've worked with Boeing to put our level of ops together. We were supposed to get 27 aircraft. We've now taken that down to 19, and we have the delivery schedule that we believe that Boeing will meet. We, you know, they need to meet those dates for us to hit the level of ops, but that's the way we're planning it. The good news for us is that we don't have a lot of deliveries next year. You know, our CapEx is way down. We know what our fleet is. The uncertainty for us from a level of operations perspective is probably more on the regional side. What we're doing is being conservative on the regional side to plan, you know, three months out. We'll put a level of ops together for the full year of what we think we are, and if the constraints fall off and we have more ability to fly, we'll add those back into the schedule as we move throughout the year. We'll plan at the level that we gave you, which is the 95-100. That assumes the push in the MAXs to only 19 aircraft and that they come in a little bit later, and we'll plan the schedule that way. We do have capabilities of, you know, putting the schedule out, and we can change it every three months and things like that. You may see an adjustment to our plans as we go forward, but we're sticking the stake in the ground with this level, with this aircraft. A lot easier to do this year than it has in the past, not knowing when the 787s are coming. Still, you know, just the murkiest part for us is really the regional side and making sure that we can do the regionals at the levels we have them today. I'll just add just something that Derek said there. Really consistent with our principle of just making the airline as nimble and resilient as possible. One of the things that and huge credit to Brian Znotins and Anne Moroney and many people in our network and operations team, but we figured out ways where effectively instead of building to a fictitious delivery plan, we can build to what we know and add as we call them, lines of flying in on top of it, whether that is for regional jets or for main lines. Indeed, as you go out and look at schedules at a time when so many airlines cut capacity close in, probably at least the only one that I've seen in published schedules being able to add capacity back is American Airlines. We're finding more ways to do it. It's doing that puts us in a much better place to go manage the airline operationally and financially. Makes it a little bit harder to go and manage things like the peak days after Thanksgiving, but it's a much more practical way to go manage through some of these infrastructure uncertainties that we've got. That's hugely helpful. Thank you very much. Excellent. Thank you. Our next question comes from the line of Stephen Trent of Citi. Your line is open, Stephen Trent. Good morning, everybody, and thanks very much for squeezing me in. Most of my questions have been answered. I just had one quick question about fleet. You know, I know you guys have gone through all of that operational dislocation with the MAX grounded in 2019. As you think about longer term, you know, any high level view, sort of what's optimal for American Airlines with respect to, you know, owning versus leasing versus sale-leaseback, you know, an ideal mix when you consider what's happening with interest rates and aircraft residual values, which I'd love to hear some color on that. Thank you. Yeah. Stephen, I mean, the one thing I will say is we are very happy that we did our fleet replacement program at a time where we could finance aircraft at 3% level. Our you know as we look back at what we've done and where others have to go in this 6%-7% range, we're very happy where we're at with the financing of our aircraft. As we look forward, you know, we don't have many aircraft in 2023, that's good news. We only have about 32 aircraft. We already have five of them financed. We look at all markets. We look at the EETC market, the sale leaseback market, the mortgage market, and we are getting attractive pricing in those markets today. Our focus will be on, you know, the back half of 2023 and to finance those aircraft. We're all good through 2022. We're all good through the first half of 2023 with very attractive financing. Hopefully, as we go forward, you know, we don't have a significant amount of aircraft. We have 24 next year, and then we go into, you know, 50 and 50 the two years after that. We've done our fleet replacement program under really, really good rates that are gonna be with us for a long time. We're very happy where we're positioned now from an aircraft financing perspective. Oh, that's super helpful. Thanks very much. Thank you. Our next question comes from Sheila Kahyaoglu of Jefferies. Sheila Kahyaoglu, your line is open. Maybe if we could talk about just revenue trends to start. Q3 was the Q1 where international passenger revenue outperformed domestic. You know, any color on how you think about that trend going forward and potentially the impact on the U.S. dollar strength. Vasu, go ahead and start, and I wanna add something at the end too. Okay? Yeah, absolutely. Well, look, as mentioned before, the long-haul business is if you look back at over any time period you want, is a much more volatile line of business to be in than the short-haul business. We think that's absolutely the case. That said, we're really encouraged where things are right now. There is clearly demand that's out there for the long-haul product. That too is taking shape in a very different way than what was there before the pandemic, but coming in at levels that are far greater than what was there before the pandemic. What's less known is that we're still in a place where so many markets are still opening up. As a practical matter, Japan really only opened up last week, so there's still major parts of the international system that are coming back yet. There's still any number of inefficiencies there, which I know Robert can talk to a lot more, that are gonna yet be a bit of a drag. Over the long run, we're really excited for it. So much so that, you know, even though I've said that the airline is gonna be an 80/20 short-haul, long-haul carrier, nonetheless, we're taking 70/80 steps. We still have an order for XLRs and things like that out there because we do think that the long-haul business will come back and come back in a way which can be really beneficial certainly to us and our customers. Yeah. Hey, Vasu, you know, there's things that we're doing as a country that are actually, you know, hindering, you know, the recovery of demand internationally. It could be stronger, a lot stronger. You know, I wanna make sure that, you know, people are aware that, you know, right now or in the past, in 2019, 43% of international visitation into the U.S., that came from countries where you had to have a visa to come into the United States. You know, back then, 2019, you know, for people that wanted to come in for a first-time visa, you know, to attend a big event, meeting or a convention, you maybe had to go and spend a few weeks to get a visa, so you could actually buy a ticket with some reasonable assurance that you'd actually be able to travel. Well, now, that process of getting a visa can be over a year, well over a year, in really important big travel markets like countries like, you know, Brazil and Mexico and India. When I talk about that 43% of inbound, you know, travel of international visitation, it's not like we're limiting ourselves just on air, you know, airfares and ticket prices and airline revenue. Those people spent $120 billion when they came into the United States. So the country as a whole is harmed. Here's what we're trying to do about it because we need to get on this. International recovery would be so much stronger if we got this out of the way. We're working with the State Department. We've got to make sure that we respond to this situation and do so quickly. It really comes into making sure that B1 and B2 applicants want to come to the United States, participate in meetings, you know, that they're eligible to do so, instead of. Taking their travel someplace else, which is what they're doing right now. Anyway, I just wanted to make that point, Vasu, that international travel could be stronger. No, that's great color, guys. Maybe just one follow-up for Vasu on his comments earlier on the loyalty program and credit card spend. You know, how are you thinking about the loyalty program? Has there been a change in, you know, how Americans viewing it and its importance to the operation relative to 2019? Short answer, yes. Absolutely. You know, we've seen it in any number of ways. Look, so much of the marketplace has changed. Maybe the simplest way to think of it is this, those customers who are blending travel value travel, whereas for a lot of our customers prior to the pandemic, they might have traveled because their employer made them or they had to go and do it. We're seeing people travel with a lot more intentionality. When that happens, those same customers are much more willing to go and earn miles so that they can go and take their family on vacation, for example. That's where we see, like, AAdvantage enrollments are growing at record levels everywhere. As our partnerships expand, we're seeing growth in places like the West Coast and the Northeast at levels that we'd never seen before. Importantly, people are doing things like spending on their credit card. We did something where we counted credit card spending towards status, and that's been something really well received by our customers too. The last thing I'll say to this is we just see a lot of upside here. As you compare our PRASMs out there in the sort of traditional network business, we're in a place where domestically and in Latin America, we can be 10%-20% larger than our competitors and produce unit revenues that are 5%-10% larger than what they are. That's a really good place to be in. Even still, compared to one of our largest network competitors, they run 90% the airline that we do, but they produce $1 billion more through their co-branded credit card program. We're really focused on that because we think it's a huge value driver for our customers, a very obvious one for us. We're really encouraged by the progress we've made with our partner in Citi. As we look forward, we see that as a really key place where we need to have a strategic partnership in order to really create the value that's there. Great. Thank you. Thank you. That concludes the analyst Q&A. We will now take questions from the media. If you're a member of the media and would like to ask a question, please press star one one at this time. Again, if you are from the media and would like to ask a question, please press star one one at this time. Thank you for standing by. First question from the media comes from Alison Sider of Wall Street Journal. Your line is open, Alison Sider. So much. You know, curious, you know, everyone's been talking about sort of these different travel patterns, more blended travel, you know, different types of leisure trips. I'm just curious, do those trends kind of fully offset the loss of managed corporate travel that you're still seeing? Like, if there was sort of a stall in the corporate recovery, you know, would these kind of new leisure type or blended type bookings make up for it? Absolutely. It has way more than offset it. You can see it in the results, right? We have the corporate contracts are 80% recovered, but this is the Q2 in a row where revenues have never been higher in our history. Indeed, that's on the strength of this blended demand that's there, and an unmanaged business-related demand, all of which is coming at higher yield values, all of which tends to attach itself to really high-margin ancillary products like premium cabin seats, the credit card, loyalty programs, things like that. We're very much seeing a shift that's there and one that's really encouraging. All the more encouraging because as we look forward, really the airline revenues haven't totally recovered to their historical levels. Historically, they'd be about 1% of GDP. We're still not all the way there. We think there's yet a lot of headroom that's there. We are really encouraged and absolutely, Allie, you know, we are very much seeing that though managed corporate hasn't come back yet, it's more than being offset. The last thing I'll say to you is though managed corporate hasn't come back, the really critical word in that sentence is the word yet. As more countries open up, as the visa inefficiencies that Robert talked about get rectified, that can really unlock yet a lot of demand that's out there, which is kind of more to the upside for the travel business. Got it. Thanks. I guess, you know, you mentioned the GDP relationship, so maybe that's part of the answer. You know, like, what gives you the confidence that these are real permanent shifts and not just, you know, spill over for the summer and, you know, eventually just the inflationary pressures will get to be too much and people will just, you know, travel spending will, you know, fall by the wayside just like other spending categories are seeing? Yeah. Ali, look, it's a great question, and there's probably maybe three parts to the answer. First, it's not a thing that we've just observed recently. You know, we've been seeing this and talking about this probably for a couple of quarters now, and it is a real and a meaningful shift. Two, it's not that we see the data in aggregate. We get the luxury of seeing it in particular. So for example, in 2021 and 2022, those customers on a blended trip who enrolled in our AAdvantage program in 2022 are producing a revenue premium. Their revenues to us are about 10% higher than customers who traveled in 2021 and 2022 but didn't enroll in the program. We've seen meaningful shifts. When people actually go and spend on the credit card, they are more likely to go and fly on the airline and vice versa. There's a lot of things out there which are quite striking in the data that we see and are very consistent. The last thing that I'll mention is yeah, even though the demand for other consumer products is changing, just never forget that for us, in real dollars, the price of airfares are less now than what they were in 2019. You can still go out there and know it's not like the depths of the pandemic where there were $29 one-way fares, but now they're $49 one-way fares. Air travel has never been the bargain that it is today, and that's gonna be a thing that lasts for quite a while going forward, frankly, to the good of our customers and our business. Thanks so much. Thank you. Our next question comes from Leslie Josephs of CNBC. Your line is open, Leslie Josephs. Hey, everybody. I was wondering if how you're thinking about the AAdvantage program and with so many people getting cards, lots of sign-ups, very high spends and accruing lots of miles, how you're thinking about just the sheer number of people that have so many miles and whether you can deliver a product that entices more people to remain in the program and to keep using it, and I'm thinking like, competition for upgrades and things like that. Then my second question, in 2023, you said 95%-100% back to 2019 levels. If you do have the aircraft, do you wanna fly more, or is there a concern that that would drive down fares and revenue? Thanks. Hey, Leslie, this is Vasu. I can start into that, and others may wanna join in for the second part of your question. Look, as we like to say it, burn begets earn. The most important thing is people are earning more miles. We want them to keep continuing to do it because it's valuable to them. They wanna be able to unlock future travel opportunities. The really important thing is for that to happen, they need to be able to burn their miles. Stay tuned for more, but we're looking at a lot of ways where we can make status more rewarding and more meaningful, and also where we can do more things where people can use their miles more. We were really encouraged this summer. We actually experimented with a lot of ways where we went and expanded availability for award redemption and things like that. We found the take rates among our customers to be really promising. We see a lot of opportunities for that both within AA but also in conjunction with many of our partners. More on that soon. If you could just repeat your second question [crosstalk] for- Vasu, this is me. I'll add, you know, into that. Look, you know, whether or not, you know, the growth in AAdvantage members are outpacing our ability to service them. Hey, Leslie, that's where, you know, we talk about what we're doing with our premium seats, you know, in making sure that we have the ability to serve customers. But as well, you know, we're creating world-class product as well in so many different places. Take our LaGuardia lounge. If you haven't been there, please go see it. I think it's the best domestic lounge in the country. It's only gonna be beaten when we open up our new DCA lounge. You'll see that we're doing this kind of thing to make sure that we can accommodate, you know, a much broader group, and we're gonna spend for it. It's worthwhile to do that, and we're attracting the right customers. Hey, the last thing is, you know, would we be flying more right now if these constraints weren't out there? We'd be flying a little bit more, and we'll take a look at that for next year. As I said before, the biggest thing for us is making sure that we have certainty in terms of our schedule. We're gonna make sure that we don't outpace what we have in terms of aircraft deliveries, if that's the constraint, or if it's, you know, pilots at a regional level or our ability to train pilots from a mainline perspective. Thank you. Thank you. Our next question comes from the line of Mary Schlangenstein of Bloomberg. Your line is open, please, Mary S. Please stand by. Mary S, your line is open. Yeah. I'm not muted. Can you hear me? We got you, Mary. Yeah. Excellent. Great. Thank you. Vasu, for a long time, the thinking in the industry was that the domestic market was mature, and so the best opportunities for growth were outside of the U.S., and that seems to be the exact opposite of what you're doing now. I wanted to see if you could comment on whether there was some sort of change, whether that belief across the industry was just, you know, an error or a misreading of the industry. Then the second question was on the 80/20 short-haul, long-haul mix. Is that 20 a base for you in terms of long-haul, or could we see that potentially fall further going forward? Hey. Thanks, Mary. To the second of your questions, it's pretty unlikely that it falls further going forward. You know, how we build it back over time kind of remains to be seen. That's a big part of our 2023 and beyond planning. It would be pretty surprising at this point if we got anything materially lower than that. And indeed, through so many of these partnerships, it's probably more ways to grow it than any desire to shrink it. To the first of your questions, yeah, look, what I'd say is that, North America as an originating market is a very mature market, but it's also the highest area of airline demand, the highest-yielding marketplace that's anywhere in the world. What we find is indeed so much of what's happened, especially post-pandemic across the U.S., is there's a significant amount of demand growth and economic growth outside of the historically large, big coastal cities that are there. You know, places like Phoenix, Arizona, you know, Austin, Texas, Oklahoma City, places like that are growing at a pretty meaningful level. With that, there's just a lot of people who wanna be able to come in and travel. What we do great is we connect them into the global marketplace, whether that is New York or Heathrow or whatever the case might be. You know, maybe to put a bit of an example on that, like, you know, take a market like New York City. New York City is a place where there's, you know, more flights a day to Paris than there are to Little Rock, Arkansas. American Airlines added the first flight from Little Rock to New York, and it was made possible through our partnership with JetBlue and the NEA. By having that, we've created opportunities for customers that they wouldn't have had before. We see yet a lot of opportunities to do that. Indeed, the results kind of speak for it. The more of that we do, the more encouraged we are that our customers value and are willing to pay for it. Thank you. Thank you. Our next question comes from the line of Kyle Arnold of Dallas News. Your line is open, Kyle Arnold. Good morning, everyone. Can you guys talk a little bit about how the blended travel trend is gonna play into the holidays, whether you're seeing more people shift into earlier in the week outside of that, you know, maybe pre-Thanksgiving Day? Is there a different kind of cadence to that in the summer versus the winter, where maybe the winter where those peak days are a little tighter? Hey, Kyle. This is Vasu. Yes, we do see a little bit of that day-of-week shift. Not only do we see it just in general, a time of day shift where people are coming out of what we'll call the peak business travel time channels and into the body of the airline day. We're seeing more growth happening on things like Wednesday evenings or Thursday mornings, places where, while there was demand, it was traditionally not as great as what it would be on a Thursday evening at 6:00 P.M. With that in mind, yeah, we are indeed anticipating that it's not just that the Thanksgiving weekend, for example, will be peak, but even the days around it will have a level of demand. In fact, if you go look at our Thanksgiving schedule right now, there's less peak-to-trough variability there than certainly I've seen in the schedule for a number of years. Hey, Kyle, I'll add, you know, Vasu's organization has our revenue management team in it. They every now and then take me through the worm charts that show us how, you know, we're booking at various points in the year. I'll tell you this, what I saw, you know, earlier this week is compared to 2019 and prior years, you know, look, the holidays are booking, you know, really well. I think that bodes well. But what I think, you know, Vasu, you also probably, you know, note is that getting a seat is, you know, something that's gonna be hard, so there's gonna be a move in terms of where people can fly just based on availability. Absolutely right. Which is a good thing in hand. In fact, Scott, is that our last question? Yeah. Is that right? Hey, I'll just close with this, which is, you know, if you can't tell, we're pleased with our results. It's been, you know, a heck of a few years in the pandemic, and it's great to be at a point where not only are we reporting a profit, you know, on a quarterly basis, but looking at, you know, into the future as well. Demand remains strong. We're very optimistic. American is really in a position of strength, taking full advantage of the recovery. It's because of the things that we've done with our network, with our partnerships, with our fleet, you know, getting the airline really situated to fly what we can do best. We are focused on reliability, and that is something that everybody in the company has top of mind. I'm really pleased with how we're performing here in October and, you know, in September and as we closed out August as well. My confidence is bolstered by a number of things. Just first, I look at the metrics that we run every day. So things like, you know, aircraft out of service at the start of the morning. We're running record all-time lows. I gotta give a shout-out to our technical operations team for having our aircraft in better shape than they've ever been in. As well as, you know, things like reserve levels for our pilots and flight attendants and just making sure things are ready to go. I feel really confident the way that we recovered post the horrific hurricanes and the flooding that was here in DFW back in August. It gives me great confidence that even when you throw enormous disruption, that we can get back on our feet really quickly. That reliability translates into profitability. Yeah, we've said it over and over again, you know, we have to be profitable in order to, you know, really, you know, serve the needs of our communities, our customers, and, you know, the shareholders of this company. We're intent on doing it, and, you know, we're gonna make sure that this airline is one that you can count on in terms of producing profits, ultimately reducing debt over time and being, you know, sustainable from a profitability perspective. We're hard at work. We're gonna get back to it as soon as we get off this call. I appreciate everybody spending time with us and thank- This concludes today's conference call. Thank you for participating. You may now disconnect.