Hello, and welcome to the Southwest Airlines first quarter 2021 conference call. My name is Keith, and I will be moderating today's call. This call is being recorded, and a replay will be available on southwest.com in the investor relations section. After today's prepared remarks, there will be an opportunity to ask questions. At this time, I would like to turn the call over to Mr. Ryan Martinez, Managing Director of Investor Relations. Please go ahead, sir. Thank you, Keith. I appreciate everyone joining today. In just a moment, we will share our prepared remarks and then open it up for Q&A. On today's call, we have our Chairman of the Board and CEO, Gary Kelly, Chief Operating Officer, Mike Van de Ven, our President, Tom Nealon, and Executive Vice President and CFO, Tammy Romo. We also have other senior executives with us for Q&A, including Andrew Watterson, Executive Vice President and Chief Commercial Officer, and Bob Jordan, Executive Vice President of Corporate Services. A few quick reminders, then we'll jump in. We will make forward-looking statements today. Those are based on our current expectations of future performance. Our actual results could differ substantially from these expectations. We also had several special items in our first quarter results, which we excluded from our trends for non-GAAP purposes, and we will reference those non-GAAP results in our remarks as well. We have more information on both of these in our press release from this morning, so please make sure you check that out, as well as our investor relations website. With that, we'll get started, and I'll turn over the call to Gary. Thank you, Ryan, good morning, everybody, and welcome to our first quarter 2021 call. The first quarter results are notable, first of all, because they're a lot better than what we thought they would be back in January. Even with that improvement, we still lost $1 billion, and it was worse than our fourth quarter results due to the weaker seasonality of January and February travel. Clearly, that's not sustainable. Fortunately, we're here to report that we believe the worst is now finally behind us. We have a much better outlook and report for second quarter, and we'll give you all a full brief on the first quarter results and our second quarter outlook. Here are a few top-side highlights before I pass the call over to Mike. Number one, thankfully, we received a second round of Payroll Support or PSP from the federal government, effectively covering the first quarter. It was much needed. We're very grateful. We're the only airline that has avoided pay cuts, layoffs, furloughs, and the like. I'm very gratified that our 50-year record remains intact on that front. Not counting working capital changes in cash flow, our cash losses of $1.3 billion were more than offset by the PSP. Number two, beginning with a mid-March inflection point, we finally began to see bookings improve from the nine-month, down 65% flat line that we had been experiencing. Vaccines, vaccinations, case counts, and spring break all converged in the right way. Sensing this, we boosted our capacity by 50% overnight or 1,000 daily departures in the middle of March. Number three, taking into account our voluntary separation program and attrition since June, our staffing currently is at 92% of our June 2019 levels. In addition, we've had thousands of people on leave. Now that we're adding flights, we're smoothly recalling those that are needed on voluntary leaves and having avoided the mess associated with furloughs. As a result, we plan to fly 96% of our June 2019 ASMs, albeit with a different route network. The point being is that we're very well prepared to flex up our capacity. Even having said that, I think that we're very well aware that it will still be messy, and we'll have to carefully manage. Number four, please understand that the path back to break even and beyond is dependent upon two things. Number one, we have to have sufficient flight and seat activity. You need to read into that means more than what we've been doing prior to March. Number two, we've got to have more customers to fill those flights and obviously read into that revenue. We have too much fixed costs for us to be profitable below roughly 3,000 flights- 3,300 flights a day. At least now it's realistic for us to project break-even cash flow scenarios, which are possible here in the second quarter. In summary, I'm a lot of things here this morning. I'm relieved, I'm optimistic, I'm enthused, I'm grateful, and I'm especially thankful to our tens of thousands of employees who have fought their way through this pandemic and gotten us at least to this point. We've got a long way to go, but I'm very confident that we can all depend upon our Southwest warriors, they are very resilient. Finally, I'm pleased with the performances. The operation has been superb. The new cities are meeting or exceeding our expectations. I'm glad to have all of them as permanent additions to our route network. The addition of Global Distribution System capabilities could not have been a more timely add to our capabilities as we're pushing aggressively into the huge managed travel business market. We've got a great domestic network. We've got great service, and finally, they're going to have access to low fares. The cost and the spending performance has also been excellent, and we're making great progress towards restoring our historic productivity and efficiency. I'm absolutely delighted with the deal that we reached with Boeing last month that strategically secures our position as an all Boeing 737 operator with all the attendant competitive benefits that enables. With that, I'm going to turn it over to our COO, Mike Van de Ven, who I know will elaborate more on that, among other things. Mike, great job, great performance. Take it away. Well, thanks a lot, Gary. Well, we really had an action-packed start of the year, and I'm very proud of our people and how they just continue to rise to the occasion. They've opened up four new stations in the first quarter and two more in April, implemented a federal mask mandate, returned the MAX to service, secured a new long-term Boeing order book for both the MAX 7 and the MAX 8, and reached service agreements with GE and CFM International for the LEAP-1B engines, and all of that while running an exceptional operation. We ended the quarter with an on-time performance of 86.2%, and that was good for third in the industry, and that included a reduction of roughly 4.4 points due to weather. As you know, we've got large operations in Texas, and the entire state froze for several days in mid-February, and that impacted our network, as well as Winter Storm Xylia, which impacted Denver as we launched into our March-based scheduling. Speaking of our March schedule, we returned the MAX to revenue service on March 11th. Once we completed all of the maintenance requirements, the pilot training, and we had a self-imposed set of 200+ readiness flights on the airplane. The launch was limited to 10 lines of flying, and the airplanes were separated from the rest of the fleet for the first month of service. On April 12th, we increased the lines of flying to 55 lines, and the aircraft are now fully interchangeable across the network. We currently have 64 MAX aircraft in the fleet, we have 32 of those aircraft currently out of service, awaiting FAA approval of repair instructions from Boeing. The repairs will ensure that a sufficient ground path exists for certain components of the electrical power systems. These aircraft were identified by Boeing as part of a specific production run, the impacted MAX lines of flying are being covered by spare aircraft in our Next Generation fleet. We're not experiencing any significant operational impacts, once we receive FAA approval, it will take two to three days per aircraft to make the repairs. With all the aircraft work expected to be complete in roughly three weeks. Turning back to the first quarter performance. Our bag handling, it continues to produce all-time best company results. We delivered 99.7% of all bags and planes without a mishandled claim. As you know, we do that carrying more free bags than anyone in the industry. We continue to lead all marketing carriers with the lowest customer complaint ratio to the DOT. Perhaps the highlight of the first quarter was securing a new long-term order book with Boeing for the MAX 7 and the MAX 8, as well as our agreement with GE and CFM International to maintain the LEAP-1B engines. We announced our order book on March 29th, and there are just a couple of items that I'd like to highlight. First, we added 100 firm orders for the MAX 7, which will be the replacement aircraft for our 737-700s. We also converted 70 MAX 8 firm orders to MAX 7 firm orders. That brings our firm order book for the MAX 7 and the MAX 8 to 200 and 149 aircraft, respectively. We also added 155 options for either MAX 7 or MAX 8 aircraft, and that brings our total number of options to 270 aircraft. The interchangeability of the options between aircraft types, that just gives us tremendous flexibility. When you put all that together, we are maintaining a substantial operational and economic efficiency as a result of a single fleet type, and the LEAP-1B engine provides at least a 14% better fuel efficiency, quieter engines, and it has excellent dispatch reliability to support our on-time operation. We intend to retire a significant number of our roughly 460 737-700s over the next 10-15 years, and the MAX 7 is best-in-class aircraft for us in that 150-seat category. Just like the MAX 8 is the best in class for us in the 175-seat category. The acceleration of our fleet modernization, I think makes great economic sense. It'll also reduce carbon emissions and noise levels, which of course, is better for the environment. It also provides a superb cabin experience for our customers and our employees. Looking forward into the second quarter, we have a couple of important capabilities that we're going to add to the operation. First, we're in the final stages of obtaining ETOPS certification for our MAX 8 fleet. The MAX and its fuel burn advantages will allow us not only to reduce our operating costs Hawaii. That's also going to allow us to fill all 175 seats in winter wind conditions, and that's something that we can't always accomplish with the next gen fleet. That was our plan all along, but of course, the efforts were delayed as a result of the MAX grounding. We're going to begin a fleet transition to an all-new maintenance record-keeping system, beginning with our 737-700s later this month. This system replaces our Wizard system, and that system is nearly 30 years old. This new system provides us a foundation for real-time maintenance record-keeping, paperless records, improved planning, better analytics, and automated controls to enhance regulatory compliance. Once we complete the transition of the -700 fleet, the -800s and the MAX will follow later this year. Just in closing, I can certainly feel the operational momentum building, and I have to tell you, it feels good. We are in the process of bringing our entire fleet back into an operational status. We're coordinating our staffing to ensure that we're resourced to fly at whatever our desired levels are. We're introducing new capabilities and navigating through an environment that continues to be impacted by COVID. Our people are just magnificent. I can't say enough about them. They do all of these things. They still run a great operation, and it's amongst the best we've ever delivered. They're just the best team that I've ever been associated with, and my deepest thanks to each and every one of them. With that, President Nealon, over to you. Okay, thanks, Mike. Good morning, everybody. We provided pretty detailed investor updates each month throughout the quarter. Our earnings release certainly provided a lot of information this morning. I'm going to try not to repeat what you've already heard. I do want to provide some color regarding first quarter's revenue performance, as well as some perspective on near-term trends and our outlook for the second quarter. As you know, in the first quarter, operating revenues decreased 52% year-over-year. We're down 60% compared with the first quarter of 2019. This is better than we were expecting three months ago when we last spoke with you during the January call. February operating revenues ended up about five points better. In March, about 15 points better than our estimates from that same time. That has really been the story over the past few months. We have seen steady and very encouraging improvements in leisure travel demand and bookings week after week, really since about mid-February. We saw a very nice improvement in March with operating revenues down 10% year-over-year and down 54% compared with March of 2019, which again, was better than our guidance range of down 55%-60%. March load factor was 73%, also better than guidance, and passenger yield was down 34% year-over-year. Yields were down quite a bit for the months or for the month once we got into March. Once we got into March, rather, fares improved each week as we saw demand steadily increase. Close-in bookings held up well. We also began to see the booking curve extend further out. Keeping in mind that business travel remained fairly stagnant, which I'll hit on in just a few minutes, I'd say that we were really very pleased with March's overall performance. We were able to get a very good base of bookings in place for March earlier in the booking curve, and we did this through very targeted promotions that we ran back in the December, January, and February time frames. Once we got into March, our revenue management team was able to do a really nice job of managing our inventory close rate and managing yields. As expected, spring break performed really nicely, very well. It was bigger than just the spring break story. The entire month of March really saw a steady build in passenger traffic. Just to give some perspective, March's load factor was 20 points higher than what we experienced in January, and that was actually on higher capacity as well, which I think really highlights the pent-up demand for leisure travel that we're seeing. What's encouraging is that this momentum continues into April, and in our last investor update that was in mid-March, we estimated April operating revenues to decline 45%-55% versus 2019. Since that update, we've experienced steady improving passenger volumes and fares. We're now estimating April operating revenues to decline in the 40%-45% range versus 2019, and that's with a load factor between 75% and 80%. The Easter holiday weekend at the beginning of the month performed very well, as we'd expected, and leisure traffic and bookings for the remainder of April hasn't slowed down a bit. In our earnings release, we gave our first estimate for May revenues, which shows further improvement in comparison with April's outlook. We estimate May operating revenues to decline in the 35%-40% range versus 2019, with a load factor in the 75%-80% range. As we experienced in April, May holiday and non-holiday time periods are both booking very well in terms of our leisure demand. With these improving demand trends holding their pattern since mid-February, it really has provided us a much better opportunity to manage the booking curve for April, May, and beyond. Our revenue guidance for April and May includes the expectation of sequentially improving load factors and also improving passenger yields when compared with March. We expect the yields will still be down compared with 2019 levels, but that should be fairly intuitive given that we are almost solely reliant on leisure travelers at this point in the recovery. That being said, though, we have been pleased at how well close-in demand performed in March and is trending so far for April. At this point, we aren't quite ready to provide an outlook for June, but I will say that we're seeing bookings increase further out in the booking curve, and they're building faster. It's still pretty early in the curve for June and July, but I will tell you that bookings are building nicely at this point and shaping up seasonally as you'd expect for leisure travel. In a normal year at this point, we would expect to be around 60% booked for May. Roughly 35% or so booked for June, and around 20% booked for July, and we are currently in the hunt with those levels of bookings. With June being one of our highest demand summer months, our current expectation would be for June's revenue performance to be better than May relative to 2019. We'll provide you with a June revenue outlook as part of our investor update in mid-May. As vaccination counts rise and travel restrictions ease and leisure demand increases, we are obviously pretty encouraged. It feels good, and there's a feeling of optimism. As you know, the improvements are rather skewed heavily towards leisure demand now into the summer and simply too early to make much of a prediction on travel demand for the fall. We are very mindful of the fact that the demand recovery may not be a straight and quick path back to pre-pandemic levels. Which brings us to business travel. Our corporate managed travel revenues were down 88% in the first quarter versus Q1 of 2019, which is consistent with our fourth quarter 2020 results. We did see some modest improvement later in the quarter, in particular in March, where corporate revenues were down 85% versus March of 2019. Based on what we're seeing and hearing from our corporate customers, it continues to be very clear that domestic business travel will certainly continue to significantly lag leisure recovery. For now, we are planning for a scenario where business travel will still be down 50%-60% by the end of this year. Having said that, we are in fact seeing more and more of our customers beginning to allow their employees to get off the bench and fly and travel, and they're beginning to unfreeze or relax their travel policies. Although that's happening, we just aren't seeing the volumes come back at this point. If you buy into surveys, and I guess I sort of buy into surveys, the most recent GBTA business travel survey suggested that roughly 60% of respondents expect to resume domestic business travel in the third and fourth quarter of the year. I guess we'll see. Time will tell in terms of the pace of business travel recovery. It's also not clear, to be honest with you, what% of traditional business travel ultimately returns. Our view is that there could be a 10%-20% reduction in business travel either permanently or at least for some extended period of time. Having said all that, however the business demand curve shapes back up, I can tell you, as Gary alluded to just a moment ago, that we are really well-positioned. In fact, this is the best positioning we've ever had in terms of going after corporate business travel. You're all very aware of the GDS initiatives. I'm not going to go on and on about that, but it closes a huge gap in our corporate travel capabilities. As you guys know, we are live on Amadeus, Apollo, Galileo, and Worldspan today. We are very far down the path to implement the Sabre GDS platform in the coming months, and we have a targeted go-live date that we will implement prior to Labor Day. Really good progress on this front, and the teams are doing an incredible job. We're feeling very good about where we are. Our sales teams are out in the market. We are engaging with our customers at a very high level and a very frequent level, and the response has been incredible. I think we are really well-positioned to gain some revenue and perhaps a little bit of share. Shifting gears to regional demand, I just want to give you a little bit of color on what we're seeing in terms of the different parts of the network. In general, our leisure markets, where restrictions have remained low, continue to outperform the rest of the system very nicely. Beaches, mountains, sun, and ski are all performing very well, which is totally consistent with what you're hearing from the other carriers as well. A little more specifically to our network, we are seeing strength in our Texas markets, Austin, Houston, Dallas, and San Antonio. We're also seeing strength in really all of Florida, but in particular on the Gulf Coast of Florida, which includes Panama City, Pensacola, Fort Myers, Tampa. The Desert Mountain region is performing really nicely, which includes Phoenix, Salt Lake City, Boise. Denver is also performing very well. There's a lot of strength within the network. Demand continues to lag in areas such as the Northeast. Chicago's lagging a bit. California is lagging a bit, although it's really improving since the restrictions are being lifted. We are seeing improvements across the system, which is encouraging. Honestly, whether a city has been lagging or outperforming, what we are seeing is that all markets have improved fairly significantly recently compared to where they were in January and February. As a result of what you just heard, we are comfortable adding back flights to capture additional demand, including Hawaii, and it's great to see demand from California to Hawaii, as well as between the islands, ramp back up. We're finally at a point where we can get to our Hawaii flight schedules up to where we hope we'd be a year ago before the pandemic. As you know, international testing remains in place. Overall, I'd say our international demand is performing just fine. Not a lot to report. At this point, we are only serving eight of our 14 international stations, and we'll intend to bring the remaining six back online as it makes sense and as restrictions ease. A little color and perspective on new stations. At this point, we have opened 10 of our announced 17 new airports, and all of them are performing terrific. In fact, there's not a clunker in the bunch. All of them are generating new customers, additional revenue, and collectively are contributing positively to our cash performance. We feel really good about what we are seeing in our first 10. More to come. We'll begin service in Fresno on April 25th, Destin/Fort Walton Beach on May 6th, Myrtle Beach on the 23rd of May, Bozeman, Montana on the 27th, Jackson, Mississippi on June 6th, and we also just announced last week that Eugene, Oregon will begin service on August 29th, and we will begin service in Bellingham, Washington later this year. All the new stations that are operating today are meeting or exceeding our expectations. They've been on our radar for years, and it's great to see them up and operational, and honestly it's pretty interesting. I think our network planning team is batting 1,000%. This is really something. The operations are starting up really cleanly. In terms of our capacity, for the first quarter, capacity decreased 35% year-over-year. It was down 39% compared with the first quarter of 2019, which was consistent with our expectations. As planned, we added, as Gary alluded to, we added additional capacity in March, which equated to roughly 1,000 flights each day, beginning mid-month. That really paid off as demand improved. These incremental flights improved our March performance by roughly $150 million. That's revenue performance by $150 million. Our April capacity is expected to decline 24%, and May capacity is expected to decline 18% relative to 2019 levels. This includes a modest increase in flying in April and about 3 points of incremental capacity in May compared with our previous guidance, which is really just the result of a stronger demand outlook. At this point, we are in the process of adjusting our June flight schedules, and once the revisions are complete, we expect June ASMs to decline 4% versus 2019. As you've seen throughout the pandemic actually, we've cut more business-oriented short-haul flying and added more leisure-oriented longer-haul flying, as well as more connecting itineraries, which is driving higher capacity with fewer aircraft. This makes up roughly 4 points- 5 points of the 14-point sequential capacity increase from May to June. Assuming the current trends continue, our preliminary plans for July call for similar levels of capacity as June relative to 2019 levels, and we'll be finalizing our July plans here very shortly. In terms of passenger revenue and capacity, our focus remains on managing the next few months with as much precision as possible, which is what we've been doing throughout the year, and improving our revenue performance as well as improving our cash burn performance toward breaking even or better, with an emphasis on or better. That's our goal. In terms of other revenues, our other revenues performed better than passenger revenue in the first quarter and was down 15% year-over-year. For March, though, our other revenue was actually up 3% year-over-year. Our ancillary products, specifically commissions from car, hotel, and vacation bookings, performed about in line with passenger revenue. No surprise there. The biggest contributor to our other revenue performance was our Rapid Rewards program. The first quarter total revenue from our loyalty program was down 19% year-over-year, or 22% versus 2019. When you look at it at just the loyalty revenue that flows through other revenue was down 12% versus 2019. This is a very strong performance, especially relative to passenger revenues. I think it just speaks very clearly to the strength of the program as a whole and the high level of engagement that we have with our customers and they with us. The sequential improvement from Q4 was primarily driven by increases in retail sales and commissions on new card acquisitions. Total co-brand card spend in March was only down 1% versus March of 2019. For the first time since the pandemic began, our credit card portfolio size grew in the first quarter, again, relative to 2019. We're thrilled to see that. Our credit card portfolio remains very strong. We're seeing the average spend per cardholder continue to improve. Attrition continues to be very low, and we are really very pleased with the performance of our program. I think you can see in our results, we have more Rapid Rewards members, more credit card holders, and more engagement from our customers. Now we have more places for them to go with a lot more leisure destinations. Building on that, our brand remains very strong. Our brand NPS scores continue to rank at the very top of the industry, which is something that we focus on and watch a lot. We watch very closely. Our trip NPS, which measures individual flight experiences, is trending even higher right now as well, which speaks to our people's focus on hospitality and producing great on-time performance. As Mike said, man, I am so grateful for our frontline employees. They just execute every day with precision and grace, and I'm thankful for that. Finally, I do want to share a few comments and our perspective regarding our focus on the environment, which seems appropriate since today is Earth Day. Gary's already shared our long-term goal to be carbon neutral by 2050, which is aligned with A4A's goal as an industry. This isn't a new topic for us, though this is something that we've been focused on for a long time. Our focus has certainly intensified over the past year. Just for perspective, since 2002, we've invested more than $620 million in fuel efficiency initiatives, and that's independent of new aircraft. In 2019, we saved more than 7 million gallons of fuel through flight planning initiatives. This is something that, again, is not new to us. As Mike discussed earlier, we plan on retiring a significant number of our roughly 460 737-700s over the next 10 years- 15 years. We'll be investing billions of dollars on new aircraft that are 14% more fuel efficient. As it stands today, the carbon emissions that we generate on a per ASM basis is among the very best in the industry, and our fleet modernization program gives us a massive opportunity to continue to significantly reduce our CO2 emissions over the next 10 years- 15 years. That's all great. We also know that fleet mod alone isn't nearly enough to get us to our goal of carbon neutral by 2050. In our views, the most promising path over the next 10 years- 15 years is a combination of fleet modernization, operational fuel efficiency initiatives, air traffic control modernization, and the introduction of economically viable, sustainable aviation fuels, or SAF, at scale. Today, we have a SAF offtake agreement in place with Red Rock Biofuels, and our teams continue to work with the National Renewable Energy Lab, or NREL, on the development of new SAF feedstocks and pathways. We've also recently signed MOUs with both Marathon Petroleum and Phillips 66 to accelerate the production of SAF with the objective of achieving affordable SAF with low carbon intensity scores at scale. The crux of the agreement is to work together toward the production of 300 million gallons of SAF in the 2025 timeframe. This is a very ambitious target and there's a tremendous amount of work to be done, but it's also a really important step forward, and we intend to work very closely with both Marathon and Phillips 66 throughout the process with the intent to secure large offtake agreements that represent a significant share of the SAF that's produced. To be honest, this effort is not just about Southwest securing more SAF for Southwest. It's also about getting large energy producers into the market and getting production to scale at affordable prices. We also believe that the use of carbon offsets can be appropriate and helpful, but we see this as a bridging technique. Our use of offsets so far has been focused on renewable energy credits, which are natural gas offsets, to complete our headquarter campus 100% renewable energy plan. Up to this point, we have not been using carbon offsets, but if used appropriately, again, they can be helpful, whether it's making offsets available to customers or corporations who are looking to offset their travel emissions. More to come on this, but again, we see offsets as a bridging solution. Direct air capture, new airframe and engine technologies, and new energy sources such as hydrogen, power-to-liquid or PtL, also have tremendous promise, but we see these things as being much further out, call it 2035 and beyond. Our objective is to focus on things that we feel like we can have a real impact on over the next 10 years- 15 years. This is something that we are absolutely committed to achieving, but to be really clear, the industry is going to have to work together. No single airline can do it alone. It's just impossible. It's going to take a lot of work with a variety of organizations, including the private sector and nonprofits, as well as strong support and policy from the federal government and state governments. We'll need innovation and scale from the energy industry, and we'll also need continued advancements for the aerospace industry to become carbon neutral by 2050. Gary's asked me to be the executive sponsor for our environmental efforts, and I've asked Stacy Malphurs, our Vice President of Supply Chain, who happens to be extremely knowledgeable of SAF and the end-to-end fuel supply chain, to take this on with me as well. To wrap it up, we'll be providing a comprehensive report of what we're doing and the progress we're making in our annual sustainability report, which we call the Southwest One Report, and we'll be publishing this online to our investors site in the coming weeks. With that, Tammy, I'm going to hand it over to you. All right. Thank you, Tom. Hello, everyone. I'll round out today's comments with a few remarks on our performance and an overview of our cost, fleet, liquidity, and cash burn before we move on to Q&A. This morning, we reported first quarter net income of $116 million or $0.19 per diluted share, which included $1.2 billion in payroll support. Excluding this benefit and other special items detailed in this morning's press release, our first quarter net loss was $1 billion or a $1.72 loss per diluted share. While our losses persisted in first quarter, I feel good about the progress we are making, in particular as we move through second quarter here. I want to commend our people on another solid cost performance as we have to remain extra diligent with our spending. Excluding special items, our first quarter total operating cost decreased 24% year-over-year to $3.3 billion and increased 17% year-over-year on a unit basis. Fuel represented about 35% of that decrease. Our first quarter economic fuel price of $1.70 per gallon was at the midpoint of our guidance range, and our fuel expense declined 44% year-over-year. Reduced capacity levels resulted in gallon consumption down 37%, the largest driver of our year-over-year decline, and economic price per gallon down 11%. We realized a modest hedging gain of approximately $1 million or $0.01 per gallon, and our hedging program premium costs were $25 million or $0.09 per gallon. While fuel price was still below year-ago levels, energy prices have been creeping up over the past few quarters, which only serves as a reminder of the importance of having a consistent and meaningful fuel hedging program. We have great hedging protection in place with hedging gains beginning at Brent prices in the $65-$70 per barrel range and more material gains once you get to $80 per barrel and higher. Based on market prices as of April 15th, we expect our second quarter fuel price to be in the range of $1.85-$1.95 per gallon, including another modest hedging gain of $0.01 per gallon. Looking at 2022, we also have a high-quality fuel hedge in place with a similar level of protection. We would start recognizing hedging gains around the $60 per barrel Brent range, with more meaningful hedging gains beginning at $70 per barrel and higher. Last year, we took the opportunity to add our 2022 hedge position while prices were lower. Our first quarter fuel efficiency improved 5% year-over-year, primarily driven by many of our older aircraft remaining parked. Some of the current fuel efficiency gains are temporary, as we'll see some sequential pressure as we return more of our older 737-700 aircraft to service this summer. We currently estimate our second quarter fuel efficiency to be sequentially in line with first quarter's ASMs per gallon, partially due to returning the MAX to service last month. The MAX is our most fuel-efficient aircraft, and we have a line of sight to more significant improvements over many years as we plan to retire a significant amount of our 737-700 aircraft in the next 10 to 15 years. We get at least a 14% fuel efficiency improvement on a per aircraft basis each time we replace an end-of-life 737-700 aircraft with a new MAX. This will be a big driver of progress towards our long-term environmental goals. Excluding fuel, special items, and profit sharing, first quarter operating costs decreased 19% year-over-year on the better end of our guidance range. On a unit basis, the increase was 23% year-over-year, primarily driven by the 35% reduction in capacity. We continue to realize cost savings from our actions taken in response to the pandemic, including $412 million of savings in first quarter salaries, wages, and benefits, driven by the benefits of our employee voluntary leave programs implemented last year. We had pay rate increases for our people that are flowing through this year, but the voluntary program savings far offset that rate inflation. Outside of salary, wages, and benefits, we had year-over-year decreases in most other categories due to reduced capacity and the related cost relief, primarily in the areas of maintenance, landing fees, and employee, customer, and revenue-driven costs. In terms of a few other notable items in first quarter, aircraft rental expense was $52 million, down 9% year-over-year, driven by the return of leased 737-700 aircraft. Advertising spend has increased sequentially from fourth quarter as we ramp up some marketing. Our first quarter advertising spend was down 8% year-over-year. We realized one-time favorable settlements in first quarter, primarily property taxes, and those are reflected in our other operating expenses. Again, our first quarter cost performance was solid, and I appreciate all the work our teams are doing to manage costs in this unprecedented environment. Turning to second quarter, we currently expect operating expenses, excluding fuel and oil expense special items and profit sharing, to increase in the range of 10%-15% year-over-year, and also to increase sequentially compared with first quarter. We estimate that 60%-70% of the expected sequential increase is due to variable flight-driven expenses as we plan to increase capacity to near 2019 levels by June. To support the increased flight activity, we are recalling a portion of our employees who had elected our voluntary Extended Emergency Time Off program. In terms of salaries, wages, and benefits expense, sequential cost increases from a few items account for about a third of the total sequential increase. We have increases driven by a higher number of active employees in second quarter, including the impact of recalled employees. Roughly half of our recalled employees will return in second quarter. Some training will be required for those employees that we recalled as we prepare for them to go back to work. Partially offsetting our second quarter cost pressure from these recalls is an estimated $325 million in cost savings from our voluntary separation and extended leave programs for those employees that took a voluntary separation last year and those employees that remain on Extended Time Off. With some early recalls, we now estimate annual 2021 cost savings from our employee voluntary program to be in the range of $1.1 billion-$1.2 billion, down from our previous estimate of $1.2 billion. Outside of salary, wages, and benefits, the largest drivers of our sequential cost pressure are flight-driven cost increases and landing fees, employee, customer, and revenue-related costs, and maintenance expense as we prepare aircraft that have been parked for a return to revenue service, as well as higher flight-driven maintenance expenses as flights resume. These ramp-up costs combined represent the other two-thirds of our capacity-driven sequential cost increase. Outside of capacity-driven cost increases, we expect sequential cost pressure driven by airport cost inflation and higher aircraft ownership costs due to the MAX deliveries. This rounds out the majority of the remaining cost increases. While we are facing expected sequential cost increases that naturally come with increased flight activity, we expect our second quarter operating costs to remain below second quarter 2019 levels. We expect that our ramp-up cost pressures will vary and persist until we get capacity back to 2019 levels. That said, we remain laser-focused on cost control as we navigate through this recovery. Our first quarter interest expense was $114 million, in line with fourth quarter. Assuming our current momentum continues, we don't currently anticipate raising additional debt, and based on current levels of debt outstanding and current interest rates, we expect second quarter interest expense to be approximately $115 million. Our first quarter effective tax rate was 21%, which was in line with our expectations, and we currently estimate our annual 2021 effective tax rate to be approximately 23%. Mike covered the highlights of our Boeing agreement. I just want to add my thanks to the teams at Southwest Boeing and CFM International for their tireless work to develop agreements that extend and support our long-term relationships and that support all our Boeing 737 business model. Based on the refreshed order book and our retirement plans over the next 10 to 15 years, I feel very comfortable with our ability to manage the size of our fleet, support fleet modernization, and pursue growth opportunities as they arise. We can do this in a cost-effective manner, in particular with manageable CapEx. We ended first quarter with 730 aircraft, including 61 MAX 8s. For second quarter, we expect to receive seven MAX 8 deliveries and retire three 737-700s. We will have one more MAX 8 delivery in third quarter and retire up to six more -700s by the end of the year. Beyond 2021, we are going to wait a bit longer before we make a decision about 2022 fleet plans and 2022 CapEx. That said, we are well-positioned to begin retiring roughly 30 to 35 737-700s a year beginning next year. Our firm orders should cover the majority of our fleet modernization plans, and we will make decisions on exercising options based on the economic and demand environment and based on growth opportunities and capacity plans. As Mike mentioned, our options provide us tremendous flexibility. As expected, our first quarter capital spending was $95 million, and we currently expect our full year 2021 capital spending to be roughly $500 million, with an immaterial amount of aircraft CapEx and driven mostly by technology, facilities, and operational investments. We have plenty of flexibility to manage CapEx with our order book, with aircraft CapEx on firm orders of $700 million next year. Before I wrap up and open the call up for questions, I will provide an overview of our liquidity and cash burn. We currently have approximately $14.3 billion in cash and short-term investments, in line with where we ended first quarter. We are thankful to our federal government for providing continued economic relief to protect jobs as the pandemic persists. We received $1.7 billion in Payroll Support Program proceeds during first quarter and expect to soon receive an additional $259 million as our final distribution of the second round of PSP support, our $2 billion total from the PSP extension. We are currently working to finalize our agreement with the Treasury on the third round of PSP support and expect to receive an additional $1.9 billion. Our liquidity position provides a solid foundation as we operate in the wake of 2020's substantial losses and on the heels of another substantial non-GAAP loss in the first quarter. Our first quarter average core cash burn was $13 million per day. A $1 million sequential increase from fourth quarter, with rising fuel prices offsetting improving revenue trends. The material improvements in revenue began substantially in March, resulting in an $8 million improvement from our February cash burn of $17 million per day to a March cash burn of $9 million per day. When you include the benefits from future cash bookings and other changes in working capital, as we define for you in our earnings release, we flipped positive in March and produced cash flows of $4 million per day. Assuming the continuation of positive revenue trends, we expect our average core cash burn in second quarter to be in the range of $2 million- $4 million per day. We continue to expect to achieve cash burn breakeven with revenue of roughly 60%-70% of 2019 levels. Barring any unforeseen changes in current demand trends or cost trends, and assuming revenue and booking trends continue to build throughout second quarter, we are hopeful that we can achieve core cash breakeven results are better by June. In closing, while the effects of the pandemic persist, our Southwest team continues to conquer both the familiar and unfamiliar challenges of the day. While we aren't out of the woods yet, we are encouraged by the rise in vaccinations that seem to be unlocking the pent-up leisure demand that we all believed was there. We are optimistic and hopeful that the worst is behind us. We are mindful that business travel continues to significantly lag leisure. We will continue to manage our business closely to focus on what we can control, maintaining a strong balance sheet and liquidity position, reducing our cash burn as we work towards breakeven, and managing tight cost control and seeking efficiency, especially as we begin to ramp capacity levels. I am immensely proud of how our people continue to persevere and show up for our company, our customers, and each other. Working together, I am confident that our best is yet to come. With that, Keith, we are ready to take analyst questions. Yes, thank you. We will now begin the question and answer session. Our first question is with Stephen Trent with Citi. Good afternoon, everybody, and thank you very much for taking my questions. Just one quick one for you. Tammy, I was intrigued by what you mentioned about your hedging policy, and you guys also mentioned the approach to climate change with renewable energy credits. Are you thinking about the energy credits and lower emissions and your fuel hedging policy going forward? Are you thinking about them in conjunction with one another as a, let's say, a holistic approach to these topics? Yes, absolutely. There are really two different topics in mind, but we are certainly thinking about them all holistically. Our fuel hedging program, as you know, we've had that in place for many years to provide us protection against rising fuel prices. Looking forward, a component of that will be sustainable aviation fuels. We're just not at a point today where we're at significant volumes there with sustainable aviation fuel. I see that being more relevant with time. As we look here this year, over the next several years with the hedging position that we have in place, the purpose of that is really to protect against conventional fuel, which is obviously going to be what we're heavily reliant on. Tom, do you want to add anything? Okay, I appreciate that [crosstalk]. Stephen, I think that to get SAF up to where it needs to be, there's going to have to be some sort of market-making going on, and there's going to have to be some level of incentive tax credits for the producers, for the lenders, for the consumers. I'm not sure. I think Tammy and I are both kind of early in exactly what the tax benefits are for all these various ESG-oriented elements we're going to have to be investing in. I think that's part of what we have to create in order to make SAF really viable and economically viable if you go going forward. I think it's kind of an open question, to be honest with you at this point. I appreciate the color. Thank you. Thank you. The next question comes from Hunter Keay with Wolfe Research. Hey, everybody. Good afternoon. Hey, Hunter. Hey. Gary, [Topaz] has a long track record of looking after your shareholders. Obviously, you and others diluted a lot during COVID. What do you think is the best way to sort of repay your shareholders? Is it through buying back that stock? Is it through special dividends, or is it really just sort of just taking the money, investing it back in the business, and just trying to grow the stock price through our earnings? I think it's really a ways away before it's a real question for us, obviously, because we've got CARES Act limitations that, Tammy, go what, through-? September of 2023. 2023 [crosstalk]. 2023. As you're well aware. It's post that environment. I do think we've tried to be clear that our priorities would be pay down the debt, number one, and then number two, grow the business. Obviously, we think that that's the best way to maintain the health of the enterprise, but also the best way to take care of all of our stakeholders, certainly our shareholders. I'll let Tammy add if she wants to. I just think it's premature to telegraph what our thoughts might be, ultimately, in terms of shareholder returns. I'm not a fan of special dividends. I don't mind sharing that. I also don't mind sharing that I haven't had that thought that we would be doing a special dividend, and we couldn't do it until post September 23rd or 2023 anyway. We've got four phases, Hunter, that we're thinking of. One is survival, second is stabilize, third would be prepare, then fourthly would be back to prosperity. We've sort of declared that until we stop losing money, we're still in the survival mode. That's a little out there for what we're thinking. Once we get to prosperity, I'd love for us to get back to handsome shareholder returns, and I just feel like we need to repair the balance sheet first. I got the question this morning on CNBC, and I thought it was a good one. We view share repurchases, as you well know. We had a healthy dividend going into the pandemic, as you well know. We also had the strongest balance sheet and the lowest leverage in our history coming into 2020. All of that is key in terms of thinking in the future about what we would do with shareholder returns. We've got to get our balance sheet back in order. It's not broken, but we do have some work to do, and I know we're all aligned here that that's our top priority. Yeah. No, I appreciate that color. Just a quick one here for you, Gary, as well. I know this is a too, like a crazy question, but if demand sort of doesn't get a whole lot worse, but doesn't get a whole lot better either, and we find ourselves looking at PSP4 maybe attached to the infrastructure bill or something like that, is that something that you expect to happen or would advocate for or would actively say we don't need it? Well, I will admit, that's not anything that I've contemplated. I'm very grateful that we've gotten not one, not two, but three PSPs. I guess to be totally open on the question, we feel like we're on the cusp here of achieving breakeven. It's hard for me to argue that Southwest would need any further support. The premise that you raise, of course, is that, if I could sort of extrapolate, that isn't achieved and we sort of bump along, with my comments initially. Yes, our first quarter turned out better than we thought it would be, we still lost $1 billion. Well, that can't go on indefinitely for any company and certainly for an airline. I don't think that that's what we're staring down. I don't think we're looking at a billion-dollar loss second, third, fourth quarter. Given that, which is the only way I can really answer the question, I don't think we're in that scenario, so therefore, no. This is a live question on this infrastructure bill. Finally, no, we're not advocating for anything different other than just trying to provide our input on the spending and the investments that are being contemplated in that bill, along with the prospect of corporate tax increases. That's our focus. Thank you. Thank you. The next question comes from Ravi Shanker with Morgan Stanley. Thanks. Good afternoon, everyone. Gary, can you share a little more detail on what the early conversations with your corporate customers or potential corporate customers have been now that you have widespread GDS integration? Is it different from your existing corporate customers given that kind of you're one of the first LCCs to enter the space? Kind of, how are those conversations trending, and how is that customer base looking versus what you initially envisioned? Yeah. The managed travel accounts definitely are behaving differently than our non-managed travel accounts, and I'm going to let Tom and Andrew speak to that. I was hoping you would. Let me just talk about the business travel for just a second. The industries that are starting to pop back up again, I consider business demand is falling as opposed to leisure demand, which is hot. The areas of the business demand that are starting to travel, it's a lot of government DoD. It is manufacturing, some transportation. The areas that are not traveling are the big consulting firms, which by the way, are the biggest consumers we have of air travel. It's really not happening yet. I think that in terms of the conversations with the large accounts at this point, given that we are now on GDS platforms, we were talking about this before, we're starting to see the channel shift that we'd expect to see, given that we're now on four GDS platforms. I guess the honest answer is the volumes are so low, it's just hard to know if we're seeing what we would have expected to see in terms of channel shift from one to the other. What we are seeing a little bit of shift, I think, Andrew, jump in if I'm not correct here, is a little bit of shift from the Sabre BBR basic product into more the standard GDS platform. That's working well. I guess just in general, In fact, Dave did a great piece with Hunter. I'm not sure if you guys read it. Took a while to read it. It's pretty long, but it was really good. The conversation was really such that the customer really gets our product, they really want the product, we've just been so hard to do business with, et cetera. I think the conversations with our large corporates are really very positive, and they just want us to be on the shelf in Sabre and the others, and we will be. We just need to follow business travel, I think. This is Andrew, the only thing I'd add to that is these TMCs and corporations, we already have relations with them because through our direct connect and our SWABIZ platforms, their customers now just was not their preferred platform. I would think of it more of as expanding our book of business with them rather than introducing ourselves to these new corporates and TMCs. The fact that we're moving to something that's more their liking has received good returns from them. That's why we expect to do better post-pandemic than pre-pandemic with the largest corporations who had more of a standardized process that would go through the GDSs. Very helpful. Thank you. Thank you. The next question goes to Mike Linenberg with Deutsche Bank. Oh, yeah. Hey, good afternoon, everyone. Hey, Gary, earlier I saw a headline out about you making a comment about a business travel rebound not taking place for about 10 years, and I'm just curious the context within that comment, and I don't know if it was a misquote or maybe there's some analysis that you guys have done, or maybe it's your point referencing that maybe some portion of business is never going to come back. Can you just sort of clarify or qualify that statement? I'd be happy to, Mike. Honestly, there's nothing new. I've said 10 years for a year, and my only point was. You're expert at all of this. We've just lived through an environment where it is impossible to forecast. It's impossible to predict. We can all pontificate. All I've been saying is really in response, Mike, to a question about will business travel ever recover? Yeah. I think it will. I think it's silly to sit here and say it will never recover. That's a bold statement. Mike, it could be a long time, and that's where I've thrown out the 10 years, and I've done that consistently. Yeah. A typical recessionary recovery is five years for business travel. Yeah. We've lived through a lot of recessions together, so that I feel confident of. What I'm not confident about is whether this is a typical recession, number one. It's got some pluses compared to a typical. It has the negatives because of everything that we know about being able to work now with technology virtually and remotely. That is a huge question mark. Yeah. I'm on another board besides Southwest. I've talked to other CEOs, talked to all my friends and colleagues here at Southwest, and we get plenty of anecdotal information that suggests that business travel will not recover to pre-pandemic levels anytime soon. There's just no way to know. No, I'm not predicting it's 10 years. Really what I was trying to do was sort of tamp down the argument that it will never recover, and just simply to say that who knows? It could be a long recovery time period, but we're going to be prepared, Mike, regardless. Tom and Andrew were just talking about GDS. For Southwest, I think that we will recover business travel faster because we have a new avenue to gain business travelers. We dramatically under-indexed the managed travel market, and that was because we weren't a part of the GDSs. We remedied that. We're the largest airline in the United States. By virtue of that, I would argue that we're the largest business airline in the United States. As I said in my remarks, now the managed travel accounts will have wide access to a great network, great service, no bag fees, no change fees, and low fares. They will finally have access to low fares. I think we will do extremely well there. Great. That context is very helpful. Just my second question to Andrew. With the cities, 10 that have been announced, I think out of 17. Interesting when you think back historically, Southwest was an airline that was very sort of tactical and methodical in sort of additions. Maybe one, two a year, maybe some years, no cities. Now all of a sudden, a deluge of cities, and some of these are actually small markets. If I think back, Southwest in the past, some small markets, the company historically may have struggled. It sounds like the ramp-up is going fairly well. Andrew, maybe what has changed that you feel much stronger in moving into some of these smaller markets and more quickly? Maybe it's just the pandemic, you strike when the iron is hot. Maybe it's the density of the Southwest network. Small cities can plug in, and you can turn on and be successful far easier today than the Southwest of 10 years ago. Maybe I answered the question, but if you could just give us some color, because this is a different mode for Southwest with respect to new city development. Certainly, I'll be happy to answer. Tom, feel free to join in. We are methodical. Prior to the pandemic, we have a practice every year of going through and looking at every place we could fly our aircraft and evaluating them, at least a desktop, if not in-person visits. All these cities were ones that were known to us and evaluated prior to the pandemic. When the pandemic, as Gary talked about, we're unsure about the pace of business travel return. Because we have a lot of business travelers, if they were not to return in a timely manner, we would have a shortfall in revenue activity to deploy our people and assets against. With the operating leverage model, we don't want that. We want to make sure we have enough new cities to cover any potential shortfall in that return. That led us to go a bigger scale than normal. The cities we chose also to have a low risk as far as their maturation. We've been in plenty of small cities for a long time. Our West Texas cities and Pacific Northwest cities, they're modest, and we do quite well, upstate New York. The key is a small city that is relevant to a place where we have a large customer base. If you look at all these small cities, they're either marquee destinations unto themselves, or they're relevant to a nearby large Southwest city where we have a large customer base who would be big purchasers of tickets to these small cities. That's what's important to us. We want to make sure we go in with at least a level of flight activity that allows for crew efficiencies so that we have originators and terminators that make us not to have crew deadheads that would undermine inefficiency. All those things must come together for us to add those new cities. I think we were prepared, and it fits with our model, I think is the answer. Hey, Mike, I just want to pile on very quickly. Yep. kind of reconcile to 1992, when you worked on our secondary offering, in those days, I don't know if you remember our rule of thumb, but we didn't want to go into a city in the early 1990s unless we thought we could do, let's say, eight departures a day. So I wouldn't translate what we're doing with these 17 cities as being a violation of even that old rule of thumb. Some of these "small cities," I think, Andrew, I won't name names because we may not want to telegraph yet, but there are a handful that I can think of that you might think are small. We're thinking they're going to be a dozen or more daily departures and to a number of non-stop destinations. I do think the fact that we now have such a large U.S. presence, it makes a lot of these "smaller markets" much more viable today in terms of flight activity than it did 30 years ago. The other thing I would point out is that Miami isn't small. Bush isn't small. Colorado Springs isn't small. O'Hare is not small. We do have a few cities that have three or four daily departures on the route map, and Mike would call those small. We have experience with them, and we know that they can work. I don't think that that means that every city like that would work. Anyway, we have been delighted that we could actually have the capacity to put them on the route network here. I got asked earlier today about whether we'll continue this, I think Andrew's going to need, assuming that we continue on our recovery path, he's going to need to take a lot of these airplanes and put them back into restoring flight activity into our existing network. That will challenge our ability to continue doing this play, but they're permanent adds and we're delighted with the performance that we're seeing. Well, great. Just to give a little more, this is one question, so we'll move on quickly. We've got about 45 aircraft or so, Andrew, I think, committed to the new cities so far. About 8% of the trips. As I talk about the business demand thawing, as it begins to thaw, we're going to need to begin to get our network back in business travel shape. Just to give you a little cue, because people are going to ask us, "When does the network get back to normal?" Well, the network is not going to get back to what it was because we have 17 new cities on the network. What I can tell you is when you think about the principles and the characteristics of the Southwest network, those will be intact. Point to point, you should expect to see a very similar mix of short, medium, long, a similar mix of direct and connecting traffic. Our focus, once we begin to see business unthaw, is we got to begin to put the depth back into the markets like the St. Louis's and Milwaukee's and intra-California business markets and such. It's going to be interesting, but that's also why we're getting more aircraft. Yeah retire some, we're going to add some incremental, so it's going to take time, which is fine because business traffic is not going to show up on one Sunday and all of a sudden it's back. It's going to take time, and we'll begin to build our fleet back and our network depth back. You spurred a lively topic there, Linenberg, so thank you. Hey, Gary, I appreciate everyone. I appreciate the responses and especially the early 1990s reference, Gary. It was a fun time. Mike, the thing that really pisses me off about you is you don't look any different. You can't see me. Okay, thank you. The next question comes from Brandon Oglenski with Barclays. Hey, guys. Well, I wasn't on the early 1990s roadshow, sorry about that. Gary, you did mention four phases here, survival, stabilize, prepare, grow, I think is the way you laid it out. It sounds like you're going to go through stabilize and prepare pretty fast here, just with your June capacity outlook. I guess I just have one question for you because I know it's been a long call, but investors are wondering, how are you going to take advantage of your net debt position, especially relative to some of your larger competitors that have other capital priorities in front of them? Is the view here that potentially you're going to grow into a marketplace, potentially take share? Could that sustain lower fares in the future? Should we be thinking, "Look, we really want to get back to prior profitability before we push a lot of these fleet and network expansion opportunities that you guys just discussed? I think we want to keep all options available. We've got a great balance sheet as it stands today. We will absolutely have to get back to profitability regardless. We've got to get back to profitability. I already conceded that balance sheet repair will be an objective. Tammy is already rethinking liquidity targets as well that will be more robust perhaps, than what we had before. There are several things that we'll want to think through, but clearly, we're in a position where we have that option. We can pay down more debt more quickly, or we can think about expanding more rapidly as compared to some baseline. It's just too early to judge that yet. We have tons of opportunities. We're a growth company. We know how to manage growth. We would be foolish to pass on what I think is the opportunity of a lifetime to grow this airline in this environment. We are so well-positioned. If in fact, the business travel stays modest over the next five to 10 years, we are perfectly positioned to prosper in that environment with our low costs and our low fares. Thank you, Gary. Thank you. The last question of the session comes from Jimmy Baker with JP Morgan. Hey, everybody. I got to tell you, I really liked Mike's question. I remember being in Telluride with him about 20 years ago and betting on the one market that you might open that year, and I'm sure the idea of Montrose never crossed either of our youthful minds. It's a good segue into my question. Is there a reservation or IT issue that prevents you from flying to Canada? Tom, you want to talk about that? Yeah, there is. To make Canada work for us, that's both a business and a leisure market, and we've got to be able to sell. It's back to the whole foreign currency, foreign point of sale thing that we've been talking about for a long time. That's the thing we need to get done. Jimmy, it's not like it's a unconquerable technical task that we don't know how to do. It's just a question that we keep putting GDS and GDS may have these other priorities popping up, the ETOPS. It's not that we don't know how to do it's just that it keeps getting knocked down the list in terms of priority. It's just a piece of work around the foreign currency and foreign language that we keep talking about that we just keep deprioritizing because there's a bigger idea. It's really as simple as that. We think there's probably five, six, seven really nice markets, which by the way, is part of the reason Bellingham is now in the schedule, right? There's some nice Canadian markets that could really do very well on the Southwest network. We just got to get a little more time to get that on top of the list, I think, really. Yeah. I totally agree with everything Tom said, but I would just reemphasize our previous conversation to his question, which is, okay, we've added these 17 destinations. We got a lot more we'd like to add. I don't know that we would have airplanes. Even if we tackled that technology challenge, I don't know that we would have airplanes to be able to add those new markets. I guess the point is, Jimmy, I don't consider it to be an IT obstacle for Southwest at all. It's whenever we're ready, we'll commit to that. We'll get the work done. We'll add it to our route network. Right now, we got all we can eat with the current capabilities we have. Got it. A follow-up to an earlier point, you mentioned that consultants are still pretty much grounded. Pre-COVID, can you remind me what your top three businesses were that make up corporate revenue and what% of your corporate spend they represented? Top three or four. Specific companies or industries? I doubt you're going to give me the companies. Industries. I'm not going to give you the companies. I got industries, yeah. I can't remind you because I've never told you, but I'll see what Tammy and Tom have to say. I think, Jimmy, you probably know as much if not more, but certainly defense is a big deal. It's not a industry, but DoD is a big traveler for us. Certainly financial services, banking is big. Certainly, professional services consulting. In fact, you look at the BTN 100, I bet every major Tier 1, Tier 2 consulting firm is in there. They're big. Transportation, manufacturing, so the list goes on and on. Higher ed, actually. The state of California higher ed is a pretty big deal. There's a long list, I guess, is the point. There's a lot of money tied up in it as well. I think what's more important is it's not 80/20. Our largest ones make up a very-v ery small percentage of our corporate book of business. Our corporate book of business is a long list, we appreciate them all, but it's a modest number compared to our overall revenue line item. Sure. That's very helpful. Thank you very much, everybody. Take care. All right, see you. Okay. Well, that wraps up the analyst portion of our call today. As always, if you have any follow-up questions, please give me a call at 214-792-4415. Thank you all for joining us. Keith, I'll send it back to you. Yes. Thank you. Ladies and gentlemen, we will now begin with our media portion of today's call. I'd like to first introduce Ms. Linda Rutherford, Senior Vice President and Chief Communications Officer. Thank you, Keith, I'd like to welcome the representatives of the media to our call today. We can go ahead and get started. Keith, if you would give them the instructions on how to queue up for questions. The first question comes from Dawn Gilbertson with USA TODAY. I'm sorry, actually your question is with Alison Sider of The Wall Street Journal. Oh, thank you. Hi. Yeah, I wanted to ask about the latest issues with the MAX. Just curious, how you're thinking about this, if it affects your ability to build confidence in the plane, given that there was a lot of vetting and a new issue just cropped up? Yeah. Hey, Dawn. This is Mike. The issue with the airplane was it was specific tail numbers that were identified by Boeing as part of a production run. They made certain changes in that production run and may have caused some electrical ground and bonding issues in a couple of different components. The risk there really was just inconsistent electrical currents to those systems. I think that we had had no issues or any identification of that being an issue with our own operating experience of the airplane. I think the issue's well understood by Boeing. It's well understood by our engineers, and I think it's a relatively straightforward repair on the airplane. As soon as the FAA comes out and approves Boeing service bulletins, we're ready to execute that repair. I think, like I said, it's just a one or two-day repair on the airplanes, and it's relatively straightforward. Got it. I'm curious, when you found out about the issue a couple of weeks ago, what was the reaction? Was there any frustration to be in this position again so soon after bringing the plane back? Well, yeah. I think it's frustrating to have to go through that process again. I don't know if lucky is the right word to it, but we had plenty of spare airplanes where in terms of an operational issue, it was not a concern for us. Overall, Dawn, I think Boeing's a good company. I think they've clearly suffered over the last several years, maybe with various quality issues across some of their product lines. At heart, they're an engineering company, and I feel like they need to be leaders in the aerospace and the commercial businesses for our country. I think they understand that, and I think they're going to get back to their roots, and I have a lot of confidence that the MAX airplane's going to lead the way there. Thank you. Thank you. The next question comes from Dawn Gilbertson with USA TODAY. Hi, good morning. I have two questions. First question is for Tom. Have you guys seen any impact from the State Department's alert level that they raised, as you did back when the CDC started the testing requirement, or is it too early? What are you seeing there, if anything? Go ahead and just elaborate a little bit on what you're talking. I'm not really familiar with what you're saying, Dawn. This week, the State Department has been raising the alert level for international countries, including such popular places as Mexico to better align with the CDC rankings. Now more than 80% of countries, including, like I said, some popular destinations have a higher alert level. I know sometimes bookings take a hit when that happened. I wondered if you've seen? Yeah. Any impact at all or expect it. I know what you're talking about now because one of my kids is booked. The answer is, no, I don't think we're really seeing much of an impact on that at all at this point. What's your second question? The second question, I'm not sure who it's for. When you guys were recalling flight attendants recently, one of the things you cited in one of the memos was an increase in people calling in sick. I'm curious why you're seeing an increase in people calling in sick. Are you seeing an increase in COVID infections as travel has rebounded, or are there reluctance among flight attendants to return? Can someone talk about that a little bit? Thank you. Yeah, I'll jump in there with that, and then anybody else can. Our labor contracts, we're very flexible for our people in terms of their sick banks and how they use sick. It could be a variety of things. It could be family issues that they're dealing with, it could be daycare issues that they're dealing with. It could be illnesses themselves, it can be doctor's appointments. As we're recalling people and they're coming back into work, I would argue that they don't have all of their personal lives all laid out as neatly as they normally would. I think we will see a spike in that as people are coming back to work. I don't think that it's any indication of a long-term trend or a big operational hiccup for us. We have reserves that will cover those lines, and we navigated through that pretty well. Thank you. Thank you. The next question comes from Kyle Arnold with The Dallas Morning News. Hey, guys. What are you seeing in the airfare environment, and are you going to be able to hit some of your financial goals with the leisure traveler? The leisure travel is very fickle in terms of airfares still leading the way. Well, I guess I'll start, and Andrew, feel free to jump in. I kind of described earlier in the call is I think the leisure side is pretty hot right now, and I think the business demand side is starting to thaw out. I literally have right in front of me what the booking curve and the fare curve looks like for the upcoming months, and they're pretty solid, and they're really encouraging. Barring a trend shift, I feel pretty good about where we are, and it's kind of back to what we said in the call. Barring a trend change, we feel good about the opportunity to break even, perhaps even make a little bit of a profit sometime in June or beyond. I think that's how I'd answer at this point. As the booking curve begins to get more extended out further out, it just gives us a lot more flexibility in terms of how we manage the inventories and the fares. It's starting to take on normal booking distribution shape, if you will. The level's too low, but the shape is normal, so we're able to manage our pricing more effectively, and that's where we are. We feel good barring a trend change. The guidance that Tammy and Tom gave you includes what we saw in the spring of the leisure fares getting stronger from the bottom of the winter wave through towards the summer. The lack of business travel that Gary and Tom talked about means some of the higher fares that they pay will be absent. Our fares overall will still be down two years and year-over-year as a result of that. Improving trends. Kyle, this is just talking about our fares on average were down 20% in the first quarter. We never give information about what we're going to charge, so they're not speaking to that. We're just talking about how the array of fares that we have average out with the demand that we have. I would just say this, the industry has more seats than it does passengers, and Economics 101 tells you that pricing will settle that, but at a softer level. We're down 20% this quarter, and what we'll be prepared for is a very low-fare environment for a long time, which gets back into the discussion that we've been having all day about business travel demand. That is our wheelhouse. We are low cost, we are low fare, and we can live on low fares, and we'll certainly make sure that we manage our business accordingly. Thank you. The next question comes from Leslie Josephs with CNBC. Hi. Thanks for taking my question. Two quick things. On the MAX, are you getting any compensation from Boeing, either in the form of a payment or a discount on other planes? Do you have any sense of how much not having those planes in service is costing Southwest? My second question, if you want, I could wait till after. Yes, this is Tammy. In terms of the pricing on our aircraft with Boeing, that is confidential. We have shared with you that the CapEx that we have with regard to our firm order book for next year is about $700 million, and that is for 30 aircraft. It's just not that simple. There's a lot going into that, and as you've alluded, that incorporates discounts from previous settlements that we've had with Boeing on the MAX grounding, as well as the terms of our most recent agreement. The actual terms themselves are confidential. Yeah. Are you talking more specifically to this most recent grounding? Yes. The electrical issue. Do you get any. Yeah. Do you know what the financial impact is on you? Yeah [crosstalk]. Yeah, we've got our arms around what we think that impact is. I will tell you, just in the scope of our operations, it's not material. They're new airplanes. The airplanes are warrantied by Boeing. I don't think that will be a concern for us at all. Okay. My other question is, what are your staffing needs for this year and then going into next year? Do you expect to hire? Do you think that too many employees might have left the company permanently? I know some employees who were on temporary leave are getting called back early. I think I can maybe start with this, and I'll maybe have some of my friends around the table talk. The real question is, we're looking for the commercial side of the business to be able to go sense the demand out there, and we're looking out five and six months, and then be able to lay out a schedule that responds to that demand. I feel like we have a lot of flexibility on the airplanes side and on the staffing side with plenty of notice to be able to go fund that. Just to be honest with you, we can do any of the things. If demand falls off from here, we're in a good position. If demand stays flat, we're in a good position. If it increases, we have ability to recall people on ExTO, and if it really explodes, we have the ability to go hire people. It's tricky, and we're trying to make those decisions as close in as possible. We haven't really thought about the second half of the year yet. I'll just summarize some comments that I made at the outset of our analyst call, which is, we are currently at about 92% of our pre-pandemic staffing. Of course, you pick a point in time and you can nudge that number around, but that just gives you some sense. What Tom was talking about was flying our June schedule at 96% of what we were pre-pandemic for June. We've had a little bit of attrition. We've had a voluntary separation program, and that's what gets us down from 100 down to this 92% level. We're comfortable. We're overstaffed right now in March, April. Projecting forward to June, we would be right at the proper staffing, if not a little bit short. There's pluses and minuses. One department might be a little over, one department might be a little under. I think to Mike's point, beyond June, I think what we're all anxious to see is, well, what do things look like when we get to June? Are we going to hit our forecast as we've anticipated it? Will the bookings for July, August, September look as good as we hope? Is there pent-up demand that is not sustained beyond that? There's just a number of good questions that can be posed at this point. It's just a little bit premature. If we get to the point where we've got some staffing challenges, I think everybody here would consider that to be a really high-quality problem. Bob Jordan is here with us, and Bob heads up our Corporate Services, which includes HR. In terms of our current hiring or current hiring plans, you might just share whatever you're willing to share there. Yeah, you bet. On the recalls, gratefully, we had about 11,000 folks take the ExTO, and it was just a terrific response for our employees. We've recalled just south of half of that to meet the demand that everybody's talked about here for the summer. If you see more demand, we can be in the position to continue the recall. We have begun to ramp back up our hiring ability. Before you can hire, you've got to have people that went off and did other jobs, come back and sort of rebuild that team. We are ready to hire. That's very modest right now to key positions. I think if we see the demand continue, we are in a position to ramp that back up quickly. I do think, again, to be straightforward about this, I think we're all prepared for this to be messy. It's just not easy to predict. It's not easy to execute. We also don't want to end up with excess staffing. It's just trying to strike the right balance here. It was really messy a year ago, trying to downsize the airline, and I think we're all just going to have to recognize it will be messy. I think we need to be up to the task here and manage well, but just recognize it may be messy. Having said that, our operation went up 50% in terms of flight activity overnight back in March and had a flawless execution and outstanding performance. We've got a basis, I think, for our confidence going forward. We've been a hiring machine for 50 years, and I feel like we'll do well when we're ready to turn that back on. I look forward to that. I think that will be a high-quality problem. Thank you. Thank you. The next question comes from Rick Velotta with the Las Vegas Review-Journal. Thank you. I hope this is a little bit of a lighter topic than some of the heavy things that you've been discussing. Does the company have any opinion on the city of Chicago's plan to enable the installation of slot machines at Midway and O'Hare International Airport? As a follow-up, does the company have any position on legislative proposals to open Texas to legalize gambling with integrated casino resorts in Dallas, Houston, San Antonio, and Austin? Hey, Rick, it's great to hear your name and hear your voice, and I understand where you're coming from. I would say for Chicago, and I'm looking at our real estate guy here, I would say anything that lowers our operating costs at an airport, we would be all for. I agree. I think Las Vegas has led the way with some really innovative techniques out there. Beyond that, I don't know that I'll comment on what's going on in the state of Texas right now. I guess by extension, anything that generates more travel, I bet everybody in this room would be all for it. Good to hear from you, Rick. Thank you. Thank you. We have time for one more question, and that comes from Jay Singh with Simple Flying. Hi. Thanks. I just want to go back a little bit to your MAX comments earlier. It seems like you have an appetite for expansion, and you've got an order book out until 2031. What's the argument against taking maybe a MAX 9 or a MAX 10 and freeing up some smaller jets for expansion when you've got a pretty significant backlog with a lot of flexibility? Thank you. Well, I think the downside for us taking a MAX 9 or 10 is it doesn't fit our network. Our network is built around point to point. We don't want to have too many connections, and you start getting to a nine or a 10, you're quickly into 200-passenger aircraft, and that's just too big for our network and the way we run our business. Yeah, I think we'd rather see Boeing. If that's our challenge, we like the eight, we like the seven as well as we like the eight. We're not certain what mix of those model numbers we'll have in the future. Just as a rule of thumb, call it 50/50, 60/40, who cares? If that is the issue, I think we'd be pressing Boeing to increase their production rates. Again, that would be a high-quality problem. Great. Thank you. Thank you. This concludes our question and answer session. I would like to return the conference back over to Ms. Rutherford for any closing remarks. Thank you all for joining us today. If you have any other questions, our communications team is standing by at 214-792-4847, or of course, through our media website, swamedia.com. Thank you. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.