Good day. Thank you for standing by. Welcome to the Q1 2023 Allegiant Travel Company Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during that session, you will need to press star one one on your phone. You will hear an automated message advising your hand is raised. To withdraw your question, please 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, Ms. Sherry Wilson. Ms. Wilson, please go ahead. Thank you, Chris. Welcome to the Allegiant Travel Company's First Quarter 2023 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. Well, thank you very much, Sherry. Good afternoon, everyone. We've hit the ground running in 2023 in continued operational strength leading to financial results. We reported earnings per share of $3.09, which compares favorably to our initial expectation and provides us confidence to raise the midpoint of our full-year EPS guidance to roughly $9.75 a share. The leisure customer range remains exceptionally strong, as evidenced by total revenue growth of 29% as compared to Q1 prior year, coupled with recent company history best Q1 load factors approaching 86%. These results exceeded expectations and were underpinned by a stellar operational performance with an impressive controllable completion during the quarter of 99.9%. We delivered this operational performance while growing departures 2.3% on a load factor of 85.8% during the quarter. More than 4.1 million guests traveled on our airline, helping fuel a record quarter for Allways credit card acquisitions of 46,000 cardholders as we ended the quarter with 435,000 active cardholders. A key focus of this management team is improving the experience of our guests and the strengthening of our brand. This is a critical tool for us in expanding our powerful customer database of 16.5 million customers, which is growing on average by 225,000 per month. The continued demand of our product by our customers is key to us to support the 1,400 incremental routes of airline growth our team has identified. Being the employer of choice for our team members is one of our top priorities. We strive to make a positive impact on our employees. Thus, I was very pleased to see Allegiant named one of Forbes America's Best Midsize Employers for 2023 and Newsweek's America's Greatest Workplaces for Diversity in 2023. In addition, prioritizing our team members also includes reaching collective bargaining agreements with our flight attendants and pilots. Getting these respective deals done is number one on my priority list. I remain optimistic about reaching agreements with these team members that these team members deserve and are proud to support. Great progress has been made with both CBAs, and we would expect these to be finalized in the not-too-distant future. Turning to Sunseeker Resort Charlotte Harbor, I'm pleased to report we are currently on track for official opening date of October 16th. The Sunseeker team and construction crews have been working around the clock and the remediation work related to hurricane and other events is just about finalized. As we work through construction delays and repair work related to the hurricane, we have clear line of sight to a final budget. We've updated the capital expenditure budget, which is inclusive of the Aileron Golf Club, including both the golf course renovation and construction of a new clubhouse and entry gate to $695 million. We are well outside of the normal hotel booking curve, yet we remain encouraged by early booking indicators. To date, we have booked roughly 2,000 transient room nights at an ADR of $407 with minimal advertising effort. More importantly, the ADR has been accelerating over the last two months, coming in at $540 and $460 for business booked in the months of March and April, respectively. In addition, we have over 6 million Sunseeker Resort emails and expect the number to grow to closer to 7 million emails by opening date. We continue to attract high-quality group bookings as well, with over 40 different groups currently contracted for rooms, food, and beverage totaling $12.7 million. There are another four groups we are in advanced conversations with on 3,000 rooms and $1.9 million in rooms, food, and beverage. Last month, we unveiled 20 original world-class food and beverage concepts. These unique offerings will truly be one of a kind for the area. We have always looked at the resort as an incubator to launch all the IP being created. We're excited to reveal these incredible concepts. Touching briefly on Sunseeker Financials, total operating expense during Q1 2023 came in right below our estimated $5 million for the quarter. We continue to expect a similar run rate in the second quarter before jumping to roughly $15 million during the third quarter related to pre-opening expenses. All in, we currently anticipate a $1.25 loss per share for 2023 attributable to Sunseeker Resort. This amount does not include insurance recoveries related to business interruption coverage. In closing, I wanna thank our employees for a tremendous quarter. Your efforts drove an exceptional operation, which is paramount for our guests, for you, our employees, and for the long-term vision of this company. Many of you I recently visited on my travels to several of our bases, and your enthusiasm, dedication, and passion is infectious. Thank you. With that, I'll turn it over to Greg. John, thank you, and thank you everyone for joining today's call. 2023 is off to a great start, as reported in our first quarter results. The team delivered meaningful improvements in operational areas across the board, most notably a terrific 99.9% controllable completion factor with an industry-leading 99.1% completion factor. This operational excellence was evident in our financial performance as our total irregular operational cost came in just below $9 million. That's down $57 million compared to the same period in 2022. I couldn't be prouder of this team's performance, and I'm happy to report an update on our C-suite, and that's that Keny Wilper, who has served as our Interim COO since January, has been appointed as our permanent Chief Operating Officer. Congrats, Keny. You have our full support and confidence. This is one of the most exciting times I've experienced in my history with Allegiant. Our leadership team is strongly aligned, and our team members are dedicated to executing in stride and rethinking processes to become more productive and to strengthen this organization. For example, our planning, finance, and operational teams continue to work together shoulder to shoulder on a multidisciplined approach to drive operational excellence while expertly matching capacity with demand. Recently, to preserve operational reliability, the team trimmed full-year capacity 2.5 points, now guiding 0%-3% ASM growth. This is a result of MRO delays for aircraft and heavy maintenance, pilot constraints, along with airport construction disruption and ATC delays in some key markets, particularly during peak travel days. Even with this reduction in guided capacity, we expect improvement in full-year airline earnings to $11 per share, an increase in our full-year guide of EPS of $4 per share. We believe our measured approach, coupled with our differentiated model, sets us up well to deliver industry-leading results regardless of the broader macro environment. Mentioned last quarter, we have incorporated within our EPS guide the expected cost increase for our open labor agreements. The actual increases in compensation will vary depending upon economic terms reached and the timing of these agreements. This increased compensation was initially incorporated into our full-year EPS guide beginning in July. However, we have now moved this date up to May 1st, as we fully expect to be paying higher rates in the near future once agreements are finalized and approved. In fact, I'm happy to announce we've reached a tentative agreement on a contract extension with our dispatchers represented by the IBT. This agreement will modify the final pay rate increases in the CBA and provide a two-year extension on their current CBA. I think it's important to note that this contract did not even become amendable until May 31st of next year, but the parties worked together to bring these meaningful improvements to our dispatchers today. As John mentioned, we are still in active negotiations with our flight attendants represented by TWU and our pilots represented by IBT. Resolving our open labor agreements is our highest priority. Negotiations with our flight attendants opened eight months ago, and we are quickly closing in on the outstanding open items. Both sides are very pleased with the progress that has been made, and we look forward to announcing a tentative agreement very soon. On the pilot front, we had our first mediation sessions with the IBT last week, with another session taking place next week. After working to highlight and identify the gaps in each side's proposals, all parties left the first sessions encouraged by the possibility of finding a path to an expedited deal. As a result, the mediators have already provided numerous additional dates to continue to work together towards resolution. Touching briefly on our current pilot staffing, our net headcount for the year remains roughly flat and consistent with the trends messaged last quarter. However, within our schoolhouse, the number of new hire pilots are outpacing our initial expectations. With a strong recruiting team and pathway programs in the works, we remain confident in our ability to attract, train, and grow pilots. Allegiant is uniquely set up to be the destination airline for our team members. Our out and back model is built around our flight crews having the opportunity to be home every night, and that is something they highly value. We look forward to reaching agreement with our flight attendants and pilots and provide compensation and work rules that they can be proud of and, most importantly, they deserve. Turning briefly to our systems transformation, we continue to make significant progress on our four core system integrations, Navitaire, SAP, TRAX and NAVBLUE. First up will be Navitaire, which we expect to go live this quarter. Its enhanced functionality in our commercial platform is expected to unlock additional features to drive higher ancillaries and bundles. In addition, Navitaire provides the necessary functionality for us to expand internationally into Mexico through our joint venture with Viva Aerobus. While we are still awaiting DOT antitrust immunity, we are confident in this outcome. We are fired up about this partnership and its unique ability to provide incredible value to our guests and more growth opportunities for our team members. In closing, these results could not be accomplished without the efforts of Team Allegiant. Over the past 90 days, I've had the amazing opportunity to immerse myself more broadly throughout the organization, and in particular, with our frontline team members. Each visit has been exceptional for me. I have the privilege of meeting the best team members in the industry, a learning experience that provides me with the insights to continue to assist and help those in the field that every day provide our guests with a safe, reliable, and convenient product. I want to thank each and every one of them. With that, I'll turn the call over to Scott DeAngelo, our Chief Marketing Officer. Thanks, Greg. First quarter saw unprecedented demand generation and capture that enabled Drew and his industry-leading revenue management team to maximize both load and yield, resulting in record-setting revenue results. What's more, our nearly 30% year-over-year increase in revenue was driven by advertising spend that was 10% lower than prior year. This greater marketing efficacy was driven by leveraging data science and enabling technologies, including beginning to leverage artificial intelligence to create more targeted, more personalized, and higher impact execution. For example, our major sales events in January and February were executed purely via digital advertising and our owned media assets, and they drove four of the top eight book revenue days in our history. In addition to the historic overall base fare and air ancillary revenue performance in Q1, we also, as John mentioned, continued to outperform expectations with our Allways Rewards credit card program. Q1 was the strongest to date, both in terms of new card sign-ups, with March being our single best month ever for new card sign-ups, and in terms of program compensation. We are closing in on 500,000 cardholders and for the year expect to generate more than $100 million in recognized revenue from the Allways Rewards credit card, which, as you know, has an EBITDA margin of more than 90%, and about $500 million in flown revenue from cardholders who still represent fewer than 3% of total customers. Plenty of upside there as we continue to generate new card sign-ups at an ever-increasing rate. Beyond that, our Allways Rewards non-credit card program, which has more than 15 million total members, saw 1 million members book during Q1. That's up 44% versus last year. These rewards program members exhibited spend that was 32% higher than non-members, driven by greater air ancillary take rates and greater third-party hotel and rental car attachment. Our active customer base continues to be a healthy balance of repeat and first-time customers. Like last quarter, we surveyed a representative sample from both these most frequent flying rewards program members, as well as those who flew us for the first time ever this past quarter to understand why they traveled with us and what their future travel intentions were. The results were virtually identical to what they were in January. For these most frequent flyers, nearly 80% traveled for leisure only, and nearly 20% traveled for both business and leisure. More than 40% said they stayed with family or friends. Nearly 40% said they stayed at their second vacation home. That means around 80% fall into types of travel that are the most resilient during negative economic climates. To further validate this, we again asked these customers the extent to which they expected their travel plans with Allegiant to be impacted given the prospect of worsening economic conditions. They told us the same thing they did a quarter ago. Nearly 50% said that economic considerations would have no impact on their flying behavior with Allegiant in the next 12 months. More than 30% said that economic considerations would actually make them more likely to fly with Allegiant in the next 12 months. In addition to this core and growing base of loyal frequent flyers who drive a majority of our revenue, we continue to add new customers that are defecting from traditional higher fare airlines to Allegiant at record levels. These customers expressed similar future travel intention with more than 40% of these first-time customers saying that the macroeconomic climate will have no impact, and more than 40% saying it will make them more likely to fly again with Allegiant in this upcoming year. The only meaningful change this past quarter among first-time customers was that a significantly larger portion versus three months ago said that they last flew or regularly flew one of the top four largest traditional higher fare carriers. All that said, while some customers are expressing concern about the economy and a portion say they do plan to take fewer leisure travel trips than they did last year, we view this simply as a return to normalized pre-pandemic peak and non-peak seasonal travel patterns. The fact that any downward pressure that might come from macroeconomic factors appears to be only reinforcing our existing customers' decision to keep flying Allegiant, as well as driving more new customers to Allegiant, has us remaining bullish from a forward-look demand perspective. Allegiant is not only fully capable of maximizing peak travel demand capture. We're unique in our ability to capture a greater slice should there be any temporary shrinking of the leisure travel pie during off-peak leisure travel periods through our direct-to-consumer marketing approach. That appeals to those seeking relief from sky-high fares for flights that connect through crowded hubs and makes them aware of Allegiant's low fare and all nonstop flights brand. As our customer research points to, we continue to grow our addressable customer audience by capturing a greater share of those who have usually flown traditional higher fare carriers, but given the current environment, are choosing to buy into the ULCC category with Allegiant. As such, we believe Allegiant is well-positioned to weather any challenging macroeconomic conditions, just as we have always done historically. With that, I'll turn it over to our Chief Revenue Officer, Drew Wells. Thank you, Scott, thanks to everyone for joining us this morning. I'm extremely pleased with the first quarter performance of $650 million in total revenue, growth of nearly 30% on system ASM growth of just 1.2%. This combination produced a TRASM of $13.89, which beat any previous first quarter by a full cent and grew year-over-year by 28.8%. Four March weeks landed in the top 12 from an all-time TRASM perspective. Could not be happier with the peak spring break season and the quarter as a whole, both financially and operationally. The strength in the quarter was well-balanced, as both yields and core air ancillary products each contributed one to one and a half points of outperformance against the expectation at the previous call, providing lift from the expected mid-20%. Encouragingly, the Allegiant Extra rollout, while still early, has continued to exceed expectations, and we're thrilled to make this option available to more guests on more routes soon. Additionally, our charters group worked incredibly hard to set a first quarter record revenue performance as well. They were opportunistic in filling in scheduled service gaps through high-fuel January and February, with new fixed-fee business giving us the incremental lift. As I mentioned three months ago, we're looking at forward indicators and have not seen anything that caused us to incorporate a downturn into our models. While we continue to read and hear the same headlines, we have not seen booking impact from our leisure customer base and have forecasted as such. In the event macroeconomic pressures become real, our business model is well-positioned to adapt and overcome. Building on Scott's commentary, many of the pieces that have made us resilient to macroeconomic pressures have strengthened over time. Our total ancillary performance of $75 per passenger in the first quarter provides a very healthy base from which we can optimize airfare to maximize total revenue, and historically has shown resilience in all environments. We accomplished that milestone without the expected benefits of Navitaire coming later this year after the upcoming deployment Greg mentioned. Our trip cost has reduced and will continue to reduce drastically since the last non-COVID economic downturn. Thanks to the addition of first used Airbus A320 family aircraft and soon new 737 MAX technology that continue to lower the threshold required to achieve profitability. On the whole, we still expect TRASM over the last nine months to be up mid-single digits in aggregate, even in the face of more challenging comps, with the most challenging coming in the fourth quarter. Continued operational stability, a historically mature network, expanded Allegiant Extra product, and the Navitaire integration provide tailwinds that support the revenue story through the year. As we continue to work hand-in-hand with our operational groups to best align the future schedule, we've made the decision to trim about 2.5 points of capacity out of our summer schedule, which will push the next two quarters to around flat year-over-year and the full-year ASM story a bit lower than originally thought. While our original planned schedule already had dialed back Vegas as a percentage of the overall system, an outsized portion of the recent summer trims also came here in Vegas as construction work impacts operations. We remain bullish on the demand environment, though factors like completion, operational reliability, both controllable and uncontrollable to Allegiant, as well as fuel, will continue to play a role in the planning process. With that, I'd like to turn it over to Robert Neal. Thanks, Drew, and thank you to everyone for joining us today. We're pleased to report today first quarter consolidated net income of $56.1 million, yielding a consolidated adjusted EPS of $3.04. When excluding Sunseeker, we reported airline-only EPS of $3.30, well ahead of our expectations. Drew mentioned that unit revenues increased 28.8% versus the same quarter last year. This was on the back of ex-fuel airline unit costs of $0.0775, which were up 9.8% as compared to the same quarter last year on 1.2% more capacity. Unit cost headwinds in the quarter included elevated airport costs, lower aircraft productivity, and higher credit card fees from higher revenue, along with a one-time Employee Retention Credit that we had in the 2022 comp. Additionally, fuel costs were elevated through much of the quarter, coming in 11.4% higher per gallon versus the first quarter of 2022. Improved operational performance provided a nice tailwind to our unit costs. As noted, we've reduced our full year 2023 capacity outlook by roughly 2.5 percentage points, we expect this will leave continued pressure on unit cost metrics throughout the year. Since our last guidance update, we've seen improvements in our fuel cost outlook, driven primarily by a steep reduction in the crack spread of nearly $1 per gallon from the high point in late January, allowing us to reduce our estimated full year cost per gallon to be $3, down from $3.60. The reduced fuel forecast, coupled with continued strength in peak leisure demand, drives an increase to our full-year airline estimated earnings per share of $4 at the midpoint to a new range of $9-$13. Our full-year earnings guidance incorporates increased costs associated with pilot, flight attendant, and dispatcher agreements, as well as wage increases for our maintenance technicians, all beginning in May. While of course, actual increases in these costs will vary depending on the final terms reached, completing these CBAs with major work groups is a top priority for us. We are built to be a larger airline than the one we're running today, and we believe the efficiencies gained from better utilizing our existing infrastructure and fleet will outweigh costs associated with new labor rates. In looking at the balance sheet, we finished the quarter with total available liquidity of $1.5 billion. That includes approximately $400 million in undrawn credit facilities and $1.1 billion in cash and cash equivalents. The business produced roughly $215 million in cash from operations during the quarter, a first quarter company high for Allegiant. As our capital expenditure commitments remain elevated throughout 2023, we will continue to take a conservative approach to liquidity and expect to finance most of this year's CapEx with debt. Turning to fleet, we inducted three Airbus A320ceo aircraft during the first quarter, bringing the total operating fleet to 124 aircraft, with two additional A320 aircraft owned and on property at the end of the quarter, which we expect in operation in the coming weeks. For the remainder of 2023, we expect to take delivery of three mid-life A320 series and two 737 MAX 8-200 aircraft. As mentioned on our last call, our first 737-8-200 aircraft are scheduled for delivery to Allegiant very late in the fourth quarter. For capacity planning purposes, we are not relying on these airplanes for revenue service until early 2024. We remain in very active dialogue with Boeing regarding the remainder of our 737 MAX delivery schedule and as of today, still expect to take delivery of all aircraft in the firm order book by late 2025. 2023 is an investment year for Allegiant with approximately $1 billion in CapEx. Most of this is for assets with earning potential coming in 2024. Notwithstanding our expected earnings production this year, we would expect to exit 2023 with net debt to EBITDA similar to current levels. In regard to Sunseeker CapEx, our current capitalized expenditures and updated budget in today's release would indicate $124 million remaining to complete the project. The deposit account for our Sunseeker financing facility holds $118 million in cash allocated for completion of resort construction. To clarify, for the remaining $124 million, we do not expect meaningful use of liquidity sources to cover remaining construction costs. In closing, I'd like to add my thanks to all of our hardworking team members. Their strong execution during the first quarter, and in particular, improved operational metrics, give me great confidence in our ability to scale this unique business model. With that, Chris, we're ready to take questions. Thank you. As a reminder, to ask a question, please press star one one on your phone 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. Stand by as we compile the Q&A roster. One moment for our first question. Our first question will come from Savanthi Syth of Raymond James. Your line is open. Hey, good morning, everyone. Thanks for the time. This is Matt on for Savi. Y'all provided some color on the capacity and CASM ex impact. I was wondering if you could provide maybe a little detail on each one of those buckets and how you're thinking of the contribution there and the cadence from second quarter and the second half as well? Yeah, Matt, it's BJ. you know, I think in the 9.8% increase year-over-year, you can think about four points of that being related to the retention credit. That's largely offset by the benefit from reduced irregular IROPs costs. You've got a couple points for reduced asset utilization, a couple of points for credit card fees, Let's call it three for stations and airport-related costs. I think that covers it. The rest of it should kind of fall onto the other bucket there. Okay, thanks. Thanks, appreciate that there. Also, you all spoke on the pilot situation and your net hires for the year. Does that imply that attrition has gotten worse to your prior plan, or how are you thinking about attrition relative to when you spoke about it last quarter? Hey, Matt, it's Greg. No, I mean, attrition is in line with what the plan is. Where we've seen a lot of upside, particularly as of late, is within the schoolhouse. The new hires coming in. You know, the team there, and I think I mentioned this on the last call, has some terrific pathway programs with the military, with the universities called Accelerate Pilot Pathway and also with Spartan. To put that into perspective, we were planning on like 12 new pilots per class. We're roughly running in May, 20, and in the summer as well, 20 per class. We're encouraged on that regard. I think in my opening comments, though, I mentioned that just overall it's in line with what we're expecting and basically net pilots is flat. Okay. You did great. Thank you all very much. Thanks, Matt. Thank you. One moment please for our next question. The next question will come from Michael Linenberg of Deutsche Bank. Your line is open. Good morning, everyone. Question for Scott DeAngelo. Scott, you do a lot of survey work. It seems to be very fairly granular. I was intrigued by the answer of first-time flyers who the last time they had flown, they had flown one of the legacy carriers. Do you also ask some of these Customers first time or even current customers who've flown the bigger carriers, what was the reason and whether if the reason had to do with a loss of service? I think we've seen the big three pull out of about 70 or 80 airports over the last year or so, and some of those airports are airports that you serve, and I'm just curious if that you're picking up some of that traffic. I have a second one. Thanks, Michael. Yep, absolutely. Thanks Michael for that question. The answer is yes. The winning reasons, still tend to be, you know, price and nonstop flight followed by schedule. Indeed, in places where they've pulled out as has been kind of our history of growing up market, that certainly is a tailwind as well. I would say largely these are people actively choosing us versus other options because of price and because of nonstop flights. Okay, great. Then just in the revised guidance, I guess this is probably for Greg and BJ. You know, you can back into it and see kind of the impact from the reduced fuel price. What sort of assumption are you building in for, you know, revenue that you're able to hold on to? I assume you're building in some sort of loss of revenue as fuel prices decline, just given the historical correlation. What's the stickiness? I don't know if you have some sort of correlation or percentage, you know, fuel down by a certain amount, you cut revenue by a certain amount to reflect, you know, maybe macro weakness, and/or, you know, pass through in the fare structure. How do you think about that? Thank you. Hey, Mike. Drew here. I'll take this one. Hey, Drew. There's definitely a relationship between the two. If you think about how Allegiant has historically handled price, fuel price changes, it's been through capacity. As we've kind of become our own worst enemy, if you will, towards unitized metrics as we add capacity and to take advantage of lower fuel, but is a massive benefit to the bottom line. We're probably a bit more constrained than we have been historically to be able to fully take advantage of fuel price declines here in the short term. I would expect our revenue to remain more intact. You know, probably won't be non-impacted, but I wouldn't run away with any sort of materiality on decreases to the rev side. Okay. No, that's helpful in allowing us to sort of think through it and the impact. Thank you. Thank you. One moment please for our next question. Our next question will come from the line of Duane Pfennigwerth of Evercore ISI. The line is open. Hey, thanks. Good morning to you. Just with respect to the guidance, I think you said the next couple quarters flat, which I assume 2Q is one of those quarters. If you can hit 2Q flat in 2Q, it is your biggest quarter of the year in terms of absolute ASMs. I assume you feel like you're undersized a bit relative to demand in 2Q. Just bear with me here. If you can hit flat in 2Q, just mathematically, it feels like you could hit low teens growth in 3Q and mid-teens growth in 4Q, just mathematically. What is holding you back or, you know, just practically, how would you push back on that math? Duane, I think the way I would, you know, talk about it is break down the quarters into the different periods, right? We think about third quarter will be mostly constrained, obviously in our peaks. You know, just there's a ceiling on what we can do in July, which will impact the quarter as a whole. There probably is, you know, room if we wanted to increase September, you know, I don't think that's something that we're looking to do today. If, you know, I think Brent's down 3% again this morning. If that continues to run down, I think you will see some additions into September. It's a lot about breaking out where we're constrained, September being fuel versus demand. If we get goodness there, then you're right, I would expect some run. Otherwise it's gonna be dictated by the peak flying in each of those quarters and where that ceiling hits. Hey, Duane, this is Greg. Maybe let me just add one other comment to that. At the end of the year, you know, we start to take our Boeing aircraft. We're gonna pull crews and we wanna be ready to make sure that, you know, we can support that order. That's another element to kind of limit the capacity growth in the back half of the year. Just to follow up there, why would ramping on Boeing impact growth on Airbus? We have to pull the crews to get them trained to be able to fly on the 737 MAX. We'll have a number of pilots that are offline for that training, unable to fly on the Airbus during that time. Okay. Maybe just relatedly, just 'cause I wanted to ask you about that. What are the sort of second fleet- type costs, you know, that you're expecting in the back half of the year that you're not not incurring now? I guess I would've thought of that as sort of net new fresh recruiting of Boeing pilots, but maybe we're thinking about that the wrong way. Yeah. The way we have it planned, Duane, is, you know, the way I would think about it is from a pilot inefficiency perspective in terms of pulling pilots, to Drew's point, to train on the new aircraft, you know, we think probably this year in 2023, it'll be roughly a $5 million headwind. As we go into 2024 and 2025, that gets up to $15 million, it then normals out, normalizes kind of back in 2025. You know, from a D&A perspective, there will be a headwind, we think in the back half of this year, with the limited productivity, from a CASM perspective. You know, I think that's probably $0.002 thereabouts is what we're expecting. Maybe let me pause there. Is that kind of where you're going? You just wanted to understand the headwinds from a D&A and a, you know, labor, perspective? Thank you. Thank you. We lost Duane. If you like, I can bring him back. He said thank you, and that was it. Okay. All right. We can't hear. Sorry, we can't hear coming through. Looks like we have technical difficulties. Oh. Are you able to hear me now? No, it's still a little choppy. Okay. Would you like to hang up and call back in? If you speak one more time, it might be a little better. How do I sound now? It's getting better. Can you hear us? You are loud and clear. Okay. I think we're good. I'll chat you if we're not. Thank you. Do you want me to bring back Mr. Pfennigwerth? No, I think we can go to the next one. Understood. Thank you. One moment please, for our next question. The next question will come from Conor Cunningham of Melius Research. Your line is open. Hi, everyone. Thank you. Historically, I think you've done, like, 60% of your net income in the first half. This year is gonna be a little bit different with labor and some of the Sunseeker stuff, just, you know, curious on how you get to the high end and the low end in the back half. If just is all, you know, unit revenue based? Just curious on the swing factors there. Thank you. Yeah. Hello? Yeah. Yeah. Sorry, Conor. We were discussing each other. Yeah, I think the revenue environment is a pretty big impact there. I would also, as we'd like to caution pretty much every quarter, remember our share count is relatively low. A $4 swing in EPS is not a lot in absolute terms of bottom line. Year-over-year, big one fuel will swing a little bit, too. I don't know if there's anything else you guys wanna talk about. I mean, I think, Conor, this is Greg. Just to hit, you know, on that point, there's kind of like three, the way I think about it, three periods in the year that really, you know, drive the bottom line. That's March or, that's the summer, and that's the holiday period. You know, first quarter, I thought we put out some really good numbers. I think second quarter will do the same, and that'll continue to catapult us into a really strong year as we see it. Okay. That's helpful. Just on the MAX 7, I'm just curious on if there's any language in the contract that can allow you to get out of the 7 if the certification continues to be, you know, delayed. Have you thought about that, at all as you start to think about, like, getting back to this double digit growth rate I think that you historically spoke to in 2024 and beyond? Thank you. Yeah. Hey, Conor. I mean, we can't talk about language in the contract. I think we have, you know, adequate protection for the company in that agreement with respect to the certification on the MAX 7. We've been close to Boeing throughout all of this year, as they've been working on getting that aircraft certified. You know, I don't know that at this point we'd have any interest in getting out of those commitments, just given we think those delivery positions are extremely valuable, and we're really looking forward to the earnings that those aircraft are gonna produce as compared to those that they'll replace. Hey, Conor, this is Greg. I might just add a couple quick comments to that as well. You know, as we think about longer term over the next five to six years, at Allegiant, we're planning to be an airline with 200 aircraft. This order with Boeing, this is a big foundational piece to be part of that. As BJ has talked about in the past, when you get to, you know, an airline of our size, having a new order is, you know, really important to support, you know, those long-term fleet plan targets. As he said, the economics, you know, on the Boeing aircraft, they're 20% more fuel efficient. That's like we talked a lot about EBITDA per aircraft, $6 million in 2019. You know, if you think about the MAX aircraft, those on average earn $2 million more in EBITDA per aircraft than our current fleet. Terrific operating metrics there or numbers. You know, there is some inefficiencies that we talked about with having a dual fleet type. Obviously those operating eco-economics, we believe, greatly outweigh those inefficiencies. Also we're able to mitigate some of the complexities given our unique base strategy where, you know, we base the different aircraft in various bases. An all Airbus fleet at one base and an all Boeing fleet in another. All in all, we're still really fired up about the order. We think it could be a game changer long term for us, bringing that fleet type in. The team's done a really good job of getting ready to bring it on. Okay. Thank you. Appreciate it. Thank you. One moment please for our next question. The next question will come from Daniel McKenzie of Seaport Global. Your line is open. Oh, hey, thanks. Hopefully you guys can hear me okay. Couple questions here. To put a finer point on the full year guide, does it embed margin expansion in each of the remaining quarters? You know, if not, would it tie to revenue conservatism, cost conservatism, or would it be tied more to- Dan, I'm sorry. We can't hear again. Operator, are you on the line? I am still here. Can you hear me okay? I think perhaps we should dial in again. Okay. Okay. Operator, can you hear me okay? You are fine, sir. I can hear you loud and clear. Oh, thank you. Okay. If you just give us two minutes. One moment, please. The speakers will be back on shortly. Everyone, please remain on the line. The speakers will be back shortly. One moment. Again, one moment, please. In a moment, the speakers will be back. Please stay on the line. One moment. It looks like the speakers have returned. Speakers, are you able to hear us? Yes. Are you able to hear us? You're loud and clear. Are we okay if Mr. McKenzie asks his question again? Yes, please. Okay. Thanks. Yeah, thank you, guys. A couple of questions here. One was just, you know, trying to put a finer point on the full year guide. My question really was just whether it embeds margin expansion in each of the remaining quarters. If not, you know, if it would tie to revenue conservatism, you know, possibly some cost conservatism or, you know, perhaps, you know, more tied to suboptimal aircraft utilization. Whatever you can share would be great. Hey, Dan, it's BJ, if you can hear me okay. look, I mean, we've really tried to stay away from any guidance on, you know, the quarterly cadence in particular. really proud of the op margin that we produced in the first quarter, I will say that. I think you can kind of back into the op margin on a full year basis and see about what we produce in the remaining three quarters. to answer your question, we're not expecting continued expansion throughout the year. Yep. On the cost side, I think we feel pretty good about the cost story. A lot of our costs are in. Definitely keeping an eye on fleet utilization and just the drag on asset productivity, but that's in our guide already. On the revenue side, Drew, if you have anything to add there. No, I mean, just we have pretty good insight to the second quarter, and then, you know, we're kinda a bit more blind as we go into the back half of the year. There's certainly some variability that could be there. Yep, understood. Okay, fair enough. Second question here just follows up on that last point. You know, kind of a question on the cost of a good operation and, you know, just, you know, getting at unpacking the upside from here operationally. Guess what I'm trying to get at is the buffer that you guys have built into the schedule, you know, versus, you know, whatever year it makes sense to benchmark against. You know, reserves, soft times, spares today versus where you'd like to be once past ATC understaffing. Just related to the cost of this good operation, how can we think about the cost and revenue penalty that eventually goes away, you know, once we get back to the environment where we can operate a little bit more efficiently? Hey, Daniel. Why don't I start with it? I think the quick takeaway is if you look at our IRROPS numbers from last year, I think full year 2022 was roughly like $136 million in IRROPS. The first quarter of 2022 was like $66 million. We were, you know, well below that this quarter at $8 million. You can see that, you know, when you're not completing flights and you're running, you know, an operation that's not doing that, it gets really expensive really quickly. That's why, you know, shout out to John Redmond, Drew, and Keny and team to make sure that, you know, we're putting up operational reliability focus, we'll build on that. You know, once you have that in place, you start seeing things across the board improve. For example, like unplanned absences with our flight crews is much better now. We're trending in the right direction, you know, because there's a better operation out there. You get that stability, and then you start strengthening on top of that. I think that gives a good indication on, you know, what the upside is and how important it is, particularly for us, we believe, to run a good ops. I think on the revenue side, Drew, did you wanna follow up with anything on that or? No. I mean, you're right. We built in a fair amount in the schedule in terms of, you know, slack through the day to be able to catch up for, be it the ATC or things, you know, even out of our control. Spare counts a little bit higher. I would say we probably were under-spared earlier, and we're probably at a healthier number now. We'll continue to run heavy maintenance lines through the entire year, which is something that we weren't doing as a smaller airline. There are some kind of unique things that will persist in terms of lack of productivity, but are the right things overall for the company. There's a little bit for us to recapture, as we get into, you know, the next couple of years, particularly taking advantage of the reliability of the 737 MAX aircraft as that rolls out. But I would say there's a fair amount of those penalties that will remain in place. You know, when you look at all that, we obviously provide annual guidance because we are long-term thinkers, not short-term. When you have a bad operation, if you will, you denigrate your brand. Our brand, as you heard me make a comment about, is extremely important to us today and long term, and that's why the operational integrity of the airline is paramount to what we wanna do. And Dan. Yeah. Just, like I might just add one more quick point. Sorry to jump back in, but, you know, we talked about this, I think, on the last call, but just like what an extra half hour of productivity does to the bottom line. Just an extra half hour of flying in today's environment is worth like $50 million to the bottom line. Worth like an extra half hour is worth a quarter of a cent of CASM ex as well. You know, right now, we're running about six hours, a little over six hours per day. You know, that's for reasons we talked about, some of the constraints. As you're able to take that up with productivity, you can see some meaningful upside to the numbers that we provided. Yeah. Perfect. Thanks you guys. Appreciate the time. Thank you. One moment, please, for our next question. Our next question will come from the line of Helane Becker of TD Cowen. Your line is open. Thanks very much, operator. Hi, everybody. Thank you for the question. On second quarter RASM, just wanting to know, are you implying 10% year-over-year, and then for second and third quarter and then fourth quarter down a little bit? I don't think we've implied anything at a quarter level. I think you could probably read between the lines a little bit over the last nine months in aggregate and where the comparisons came in from last year, and maybe run with it from there. Like Robert mentioned earlier, we're not gonna dive too much into the quarterly specifics. Okay. Did you give a full year CASM guidance number? No, we didn't. Can you? No. I think we decided that we were gonna guide, just guide full year EPS, Helane, and then the other numbers that are there in the guidance table, you can kind of back into what's happening with CASM ex throughout the year with the fuel price. Okay. That's fair enough. Then I just have one unrelated question. On your, is the DOT approval of the Viva codeshare contingent on Mexico recouping Category 1 status? Do you anticipate I know the Mexicans are thinking they should have it by the fourth quarter, but given that FAA has to be reauthorized this year, are you anticipating any delays? Hey, Helane, it's Greg. Why don't I take that real quick? You know, the audits take place here in May, and this is for, I'm sorry, the Category 1 status. The Category 1. Being reinstated. That's set to take place in May, and our counterparts down at Viva, you know, expect a great outcome there and would expect the Category 1 status to be reestablished in the summer. That's kind of the timing in that regard. In terms of our antitrust, Immunity approval with the DOT. The application is substantially complete, and so, we're waiting for the DOT to come back with a ruling on that. There's not a set timeline per se, but, you know, I think we have all the information in, and if they get to it, we look forward to hearing where we're at with that, but we're optimistic that it will be approved. Thank you. Thanks very much. Thanks, Helane. Thank you. One moment, please, for our next question. Our next question will come from Catherine O'Brien with Goldman Sachs. Your line is open. Hi, everyone. Thanks so much for the time. you know, really helpful to have the Sunseeker outlook, that you gave us this quarter, but I was just hoping you could help us parse that out a bit further. you know, as we think about the fourth quarter, which is almost a full operating quarter, does that get closer to break even? How do we think about a typical ramp up for a new hotel opening to get to break even? Thanks. Hi, Catherine. I think the best number we're gonna provide at this point in time is a dollar and a quarter, negative $1.25. You know, there's a lot of moving parts we're gonna still run into in Q4. We believe the opening date is pretty solid, but anything can happen, including another hurricane. You also have, you know, BI interruption insurance. There's a lot of things that can happen there that I wouldn't wanna mislead anyone in that regard. I think as we stand today, I think we'll just stick with the guidance that we gave on the negative EPS of a dollar and a quarter for Sunseeker and leave it at that. Okay, fair enough. I apologize, I do wanna come back to CASM for this year. You know, I know you're not providing any formal guidance, but you gave a lot of details last quarter on puts and takes. That got me personally to a high single-digit airline-only CASM ex increase over year-over-year and, you know, understanding comp won't be throughout the year, but now capacity is expected to be 2.5 points lower, and we're now assuming the labor step up in May versus July. Versus where you were three months ago, is that a couple of extra points? Or given the capacity cut was a little further out, we shouldn't be doing a one for one capacity versus CASM ex increase? Y ou know, just on my own high single-digit number, that would get me into low double digits. Is any of that math, like, in the right zip code? Cathe, it's BJ. Thanks. I think that with the guidance that we have put out there, that's about what you would imply or what you could take away on CASM ex for the full year. We took the labor costs, which were previously baked in beginning July 1, and brought them up to May 1, and then you take out a little bit of capacity, so it's slightly above where you were when we spoke last quarter. Okay. Got it. Thank you. Thank you. Again, one moment please as we prepare for the next question. Our next question will come from Christopher Stathoulopoulos of Susquehanna International Group. Your line is open. Good afternoon, everyone. Sorry to beat a dead horse here, but, you know, in the absence of some of the kind of more core, explicit guidance items here, I just wanna understand this. In your prepared remarks, you talk about EPS growth despite lower capacity. It would seem that this is mostly TRASM-led, but you're really not giving, you know, kind of really much color on the cadence of that. The last question implied it was sort of a low double digit, if I got that for airline only for full year. In absence of hard numbers here qualitatively here, you know, could you kind of put a fuller point here? Is this TRASM and better utilization and productivity-led? Also, if I caught you right, it sounded like the base case or midpoint of your guide, the economic scenario underpinning that is sort of a steady state. Wanna make sure that that's correct. Thank you. Hey. Yeah, I'll start and others can jump in here. I think the raise on the guide, you know, of course, taking into account the benefit of the reduced full year fuel price. Then you're adding in some of the labor costs that we talked about for a couple of additional months there, and then continued revenue strength, in particular in the peak periods, and this has been good. Yeah. That we, you know, on the TRASM front, outperformance in the first quarter relative to what we had communicated, but a reiteration of what we're expecting for the last nine months. That steady state comment is accurate from that front. We're not, at the moment, not forecasting a significant increase in asset utilization between now and the end of the year. That's just because you still have additional A320 aircraft coming on between now and then. Okay. Got it. Thank you. My follow-up: So when I talk about the trade- down, which you referenced in your prepared remarks, in a recession scenario with clients, you know, it's generally perceived as sort of an academic view and perhaps let's wait and see how that plays out. You know, your customers are generally thought of as different versus the big three in the LCCs. I don't think you gave much color in terms of demographics in your survey work, but there is the perception that it's a different bucket, if you will, given really kind of how you run the airline and more variable flying, et cetera. If you could give up, you know, some more detail on, you know, why you believe that in a slowdown, you know, I realize that it's perhaps ultimately gonna just come down to lower fares there, but if you could put a finer point on why you feel so strongly about this trade-down effect into a cyclical slowing? Thank you. You bet. This is Scott, and I'm happy to start there. First off, the demographic profile of our customers, and let's use CVG as a prime example. You know, formerly a Delta hub, they largely, you know, reduced flying here. We move in, it's one of our largest origin cities, and we share a bunch of customers with them. From an income perspective, specifically discretionary, from a summer second homeownership perspective, they're virtually the same customers. They often fly Delta when they're doing it on a corporate card. When they're on their own dime, they don't wanna stop through Atlanta en route to their second home in Florida, so they fly us. I know that's one airport-specific example, a big one for us, but we see that play over and over again in the Indianapolis, in the Pittsburgh. Think about places that network carriers traditionally had, you know, strong presence, but through consolidation, pulled out, or as I like to say, orphaned many of these markets. What is left now is a former US Airways, you know, a former Delta and/or a shared customer that we have. While I know the market likes to classify us next to the other ULCCs, the customers don't see it that way. All they know is what airports flying nonstop at low cost from their airport in the cities we serve, that's us. The only other thing I would tell you, we've even—this is, you know, complete back of the envelope fuzzy math, but as we extrapolate from the mini- surveys we do to our customer base, it suggests anywhere from a 1.5 to 2 to 1 kind of trade- down, if you will. Meaning for every one customer who goes out of the market, decides to drive or not fly, we're seeing 1.5 to 2 come from another carrier as part of the buy- down. You know, we triangulate a bunch of different ways, but as a rule of thumb, that's what we've seen the last several quarters. That's why we believe that, you know, if and as macroeconomic environment shows deterioration, people are still gonna go see grandma for the holidays. They're still gonna do a summer vacation as we saw. They went on spring break. They're just gonna be a little more deliberate about the price they're paying and how quickly they can get there. I think what it comes down to, this is John, is the carrier selection is not indicative of someone's net worth or demographic. A carrier selection is indicative of what someone's willing to pay on the travel as opposed to what they're willing to pay on the experience. People who wanna pay more on the experience and less on travel, they're selecting a lower cost carrier like us, because that's the decision they make. The mistake a lot of people make is associating Allegiant with a different demographic, and that's a large mistake. It's really indicative of a customer deciding to spend less on travel and more on the experience when they arrive. Okay. Thank you. Thank you. One moment please for our next question. Our next question will come from the line of Scott Group of Wolfe Research. Your line is open. Hey, good afternoon. This is Ryan on for Scott. Just one here. You know, some of your peers have discussed sort of weaker than normal trough periods, given less spill of peak demand. Just wondering if this is something Allegiant is seeing as well. No, Drew here. I think what a lot of carriers are experiencing is what the leisure seasonality looks like. You know, what we saw in January and February was very typical to what we'd expect, granted still at elevated relative to pre-pandemic kind of performance. The leisure customer, it generally needs that catalyst to travel. It's spring break, that summer holidays, a lot of things that Scott DeAngelo just mentioned in the last response. I think maybe as an industry, we got carried away with how good September was. I think folks got priced out of the summer and were able to reaccommodate into September. I don't think that, you know, forward run rate we should expect through the January, February, through September, through the early December that are traditionally quite poor in the leisure space. You know, everything is elevated, but there's still going to be the peaks and valleys that are associated with leisure travel. That's helpful. Thanks. Thank you. This will end the Q&A session for today's call. I would now like to turn the conference back to John Redmond for closing remarks. Thank you, operator. You know, I recently had read an analyst report, and it kind of reminds me of a comment I made several years ago in an Investor Day, which was, "Don't bet against Allegiant." This Allegiant team has only gotten better with each negative issue raised in the past, from fleet transition risk to management changes, and of course, to more recent events even such as pandemic and hurricanes. We've only gotten significantly better as a team with a model that has been refined and transformed for an incredible future. Stay tuned. And again, I look forward to hosting many of you next week in Florida. Should be a lot of fun and very informative as well. Thank you all for your time and take care. This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.