Good day. Thank you for standing by. Welcome to the full year and fourth quarter 2022 Allegiant Travel Company earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sherry Wilson. Please go ahead. Thank you, Justin. Welcome to the Allegiant Travel Company's full year and fourth quarter 2022 earnings call. On the call with me today are John Redmond, the company's Chief Executive Officer, Greg Anderson, President, Scott DeAngelo, our EVP and Chief Marketing Officer, Drew Wells, our SVP and Chief Revenue Officer, Robert Neal, SVP and Chief Financial Officer, and a handful of others to help answer questions. We will start the call with commentary and then open it up to questions. We ask that you please limit yourself to one question and one follow-up. The company's comments today will contain forward-looking statements concerning our future performance and strategic plan. Various risk factors could cause the underlying assumptions of these statements and our actual results to differ materially from those expressed or implied by our forward-looking statements. These risk factors and others are more fully disclosed in our filings with the SEC. Any forward-looking statements are based on information available to us today. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information, or otherwise. The company cautions investors not to place undue reliance on forward-looking statements which may be based on assumptions and events that do not materialize. To view this earnings release as well as the rebroadcast of the call, feel free to visit the company's investor relations site at ir.allegiantair.com. With that, I'll turn it over to John. Thank you very much, Sherry, and good afternoon, everyone. I'd like to begin by taking a moment to thank our team members for all their efforts this past year. 2022 was yet another difficult year. The operation was hit with countless challenges from COVID spikes to hurricanes, and most recently, winter storms, but you stepped up and made sure our customers were taken care of. Your commitment to safety and service is remarkable, and I am proud of how you responded to these challenges. You likely heard the news that our COO, Scott Sheldon, has made the decision to resign to pursue other opportunities. I wanna thank Scott for his many years of service and dedication to our airline, and we wish him all the best in his future endeavors. With Scott's departure, Greg Anderson will continue to serve as president and will assume oversight of the company's operational teams. As you all know, Greg has been with the company for more than a decade. There is no better person to take on this role. He is highly respected both internally and within the industry, and I have the utmost faith he will execute on the numerous strategic initiatives we have in store this year. I'm pleased to report that despite the operational difficulties during the first half of the year, the last half of 2022 is a testament to the success of the challenges we implemented. We exited the year with a controllable completion percentage of 99.5%. Earlier this year, I noted we are a margin-focused company and with operational improvements, margins would grow. This is exactly what happened we saw during the fourth quarter. We recorded an operating margin excluding employee recognition bonus and Sunseeker special charges just shy of 16% for the quarter. We generated more than $140 million in EBITDA during the quarter. Underpinning this strong financial performance is a robust demand environment that shows no signs of slowing. Fourth quarter TRASM of just above $0.14 was the highest quarterly TRASM in company history. This helped contribute to a record-setting total revenue for 2022 of $2.3 billion. We have great momentum heading into 2023. In regards to our ongoing negotiations with our flight attendants and pilots, it is our expectation to have an agreement in principle done with our flight attendants by mid-year. To date, we have reached tentative agreements on two-thirds of open sections. The pilot negotiations are progressing as well with tentative agreements reached on about half the open sections. In an effort to expedite the bargaining process and secure an agreement in principle, the company and the union jointly requested an NMB mediation. We look forward to working collaboratively on an agreement that our pilots are proud to support while providing the company with the ability to continue to fly a safe and reliable operation and remain positioned to grow profitably. It is our expectation to have an agreement in principle done by mid-year. Touching on Sunseeker, we continue to make progress towards completion. Construction crews are back in full force. Much of the remediation work related to Hurricane Ian is now behind us. Further investigation necessitated an increase in total estimated damage related to Ian, resulting in additional special charges of $5 million in losses. We continue to believe all Hurricane Ian damage will be fully recoverable by insurance. A significant thunderstorm followed Hurricane Ian in early November prior to Ian damage being fully remediated, resulting in additional damage as well as a small elevator fire in November. Losses related to these events were recorded in the amounts of $10 million and $1.2 million, respectively. Both events are covered by insurance. Recorded losses were offset by $18 million in insurance proceeds related predominantly to Ian damages. As insurance coveries are received during the coming months, we will record these as special charges offsetting the recorded losses. We have business interruption insurance which we believe will cover the period May 26th, the pre-hurricane scheduled opening date, to the opening date of the resort. Given the delays caused by Ian and the subsequent storm, we pushed the first accepted reservation date to October 15th this year. We are still working through remediation timelines related to the recent storms. We intend to provide a firm opening date at our next earnings call in April. We have not provided any guidance in the release on Sunseeker operations due to uncertainty at this early stage on the opening date. In the Q1 2023 earnings call in April, we will provide guidance on pre-opening expenses leading up to opening the resort, revenue, EBITDA and operating income for the year 2023. We will also update final construction budget numbers and a business interruption update to the extent we have information. We also intend to extend to any of you who are interested, the opportunity to tour the resort in early May. Sherry Wilson will be happy to coordinate with you dates and times in April this year. In regards to our partnership with Viva Aerobus, we still expect all the necessary approvals will be in place, including Category one status in Mexico in the first half of this year. As you saw in the release, we are returning to providing annual guidance as we did in 2019. At the end of each quarter, we will update the annual guidance if appropriate, given the results to date and future forecasts. As a reminder, we will be segment reporting as it relates to Sunseeker in 2023. We will be comparing to 2022, and not 2019. We have progressed beyond 2019 results feel moving to prior year or 2022 is a more comparable and relevant going forward. In closing, Allegiant has a strong history of shareholder returns, I am pleased to report we bought back 377,529 shares during the fourth quarter at an average price of $78.94 a share, totaling $29.8 million. Furthermore, our board approved increasing our repurchase authority to $100 million. This authorization reaffirms the board's conviction in both future results and balance sheet strength. With that, I will turn it over to Greg. John, thank you. I echo your sentiment around wishing Scott the best of luck in his future endeavors. He and I have worked shoulder to shoulder for nearly 15 years here, which has been an amazing and fun ride. One of the best compliments I can provide Scott is the organization is in terrific hands. We have an incredibly strong team with an incredibly bright future. As announced, Keny Wilper will take on the interim COO role. Over the past 20 years, Kenny has demonstrated his strength as an operator and as an exceptional leader. Additionally, Tracy Tulle will serve as our Chief Experience Officer. Tracy has vast operations experience overseeing both flight ops and in-flight, as well as chairing our customer experience leadership team. In this new role, she will focus on improving the customer-centric experience for our team members while also helping to develop leaders internally and drive organizational alignment. I have to admit it's pretty awesome to be able to say Robert Neal is now our Chief Financial Officer and Drew Wells is our Chief Revenue Officer. BJ and Drew are both A-plus leaders, the best at what they do, and I feel no further introduction is needed given they are already well known to our investors. I look forward to working even closer with and supporting each of them in their expanded roles. While I have mentioned only a few names, the depth and breadth throughout this organization is the best and strongest it has ever been. As we look forward to the amazing opportunities in front of us, I can speak for the team when I say we are fired up in establishing Allegiant as the most exciting story in the space. While 2022 brought its own unique challenges, we achieved a lot during the past year. We added more than 900 team members, bringing our total team member count to more than 5,630. These team members enabled us to grow our fleet by 13 aircraft and fly 14% more ASMs as compared to 2019. The first half of 2022 experienced unique challenges with the Omicron spikes. This resulted in labor constraints and unplanned absences during peak leisure travel periods, which led to elevated cancellations. This operating environment had a significant financial impact of over $100 million in IROP costs, including fuel and crew costs, lost revenue, and going above and beyond by providing cash compensation to those customers impacted by canceled flights. To combat these challenges, our planning and operational teams worked closely together in refining the schedule to adjust for this environment. While this came at a cost to aircraft productivity, our operations strengthened quickly as the second half of 2022 saw meaningful improvement. Controllable completion was 99.5%, more than 2 points better than the first half of 2022 and near our industry-leading controllable completion results of 2019. I am pleased to report these much improved operational results had a positive impact on our financial results. The impact from our irregular operations in the back half of the year had a total financial impact of $30 million. This is $70 million less than the first six months of 2022. These improvements showed up in our financial report as we closed out the December quarter with a 16% adjusted op margin, and this is substantially higher than our initial adjusted operating margin guide of 8%. These impressive results were achieved despite the impact to the quarter from the winter storm over the holidays. Another important element of 2022 is the significant progress we made towards our systems transformation. In 2021, we made the decision to move from certain core proprietary software systems to best-in-class systems such as SAP, Navitaire, Trax and NAVBLUE. We remain on track to go live with the first three of these key systems in 2023. NAVBLUE should follow shortly after. Such systems have been key investments to more efficiently scale the organization. In addition, we continue to track ahead of schedule on the incorporation of our new Boeing MAX aircraft as we expect our first delivery near the end of the year. We intend to place these early MAX deliveries at our Orlando Sanford base. As John touched on, one of our highest priorities remains finalizing labor contracts that our crew members deserve. So far, we have put a great amount of effort into updating our agreements with both our flight attendant and pilot unions. It is our goal to get both of these deals across the finish line as soon as possible. While we are unsure around the exact timing of getting these deals done, we have incorporated the potential costs in the back half of the year within our 2023 guidance. Please realize that the actual increases in costs will depend on the economic terms reached and the timing of the agreements. As a reminder, although these contracts will be cost headwinds, we expect them to increase momentum towards restoring staffing levels and optimizing aircraft utilization. We are not assuming any improved productivity in our full year 2023 capacity guide. BJ will provide more full year guidance detail momentarily. We will continue our focus in strengthening the operation and are excited about what's in front of us in 2023. As we've highlighted on prior calls, we have laid the foundation for executing on these items, and our teams across the organization are making steady progress on the implementations of the new systems and other initiatives, such as labor contracts, Sunseeker, Viva and Boeing. These leadership changes announced will further support these initiatives. As we progress further into 2023 and have better vision on the completion time frames, we expect to host an investor day to more specifically outline expected contributions from these strategic initiatives. More information will follow on that front. With that, I'll turn it over to Scott DeAngelo, our Chief Marketing Officer. Thanks, Greg. Fourth quarter saw continued strong leisure travel demand for Allegiant across both web and app traffic to allegiant.com, as well as passenger segments booked, capping off a record-setting year for Allegiant on both measures. Surging awareness and preference for the Allegiant brand, along with our direct-to-consumer distribution approach, continues to give us an advantage in capturing demand by being able to satisfy the two most important buying factors for leisure travelers: low fares and nonstop flights. For full year 2022, 136 million web users came to allegiant.com, up 24% from 2019. Notably, despite the fact that new route growth was limited, excuse me, new web users to allegiant.com were up by nearly 40% from 2019. Why? As I referenced the past two quarters, our addressable customer audience continues to grow as more new customers enter the ULCC category and consider Allegiant for their leisure travel needs. They're seeking relief from sky-high fares and looking to avoid the risk, inconvenience, and time associated with connecting flights through crowded airport hubs. What's more, 77% of our allegiant.com users came via our most direct and lowest cost channels. That's direct URL, our app, email marketing, or organic search. That's up 37% from 2019. It means we're relying less and less on paid advertising as awareness of and preference for the Allegiant brand continues to grow in a scalable fashion based on our fixed investments like Allegiant Stadium and our Live Nation partnership, as well as our Allways Rewards loyalty programs, both co-brand credit card and non-card. We continue to outperform expectations with our co-brand card program, ending the year with more than 400,000 active cardholders and more than 150,000 new cardholders acquired in 2022. That's more than 40% higher than we had acquired the previous highest year, which was 2021. As a result, the co-brand card program drove total compensation of more than $100 million in 2022. In addition, our non-card loyalty program, Allways Rewards, added 2 million new members last year and now totals 15 million members. In 2022, 3.2 million customers, nearly 70% of our total unique transacting customers, were active members of the Allways Rewards program. On average, they exhibited 39% greater booking frequency than non-members and an average spend per booking that was 36% higher than non-members. This less than average spend was driven by higher take rates in air ancillary products, as well as higher attachment of third-party products like hotel and rental car. This customer behavior reinforces the continued opportunity that Allegiant has to sell beyond the aircraft in order to achieve greater revenue per passenger growth that can outpace and is not constrained solely by capacity growth. In terms of our customer makeup, Allegiant saw an elite subset of Allways Rewards members and cardholders. Just over half a million customers, which is about 15% of our total unique transacting customers for the year, fly three or more times with us and drive roughly 60% of both total passenger segments booked and total revenue for the year. In the past week, we surveyed a representative sample with more than 3,000 respondents from this group of frequent flyers to understand why they traveled with us and what their future in travel intention was. The news keeps getting better for Allegiant. Of these Allegiant frequent flyers, nearly 80% travel for leisure only, and nearly 20% travel for leisure, both business and leisure. More than 40% said they stayed with family or friends, and nearly 40% said they stayed at their second or vacation home. That means around 80% fall into types of travel that are the most resilient during negative economic climates. To validate this, we asked these customers the extent to which they expected their travel plans with Allegiant to be impacted given the prospect of worsening economic conditions. Here's what they told us. Basically, half said that economic considerations would have no impact on their flying behavior with Allegiant in the next 12 months, and nearly one-quarter said that they would be more likely to fly with Allegiant in the next 12 months. It's common for many to think that ULCCs have an infrequent and transitory customer base, but that's not the case for Allegiant. We have a core base of loyal frequent flyers who drive a majority of our revenue, while at the same time, we continue to add new customers that are defecting from other airlines, namely Southwest and Legacy carriers, to our customer base in record numbers. In looking forward at forward-looking searches for travel at allegiant.com, searches for our all-important travel season during spring break and summer are up by 40%-75% versus last year, which, as we all know, was a historic high year for bookings and revenue. Put simply and in conclusion, Allegiant has a trifecta when it comes to our balanced customer base. We have a solid core of frequent flyers who show no signs of retracting their travel behavior with us in the upcoming year, regardless of the economic climate. At the same time, we are also showing lift across all existing repeat customers that are members of our loyalty programs. We're seeing a continued surge in new customers that are coming to Allegiant in record numbers from other airlines because they're seeking low fares and nonstop flights, along with our strong and growing assortment of asset-light, high-margin third-party leisure products that we make available at allegiant.com. Put another way, all of these customer segments are seeking to live what we at Allegiant refer to as the nonstop life. With that, I'll turn it over to Drew Wells, our Chief Revenue Officer. Thank you, Scott, and thanks to everyone for joining us this afternoon. I'm extremely pleased to close out the year with a record $2.3 billion in total revenue, easily the best number in company history and 25% higher than the previous best in 2019. When accounting for seasonality, nearly all metrics improved sequentially through the year to produce the record result. While we remained flexible through a lot of the year to find the right capacity levels, the teams continued to optimize incredibly well within shifting constraints to produce great results. The fourth quarter had the most stability throughout the year, and our results reflect that. Fourth quarter revenue came in nicely above the range at $612 million and 32.6% above the fourth quarter of 2019, despite ASMs ending approximately 2.5 points lower at the system level and three points lower for scheduled service. We did take a benefit of approximately $9.6 million associated with updated guidance on breakage factors for the co-branded credit card and the initial guidance for the Allways Rewards program. Even excluding that benefit, the divergence between revenue and ASMs produced an all-time best TRASM of just under $0.14 and nearly 20% higher than 4Q 2019. The yield performance in the quarter was the major upside catalyst, particularly in December. The roughly 75% sequential improvement exceeded our expectations and drove almost 6.5 points of upside to the quarter. Total ancillary per passenger exceeded $70 for the first time at the quarter level, and total revenue per passenger of 151 was also an all-time high. On the weather disruption front, Winter Storm Elliott saw revenue loss of $8 million and nearly two points of lost capacity. The close in demand, some of which was rebooking of impacted customers and some incremental, was exceptional around the holidays to round out the year. While the rest of Florida bounced back quickly from Hurricane Ian, Punta Gorda did see continued softness through the quarter and was a headwind of just under the expected three points. The impact should temper a bit into the first quarter, but we still expect a roughly 1.5 point headwind to total revenue as the region continues to recover. In November, we opened our 24th aircraft crew and maintenance base in Provo, Utah. Since our entry to the market in 2013, we've been the low-cost option for Provo and the surrounding areas. We begin serving our 13th route, Nashville, on February 15th, which is coincidentally our 10-year anniversary in the city. As we turn toward the new year, we have a somewhat different than usual story. Our midpoint year-over-year ASM growth rate of 4% would be lower than any full year other than 2011. First and foremost, continuing the successes of the second half of 2022 and ensuring a stable and solid operation is paramount to 2023. Second, our EPS guide includes a continued elevated fuel cost per gallon, which will temper the amount of off-peak growth as we continue to balance fuel and demand in non-peak periods. 1st quarter growth will be close to 1% year-over-year. The 2nd and 3rd quarters should be a bit higher than the 1st before a high single 4th quarter growth rate. Perhaps worth reminding that the 1st quarter is still slated to be 20% larger than the 1st quarter of 2019. The Omicron real comparison of 1Q22, coupled with a continued robust demand environment and low growth rate should provide some runway for great unit revenue metrics. I'm expecting year-over-year TRASM growth in the mid-20% for the 1st quarter, and I'm extremely encouraged by the peak spring break outlook. Load factors are higher, and the discrepancy between the search volume Scott DeAngelo mentioned and available inventory bodes well for yield results. Through the rest of the year, we are not contemplating material changes broadly to the economy. While we read and hear the same headlines, we've not seen any booking impact from our leisure customer base and have forecasted as such. Additionally, the network will be the most mature of any time in Allegiant history in terms of markets in our first twelve months. Approximately only 4% of the on-sale schedule for the first half of 2023 is in that maturing window. We should also see the rollout of our Navitaire commercial platform and the expansion of our Allegiant Extra program, both providing air ancillary tailwinds weighted more heavily to the second half of the year. Collectively, this leads to expect unit revenues in the positive mid-single digit% range over the last nine months as we hit more reasonable and challenging comps. There are significant catalysts for Allegiant's revenue capabilities through 2023 and beyond. We are setting an incredible foundation for us to continue to capitalize on what remains a truly remarkable leisure demand environment. With that, I'd like to turn it over to BJ. Thanks, Drew. Thank you to everyone on the call for joining us today. This afternoon we reported fourth quarter net income of $52.5 million. Adjusting to exclude the 2022 employee recognition bonus, special charges related to Sunseeker, earnings per share was $3.17 in the quarter, well above our initial guide. Catalyst behind the strength of our fourth quarter results included, of course, the sustained strong demand environment, operational improvements which brought decreased irregular ops costs, a more favorable fuel cost than we had anticipated, and a better than expected non-fuel cost performance. Fourth quarter unit cost excluding fuel, employee recognition bonus, and the Sunseeker special charge was $0.0756, up 12.2% as compared with the fourth quarter of 2019 on 10.9% more ASM capacity. The cost increase as compared to fourth quarter 2019 was primarily comprised of 5.5 points for reduced aircraft utilization, 3.8 points in labor productivity, and 1.5 points related to Winter Storm Elliott. As you're seeing in our release, we will temper capacity growth in 2023 to ensure that operational integrity is prioritized. Even with this reduced capacity, we are forecasting full year airline-only earnings per share of approximately $7 on an assumed average fuel cost of $3.60 per gallon and increased labor cost assumptions related to pilot and flight attendant contracts, which for our guidance purposes would begin mid-year. With respect to Sunseeker, we expect to record our normal quarterly operating expense run rate of roughly $5 million-$7 million in each of the first two quarters of the year. We are not prepared today to guide full year pre-opening expenses or operating income associated with the property until we have a firm opening date on our next earnings call. Turning to CapEx, we expect total CapEx for the airline in 2023 to be roughly $700 million, comprised of roughly $560 million related to aircraft, engine, PDPs, and induction costs, and the remaining $140 million coming from other airline CapEx. We expect deferred heavy maintenance costs similar to levels observed in 2022 or roughly $55 million. We expect to receive two 737 MAX 8-200 aircraft during late 4Q 2023. While it's certainly possible for these aircraft to be in service by year-end, we are planning conservatively for operational requirements of onboarding a new fleet type at the end of the year and have chosen not to plan ASM capacity for these aircraft until the early weeks of 2024. We remain in discussions with Boeing to finalize our 2024 delivery schedule. We can share that directionally we're planning to take roughly two aircraft per month throughout next year based on what we know today. For 2023, we plan to induct 7 A320 aircraft into the operating fleet throughout the year, two of which have already entered revenue service in January and three of which were owned and on property at the end of 2022. We expect the bulk of our CapEx spend during 2023 to be debt financed and have been pleased with the level of financing support and attractive terms proposed to us thus far. Although 2023 will be a heavy CapEx year for Allegiant, we plan to maintain total available liquidity of roughly 2x our ATL balance and expect to end the year with roughly $1 billion in cash and investments. In closing, I'd like to add my thanks to our more than 5,600 team members for their incredible efforts during 2022. After a very challenging first half of the year, the team came together in the back half to deliver results which reduced the financial impact of irregular operations by over 70% as compared to the first two quarters. We're extremely proud of how the team turned the story around, particularly in the fourth quarter, and excited about the momentum we have stepping into 2023. With that, thank you, Justin. We can begin taking analyst questions. Thank you very much. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. We ask that you please limit yourself to one question and one follow-up. One moment for our first question. Our first question comes from Catherine O'Brien from Goldman Sachs. Your line is now open. Hey, good afternoon, everyone. Great to be back. I just wanted to think about some of the puts and takes of costs this year. You know, trying to think about what the impact adding the flight attendant and pilot contract for half a year and then filling capacity growth will mean. I think the last time we talked about cost was, you know, kind of flattish on high single-digit growth ex labor contracts. Just trying to think about the walk from there underlying your current EPS guidance. Thanks so much. Hey, Catie. It's great to hear you. This is Greg. Why don't I kick it off here? Just on your point. As BJ mentioned, beginning in the back half of the year, so July 1st, we've incorporated labor deals, both CBA deals for our pilots and flight attendants. For a half year basis, what I would expect this to be about a third of a cent of CASM hit for a half year, again, basis. In terms of some of the other puts and takes, you know, IROPS, I think that'd be a tailwind, so call it about two to three points year-over-year on the IROPS side. We'll see there. A slight headwind in inflation. The D&A, I think there's gonna be a slight headwind there from about one or 2 two points based on lower productivity. I mean, you called out the ASMs being lower than what, you know, maybe we are anticipating at that 10%. I think that's worth roughly four points to year-over-year. You know, the other thing that's probably just worth mentioning is the bonus. This year, I'm sorry, last year in 2022, we carved out that recognition bonus, but this year that'll in 2023, that'll be included in, so that too will be a headwind. Really, if you kind of compare those two year-over-year, I think they kind of wash each other out. You know, I'll pause there. Obviously, we're not giving formal guidance. See if anyone else wants to add anything or if that helped answer some of your questions there, Catie. Yeah, that was great. Unless any, unless there was anything else to add, I do have a follow-up. you know, this might be front running some of the initiatives you're going to talk about Investor Day, but now you've hit a new record on ancillary per passenger over $70. Should we think about growth from here being a little bit more tempered going forward? Like, have you hit a lot of the low-hanging fruit or, you know, some of the new levers that get unlocked with Navitaire, you think there's upside to that? Just kind of like, you know, I don't know, blue sky, like next couple years type number, if you have it. Thank you so much. Thanks, Catie. Glad to have you back. I do think that there are, you know, more step-ups to come. We have not yet rolled out Navitaire. That'll come likely in the second quarter. I would expect a little bit of a tapering as that kind of builds into what it could become. You know, additionally, we talked about Allegiant Extra. There are only seven tails in that LOPA at the end of 2022. We'll be up to 14 by the end of 2023. A lot of these things will be back half loaded, but really, you know, fully pronounced as 2024 stories. You know, we will certainly get into those more as an Investor Day in terms of valuation and whatnot. Don't know if you'd like to add any more. Yeah, no. I would say that, you know, even still to this day, as we think about our bundled ancillary, which has been a big driver of people being able to not just buy à la carte, but have that fuller ancillary, we are still at levels of penetration that we think have plenty of room for upside. Last but not least, you know, as we just continue to leverage the technology foundation that Greg mentioned would be going in to create just a better user interface and user experience, we think there's, you know, small but material gains along the way, as we make it easier to merchandise, and easier for our customers to add these things to their cart. Thanks so much, everyone. Thanks, Catie. Thank you. One moment for our next question. Our next question comes from Daniel McKenzie from Seaport Global. Your line is now open. Oh, hey. Good afternoon, guys. Congrats to Drew and BJ. I've got a few questions here. I guess first, you know, just RASM up mid-single digits, second quarter through fourth quarter. You know, obviously that's pretty strong. I'm just wondering if you can elaborate on that a bit. You know, how big is the benefit that you just spoke to Navitaire and the, I guess, the extra comfort. Is there, you know, more from Navitaire that can help drive that? I guess secondly, related to that, if there is a mild recession, you know, to what extent would that potentially change the forecast? Yeah. Thanks, Dan. Yeah, maybe I have a slightly different perspective. You know, I didn't view mid-single digits positive as overly aggressive given kind of the growth cadence we have in place. You know, it's been a long time since we had you know, a series of quarters in the low to mid-single digits, and historically, we've had some really strong unit revenues along with that. If you remember back to last summer, we did have to pull out a material amount of our capacity. We actioned in April and took out 15%-20% of our summer ASMs, which did, you know, contribute some thrash as we think about final results, and I think that will, you know, be able to buoy, you know, this year a little bit more. Navitaire coming online will certainly support. Like I mentioned, we'll get into a bit more in terms of valuation and whatnot through Investor Day, but that will provide a little bit of upside there. All in all, I do think it's a reasonable. A reasonable unit revenue target and not something significantly aggressive. Hey, Drew, this is Greg. I might add, Dan, just some other puts or items to think about. Last year, you know, we talked about IROPS already in our opening remarks, $100 million full year, right? You know, a big chunk of that is lost revenue. That's gonna be a helpful comp year-over-year on these unit revenue numbers. The growth, although it's limited, that Drew's looking at, it's measured, it's de-risked. It's in markets that already exist today, so we're not going out and trying to add new markets. There's already a maturation there. The other thing, maybe just to your point or about potential recession is, you know, our utilization per aircraft going into this year is low, 6.2 hours, right? In 2019, by way of comparison, it was eight hours. We already have the lower utilization, and our model is built to flex in those peak periods to capture that demand. I think we're just very well positioned in the event we do see a slowdown. Yeah, I think if we look at, you know, the next couple of quarters, you know, only 20%-25% of our capacity will likely be on an off-peak day of week, kind of going off what Greg was mentioning. We're very well aligned with where the leisure customer wants to travel already, well positioned for that. And we know that the leisure customer is incredibly resilient. We'll see what that means for fare, kind of broadly across the industry in the event that that happens. The leisure customer is still able to be stimulated to travel, just finding that right price point to get there. On the inflation front, I mean, we have great visibility on the first half of the year, for sure the first quarter. To the extent there is any, you know, modest inflationary pressures, we just don't feel it or see it, but it's gonna be back-ended in the year to the extent there is anything. Wow. That's great perspective. Thanks. If I can get a second question in here, I guess, BJ, I'm already getting inbound on negative free cash flow this year. It's a solid outlook to be sure. I'm just wondering if you can speak to that and if the plan is to use cash on the balance sheet, potentially equity or additional debt, if we could potentially just take that worry off the table. Yeah. Thanks, Dan. Most of the CapEx this year is debt financed. Greg, I don't know if you wanna talk to specific numbers here. You know, we can If you think about where the CapEx is and just use sort of like rough historical LTVs, we can bring in north of $450 million in new debt. That's, you know, at our discretion as we navigate throughout the year. Then there's between $150-$200 in principal payments. The thing I'd mention is we have line of sight to really fantastic terms on attractive financing for all of the CapEx coming in. As you know, Sunseeker is already financed at an interest rate that's in the money now, something that we're really pleased with. On the aircraft, the appraisal values are up, I think, three and a half million dollars since we placed our order at the end of 2021, which just gives us a great ability to go out and raise financing and draw a lot of interest, for supporting those airplanes. Wow. Okay. That's great. That's great. Oh, hey, this is Dan. Oh, okay. This is Greg. Yeah. I was just gonna add two things just to BJ's point, maybe just to crystallize here. That's, you know, while we are gonna add leverage, if you just take the midpoint of our guide for 2023, that gives you about $500 million in EBITDA. If you take the net leverage, so I think BJ said we'll end the year with $1 billion in cash, and you kind of take the waterfall of debt, that gets you $2.5 billion in debt, net debt, you know, $1.5. Pre-terms net leverage, still comfortable. This is a time when we're investing back in the company. We're investing in assets that are yet to be revenue producing. We're doing it with a strong credit. When we get on the other side of this, 2024 and beyond, you're gonna see, you know, that delever pretty quickly, is our expectation. That's perfect. Yeah. Thanks so much, you guys. That's perfect. Thank you. One moment for our next question. Our next question comes from Helane Becker from Cowen Securities. Your line is now open. Thanks very much, operator. Hi, everybody, and thank you, of course, for the time. Two questions. One is, as you think about your ASM growth being so low single digits this year, how are you thinking about where to prioritize the growth? Are you In other words, is it new markets? Is it increased service in existing markets? How should we think about that? Sure. Thanks, Helane. It's not a lot of new markets. You know, for the first half of the year, only about 4% of our ASMs will come from markets in their first 12 months. Within that, We have a few new markets starting here in the first quarter, and that's, then that's about it. It's pretty minimal. I'd focus more on the restoration of a little bit of that frequency, you know, depth where we can get it. You know, when we're talking 1% in the first quarter and a small step up, there's not a ton beyond that. Okay. That's helpful, actually. Thank you. My follow-up question is, as you're thinking about the resort, Sunseeker, Punta Gorda, the region and so on, you know, climate has been an increasing issue for a lot of companies, and obviously, it was a big issue last year for you guys. How are you thinking about hurricane seasons going forward and the hurricane season this year? Maybe it's how do you protect the resort from hits like this in the future? Hi, Helane. This is John. You know, I'm stating the obvious when I say hurricanes have been around in Florida forever. And the state has reacted to those, you know, over time by changing building codes, by doing a lot of things with technology that allowed buildings to be built differently and operations to be run differently. When you take the resort, we thought about that when we were designing it. Frankly, a lot of you probably didn't understand when we were first chatting about it, but we built the resort 16 feet above the mean high tide line. We wouldn't have had any damage, but for falling cranes. If you look at the worst hurricane, a lot of people are referring to that's happened in the state of Florida. Put another way, if the resort was done and if the type of storm surge that hit Fort Myers hit where the resort is, it would have gone underneath the building and out the other end. We wouldn't have had any damage. We're the only resort in the entire state of Florida that's built like that to be able to withstand it. Also we're built to Category Five standards. I think that's how we reacted to what we've seen in the state of Florida, I'm sure that's how others have reacted in whether they're building office buildings or anything else, they're building them differently. I'm sure homeowners will build differently going forward as well after seeing what happened down in Fort Myers. We like where. We have obviously love what we did. We're positioned fantastic going forward to weather any kind of a storm in Florida. I guess this was a test to that, you know, again, but for these hurricanes falling down on the building, we wouldn't have an issue. It's also worth pointing out the last major hurricane that hit Southwest Florida like that was Charlie in 2004. It's not like these are annual events. They might be annual to a certain extent somewhere in the state, but not always in the exact same region. You went from 2004 to 2022, you know, before you had the next major one. That one, which was the worst, would not have hurt us at all if we were completed. You're done. Okay. All right. Actually, thank you. That's actually very helpful. I appreciate the color. You're welcome. Thank you. One moment for our next question. Our next question comes from Brandon Oglenski from Barclays. Your line is now open. Yeah. Good evening, and thanks for taking the question. Congrats on all the promotions. John, I guess, you know, as you look at 2023, you have had some leadership changes. You know, you're pulling back growth, as noted in the earlier remarks, you know, the lowest since I think 2011. How do you put this in context? Like, what are the strategic priorities for the organization this year? Is it preparing for the MAX? Is it, you know, really getting Sunseeker up? What, what do you want investors to take away from this year? I mean, you're hitting on them, a couple of them right there. You know, Greg touched on it a little bit, but we've been starting in 2021. We started it in 2022, significantly invested in it, which was all of our plumbing and electrical, all the back end, if you will. We've been spending significant sums of money to make sure that we're at the leading edge of technology in all of our systems. By the end of 2023, we will be at that leading edge with everything and all of them turned on and operating. All the system investments, Greg touched on SAP, Trax, Navitaire, NAVBLUE, you know, that's a heavy lift. You look at in 2022, for instance, we spent in the neighborhood about $50 million alone on all the technology upgrades, if you will. That's a big initiative which allows us to do everything from Viva, that relationship to obviously operate and yield what we're doing in a much better format. The Viva relationship is very strategic for us. We had to fix some of the technology in order to accommodate that. We raced to do that, and we're in great shape to do that. Now we're just waiting on all the regulatory approvals. Boeing and the MAX, I mean, that's well understood. We know it's back-end driven, Q4 really driven. There's a lot of work that has to be done leading up to the, you know, receipt of any plane. That's all being done. We like where we're at. I mean, the resort is an obvious one. We've been working in that for some time. We've actually had delays that have been longer than what it would have taken to build it. Obviously, it had nothing to do with anything we did, but we were scheduled to open that in 2021. All of these are major initiatives that are driving major CapEx in the last, you know, 1.5 to 2 years that we're not gonna see any re-revenue benefit from until the back end of this year. BJ and Greg touched on that. We are in great shape with all these initiatives. The team has done a great job. We have a lot of people focused on it. They're working, you know, burning the midnight oil, as they say. We like where we stand. We're not falling behind on anything, and we're well-positioned to be able to absorb all of this significant growth that the company's taken on with all these new opportunities. John, if I might add, and you hit on this in your opening remarks, and Brandon, maybe it's already stating the obvious, but, you know, the airline's at the heart of everything we do. Operational integrity, as I hope you heard in the opening remarks, number one, too. That's top priority. As John mentioned, you know, getting a deal for our crew members, our flight attendants and pilots is at the highest priority. Our Executive Chairman, Maury Gallagher, continues to spend time or has been spending time trying to make sure we continue to move and advance this ball and get a deal done with our crew members as soon as possible. I know that probably went without saying, but in all of that too is a very high priority for us as we think about 2023. Well, it's very much worth reiterating, that's for sure. John and Greg, I appreciate that. I guess specific to the growth this year, because you had been planning for more, and I think, Drew, you spoke to this a little bit, but is this really demand related, cost related, or operational integrity? What are the constraints right now? Is it really pilot availability that's constraining your ability to grow, or is this commercial as well? The demand environment is still extraordinarily robust, so that is not a concern. You know, we're generally scheduling up to our first operational constraint in many months. That's going to be our pilot headcount. In others, it might be the number of available tails we have given our heavy maintenance lines, and how we try to structure that with some peaks and valleys. That's primarily the driver. As we get into the back half of the year, in preparation for the first MAX deliveries, we will have to start pulling some crew members off the line to begin training in order to be ready to fly those as early as possible. We'll run into a little bit more of that being, kind of the constraint as we get later into the year. Drew, sorry, I might add, the team's going to tease me here, Brandon, because I use this term that we're spring coiled and ready to go. You know, as you, as you alluded to in your comment is that we plan for a larger organization, so there's some pacing items, crew constraints being one. When those loosen up, if you will, I mean, we're spring coiled and ready to go. The infrastructure is going to be able to support that, and that's how we're viewing it long term. We're excited about that and we're working towards that. You may see next year or in 25, you know, maybe higher growth than normal, like if you were to compare it to aircraft count, because the idea is you have the potential to take utilization up. We're flying 6.2, 6.3 hours, per aircraft per day in 2023. If you take that up 1 hour, you know that's going to obviously, improve, capacity as well. Just want to make sure we mention that also. Thank you both. Thank you. In the interest of time, we ask that you please limit yourself to one question. Again, in the interest of time, we please ask that you limit yourself to one question. One moment for our next question. Our next question comes from Duane Pfennigwerth from Evercore. Your line is now open. Hey, thanks. I don't know if the one question was just meant for me, but I'll respect it. On the 4Q revenue outcome, you touched on the breakage. I guess if you could go into a little bit more detail on what were the drivers of the upside and on base fares in particular, any particular markets. I think the pattern we've seen the last couple of quarters is that there was kind of an inability or constraints to flex up in these peak demand periods, and that was kind of holding you back. Is there something that has changed or something you're doing differently that is helping you kind of flex back up in the peaks again, unlike, you know, the last, you know, two or three quarters? Hey, Duane, I don't know that that's, you know, necessarily true. I mean, some of our best performance before the holidays was in the summer and what we were able to do on a yield basis. It certainly wasn't to this extent. I think there's a little bit of a difference, and there always has been in terms of the holidays and spring break versus summer, where you have this very tight window in which travel occurs, right? Thanksgiving is very heavily concentrated around the holiday. Same with Christmas and New Year's versus a much kind of longer and drawn out summer that's good, but it's kind of this spread drawn out good. We, we were really able to capitalize well on that very concentrated window of demand, probably in a way that you're at least I felt we were not able to at the same level in the summer. The off-peak stuff still looked good. October was healthy as well. There, there's not necessarily any individual piece to call out. It, it all looks good with maybe some slight outperformance in the holidays, like I mentioned, tight windows. Sorry, I'm going to contradict myself. On the guidance, is that just airline EPS or is that consolidated EPS guidance? Yes, airline EPS. Okay. Thank you, guys. Thanks, Duane. Thanks, Duane. Thank you. One moment for our next question. Our next question comes from Michael Linenberg from Deutsche Bank. Your line is now open. Hey, good afternoon. Hey, congrats to the team on the promotions. Yeah, no, I just one here. I guess, Scott DeAngelo, you called out, you talked about, you know, the loyalty of your customer base, and you provided some qualifiers around it. I thought it was interesting that, you know, you called out Southwest and other airlines of where you were, you know, getting passengers or picking up new customers. Is, is the Southwest mention, is it because of the overlap that you have with them, or more recently, are you actually seeing meaningful traction in the markets where, you know, you may compete head to head or just in their backyard? Thanks, Michael, for the question. It is more the former. We've tended to overlap with them the most. When you ask our customers, who did you last or most recently fly with? About 1/3 of the time that answer is gonna be Southwest. The other carriers, even though it's convenient, I know, for the market to classify us alongside other ULCCs, the reality is we don't have much overlap there. The next three airlines that are answered when asked, who did you last or most recently fly with? Are always Delta, American, and United in that order, with obviously many of our customers actually flying the regional arms, but identifying with, right, the overall brand of those airlines. It was meant simply to show that in this environment, even if there was some type of recession, I would just ask the market to, in as much as there was any contraction at any point in leisure travel, also look at the slice of pie that is ULCC because our data would indicate that even if the overall pie were to shrink, our slice of that pie would continue to grow as customers of whether it's Southwest or other network carriers are increasingly buying down and/or coming into the ULCC category, to be given our brand of nonstop travel. Hopefully that's helpful in providing some color there. Well, Scott, on the survey, when they give you the airline, what is the number one reason? Is it because of fares or is it because they had a lousy experience? I'm just, I'm curious. Oh, yeah, no, great. It's usually nonstop flight and fares. And those can go one to two, but those are far and away the top two. Schedule is the 3rd one, but it's usually, you know, way down and then preferred airport, you know, everything else, you know, ties for, you know, 4th and beyond. But we haven't seen that there's just a swell given just one bad experience, but we undoubtedly know that, right, overall disruptions, you know, especially when it involves connecting flights, will draw someone now to look for nonstop flights. As you all know, all of our flights are nonstop. That's really the key driver, I think. In times of disruption, whether it's weather, whether it's just irregular operations over the summer, over the winter, it happens to every airline. If there's one thing we know, it's one thing to potentially get canceled, delay in your origin or your destination. There is nothing worse than getting stuck in the middle, and that's what we're seeing a lot of customers react to and be drawn in by an airline that only flies nonstop. Thanks, Scott. You bet. Thank you. Thank you. One moment for our next question. Our next question comes from Andrew Didora from Bank of America. Your line is now open. Hey, good afternoon, everyone. Just a question on the CapEx, right? I think last call you set a floor of like $500 million on CapEx. I guess at the time I never thought it could be, you know, north of the $700 million you just guided to. I guess, you know, one, what are the big buckets of CapEx kind of that are coming in this year ahead of plan, particularly on the non-aircraft side? When, you know, when you think about, you know, the CapEx, and I know you can finance a lot of this, how do you think about minimum liquidity going forward? Because I would think with the MAXs pushed out to 2024 deliveries, CapEx will be pretty high next year as well. Hey, Andrew. It's Greg. I'm gonna kick it off real quick, BJ will walk through a little bit more detail, just 'cause I think I'm the one that threw out that floor of $500 million of CapEx next year. Really it was there was a lot of uncertainty around the timing of the Boeing aircraft being delivered in 2024 and PDPs. We wanted to throw that out of the floor that it would be no less than. We've had more time to work through that and understand the timing, which is now why we're updating you with those numbers. With that, BJ. Andrew, just on that same point, I mean, if you think about a large portion of the aircraft are paid for in the calendar year prior to delivery. With so many aircraft moving into 2024, you've got a lot of CapEx going out for PDPs this year. I think that's actually our largest CapEx commitment this year is pre-delivery deposits. You have the two aircraft delivering from Boeing in the fourth quarter of this year. Remember, we also slid four placeholder aircraft from 2022 into 2023. A lot of this CapEx was sliding from 2022 to 2023 and then paying PDPs for 2024 and 2023. Liquidity, I think BJ mentioned it in his opening comments, two times, roughly two times ATL. Right now ATL is running about $400 million. I think total liquidity would be around $1 billion is what we're targeting for the year to end it. Is that fair? Yeah. Maybe just mention that our revolver facilities are undrawn today, which are $225 million. The better part of our $200 million PDP financing facility is undrawn as well. We'll be using those as necessary throughout the year. Understood. Just, what are the big buckets of the non-aircraft CapEx? It's, you know, I think it's about $135 million in total non-aircraft. $60 million-$70 million of that's gonna be that IT investment that we were talking about. You have some sims and simulators that we're gonna be acquiring to start taking delivery of the Boeing aircraft or fleet. Then, the remaining would be just your normal kind of standard CapEx, maintenance CapEx, such as parts, tools, things like that. Got it. Thank you. Thank you. One moment for our next question. Our next question comes from Savanthi Syth from Raymond James. Your line is now open. Hey, good afternoon, everyone. just on the, kind of the pilot and flight attendant side and also on the pilot side, what have you seen in terms of. Attrition levels or kind of being able to staff that well. I'm just kind of curious with, you know, if you're only getting a deal by mid-year, that means as you head into the summer, you will be kind of having a headwind versus a lot of other airlines that have increased pay deals. I just am curious on what you're expecting there and what you're seeing there. Hey, Savi, it's Greg. Why don't I give this one a stab? You know, what I would just say and the big takeaway is that I think as we plan the schedule for 2023, we've taken a very conservative approach in terms of attrition and onboarding and making sure that we have the available resources and crews to support those peak flying seasons, such as March and the summer. Just to put some more color around that, for the full year 2023, we're expecting about a 25% system attrition on the pilot side. To put perspective in that, in 2022 it was 17%. The last three months, however, it's been roughly 20%. Again, the point being, we're expecting higher, or we're planning and scheduling for it to be higher than what we've seen historically or at least in the past, three months and past year. In terms of the schoolhouse and our ability to attract and bring on pilots, I think just to give some perspective there, we're every class we're anticipating around 12 new hires or pilots. We had two classes in January. There was 30 pilots in that class. All in all, just to bring this together, I think we're expecting roughly 2 to 250 new pilots to join Allegiant during 2023. Really excited about, you know, what Tyler Hollingsworth and Rod Hardesty. Rod's our Chief Pilot, Tyler's our VP of flight ops. You know, they're also out there on the recruiting front and putting in additional pathway programs. I think there's five creative pathway programs today. They're taking that to eight. We're really doing the taking the appropriate steps, I think, to ensure, you know, kind of protect and control our destiny. But we're planning for kind of the we're planning for a down case scenario. So far, we feel good about that plan. All right. Thank you. Thank you. I show no further questions. I would now like to turn the call back over to John Redmond for closing remarks. We appreciate everyone's time and questions. All great questions. You can see why we're excited about 2023 and the out years. Greg uses the term spring coil, as you mentioned, for 2024. We wouldn't be in that position but for the investments in 2021 and 2022. We're jazzed. Of course, those investments, as we touched on, are not only all the IT infrastructure, et cetera, that we're doing, but all the, you know, the employee investments, everything from pilots, flight attendants, everything else we're doing. It's a heavy CapEx lift, but it's needed and required in order to take on the growth that we're doing going forward. Stay tuned. 2023 is gonna be amazing, but 2024 will be really something else. Thank you, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect. Great job, everyone.