Welcome to the first quarter 2021 conference call. My name is James, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the Q&A session, if you have a question, please press star one on your phone. I'd now like to turn the call over to DeAnne Gabel, Senior Director, Investor Relations. DeAnne, you may begin. Thank you, James, and welcome everyone to Spirit Airlines' first quarter earnings call. This call is being recorded and simultaneously webcast. A replay of this call will be archived on our website for 60 days. Presenting on today's call are Ted Christie, Spirit's Chief Executive Officer, Matt Klein, our Chief Commercial Officer, and Scott Haralson, our Chief Financial Officer. Also joining us on the call today are other members of our senior leadership team. Following our prepared remarks, there will be a question and answer session for the sell-side analysts. Today's discussion contains forward-looking statements that are based on the company's current expectations and are not a guarantee of future performance. There could be significant risks and uncertainties that cause actual results to differ materially from those reflected by the forward-looking statements, including the risk factors discussed in our reports on file with the SEC. We undertake no duty to update any forward-looking statements. In comparing results today, we will be adjusting all periods to exclude special items. Please refer to our first quarter 2021 earnings release, which is available on our website for the reconciliation of our non-GAAP measures. Ted, I now turn the call over to you. Thanks, DeAnne. Good morning, everyone. Thanks for joining us. I've had the pleasure of visiting several of our stations recently, and once again, I am proud to see the well-orchestrated coordination between team members. Together with the rest of the Spirit team, we once again delivered strong operational results. For the first quarter, completion factor was 98.6%, and our on-time performance was 85.3%, an excellent result all around. As we enter the next phase of recovery, thanks to the contributions of all our team members, we are well positioned to capture the many opportunities that lie ahead of us. The first quarter started slowly, but as demand dramatically improved during the last few weeks of March, we were very pleased with how the domestic network performed and how the international network results progressed, driving positive cash from operations for the full first quarter 2021, even when excluding the payroll support funds received. Our Florida routes saw particular strength during this period, as the typically strong spring break period was further supplemented by pent-up demand for leisure travel. Assuming the current trends continue, we believe we can achieve a positive adjusted EBITDA margin for the full year 2021. The leisure travel demand recovery has taken root. There may still be some bumps ahead, but as vaccines are more widely available, case counts abate, and travel restrictions ease, Spirit is stronger than ever and well prepared to bring our low fares to more places and offer more guests the opportunity to travel. With that, I'll turn it over to Matt and Scott to discuss more details of our quarterly performance. Thanks, Ted Christie. I echo Ted Christie's thanks to the team for doing a great job. Even as loads increase and airports get busier, our guest satisfaction scores remain higher than ever. We are committed to excellent service while providing the best value in the sky and maintaining our industry-leading low-cost structure. Earlier this month, we named Lania Rittenhouse as our Vice President of Guest Experience and Brand, furthering our commitment and focus to improve our guests' experience on the ground and in the air. Lania Rittenhouse has served as our Vice President of In-Flight Experience since December 2015 and has been a key contributor to our improving guest satisfaction metrics since joining Spirit Airlines. We are delighted to have Lania Rittenhouse take on this new role. Turning to our first quarter results, demand in January and February suffered as many jurisdictions were faced with another wave of the pandemic. In addition, about 12% of our network was negatively impacted by the new testing requirements for inbound U.S. itineraries. March brought better performance across the network, and the second half of March came in much stronger than we had initially anticipated. Load factor for the first quarter averaged 72.1%, but the last two weeks of March averaged well over 80% with many days flirting with 90%. Total operating revenue in the first quarter declined 40.2% year-over-year on a capacity decline of 26.9% year-over-year. The sequential change from peak December to off-peak January and February was greater than usual this year, as COVID-19 case counts had spiked again, we were encouraged by the steady improvement in operating yields and TRASM throughout the quarter, even as we continue to add back more capacity. For the March quarter, fare revenue per segment remains significantly depressed, down 24.2% year-over-year. Non-ticket revenue per segment continued to show relative strength, decreasing only 10.8% year-over-year. As has been the case since the start of the pandemic, non-ticket revenue per segment for the first quarter was impacted by the suspension or reduction of certain booking-related fees. As the quarter progressed and domestic and international demand strengthened, non-ticket revenue per segment began to improve significantly as well. Non-ticket rate for April has rebounded strongly, and we can see a path to a second quarter non-ticket rate that is all the way back to flat compared to the second quarter of 2019. Moving ahead to the second quarter outlook, international demand has stabilized, and both our leisure and VFR international markets are doing relatively well. Florida remains strong, and as restrictions ease in other domestic jurisdictions, we are seeing balanced strength across the network, with search and booking trends for the summer looking very solid. Regarding future capacity, given the extreme pull-down in operations for 2020, we believe it is helpful to compare 2021 estimates to 2019. Compared to the same periods in 2019, we anticipate capacity in the second quarter will be down about 5.5%, with April down 11%, May down 3%, and June down 2%. For the full year 2021, we estimate capacity will be about flat on a year-over-two-year basis. Given some of the skewed comparisons, I want to clarify our capacity plans for the next several years. Our base plan assumes capacity for the full year 2022 will be up about 30% compared to 2021. In 2023, the year-over-year growth rates should normalize back to our typical 14%-17% compounded annual growth rate. Scott will add a bit of color surrounding our ASM targets and aircraft delivery stream updates in his prepared remarks. In closing, I'd like to add that the revenue recovery has been bumpy as we had anticipated. However, the momentum we're seeing is strong and continues to prove out our low-cost business model is alive and thriving. Our progress on non-ticket production is 100% back on track, and peak travel periods are finally starting to see some yield firming. Our network opportunities continue to grow. The early numbers on our new cities starting in May and June are encouraging, and we are looking forward to full airplanes and continued revenue improvements this summer throughout the rest of 2021 and into 2022 and beyond. Now here's Scott. Thanks, Matt. It certainly feels good to now start talking about a return of demand and an eventual return to profitability. I'm proud of how our team has rallied throughout the crisis and has handled the adversity in such a professional manner. I know they are excited to see where things are headed. Turning to our first quarter 2021 financial performance. Our adjusted net loss was $243 million, or a loss of $2.48 per share. Our EBITDA margin for the first quarter was negative 43.3%, which was better than our initial guide of negative 45%-negative 55%. Both revenue and non-fuel operating expenses came in at the better end of our implied guide. A stronger demand environment in the back half of March improved margins for the first quarter and provided a nice platform to think about a return to positive EBITDA at some point in the second quarter. For the balance sheet. While we obviously had a number of ins and outs, we started the first quarter with $1.9 billion in liquidity, and we also ended the quarter with $1.9 billion in liquidity, which includes unrestricted cash, short-term investments, and the undrawn amount available under our revolving credit facility. During March, we finalized an amendment to our revolving credit facility, extending the due date from March 2022 to March 2024 and increasing our lending commitment by $60 million, bringing the total lending commitments to $240 million. The additional $60 million remains undrawn. We also received a total of $184.5 million during the quarter related to PSP2. We have been notified by Treasury that we will be receiving approximately $28 million of additional funds under PSP2 that will be received in the second quarter. Under PSP3, we now expect to receive about $198 million during the second quarter as well. This will bring our total received under the payroll support programs to just over $750 million. Regarding our fleet, during the first quarter, we took delivery of two direct-leased A320neo aircraft. We ended the first quarter with 159 aircraft in our fleet. By the end of the first quarter, we had 12 of our 31 A319s back into service, and we expect to have about 20 in service by the end of the second quarter. During the quarter, we completed a purchase of two A319 off lease. This was a quick-developing transaction and was not contemplated in our previous CapEx guide. We have also elected to re-accelerate our seat replacement program. With these changes, our new total capital expenditure estimate for 2021 is now between $220 million-$250 million. When we placed our fleet order in late 2019, we knew the order would not fill our entire capacity need, particularly in the early years. Since then, we have been able to move a few deliveries around to plug some of the holes in our delivery stream. During the first quarter, we accelerated six deliveries from 2025 and 2026 into 2023. There is a modest increase in PDP for 2021 driven by these accelerations. We will also be looking to secure a few additional 2022 and 2023 deliveries, most likely from lessor capacity, to fund our targeted 14%-17% capacity growth target. Now for our forward-looking guidance. We estimate our EBITDA margin for the second quarter will range between - 5% to breakeven. This assumes total operating expenses will be between $885 million and $895 million, assuming a fuel price per gallon of $1.95. Assuming D&A of about $74 million, the implied revenue range based on this guide is $782 million to $811 million. While the booking trends have been encouraging, it is still difficult to predict with precision where demand, unit revenues, and profitability will end up. Given all of that, it is likely that we will get to positive EBITDA territory by mid to late Q2, and positive EPS at some point this summer. For the full year, we will likely be negative on a net margin basis, but we do expect to be positive on EBITDA margin for the full year, despite the rough start early in the year. As we look out further into the future, our base case for capacity for 2022 will be between 54 billion-56 billion ASMs, 2023 will be between 62 billion-65 billion ASMs. On our last call, I talked about our CASM ex estimates for the airline will be below $0.06 once we get the airline back to full utilization around the middle of 2022. To reiterate, this CASM ex level is based on these levels of capacity. As I mentioned on the last call as well, how far below $0.06 we get will depend on a few decisions we will make over the next 12-24 months. From a profitability standpoint, we expect we will be at or above our 2019 operating margin in 2023. In closing, we are pleased to see the first quarter close on a stronger note than we had anticipated. We remain committed to our goal to get the airline ready for full production by the summer of next year. Our focus in the near term is to bring our parked aircraft back into service and get our crew levels ready to run the full airline, both while maintaining our reliable operations. We're right on track to do just that. With that, I'll hand it back to Ted. Thanks, Scott. Since February, we've been busy on the hiring front, and I'm excited to welcome all our new team members and to progress in our efforts to restore the airline to full utilization. While we acknowledge that the recovery is still in progress and may not be linear, we are very encouraged by the improvements we are seeing in the demand environment throughout our network. In addition, our guest satisfaction is high, operations are running smoothly, and our team remains focused on driving efficiencies throughout the business. Combine all that with an extremely dedicated and motivated Spirit team, and we are well-positioned for the future, which gives me confidence that we'll be among the first U.S. carriers to reach sustained profitability. With that, back to DeAnne. Thank you, Ted. Jamie, we are now ready to take questions from the analysts. We ask that you limit yourself to one question with one related follow-up. Thank you. We can now begin the question and answer session. If you have a question, please press star one on your phone. If you wish to be removed from the question queue, you may press the pound sign or the hash key. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star one on your phone. Our first question is from Mike Linenberg. Oh, hey. Good morning, everyone. I guess, Scott, it's one accounting question. I know you've sort of given EBITDA targets, and I think you mentioned that by 2023, I think you said that the plan is for EBIT to be at or above 2019. Did I hear that right? That it was EBIT? That's right, Mike. Operating margin. Great. Just a question on when we think about, I know that there was an accounting change in, I think, the last year or two with respect to how gains on tied to sale-leasebacks are accounted for. Now, do you run that through operating expense or do you run that through non-op? I'm assuming you're talking about the accounting for leases, Mike? Yes. Yeah, that still runs through operating expenses through aircraft rent. Yeah, it's more of a balance change. Oh, when you take a gain on a sale-leaseback, you just run it through against the rental? Oh, sorry, you're talking about the gain on the sale-leaseback. On the sale. Yeah. Sorry about that. Yeah. I know in the past, you'd take that gain and you would amortize it against the aircraft rent. I think now it's moved to operating expense or other operating expense. Yeah, that flows through the rent line. Mm-hmm. Okay, great. Okay, you answered my question. That's all I needed to know. Thank you. All right. Thanks, Mike. Our next question from Savanthi Syth. Hey, good morning, everyone. Matt, I'm trying to understand this a little bit more. Some of your competitors have talked about leisure fares reaching 2019 levels this summer. If kind of leisure fares remain kind of flat with 2019 for the rest of the year, does that mean yields should be flat at Spirit? Or does kind of the lack of corporate demand kind of create some fare bucket mix impact there? Well, thanks, Savi. I'm not sure I 100% understand your question. I understand the first part about it, of leisure fares, which is what some of our competitors are talking about this summer, and we do anticipate to see some strength this summer from a yield perspective. I'm not sure I follow completely about how corporate comes into play. That's what I guess I'm wondering is if there is corporate demand that's not really there, does that really impact your yields because you don't really fly corporate? Or does it have an impact because maybe the fare buckets are a little bit different? Capacity going after leisure. Okay, great. Thanks, [uncertain] I understand your question better. Overall, as we talked about, I know you know this, it's just about supply and demand. At the end of the day, we'll have to see exactly how the capacity matches up. It's definitely going to be different by region that's out there. We're seeing strength now. We do participate usually it's more like the fall, fourth quarter, first quarter, when there's more convention traffic out there. We do carry some of that traffic, as people do tend to book a little bit further out on that, and they're looking for the best rates they can find. Generally speaking, we're not in that corporate world. If your question is related to less corporate traffic means less demand for some of my competitors, we'll just have to see how that capacity flows through the network overall. What we are encouraged by is our ability to see in peak periods that some amounts of yield management we're able to deploy, which is a nice break from where we were as recently as, say, six weeks ago. That's what's the most encouraging to us now, and we're able to deploy more yield management, and not seeing a fall off in bookings at the same time, which is exactly what we'd hope to be seeing for the summer. We're starting to see that occur as early as June and into the July fourth period. Makes sense. Thank you for that, Matt. Maybe a clarification, too, you mentioned the peak to off-peak drop off in January, February was a little bit bigger. How are peak off-peaks kind of performing now? I'm guessing you're seeing some off-peaks in 2Q as well. Is that similar to kind of prior, or is there a bigger variance there? No, it's definitely stronger now. The trough in January and February was exaggerated, for sure. For example, May is I mean, it's an okay month. It's a shoulder month. We're not seeing anywhere near the kind of demand fall off that we saw in January and February. We expect to have a relatively strong load factors throughout the entire second quarter. The yields aren't as strong in May as they were, say, over spring break and Easter, but that's totally expected, and that's what you'd expect to see. From a revenue management perspective, it's nice to see some semblance of seasonality also creeping back into the revenue management world. That's just because you can plan better and you can make better risk decisions when you have an idea that seasonality is starting to trend back to normal. That's helpful. Thank you. Certainly. Our next question is from Duane Pfennigwerth. Hey, thanks. With respect to spooling back up, as you recall, crews and employees, is everyone showing up that you expect to show up? Are you having any trouble finding folks? Are there any friction points in spooling back up that you could point to? Thanks, Duane. The good news is no. We've been able to get people back through the training machine, I guess, as well as do new hiring. As is the case countrywide, in lower wage type categories, there is a pinch I think for overall people. You're finding that more at airports and places like that where there's a lot of demand for those types of jobs. I'm talking about macro. We found that our ability to attract pilots, flight attendants, technicians, all that stuff has been very favorable, actually. Okay, great. Just with respect to the kind of more specific or more explicit longer-term growth plans, is this new or is this sort of as the plan was contemplated and I guess from the perspective, not that you've given a sort of full year cost guidance, but is there cost pressures we should be thinking about as you look to execute this growth plan into 2022 and 2023? Thanks for taking the questions. Sure. Well, let me cover the forward-looking growth stuff, and Scott can comment on how we've used costs, although he mentioned somewhat that in the prepared remarks. I think given the ins and outs of the drawdown in the airline, the weird year-over-year comparisons, the two-year comparisons, we wanted to just make sure we were clear on what our growth expectations were going forward. The answer to your question is not new. We've been consistently saying that we intend to resume our growth trajectory of the mid-teens, which this is consistent with, by the way, the numbers we talked about in our script. Just want to make sure that we had full understanding of how that plays out from a growth perspective. Scott, you want to provide any additional color on what that means for costs? Yeah. Duane, I think the point of what we were trying to do was to give some detail around that, because I know some of the numbers we had put out around our fleet and the order book, and kind of filling in the gaps and some of the changes that we've had to the fleet have been a little confusing. We wanted to just go ahead and put that out there and to reiterate the fact that the capacity that we were talking about here was already contemplated when we talked about our CASM ex-fuel numbers. This has been in the works. It's more clarification than anything new. We've just heard that there's been some discomfort around not understanding what our numbers are going to look like from a capacity perspective. It's just clarification. Got it. Maybe just one follow-up there. If you think about the level of OpEx that's running through today, what are you sized for today? In other words, are you sized for 10%, 20% bigger than 2019 today? Are you going to need to staff up to hit early 2022 growth expectations? Thanks for these detailed answers. Yeah. Hey, Duane. That's a great question. It's a little bit of both. Right now, we have three 19s that we're bringing out of the desert. We're flying probably about an equivalent number of aircraft as we did in 2019, probably around 140-ish aircraft. We have a crew level that is pretty similar. We're going to have to hire a large number of crew between now and the end of the year because the fleet will grow from an operated fleet from 140 to, the end of the year, we'll have 173-ish aircraft. That's a pretty quick additional aircraft, plus bringing the aircraft back on the service. That sort of infrastructure component is what we're talking about when we mentioned on the last call of about a $30 million number of additional expense, which is going to be maintenance and getting crew, flight attendants and pilots and some mechanics, back into the fold so that we can handle the aircraft level by the end of the year. Okay, thank you. Our next question is from Jamie Baker. Hey, good morning, everybody. At the end of 2019, I don't know how granular your profit plan for 2022 was, but I assume you at least had something penciled in. Is your current 2022 forecast suggest higher, lower, or the same pre-tax income as what you were thinking pre-COVID? I'll give it a whirl, Jamie, it's Ted. I think the answer is lower because we're still in the midst of a recovery, and we still anticipate that the airline won't reach, as Scott has said, full utilization until the, call it the second quarter or somewhere in there, but really the later part of that. There's a drag on fixed expense because of that. You've got the mix of a recovering revenue story and the airline getting back to the size. I think those are both probably net negatives to what the story would've been in 2019 versus what we see today in 2022. Yeah. I would totally agree with that, Jamie. I think another way that we're sort of looking at it is taking '19 and really pegging a future date that we expect to get to our run rate, which our sort of run rate period is probably 2023. Like Ted said. There's a lot of water in 2022, we're really sort of book-ending sort of 2019 and 2023. Beyond 2023 is you're back to a sort of status quo. That period between now and probably 2023 is murky. Okay. It could be a range of outcomes. Got it. That's helpful. Second, I was recently reviewing your schedule, and obviously there've been a fair amount of sort of new market gyrations and changes in the last year. Overall, I would characterize Spirit as an airline that once it decides to enter a new market, it most likely sticks with said market for a measurable period of time. Is that a fair representation? If so, why is that your decision? Is there a downside to churning markets more quickly the way that some other low-cost airlines do? Hey, Jamie, it's Matt. Hey, Matt. Yeah. We believe the answer to your question is yes, there's a downside to churning markets like that. Now, let me clarify that, yes, once we announce we're going into a city, we spend a great deal of time making those determinations and calls and spend a lot of time researching the city, making sure it fits our long-term network plan and growth strategy. Once we're in the city, we will then see, not every market always works right out of the gate for us. If we go into a city, announce five, six new routes, if one of them isn't performing, we're not going to be stubborn about it and just sit there with it. We will then redeploy capacity and find what the right routes are for us in that city. Generally speaking, we're of the opinion that you make the call, you go into the city, and there's a long-term intention to be there. Got it. Okay. Very interesting. Thanks, everybody. Appreciate it. Take care. Our next question from Hunter Keay. Good morning, everybody. The EBIT margin on 2023, that's a big number. I'm assuming you're talking about that in reference to the 13.5% margin you did in 2019. The question is TRASM above $0.092? Is CASM ex below $0.055, or is it fuel? Hey, Hunter, this is Scott. I'll answer part of it, and you guys can chime in. Yes, that's right. It's around 13.5 is the baseline for 2019. I think there's a couple of points in there. One is that we've talked about our CASM ex-fuel number being sub six. That would imply some TRASM appreciation, and we think that's there. Matt can talk about some of the details around that. It's also a lower fuel number than in 2019 assumption as well. I'll add, the fuel number is a mix of potentially the forward curve, but also more importantly burn. Right. That's right. Okay. Thank you. Then, Matt, why did you change the name of the $9 Fare Club? Thomas, did you have an opinion on that decision? Thanks, Hunter. $9 Fare Club has definitely had brand recognition and name recognition. The Spirit Saver$ Club, we feel as we revamped the overall loyalty program and how all the programs work together, we felt it was more encompassing of the overall brand value that we give to people. The Saver$ Club isn't just about getting a fare, it's about saving overall and how the Saver$ Club has big benefits to ancillary revenue sales as well for the guests, and that translates into revenue for us. Since he's not going to say anything, I'll just say Thomas always has an opinion on these kind of things, since you know him. Yeah. The question was really about the DOT rulemaking, of course. It's really an embedded question about your expectation on the unfair and deceptive practices and how the branding of that might fold in. We can save that for another time, unless you want to chime in on it, Thomas. That would be my opinion. I guess that's a no. All right. Yeah. Thank you. Thank you. Next question from Helane Becker. Thanks very much, operator. Hi, everybody. Thank you very much for your time. Just two questions here. As you take in more leased aircraft, are you having to also do maintenance reserves, or are the lessors at this point comfortable with your balance sheet and your track record that you don't have to account for those? Hey, Helane, this is Scott. We have not had any leases with maintenance reserves since 2013, 2014. No maintenance reserves for us. Okay. Then the ones on balance sheet, can you recapture that cash? We generally do that in a couple of ways. Obviously, the reserves are meant to be recouped once you do the maintenance. That's generally how that cash comes back to us. We have also through the years, renegotiated and extended some of the leases, and in that, we will typically have a discussion around what to do with maintenance reserves. A large majority of those, we generally get those back with an extension. Got you. Okay, thanks very much. Our next question from Catherine O'Brien. Good morning, everyone. Thanks for the time. With the strength you've seen in non-ticket per passenger throughout the pandemic, these products, they've driven a higher proportion of total fare than they have historically. Do you expect to see this trend continue? With maybe some of the positive commentary we've gotten over this first part of earnings season from some of your competitors on yields this summer, is that more likely to normalize back towards 50/50 we've seen historically? Just any thoughts there would be helpful. Sure, Catherine, it's Matt. Thanks for the question. We do expect we will see yield firming on the fare. That will take some time to get all the way back. Between now and then, it's hard to predict exactly when the then is going to be when the ticket yields are all the way back. There's a lot that goes into that, the supply-demand environment being, of course, the largest factor there. For a period of time, we will anticipate that non-ticket production will be stronger than the ticket yield, but that's not the long-term design. We would expect things to come back to 50/50 in a more normal environment. Really, we've always said that we feel like there's more room on the ticket yield to improve as well. Non-ticket will continue to go up. We're back on track there, and we anticipate we'll start to resume our march upwards on non-ticket over time in a very methodical, pragmatic way. The ticket yields will catch up, and one of the things how that can happen is through network deployment and how we think about the network. Unfortunately, the pandemic caused lots of issues across the entire world and especially for our industry. One of the things that we talked about pre-pandemic was how we were going to think about our network moving forward and capitalize on our strengths and continue to build on our strengths and think about that a little bit differently than we had in the past. We didn't get to deploy that plan. That is our anticipation moving forward, which is why we're continuing to think strongly about Latin America and the Caribbean and how we think about our strengths in Florida, Las Vegas, California, New York, where leisure travelers want to go. As we build upon that strength, we'd anticipate the upward ability for ticket yields to not just come all the way back to 50/50 with non-ticket but eventually get back higher than 50/50 over time. That might take a couple of years from where we are today, but we do anticipate we can get there through network deployment. Okay. Very interesting. Thanks. Maybe just a follow-up related to the network and capacity decisions. With legacy carriers just allocating more capacity to non-traditional leisure routes for them, at least for the short term here, and some new low-cost service entering the market, how does that impact your overall, just what level of capacity you're adding back and maybe some of your route decisions? Does that factor in? If it does, how? Thanks so much for the time. Yeah, sure. The answer to your question is yes, of course, we're taking a look at what's going on out in the network overall. Where we think there's good ideas, we don't have a monopoly on good ideas. Other airlines can clearly do analysis and think about what they think are good ideas as well. It doesn't bother us. We know where we think we can grow. I think that the new cities that we're adding, we're making it clear, I think, that we believe we're strong to Florida, Las Vegas, California, all the leisure destinations that are out there, and that's where you're going to see us grow. We will continue to add new dots on the map that we think connect well to those places. We did have a little bit of a hiccup in our international network solely because of the international inbound testing requirement. We redeployed some capacity in the latter part of the first quarter and into the second quarter. In fact, we took our Latin American and Caribbean capacity down from around, say, 19%-20% like it was in the fall. We brought that down to around 15%-16% in March, April timeframe. By June, we're back to that same mix of ASMs in Latin America and the Caribbean, back up to the 19%-20% level. We will move the network around where we think it's best and how we think about deployment of capacity. Yes, the whole industry is one big ecosystem in a way, but we know that when we go into markets, we grow them, and that's the most important thing for us in our business model. Understood. Thanks, Matt. Absolutely. Our next question from Joseph DeNardi. Thanks. Good morning. Scott, I think you said sub 6 CASM ex in 2022. Is that for the full year? What's the trend for CASM ex kind of after that, if you're growing 15%? Is the expectation that CASM ex is down every year after that? I think pre-COVID, there was a little bit of pressure on that. Maybe just an updated view there. Yeah. Hey, Joe. I think the sub six we said was going to be a product after we get to full utilization, which we said would happen probably around the middle of 2022. The sub six CASM would happen at some point after that, once we get to full utilization. That's really sort of a marker for a full year number. We'll probably be in that range as we get there in the third quarter, but it's really meant for a full year barometer. Obviously, after that, we're going to continue to have the inflationary components that are normal for our business. We saw that pre-COVID. Those are not going away. We saw them in wages, we saw them at airports and amortization for us. Those are not going away. We're going to do what we can to manage those, but those are still going to be headwinds. I would expect the same sort of trend that we were looking at pre-COVID to still be there. It's difficult to say what it will be in 2023 or 2024. I think that's a good proxy. Okay. That's helpful. Matt, I'm wondering if you could just talk a little bit about demand stimulation as you see it, just in the context of there's probably limitless demand to go down to Florida if the fare is low enough. Can you talk about how sensitive that is? If your average fare is $50, the market is X. If $50 becomes $45, how much does X go up? Hopefully you get the point. Just interested in your perspective there. Yeah, you're describing classic elasticity, right, Joe? Yeah. Yeah, for sure. Every market's going to be a little bit different, so I don't have a really, a rule of thumb to give you because the size of the market or the size of the city coming down to Florida or going anywhere for that matter will matter in that calculation. What we do know is that we can stimulate demand and drive load factor. We talked about in the prepared remarks the load factors that we saw, and we're going to see strength in loads throughout the second quarter and the summer. It wouldn't surprise me if we're at or near the top of load factor for the industry for the foreseeable future. That's from us being able to do that with our cost structure and the non-ticket revenue production. While it took a dip in the first quarter, which was really hammered in January and February. There's a couple different reasons for that. The fall-off in some of the issues we had with international traffic had an impact. As that regains its strength and comes back, we start to see that production come back. When we go into new routes for that matter, we do think about non-ticket versus ticket. This does come into account in how we think about where we go. Where can we stimulate travel with a low fare, where do we anticipate the attachment rate for products to be on top of that? That's all part of how we think about it. Okay. That's helpful. If I could just sneak one more in. Matt, why don't you fly to Hawaii, where does that rank on kind of the priority list next few years? Thank you. Yeah, I guess Matt's looking at me. I'll hand it over to Ted. Initially, let's start with what we know. Lower 48, Latin America, Caribbean, as far south as our equipment can go, that's the focus of the airline. There's a massive opportunity in that window or that geography, and that's why we are focused there. Up until the introduction of the NEO, Hawaii was physically off-limits for Spirit because we couldn't get there. The airplane now can reach it, but as I said earlier, it becomes a prioritization discussion, and right now there's so much opportunity where we live, and we know the markets well. It's better for us to stay focused there. Thank you. Our next question is from Andrew Didora. Hi, good morning, everyone. First question for Matt. I guess we're hearing over the course of earnings the past week or so, a lot of airlines adding capacity into the peak periods. There are more airlines now going after leisure than before. How are you thinking about your revenue management? Are you changing any tactics here in light of all of this, if at all? Thanks, Andrew. Yes, there is more capacity coming back. We expected this capacity to come back. What's been nice, at least for us, is we've been able to deploy more constraint on our revenue management strategies, in the peaker periods that are upcoming. We're very comfortable with the pace of demand that is transacting relative to the constraint that we put in place. It's still, I wouldn't call it as strong as we would've hoped to see, say, for the close-in period of late April into May. It's been relatively good compared to where we were a couple of months ago. We're definitely in a shoulder right now. As we head into the summer, what's been nice is, as I just said, yield management has been able to hold, in some cases, pretty decent fare levels. Our normal yield management strategy is to pressure test yields and see what we can get relative to the bookings that come in. As we've talked about before, is generally, I don't care where on the booking curve we get the demand, we just know what we think we can go get from an average fare perspective. That's been holding. We'll see as we get in closer to the summer, what the closer in demand looks like. Our anticipation right now is that it will be relatively strong, and that we'll be able to hold our yield management strategies, especially when we talk about the weekends of the peak periods. Tuesdays and Wednesdays are usually the days where we can drive extra demand, if we have to, at lower levels. Generally, that traffic doesn't always just go seven days a week, though. It might go on an off-peak day one direction, peak day in another direction, and that's how we kind of mix the yields together for the best outcome. Got it. Makes sense. Then just I had a follow-up to Hunter's margin question earlier. I guess, what gives you the confidence in that PRASM appreciation over the next few years that you talked about, especially when you're growing, say, almost 50% between now and then? There isn't just a whole lot of precedent for that type of PRASM growth in the model. Just curious your thoughts there. Right. I think it's two things. One is, it's where we're deploying within the network and how we think about development on new routes versus capitalizing on the strengths that we know exist. I think that's one piece of it, is network deployment. The second piece of it is our non-ticket strength and the way we expect non-ticket to very methodically just kind of march up, slowly but surely over time and hold where we are and then keep moving up from there. We anticipate we will be able to get back to flat in the second quarter this year versus 2019. We can see a path to get there, and that is while we're in the pandemic. A lot of the strategies and new technologies that we've been able to put in place, we think will set us up well as we come out of the pandemic as well. That's on top of just relaunching our new loyalty program and the Spirit Saver$ Club rebranding. There's a lot of different pieces that feed non-ticket that give us confidence in that statement. Got it. Thank you. Certainly. Our next question is from Brandon Oglenski. Hey, good morning, everyone, and thanks for taking my question. Ted, appreciate the outlook from the team here, and definitely a strong one into 2023. We have a couple more public comps now in the group, and if we look at valuation, it does appear that investors are a little bit skeptical on your ability to execute against that plan. I guess that's somewhat warranted because we did have some prior execution issues, pre-pandemic. What can you give the investor base confidence in that the outlook can be achieved and that lessons have been learned from the past? Thanks, Brandon. Yes, there are a couple more comps in our space. I don't know that we have enough information to say for sure that there's a premium to valuation, because we haven't seen any numbers. There's a market cap discussion, which could be related to a variety of things, which could be balance sheet, could be forward-looking estimates, could be a bunch of stuff. To get to the heart of your question is, what are we doing to ensure that we are delivering confidence? I think we have 10 years of track record here, as a public company. I think we've shown that while you mentioned, for example, we have had operational struggles maybe in 2019, I think we've proven to ourselves, and to the market broadly, that those things are behind us. I think we were starting to enter into a phase of really renewed growth opportunity pre-COVID. I was feeling like, I think we were hearing back that our network deployment decisions and the way we were going was very much in line with that. The best answer to all of this is execution. It's delivering upon the promise. It's hitting the numbers. I think at least our history to date gives us credibility, and I think we're going to build on that. We'll worry about the comparisons later because we're focused on being the best airline in the business, and I think we're on our way. I appreciate that response. Thank you. Our next question is from Christopher Stathoulopoulos. Morning. Thanks for taking my question. Just getting to the topic of yields here in a different way, if you could comment on what you're seeing on fares now, and if business and long-haul international stays longer on pause for your competitors, if you could give some color on how you're thinking about managing yields, whether that means more opportunistic on closing yields. Second question, with the recovery in ASMs here, any color on the cadence of costs or CASM -ex, and just remind us what percent the mix of fixed versus variable costs, and if there's a benchmark as ASMs recover, whether that's marginal cost per mile or something else that we can look at here to get a sense of how productive ASMs and costs are being deployed here. Thanks. Hey, Chris, this is Scott. I'll start, and then Matt can fill in the first part of your question. I'll talk about cost. For this year, we've talked about two points. One, we ended Q1 at about $0.074 from a CASM x perspective. We've talked about sub six towards the back end of 2022. We'll probably see a somewhat linear progression between first quarter and the sub six numbers. We're looking at second quarter, probably in the high sixes. We'll end the year probably in the low 6s. That will trend towards a sub six number in 2022. I think that's probably the best way to look at it, and we've talked a little bit about what that means for beyond that. From a fixed variable perspective, as we've mentioned before, the best barometer is probably 50/50, but obviously that moves, and we're going to get into technical components, but that fixed variable component moves the closer you get to departure. If you generally think it about it at a medium-term level, it's around 50/50. Okay. For your yield management question, Chris, I'll try to restate to make sure I'm getting it right here. If corporate demand and/or long-haul international takes a little longer to recover, then what does that mean in terms of Spirit being able to deploy proper yield management and how we think of yields? There's a couple different ways to think about that. In the grand scheme of things, in the big picture, we want the economy to be all the way back and roaring back, which it will. We want that too. It's just great overall for everyone involved when that occurs. We are not rooting against these kinds of things at all. We want the economy to rebound. In terms of if it takes a little bit longer to recover, we may see that, and we talk about that, and we're anticipating as we get past the summer into the early parts of fall, that's a question mark. It's not anything that I'm actually really worried about as well. If we see a little bit of a lull in September or October, maybe not dissimilar to just a normal shoulder period, that's fine. Once we get back to Thanksgiving and Christmas and Beyond, we'll be back into the heart of leisure peak season, and we know we will perform extremely well. As we head into 2022, everything will move along fine. If there's another six- or eight-week lull post-summer, it's not anything we're worried about. In fact, we're already thinking about that and thinking about how we deploy yield management strategies in the event that occurs. It's nice to be the low-cost provider. We have the ability to stimulate travel and use elasticity to our benefit and just get more people on the aircraft and make it through till we get to the holiday periods. That's the way that we're thinking about it right now. Thank you. Sure thing. James, are there any more questions? No. No more questions. Awesome. Thank you everyone for joining us today, and we'll catch you next quarter. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.