Hello, welcome to the Sun Country Airlines Q1 2023 earnings call. My name is Andrew, I'll be your operator for today's call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising that your hand has been raised. To lower your hand, press star one one again. Please be advised that today's conference is being recorded. I will now turn the call over to Chris Allen, Director of Investor Relations. Mr. Allen, you may begin. Thank you. I'm joined today by Jude Bricker, Chief Executive Officer, Dave Davis, President and Chief Financial Officer, and a group of others to help answer questions. Before we begin, I'd like to remind everyone that during this call, the company may make certain statements that constitute forward-looking statements. Our remarks today may include forward-looking statements which are based upon management's current beliefs, expectations, and assumptions and are subject to risks and uncertainties. Actual results may differ materially. We encourage you to review the risk factors and cautionary statements outlined in our earnings release and our most recent SEC filings. We assume no obligation updating forward-looking statements. You can find our Q1 earnings press release on the investor relations portion of our website at ir.suncountry.com. With that said, I'd now like to turn the call over to Jude. Thank you, Chris. Good morning, everyone. Our diversified business model is unique in the airline industry. Due to the predictability of our charter and cargo businesses, we're able to deliver the most flexible scheduled service capacity in the industry. The combination of our schedule flexibility and low fixed cost model allows us to respond to both predictable leisure demand fluctuations and exogenous industry shocks. We believe due to our structural advantages, we'll be able to reliably deliver the industry-leading profitability throughout all cycles. Quarter, our low-frequency model is being able to deliver excellent operational results. Again, we've done that and through a difficult winter. We finished the quarter with 99.9% controllable completion factor in our scheduled service. Thank you to all our team members working every day to deliver for our customers. I'm proud to announce our Q1-adjusted operating margin of 20%. I get plenty of questions from the investment community about what Sun Country results would look like in a normalized environment. I thought it'd be helpful to highlight some of the conditions in the Q1, which are rare historically. First, fuel prices in the quarter were high. I'm not taking a market position on fuel. We manage fuel prices with our variable capacity model. Further, about 40% of our flying has fuel as a pass-through. I wanna point out, however, that during peak periods like March, we fly as much as we're able. Fuel prices during that time are passed through directly to results. Today, we're buying fuel about 60% cheaper than we were in the Q1 average price. Secondly, we had particularly challenging weather this winter in Minneapolis. Challenging weather isn't rare, but our network is focused on Minneapolis this time of year, and the Twin Cities had one of the top snowfall winters on record. That's probably good for demand, but drives a lot of costs in our business. We had two major snowstorms that shut down Minneapolis Airport, which is rare. The resulting cancels from these closures negatively affected results by several million dollars. Some regions of our network posted uncommon results that I don't think we should expect to be recurring. West Florida is a big part of our network this time of year. The region continues to recover from Hurricane Ian. We expect the region to be back next year with higher unit revenues and capacity. Minneapolis International, in contrast, was particularly strong this year. Q1 2022 was affected by Omicron, so year-over-year improvement was dramatic. I expect international capacity growth to moderate this region's TRASM in the future. Finally, most impactful, we remain block hour constrained due to staffing. In Q1 2019, we flew our aircraft 9.7 block hours per aircraft day on average. This quarter, our utilization was 7.3. Increasing flying on the same fleet will have substantial positive impact on results. In some, I expect future Q1 margins to exceed Q1 2023 more often than not. Looking at the rest of 2023, we continue to see strong leisure demand across our network, which is currently selling through mid-December. Of particular note, we expect the recent increase in ancillary revenue to continue to drive positive TRASM trends even as we lap the COVID recovery and increase scheduled service growth rates going into the back of the year. I also wanna call out a fleet deal that we announced about a month ago. We purchased five 737-900ERs that are currently leased to another operator until their return and induction in our fleet. We're not opening a new line of business. This is just a way for us to guarantee future capacity growth and get scale in a new variant. We expect these aircraft to contribute more to our results in our operation than while we're leasing them out. However, in the meantime, we expect positive impact of about $1 million a month in operating income due to the 5 leases. With that, I'll turn it over to Dave. Thanks, Jude. We're pleased to report very strong Q1 results, which I'll detail in a minute, that were the highest in Sun Country's current history. Total revenue, op income, adjusted pre-tax, and adjusted net income were the highest they've been since we transitioned Sun Country to the airline that it is today, starting in 2017. Despite an increase in fuel prices of nearly 8%, adjusted pre-tax income for the quarter increased 235% versus Q1 of 2022 to $52.5 million. The adjusted pre-tax margin for the quarter was 18%. I'll start now with a discussion of revenue and capacity. The revenue environment remains very strong. Q1 2023 total operating revenue of $294.1 million was 30% higher than the year ago quarter. Total block hours grew by nearly 4% year-over-year. System ASMs were up 1%. Scheduled service business remains particularly strong as scheduled service TRASM grew 35% versus last year on a 3.5% decline in scheduled service ASMs. Ticket plus ancillary revenue grew 31% year-over-year as we saw a 21% increase in total fare to $221.47 and a nearly 9 percentage point growth in load factor to 88.1%. We see signs of revenue strength in the Q2 even as we start to lapse on strong gains last year. Charter revenue grew rapidly year-over-year with a 41% increase in the Q1 versus Q1 of 2022. Our contract charter business, which is flying down under long-term contracts, drove the growth as program block hours increased 52% versus last year. The bulk of this increase was due to increased flying under our Caesars and MLS contracts. Ad hoc charter flying, which was 14% smaller than Q1 of 2022, continues to be undersized versus both the potential opportunity and its historic level at Sun Country. Demand in the scheduled service business led us to allocate our limited capacity there versus picking up ad hoc trips. As our capacity continues to increase, we expect ad hoc flying to grow substantially. As a whole, we expect charter block hour growth to continue throughout the year. Cargo revenue grew 11% in the Q1 on a 5% increase in cargo block hours. As a reminder, annual rate escalations for this contract go into effect in mid-December in every year of the agreement. The cargo business remains a steady cash generative business for Sun Country that serves to smooth the peaks and valleys in our passenger service schedule. Turning now to costs. Our Q1 adjusted CASM increased 14% versus last year. Aircraft utilization decreased by 15% versus Q1 of 2022, which negatively impacted unit costs. Our average aircraft count in Q1 of 2023 was 21% higher than last year, while total block hours grew by 4% over this period. We're undersized for the fleet we have in place. Future growth should come at very high marginal profitability. An important thing to note is that lower utilization levels are not necessarily a drag on overall profitability. Our schedule is highly peaked and designed to maximize unit revenue, so having aircraft available during periods when demand is strongest is important, even if the utilization at off-peak times is low. For instance, aircraft utilization in March was 8.2 hours per day, while it averaged 13 hours per day on peak days in the month. Adjusted CASM was also impacted by a 26% increase in pilot costs as a contractual increase in pay rates took place January 1st, and staffing levels have increased to support our future growth. Turning to the balance sheet. We finished the Q1 with $261.6 million in total liquidity, including $236.9 million in unrestricted cash and short-term investments. Our net debt to trailing twelve-month adjusted EBITDA was 2.6 times. During the quarter, we also repurchased 750,000 shares of our stock at a price of $19.75 as part of an Apollo Global Management secondary offering. We still have $10.2 million in board-approved share repurchase authority and will opportunistically execute any future buybacks. Lastly, I'll switch gears to talk about Q2 2023 guidance. We continue to see strong demand booked into the summer. Total Q2 2023 revenue is expected to be $255 - 265 million, which would be 16%-21% higher than Q2 2022. This includes the revenue that we expect to receive from the aircraft that are on lease to Oman Air. We expect total block hour growth of 11%-14%. We're expecting an adjusted operating margin of 11%-16%, assuming a fuel price of $2.85 per gallon. The fundamentals of our unique diversified business remain strong and our model is highly resilient to changes in macroeconomic conditions. Our focus remains on profitable growth. With that, we'll open it for questions. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Duane Pfennigwerth with Evercore ISI. Hey, good morning. Thank you. Just on the cadence of capacity growth recovery for the balance of the year, and I guess that's mainly a scheduled service question, but maybe you could talk about it, you know, on a block hours basis across your segments, and maybe specifically for, you know, the scheduled service business as well. Are you getting kind of the acceleration at the rate that you had previously hoped? Yeah. We're seeing, we are definitely seeing acceleration. Growth in the Q2 versus the Q2 of 2022 will be higher than Q1 growth. Q3 should be a substantial growth quarter. We're expecting strong summer and, we're gearing up to grow pretty substantially Fourth quarter growth will taper a little bit, not for any capacity constraint reasons, just because of demand patterns. We're seeing the increase in capacity that we had planned for 2023. You know, we're not growing as fast as we would like or really as fast as the opportunity presents itself, but growth will be substantial, particularly in Q3, and more so to come in Q2 as well. Just a few more comments. You know, a lot of airlines have philosophies about overscheduling and then cutting down when they have a lot of daily frequencies or under scheduling and then adding, in this case for us, where we see, you know, certainty developing in our staffing. If you look forward in our selling schedules through the end of the year, we load a smaller schedule than we hope to be able to operate. Additionally, at Sun Country, we have a lot of close in charter sales, and charters continue to grow as well, with about the same pace as what we're seeing in our sched service business. Okay, great. Just with respect to, you know, variability of your scheduling, you know, just by the nature of the model, you kind of have to make a bet on seasonality and you're shaping your schedule pretty aggressively. Any surprises in seasonal demand patterns? In other words, are the off-peaks as off peaky as you're scheduling to? You know, maybe what do you make of comments from some of, you know, the industry competitors that, you know, the off-peaks are kind of worse? Thanks, Duane. Yeah, I mean, from my perspective, the surprise is that it's kind of like it was before COVID, where we had an incredibly strong spring break travel season that begins for us in mid-February and goes through Easter. It was as good as anything we've seen. The last half of January and the first half of February were, you know, as weak as they had been in the past also. What I'd say, because there's been a lot of discussion about bleisure, let me just define that term as I would think about it. It's not people going on a business trip that then tack on a couple of days of leisure. It's people that can work from anywhere and therefore, can travel a little more frequently or go to different destinations. What I've seen in our network is a really substantial increase in secondary destinations. Leisure, you know, as I kind of grew up in the space, was always about Orlando and Vegas, and now it's really diverse with particular expansions in smaller markets like the Northern Rockies and Tucson and Hilton Head, you know, Savannah and Charleston and Asheville and Destin, our small international destinations like Grand Cayman and Aruba, Belize. All those markets have really outperformed. That's what I would attribute to, because I think what you're asking is kinda the post-COVID leisure environment. The peaks still remain and that kind of, I think, tees up pretty well for our business model. Okay. Appreciate the thoughts. Yeah. Thank you. Our next question comes from the line of Ravi Shankar with Morgan Stanley. Thank you. Morning, gentlemen. Maybe just continuing on that line of conversation, but looking far out, I mean, you said that your booking curve extends out to almost December right now. What does the forward curve look like? Any signs of cracks in demand, particularly kind of maybe post Labor Day, and that post-summer travel surge? Hey, Ravi, it's Jude. It's just too early to comment on post Labor Day. I mean, we wouldn't sell that. Historically, that time of year anyway sells close in. There's no difference really. Broadly across the network, we're selling well ahead of 2019 levels. In other words, the percentage of our seats that are sold as we sit here today looking forward into the advances is higher than we were in the same time in 2019. Fares are substantially higher than they were that period. They remain higher than they were in the summer peak of last year, which was a pretty strong demand environment. You know, we're growing again really rapidly into that peak period. I'd say broadly, strength everywhere. I'd call out, you know, areas of strength. International continues to remain strong. That's been sort of echoed by other airlines on their earnings calls. You know, we turn our international network to originate out of the South in the summertime, and that's doing really well. The Pac Northwest is looking really, really good, with the resurgence of, like, Alaskan travel. I think that plays into the leisure thesis. Last summer was really about big city destinations from Minneapolis for us, and that's coming back really nicely. You know, we're trying a lot of new things on the network, and probably, you know, I'd like to see, you know, I don't know, 20% of them, fail, which is to say that we're trying things that might not work, and we have other better opportunities. I think that won't be any different from years past where we cycle capacity into 2024 that, you know, we tried this year that didn't work out. It looks really, really good. I honestly, there's nothing. I look to try to find weakness, and it's difficult right now. That's a great comment. I might steal that from you. Maybe that's also a good starting point for a follow-up question, which is a little more of a theoretical question. I mean, just given your unique network, and the reasons why, you know, passengers fly your airline, kind of given the MSP connectivity to the rest of the country and the world, just how macro sensitive or demand elastic or inelastic are your passengers, do you think? Well, they're elastic for price, that's for sure. That's no different from other leisure customers. If what you're really asking is kind of how sensitive the Minnesota leisure customer is to the macro environment? Yes Then I would rather be in Minnesota anywhere if there was gonna be a disruption because the economy is incredibly stable here. That's been proved after many cycles of the past, with, you know, really high affluency, high propensity for travel, and very stable economy that has industry dependencies that are, you know, food and healthcare and the like. you know, and we kind of demonstrated that through COVID a little bit where we outperformed the industry pretty dramatically, even on our sched service business. I don't think the key should be attributed solely to the Minneapolis market. Really, the secret sauce is being able to cut and add capacity without much change to your unit cost so that we can always find these opportunities of positive margin flying. Very helpful. Thank you, sir. Yep. Thank you. Our next question comes from the line of Catherine O'Brien with Goldman Sachs. Hey, good morning, everyone. Thanks for the time. Hey, Catherine. Hey, Catherine. I apologize in advance. This is like a multi-part cost one for my first one. Can you just give us some more color on the cost outlook underlying your, you know, Q2 margin guidance? I think, you know, on my math, that implies some slowing in the growth year-over-year, but a step-up in growth on both a CASM ex and cost ex fuel per block hour basis. You know, was there something about the Q2 2019 comp that we should be remembering, or just some lumpiness and timing this year? I guess just, you know, I'm just trying to get a better sense of, like, how we should think about the second half. You know, among your peers, your business model has changed the most since 2019, right? We layer on kind of, you know, industry wage inflation and other inflation on top of that. Trying to get a sense of, you know, kind of maybe anything we should be thinking about in the comps or lumpiness this year. Really ultimately, like, what's the goal on, you know, either a CASM ex or a cost per block hour basis when you get back to that, you know, targeted utilization? I appreciate you letting me ramble on a bit here. Thanks. Yeah. I would think of it this way. First of all, if you're looking back to 2019, obviously a lot has happened. It's like you said, we've added a whole new line of business. We signed a new pilot agreement. We've had other wage pressures that everyone else has had. I think the story on the CASM ex front is a pretty straightforward one for us. I mentioned during our, during the prepared remarks, that, you know, our aircraft utilization has dropped fairly dramatically. The number of average aircraft in our fleet is up substantially. The number of pilot bodies is up substantially. Essentially, I would think of us right now as a little bit oversized for how much flying we're doing. We've been steadily hiring, we've been steadily adding aircraft. There's an opportunity for us, as we add really pilot production capabilities here, and we're making a lot of progress on that front, to sort of grow into the size that we are now sized for. The result should be high marginal profitability going forward, not a need to add a substantial number of aircraft, nor a substantial number of pilots in the near term. That's really the underlying story on the CASM ex front for us. What we should see, what our plan is if you look at sort of on a quarter-by-quarter basis, that year-over-year pre-pressure should ease a bit next quarter, and then begin to ease substantially in the back half of the year as the strong Q3 growth kicks in. You know, I'm a little hesitant to give sort of a long run CASM number at this point, but suffice it to say, we expect the number to be trending down as we go forward. Got it. Thanks so much for all that color. Super helpful. I guess maybe just on the ad hoc charter flying, when do you think you'll have enough slack in the system to pursue that more aggressively? You know, not to say that having all that contractual long-term charter locked in is a bad thing by any means, just trying to get a sense of like, you know, when you think you'll have the slack. First, that there is ad hoc or not ad hoc is mostly about the certainty of our staffing, less about absolute staffing. You know, when we're going into a peak month, and there's some, you know, we're dependent on some assumptions around attrition or hiring or training or something like that, then we're gonna schedule to the low end of where we think we might end up, and then we'll fill that gap with ad hoc. You're still gonna see ad hoc flying grow through the year. You know, kinda what we really wanna get to is where we're scheduling to the capability of the fleet and then filling off-peak with additional ad hoc opportunities as they, as they become available, and we're ways off from that. I would like to have Grant comment a little bit. He runs our revenue. Thanks, Jude. Jude, it's exactly right. The team does a really good job of sort of looking out into the future, placing our bets in terms of where we expect the most value in optimizing revenue. Ad hoc, as we've talked about, has been the thing that's sort of been spilled off lately. I will tell you right now, we're more aggressive in the market in April, May and June in that space. I think it's sort of meeting plan and expectations, and it'll be a developing story. Our charter reputation is really, really good. You know, as we get back into that, customers are very willing to talk to us and ready to talk to us because we have a proven track record. Thank you. I might just try to squeeze one more in. You know, just coming back to something you mentioned, Dave, answering the cost question, you noted that you're, you know, a little bit maybe overstaffed and over-fleeted for what you're growing today. Is unlocking the utilization, is that about getting captains upgraded or what really is, like, the barrier to kind of getting that utilization and back up and running if it's not necessarily, you know, pilot bodies, to steal your phrase? Yeah. It's continuing to make progress on our training pipeline. You know, like I said before, we have a lot more pilots on board from a number perspective, and we're moving them quickly through the training pipeline. Just a quick statistic. If I look at January through April of 2023, compare it to January of April of 2022, we're producing about 33% more pilots than we did year-over-year. We're making slow, steady progress on pilot production here, and we expect that production to those increases to continue through the year. That continues to be sort of a gating item for us and, you know, we're making a lot of progress on it. I also do wanna just reiterate, though, this issue that I've tried to mention on the call. You know, it's not all about utilization here. It's making sure we have shell counts available when the demand is there, because peak time, day of week TRASM's average fares are so high, we need to make sure we have all the aircraft we need to pick up that demand. If we have to suffer a little bit on overall utilization because the aircraft are parked, you know, during off-peak times, so be it, because the overall profitability trade-off is there. I think it reflects itself in the Q1 profitability numbers that we put up. Got it. Thank you very much. Our next question comes from the line of Helane Becker with Cowen. Thanks. It's Helane Becker. It's TD Cowen. Thanks very much, guys, for the time. Hey, Helane. Quick question. I'm kind of Jude. Why is your air traffic liability down Q4 to first? I feel like it should have gone up. Obviously I missed something here. Well, remember, we're doing a whole bunch of flying in Q1. A bunch of tickets are purchased in the Q4. We're doing a whole bunch of flying in the Q1 that people purchase tickets for in the Q4. It's all about days out. Yeah. Okay. Our winter capacity is sold earlier than our summer capacity. Okay. That's historically been consistent. Right. That's all the close-in bookings that you tend to get, right? People tend to book closer on your airline than on the peer group. No. No? It's comparing us to ourselves. Okay. Our summer schedule books closer in because it's shorter haul. you know, it's just the kind of markets that we serve. If you think about the kind of vacation that Minnesotans take in March, it's planned months and months in advance, fairly high fare environment. people, you know, these are just very important trips to people, so they plan it really in advance. When you look at our end of December ATLs, it's reflective of those Q1 bookings as compared to if you look at the end of March, our ATLs are reflective of bookings going into the summer, which will be sold later. Okay. Thank you. I appreciate that. Then my other question has to do with the comment about the price hike every December on the cargo business. Does that fluctuate year to year, or is it a fixed amount? Yeah. I guess. We probably don't wanna get into too many details. Suffice it to say there's various line items in our agreement that change at different numbers, but it's contractually laid out. Okay. All right. That's really helpful. I have other questions, but I'll follow up later. Thank you. Thanks, Helane. Thanks, Helane. You. Our next question comes from the line of Mike Linenberg with Deutsche Bank. Oh, hey. Good morning, guys. I wanna just go back to- Mike. Hey. you know, Jude, you had mentioned about certainty of staffing and how that had been maybe a potential gating issue. What are the pain points there, and where are we? Not just pilots, I'm looking in mechanics, flight attendants, ground people, you know, any issues that you're running into, attrition rates, et cetera. Well, the technician staff is tight, but it's okay. Mm-hmm. Generally, we're able to respond, to all the rest of our staffing to how things are going on the pilot side. The dependency remains with our pilots. As Dave outlined, the challenge is really about the training pipeline now. Mm-hmm. We don't have a problem with attrition nor with hiring. It's really about trying to get people through the training pipeline, through the simulator, through the upgrade process, get the instructors, you know, into into their jobs and build the whole infrastructure out. It's just taken some time. Dave, do you- I think one of the things, Mike, just quickly to note on that is if you recall a year or so ago, maybe a year and a half ago, we saw a lot of difficulty in airport staffing. Yeah. That's eased tremendously. I mean, that constraint is gone. There's no constraint on the flight attendant side. We're staffed where we wanna be on the mechanic side. As Jude pointed out, it's a little tight. It's hard to get some of those guys, but that's not an issue. Those groups are not gating items. With the pilots and the training, do you have a sense that the light at the end of the tunnel is 2023, or does this continue beyond that? I mean, is this gonna be a multi-year that you're just gonna always be playing catch up? Well, with these margins, we'll add aircraft so that we're always constrained. Okay. Yeah. Yeah. I mean, we have, you know, we have substantial growth plans in the, in the next few years in our long-range plan. We're gonna be constantly adding training capacity and adding production capacity. It's kinda not a caught up point for us. You know, we're thinking right now, how are we gearing up for Q1 of 2024? We're gonna need staff for that, and then into the summer of 2024. It's kind of a never-ending thing. I mean, I think about it like long range. We wanna be in kind of the mid-teen range of consistent growth. You know, maybe a little bit more some years, a little bit less other years, but we wanna be able to accomplish that. Mid-teen, Jude, is that ASMs or that's block hours? Block hours for us is what counts, just because that's the unit of measure across our segments. Yeah. We're gonna start hitting that towards the back of this year. You know, we're kind of to the production levels that we would like to be. You know, as the airline grows, we're gonna need to produce more pilots every month to kinda keep that rate going. I think pilots are gonna be the story for a while. Okay. Just jumping to the new airplanes, the 737-900ERs. What's the seat count versus the 800, and what's the difference in the departure cost? Probably pretty similar. We have 186 seats on our eight hundreds, and our expectation, it's still being studied a little bit, is that we go to 200 on the nine hundred. The nine hundreds have almost the same departure cost. There's a little bit more fuel, a little bit higher landing fees, same crew complement. It's nearly identical departure costs, and so those incremental 14 seats are just very, very profitable, as you'd imagine. Yeah, I know. It's a great airplane for us. I was gonna say, that plane has the legs to make Hawaii without penalty off the West Coast? Yeah, it's a little bit longer range, actually, than the 800. The 737-900ERs, it's about 150 nautical longer. We can do everything we do with the 800, and then some. There's no real markets, though, that we would open up because of that small incremental range. Yep. yeah, we can do just about anything. It's got a little bit of field performance, so, you know, there are some challenging airfields that we fly in and out of with the 800 that the 900 can't go into. Mm-hmm. It effectively does everything we wanna do with it, with the 800 on the 900. Okay. Great. If I could just sneak in one last one. It is interesting about your scheduling versus your peers, where there is a schedule out there, we constantly see, you know, sort of the reduction or revisions with a downward bias. You're right, it's interesting, your schedules. You seem to be the only carrier where you put a schedule out there, and then as you get closer in, you know, you're adding frequency at the last minute. I'm just thinking over the last couple quarters, what has been that upward bias? Is it about a half a point of ASM growth, 1 point of ASM growth in the scheduled business? I just haven't actually done the math, but I have noticed it. I'm just curious. It does seem like there's that upward bias, and it helps obviously on the cost side as well as the revenue side. I mean, it. 2%-3%, I would guess. Just keep in mind, there's a lot going on there. One thing is we don't oversell currently any flights, and we have low frequency into markets. Mm-hmm. When we put a flight for sale, we need to commit to that flight because there's not a lot of re-accom opportunities for our passengers. Mm-hmm. The airlines that are adding a lot tend to cut down multiple daily frequencies to a little bit less frequency- Yeah So there's re-accom embedded in their network for those passengers. We just don't have that luxury. We bias towards late adds as opposed to late cuts. Mike, I would just. This is Grant. I would just add that, and you've heard us talk about this quite a bit at conferences and the like. The schedule integration topic, you know, a shout-out to the team here. We have really capable schedulers. So as we put out the charter schedule and the charter schedule adjusts. The team goes in and strategically adds flying. Great example, big partner of ours here is the University of Minnesota. They went to the Frozen Four hockey tournament. We chartered them down there, and then we found ways to be strategic with that schedule, where we opened up capacity close in for fans, at really, you know, good prices relative to the market, still really good yields. Filled up all the airplanes. It was just a win-win for everyone. Yeah. If you're looking at our schedule, there's a lot of really weird frequencies in there that you might be like, "Why are they flying Newark twice a month in March?" That's because we're flying the Red Bulls. Yeah. We make a decision when we sell that charter, is it better to ferry in or is it better to just sell it sched? We may only have, you know, a month to try to fill the airplane, but it's still better. That calculus is happening all the time, and that leads to, as Grant mentioned, a lot of other late adds in the sched service business. Yeah. I was just gonna say, notwithstanding the few days in Minneapolis, you guys don't cancel flights. I mean, as far as I can go back... Yeah. You don't cancel. It's impressive. I don't think there's anybody who has a record equals yours at present. Well, thank you. I mean, we got a great team here. I think it's the number one operating metric that we strive for. This winter was a tough one for us, but, you know, and some people had to cull a lot later. Yeah, but we do everything we can not to bring a flight down. Great. Well, very good. Thanks for answering my questions. Thanks, Mike. Good to talk to you. Thank you. Our next question comes from the line of Christopher Stathoulopoulos with Susquehanna. Good morning, everyone. Thanks for taking my question. Two questions. On Amazon, with Amazon, looking to improve the, I guess, network delivery efficiencies, if you could just comment, you know, how we should think about the puts and takes for Sun Country there. You know, a little bit more nuance here, just remind us whether there are minimum block hours with this service. Then 2, how much in advance do you get the flight schedule? Meaning, do you know what you're flying for Amazon in the second half of this year or peak season at this point? Thank you. Yeah, I mean, you know, Amazon's obviously been striving to improve overnight delivery for as long as we've been involved. You know, we have seen kind of no changes or minimal changes in their, in the scheduling. We haven't seen any significant reductions in block hours or in. If anything, it's been a little bit of pressure in the other way. It's been sort of steady eddy from a scheduling perspective from Amazon. Without going too much into the details of our agreement, there's not really minimum block hours, but the contract is constructed such that there's a fixed component and a variable component. You could kind of say that the fixed component is a minimum block hour number, but it's just a fixed number that we get. It's structured that way. From a schedule perspective, we're working on schedules right now through the back of the year. Here's how I think about Amazon, is it is a fixed input into the capacity plan. It's almost precisely reliable. We're doing about 38 dailies today. I expect to do about 38 dailies at the end of the year, this time next year, et cetera. What changes, though, is the markets we fly to. That's what Sun Country is really good at. We're always opening and closing airports for them, that's why they hired us. We're really flexible. Okay. Second question, if you could comment on what you're seeing with respect to used aircraft prices today and perhaps your thoughts on the market going forward. Thank you. Well, I mean, fortunately, we don't need to buy a lot right now because prices are a little tighter. You know, there's something I can add to the already very common discussion about the delays in the MAX and the effect that that's having on the NG market. We have the capacity, you know, with this 900 deal kinda laid out for the next couple years. We remain in the spot market. When planes pop up that fit our spec and they're at good prices, we'll still be buying from time to time, but we're talking really small quantities. That, you know, this is still growing 15, whatever, 20%, whatever we get to, going into next year. Here's one more comment on the NG prices. When we think about a used NG, we kinda attribute value to the maintenance value that we transfer from the prior operator, then the piece parts that we're gonna sell when we retire the airplane, then finally, the difference as an operator premium. That operator premium is has been around 0, so no premium, and now it's like $1 million or so. It just doesn't really move the needle. The midlife NG is still an incredible investment for us. You know, we'll be looking for 900ERs and 800s that are in the, you know, 8-12 year range, I think probably for the next 5-10 years. Yeah, I mean, one of the reasons that we're a little oversized from an aircraft perspective is because we're opportunistically buying and we're gonna grow into it. When the deals are there with the economics we want, we buy the aircraft. Ownership costs for these planes is pretty low. We're gonna continue to buy aircraft when we see great deals and we'll grow into it. Now, financing costs will spread the, you know, base rates have moved up obviously higher than where they were last year. We have the balance sheet to continue to execute the fleet plan irrespective of financing. Okay. If I could get in one more on the recent deal, the 737-900 deal with Oman Air. That looks at least until you take, I guess, possession of these, is it late 2024 through 2025? In the meanwhile, should we think about that as a, as sort of like a dry lease and is, you know, dry leasing perhaps something that you could look to, you know, move into opportunistically or kind of more on a, on a sort of, go forward basis? Thank you. I mean, think of us for the Oman aircraft, we're a lessor. We lease the aircraft to Oman Air. We stepped into somebody else's shoes. That's the extent of the relationship. We're collecting lease income. You know, we own the aircraft. It's standard lessor-lessee relationship for the duration of these leases. I don't see us really be getting very active in the dry leasing world. I mean, back again sort of to what I was saying on utilization earlier, there's plenty of opportunity to fly all of these aircraft at peak times, we can't really have them dry leased to somebody else because we want them when we need them, even if they're gonna sit around a little bit more than they would be optimal. Okay. Acquiring an airplane with a lease attached, I think that makes sense. Taking an airplane that we own and leasing it out and remarketing leased airplanes, that's not really a core competency that we wanna focus on. Got it. Okay. Thank you. Thanks, Chris. Thank you. Our next question comes from the line of Duane Pfennigwerth with Evercore ISI. Hey, thanks for the follow-up. That was actually the question I was gonna ask was on fleet, but maybe you could just put a finer point on when those aircraft come into revenue service for you. In other words, how long will you be collecting that lease revenue, and how many aircraft do you need to go out and acquire to support 2024 growth? Thanks for taking the questions. Yeah. The aircraft. Think of it this way. The aircraft come off of lease beginning in, I think it's November of 2024, and extend through like November of 2025. We need to take the aircraft, reconfigure them, and so forth. I would be thinking the first Oman aircraft come into service here probably, you know, Q2 of 2025 kind of a thing, and then sort of going out from there. We've done a couple of other aircraft deals in recent weeks that'll deliver mid this year. They'll go into service mid this year and early 2024. We probably, from an operational perspective right now, don't need additional aircraft. Maybe one, but we don't need additional aircraft going into the Q1 of 2024. I think we're properly sized from a fleet perspective. As I mentioned earlier, if a great deal comes along, we'll probably do it, but we don't really need to do it right now. Okay. Thank you very much. Thanks, Duane. Thank you. Now I'm showing no further questions. With that, I'll hand the call back over to CEO, Jude Bricker, for any closing remarks. Thanks for joining us this morning, everybody. We'll talk to you again in 90 days. Have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.