Hello and welcome to the Frontier Group Holdings second quarter 2021 conference call. My name is Brian, and I'll be moderating today's call. This call is being recorded, and a replay will be available on flyfrontier.com in the Investor Relations section. After today's prepared remarks, there will be an opportunity to ask questions. After the speakers' presentation, there will be a question-and-answer session. It is now my pleasure to turn the conference over to Susan Donofrio, Head of Investor Relations. Susan, you may begin. Thank you, operator. Welcome everyone to Frontier's second quarter earnings call. This call is being recorded and simultaneously webcast. A replay of this call can be found on our website. On the call with me today are Barry Biffle, Frontier's President and CEO, Jimmy Dempsey, EVP and CFO, and Daniel Shurz, Senior VP Commercial, as well as other members of the management team. Following our prepared remarks, there will be a question-and-answer session for the sell-side analysts. We also wanted to remind everyone on the call that today's discussion contains forward-looking statements that are based on the company's current expectations and are not a guarantee of future performance. There could be significant risks and uncertainties that cause actual results to differ materially from those reflected by the forward-looking statements, including the risk factors discussed in our reports on file with the SEC. We undertake no duty to update any forward-looking statements, and in comparing results today, we will be adjusting all periods to exclude special items. Please refer to our second quarter 2021 earnings release, which is available on our website for the reconciliation of our non-GAAP measures. With that, I will turn it over to Barry for his opening remarks. Barry? Thank you, Susan. Thank you everyone for taking the time to attend our earnings call. Although this is only our second quarter as a public company, we recently celebrated our 27th year as an airline, and I couldn't be more proud of how we've evolved as a company and the strength and resiliency of our ultra-low-cost business model underpinned by our Low Fares Done Right strategy. In a moment, I'll be turning the call over to Daniel and Jimmy to bring you through the details of the second quarter and our expectations going forward. I wanted to first provide you with some high-level thoughts. To start, we're very pleased that our expectation of pent-up demand as a result of widespread vaccinations proved to be true. Based upon this expectation, we had planned for and successfully completed the return of all our aircraft and employees into service across our stations during the quarter, and consequently operated at capacity levels that were higher than the same comparable quarter in 2019. The utilization of our aircraft and load factors achieved during the quarter were significantly higher than last year, and further improvement to the pre-COVID levels is expected as we enter 2022. I want to personally thank our Team Frontier members for their hard work, dedication, and professionalism through the pandemic and during our return to full operations, along with their commitment to our mission of Low Fares Done Right, with the safety of our team members and customers continuing to be our top priority. Our success in navigating the pandemic and returning to full operations is the direct result of all our team's efforts. Looking forward, we're closely monitoring the impact of the Delta variant. We expect any impact to be short-term in nature, given the availability of vaccines and the likely increase in vaccination rates in response to the Delta variant. We therefore expect a resumption of the pace of recovery as the Delta variant cases fall, similar to what was experienced elsewhere in the world. As we return the airline back to full operations, we have remained financially disciplined. The resulting strength of our balance sheet and liquidity, coupled with our low-cost structure, positions us well to address any delays in the timing and pace of the recovery resulting from the Delta variant and to facilitate our planned growth as the recovery continues to unfold. Our growth since last quarter has continued in both domestic and international network. Domestically, this includes new service from Atlanta, Dallas, Denver, Las Vegas, Orlando, and Salt Lake City, and the announcement of even more leisure destinations from Philadelphia and Burbank. We're pleased to have the governor of Colorado on our first flight to Grand Junction as well. Internationally, our Caribbean and Latin America presence continues to grow, including expansion into Antigua, Aruba, Belize, Costa Rica, St. Martin, and Turks and Caicos. To keep up with this growth, we've opened a new crew base in Tampa during the quarter and plan to add Atlanta in due course. We remain committed to being America's greenest airline as well. This is not only through the use of our more fuel-efficient aircraft, which generated over 100 ASMs per gallon during the quarter, but also through other initiatives, including the campaign we launched this quarter highlighting Florida animal conservation. We partnered with Visit Orlando, representing four Orlando wildlife parks and preserves. Customers were invited to choose from among resident animals from the Central Florida Zoo & Botanical Gardens, Gatorland, SEA LIFE Orlando Aquarium, and Wild Florida to determine which animal would be on the tail of the new Frontier Airlines aircraft. Ted the Turtle was our winner from this highly successful contest and will appear on a Frontier aircraft in 2022. Our efforts are resonating with customers as well. With the number of new Discount Den members surging in June to the highest monthly level since the program was initiated. In June, we also reached the highest level of new Barclays Frontier Credit Card member sign-ups in our company's history. This performance helped us achieve $60 per passenger non-ticket for the first time. Overall, I'm encouraged by the pace of recovery we experienced during the quarter and our timing of the capacity deployment to meet that recovery. There may be delays in the recovery resulting from the Delta variant, but I expect those delays to be temporary given the existing availability of vaccines and observation of the movement in case levels experienced in other impacted areas of the world. Further, as the confusion subsides and Americans understand how powerful vaccinations are in preventing severe outcomes, we expect confidence to build and the pent-up demand will surge again. I'll now turn it over to Daniel, who will provide more details on our performance for the quarter. Thank you, Barry. I want to join you in also thanking all of our Team Frontier members for continuing to take such good care of each other and of course all of our customers. As the airline returns to full operation, we continue to be very focused on strengthening our loyalty and membership programs and have seen further success and momentum from our efforts. During the quarter, we enhanced our website to better highlight the benefits of our Discount Den program, and as Barry mentioned, we've seen a result in surge in Discount Den memberships in June, the month we saw our highest level of acquisition since the program started. In addition, we mentioned last quarter that working with our loyalty partner, Barclays, we were focused on attracting more card members to our Frontier Airlines Mastercard program. I'm excited to highlight that June set a new record for sign-ups for the card, and we've just exceeded that record in July. Our capacity during the quarter exceeded the levels achieved in the comparable pre-COVID quarter in 2019. We've taken a balanced approach to our capacity growth with existing and new flight service, and our overall goal is to stay in markets with three to four times a week flight service, which we think is ideal for our business model. Our Caribbean and Latin America footprint has grown to account for over 13% of our capacity this summer, and we've recently announced new destinations to add to our existing capacity, including Antigua, Belize, and the Turks and Caicos. Our goal by the end of 2023 is for flying in this region to account for 20% of our overall capacity. Domestically, we announced plans to further grow our footprint in the fall and winter with new routes out of Atlanta, Dallas, Las Vegas, Miami, and Orlando. These new domestic routes are almost exclusively taking advantage of our existing broad airport portfolio. We saw an increase in the recovery of demand as the quarter progressed. Operating revenues for the second quarter increased 184% year-over-year to $550 million as the recovery from the pandemic strengthened for leisure travel. We had over 80% more average aircraft in service during the second quarter of 2021 as compared to the prior year, with our average daily utilization recovering to over 10 hours per day and the fleet operating at an 80% load factor. Further recovery in our utilization and load factor is expected to the levels achieved in the comparable pre-COVID period as the recovery from the pandemic continues, as Barry highlighted. On a per-passenger basis, we generated total revenue per passenger of approximately $98, including $60 per passenger of non-fare and other revenue, which was 6% higher than the comparable quarter in 2019. Our capacity levels are expected to continue to trend at or above 2019 levels as we progress through the coming months. Our forward bookings were strengthening before the recent uptick in Delta variant cases. The impact of the Delta variant on bookings and the length of that impact are difficult to predict. We do expect that as cases decline, we will see a positive impact on forward bookings. With that, I will turn it over to Jimmy to provide more details on our financials. Thanks, Daniel. I first want to thank all of the Team Frontier members for their hard work and dedication as we restore the airline to full operation during the quarter while staying financially disciplined, generating approximately $70 million in cash during the quarter and ending with $936 million of unrestricted cash and cash equivalents, the highest balance in the company's history. The cash at the end of the quarter reflects the $266 million of net proceeds received from the successful closure of our IPO at the beginning of the quarter and $171 million of additional Payroll Support Program funding under Payroll Support Program II and III. The strength of our liquidity position enabled us to allow the Treasury loan facility draw down date of May 28, 2021 to expire without drawing any remaining funds under the facility. We expect to receive our $161 million of income tax receivable later this year and are focused on repaying the $150 million outstanding under the Treasury loan at the appropriate time. This will enable us to unencumber our co-brand credit card program and related brand assets that are currently collateralized in the Treasury loan, providing standby access to substantial liquidity if needs. Our GAAP net income for the quarter was $19 million. Our adjusted net loss of $50 million or $0.24 per share excludes a number of special items. These include $87 million of CARES Act credits, a $2 million mark to market related to the warrants held by U.S. Treasury through our IPO closing date of April 6, 2021, and $6 million of costs associated with the early lease termination of our remaining A319 aircraft. We ended the June quarter with 119 aircraft or 109 aircraft in our fleet after the addition of five new Airbus A320neo aircraft that were financed through sale and leaseback transactions, partly offset by three lease returns during the quarter. The lease returns during the quarter include two A319 aircraft associated with our early lease termination with one of our lessors to complete our strategic objective of replacing all A319 aircraft with larger and more fuel-efficient A320 and A321 aircraft. To this end, during July 2021, we signed a letter of intent with two of our leasing partners to add 10 incremental A321 aircraft through direct leases, with deliveries expected to begin in the second half of 2022 and completed in the first half of 2023. The incremental A321 aircraft will enable the company to boost its ASM growth rate as the recovery from the COVID pandemic continues. We anticipate taking delivery of an additional five A320neos during the third quarter of 2021, with no deliveries expected in the fourth quarter. Looking forward to the third quarter, we continue our focus on getting the airline back to full utilization as we enter 2022, while remaining flexible to address any impact from the Delta variant on our bookings. Within the last week, we have noted softening in the level of bookings over seasonal norms that we believe is directly related to the increased COVID-19 case numbers associated with the Delta variant. The impact of the Delta variant on bookings and the duration of that impact are difficult to predict. As a result, the top end of our guidance range for net income is being adjusted to breakeven, providing us with a third quarter net income loss margin range of 0% to -5%. We are confident that as cases decline, we will see a positive impact on forward bookings. More details on our forward guidance can be found in our second quarter earnings release on our website. I will hand it back over to Barry for some closing remarks. Thank you, Jimmy. It's been a year of enormous change for our company, and we continue to thank all our Team Frontier members for going above and beyond as we navigate through the pandemic, and the successful return of all of our aircraft and employees into service across all of our stations during the quarter, enabling us to take advantage of the strengthening recovery in leisure travel. While the timing of the recovery may be temporarily delayed due to the Delta variant, we're in a very strong liquidity position with a proven and very resilient business model that positions us well for continued shareholder value creation as we grow the business. With that, operator, please open up the call for questions. To ask a question, you will need to press *1 on your telephone. To withdraw your question, press the # key. As a reminder, please ask one question with one follow-up, then queue. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mike Linenberg of Deutsche Bank. Please go ahead. Oh, hey. Good afternoon, everyone. Hey, this is Barry, and maybe to Daniel as well. First off, just kudos to the fact that you guys have this promotion out there, this Friends With Vaccines Fly Free. Definitely creative, and so definitely my hats off to you on that one, which is sort of a lead-in to my question, which, thoughts on the Biden administration is talking about all arrivals, overseas arrivals into the U.S. actually having to be vaccinated? How does that, in your thinking about new international destinations, if we just look earlier this week, you launched a whole bunch of new international destinations from multiple gateways where you have good presence. I think you've indicated in the past that you're probably going to see more international in 2021, 2022. Is it less focused on VFR and more on pure leisure destinations like Caribbean, Turks and Caicos? How does that change? Also, sort of as a follow-up question, where are you with respect to your customer base? Do you have a sense of how many of them are vaccinated? I'm bringing this up because two other carriers in previous conference calls this quarter indicated that they gave some statistics. One said a majority of their customers were vaccinated. Another one said their most frequent customers, something on the order of 84% of them were vaccinated. Any thoughts on that, since it will have some impact on people choosing where and when they can fly? Thank you. Thanks, Mike. I'll work backwards and try to remember all the questions you threw in there. Sorry. If we look at who's traveling now and compare that to a year ago, you've got massive numbers of traveling, and people didn't travel a year ago, not because it wasn't fares being too expensive or anything else. They were scared to fly, and the vaccinations made them feel safe, and that's what got people back out traveling. We've been quietly surveying over the last few days to actually get the exact latest number, but we believe it is the vast majority of everyone who is traveling today is vaccinated. I don't see a challenge, to your international question, I don't see a challenge there either. In fact, I was with the Miami Airport recently, and in the first month that they offered vaccinations in the airport in Miami, they had 50,000 people come there. People were coming off planes from everywhere to get it. The people that are going to travel and travel to the U.S., I think you're going to see that they're vaccinated as well. Look, we're in the safety business. We would support and continue to support any measures or incentives that it takes to get everybody vaccinated. The facts are real clear. There's a lot of confusion over the last week or two, talking about breakthrough cases and so forth, but there's three numbers that every American should know, 97, 99, and 100. 97% of everybody that's in the hospital with COVID is unvaccinated. 99% or more of everyone dying of COVID is unvaccinated. It's time for 100% of everybody who's eligible to be vaccinated needs to get the vaccine, and that's what's going to get us through this Delta variant and get us all back on the road to recovery. Great. Just one quick follow-up. The withdrawal from LAX, I was surprised. Presumably, it has to do with cost or maybe it's moving to a new terminal, which is less convenient. Thoughts on that? It would seem like that that would be a good market for you for the long haul. Mike, thanks. It's Daniel. Hi, Daniel. We consistently and constantly focus on keeping our costs low. Southern California has a wide selection of airports. LAX wasn't a cheap airport to start with, and we saw another significant cost increase happening there as a result of new construction opening at the airport. We've moved service to airports where we are saving on a CASM basis, a double-digit number of dollars per passenger. Look, that gives us flexibility to use our low fares to attract customers and ultimately works better for the business. It's not that we're not serving L.A., it's not that we're not serving Southern California. We're serving Ontario, we're serving Burbank, we're serving Orange County in the L.A. region. They're all markedly lower-cost airports than LAX. Great. Makes sense. Thanks, everyone. Thank you. Our next question comes from Ravi Shanker of Morgan Stanley. Your line is open. Thank you. Good afternoon, everyone. Maybe as a follow-up on some of the previous commentary in the previous question. Just your commentary on the Delta variant kind of showing up in your booking activity. That seems a little bit different than some of the other airlines, probably all the other airlines so far that have said that they're not seeing any impact so far. Is it just because you're reporting later than them, and so you have kind of more up-to-date information here, or do you think there's something different with the way where you fly or your type of customers that you're maybe seeing a slightly different Delta impact than some of the other airlines? Look, if we would've reported two weeks ago, we wouldn't have had the Massachusetts study, we wouldn't have had the new CDC guidance, you wouldn't have had all this new information about the Delta variant. I hate to be the bearer of news that this masks and the resurgence is an impact on economic activity, but it is. If you want to look at the Kayak search data, it's public, it's out there, you can look at it. It's been trending down for the last two weeks. This is very clear. If you compare that to what was going on in June compared to now, there's been a little slowing in the recovery. Nothing like we saw, obviously, a year ago. The most recent ARC data shows you in online travel agencies, for example, that we're seeing a little bit of a setback as well. We have factored that into our numbers that we're presenting today. I understand you're comparing it to carriers that haven't factored any of this in. We were in a position where it's very clear with our data. We've seen some softness in future sales. We're still seeing great demand close in, but as we look beyond the summer peak, we have seen some softness, and that is reflected in the public data as well. That's why we reflect it in our guidance. Very good. Crystal clear. That makes a lot of sense. Just kind of shifting gears a little bit for my follow-up. There was an executive order from the Biden administration a few weeks ago targeting a number of industries, including the airline industry, particularly focused on increased fare disclosure, as well as potentially looking at kind of slots in certain airports. I would love to get your take on what do you think of that and kind of how much of that is actually actionable. Thank you. Yes. This is Howard Diamond. There's nothing in those executive orders that we are concerned about. We feel like we're already compliant. These have been in the works for quite a bit of time, so we're fully prepared to comply. We absolutely believe in transparency and providing the best customer experience. Thank you. Our next question comes from Hunter Keay of Wolfe Research. Your line is open. Hey. How you guys doing? Hey. Okay. Barry, is business travel coming back, whenever it does, is business travel coming back good because it creates a pricing umbrella and alleviates some competitive capacity pressure? Or is it bad because it gives network airlines a revenue stream they can use to subsidize low fares to compete against you in a way that you probably consider to be short-term irrational? It's good. It's very good. Look, if your cost structure requires really high fares to make money, they do irrational things when that's not available to them. It's good for the entire industry as business travel come back. I think what's exciting, what we've seen, prior to the Delta variant in the last week or so, you've seen business travel coming back, I think a lot faster. The data supports that a lot faster than any of us ever expected. I can't tell you how many business dinners and events and things I've been to in the last six to eight weeks. I think it's good, and while we may take a little bit of temporary delay, the recovery is not canceled. I just think they may push back some of the office openings. That just means that there's probably going to be more people traveling in October, than there was in September. Okay. A couple questions on capacity for you. The third quarter was a little bit lower than I expected it would be. Did you dial that back because of Delta variant? Second, how did the new planes you just acquired in July impact the outlook for growth next year? Thanks a lot. I'll just deal with the second part of the question. Next year's growth rate is going to head towards about 30%, given the year-over-year change from having lower utilization this year. It doesn't really materially change our growth rate in 2022. What it does is it infills some growth, Hunter, for 2023 that we talked about while we were doing the IPO. Our growth rate at that time was around 10%-11% ASM growth. We think that'll rise to maybe high teens in 2023. It gives us some confidence now, given what we're seeing in our cost base, where the efficiency that's coming through in a more modular network on the back of what we've learned through COVID, plus also incremental A321s coming into the fleet, that we think our CASM ex-fuel actually will be modestly below $0.06 in 2023, which is a real positive move for the business from a unit cost perspective. It gives us better confidence in terms of getting the airline back to pre-COVID margins as we progress through 2023. All right. Then high teens, that's in a year-over-year? Sorry. Yeah, high year-over-year. Just to clarify, Jimmy. Yeah, okay. Yeah, that's right. Sorry, Dan, go ahead. Were you going to say something? Yeah, Hunter Keay, it's Daniel Shurz. Our capacity growth in Q3, we've lowered it slightly. We expect to apply slightly low capacity in response to what we're seeing, but it's a marginal change of a point or so. Yeah. We still expect to be growing fourth quarter ASMs more significantly. We're currently expecting fourth quarter to grow in the 12%-14% range. Okay, got it. Very helpful. Thank you. You're welcome. Thanks, Hunter. Thank you. Our next question comes from the line of Duane Pfennigwerth of Evercore. Please go ahead. Hey, guys. On lease payment deferrals, you noted you're caught up on those. I wonder if you could give us the cash flow impact and the OpEx impact from the catch-up in 2Q. In other words, the amount that will not be recurring. The big payment, Duane, in lease repayments came in Q1. That was about $22 million, if my memory serves me correct. In Q2, it was about $10 million. We've largely paid it back. It's the same for cash on net income and operating costs. There's a tiny stub of a couple of million dollars that needs to go out in the rest of the year. It's largely repaid at this stage. In addition to that, we're normalizing our working capital around accounts payable. One of the big changes that we're seeing in the business is as we move back towards full utilization in 2022, we're spending a decent amount of money on training and underutilized aircraft, really. Effectively carrying rent across this year as you get the business back up and running going into next year. That's a significant cost headwind that the business is faced with, but one that we can overcome as we go into next year. That's helpful. My follow-up is on operations. As you take a look at what's going on across the industry, what is your take on where the pain points are really emanating from? You've talked about the concept, at least for your own network, of a more modular network. Is there anything different about the way you have spooled up, either your network or your planning that helps to insulate you from some of these issues we're seeing? I'll start it and let Daniel talk. Look, we're not immune to the workforce challenges that are happening all across America in just about every sector in the services. You've seen shortages of trucking, you've seen shortages of all types of things, supply chain and shortages of people that want to work. I'll tell you, we've been heavily focused on this since January. It got more acute as everyone tried to get back to full operations this summer. It was almost like we're all stealing from each other, the same employee pool. I'll tell you, there's a silver lining. When we talk to a lot of the recruiters and the feedback we're getting from the job fairs, you're finally starting to see those people get off the couch, and it looks like they're getting ready to go back to work as their unemployment benefits are going to stop. I think this is temporary in nature, and as I tell people, look, these are good problems to have. I think we're all blessed to have the demand recovery, so we would even have these challenges. It's a lot better to have that conversation today versus what we were talking about a year ago. As far as operational resiliency, we've always been focused on that in our operational design. I think we've gotten even better at that over the last year. Daniel, why don't you talk a little bit about our modularity? Yes. I think, Duane, it's definitely helped us to have gone more modular. As Barry said, we've seen some of the same challenges, but what we're seeing in the network as we do things, as we've obviously opened and expanded our new crew bases. What we're seeing is that when there's disruption, particularly driven by weather, we can limit it more effectively than we used to be able to those parts of the network. I think that's definitely helped us. Look, going forward, we've opened crew bases already. We're opening one in Atlanta reasonably soon. We're going to be opening one in Phoenix in 2022. We continue to build out this modularity of the airline. It's better commercially. It gives us more flexibility, it gives my team more flexibility on how the network's designed, and it's better for operations on a daily basis, and it's better for operational recovery. As a result, it's better for cost. As we expand in these cities where we have crew bases, it's good for our high profit ancillaries as well. As we pointed out, we had a good quarter on our ancillary performance. We got $60. As we make these cities bigger, it's good for Discount Den, and it's good for credit card acquisition. It's got all-round benefits. Okay. Appreciate the thoughts. Thanks, Duane. Thank you. Our next question comes from Savi Syth of Raymond James. Your line is open. Hey, good afternoon. Just given how international is going to be playing a bigger role in the network as you get to 2023, just curious what you're seeing today and if there's going to be any kind of change in the type of international market mix that you're seeing or how much of your growth is going to be dedicated towards that international? Yes. I'm going to kick it off, and then I'll let Daniel talk specifically about some of the region. He just mentioned the $60 in non-ticket, and we're targeting $63 now by the time we get to 2023. That's going to enable us to have a break-even fare at our target of about $30. We believe that the ability to grow is exponentially better when we have such a low break-even fare, and we're going to use it to the near international where we see considerably higher yields, than we see domestically. We think that that's going to give us a really big tailwind from a RASM perspective in the next few years. Daniel, why don't you talk about some of the shape and specifics? In the shorter term, Savi, obviously what we've seen, and obviously as you've heard from some of our competitors, is it's been a much better summer for near international leisure than it has been for VFR. We've seen the same trends. We have focused our summer growth and we focused our winter announcements in the last couple of weeks on leisure destinations. As vaccination rates rise through the region, and as therefore travel fully resumes through the region, we absolutely anticipate continuing to add to our VFR portfolio as well. It's going to be a relatively balanced mix, I believe. While it's today focused very much on our two Florida bases, we do anticipate growth through the Frontier network internationally. We've said before, and I'll say it in my earlier comments, we anticipate getting to 20% of our capacity by the end of 2023 being in the international and Caribbean market. That's helpful. Thank you. Just as a quick follow-up on the Delta variant comments, have you seen a difference in impact in kind of where that demand softening is, or is it just kind of broad based? It's Daniel again. We're seeing it reasonably broad based for the moment. I think it's causing concern as people look to book trips further out, and I think that's a relatively general concern across the market. I would just add, look, there's a lot of confusion out there right now over the last week. Today is probably the worst time in terms of people's understanding. Again, I mentioned it earlier, I think it's people that are vaccinated are getting a little freaked out over the last week. If they understand the facts, they're going to settle down. They're going to realize as long as the data holds up, again, 97% of everybody in the hospital is unvaccinated, and over 99% of everybody dying is unvaccinated. I think everybody just got scared a little bit. They heard about these breakthrough cases, but they are extremely rare. As people start to understand that, we expect that people will get back to their normal lives. Thank you. All right, great. Thank you. Thank you. Our next question comes from Stephen Trent of Citi. Your question, please. Good afternoon, everybody, and thanks for taking my question. I just wanted to touch base a little bit, on what you guys are seeing from weather events. We've seen kind of extreme drought in parts of the desert Southwest and forest fires and what have you. I'm just wondering if any of these occurrences have created any operational disruption versus what you would have previously anticipated. Yeah, look, I can kick it off and some of the others here in the room can talk too. Yes, we have seen some unprecedented weather events. Setting records in the West, setting records in the East, thunderstorms lasting longer, seeing day after day of ground stops in airports. These seasonally happen, yes, the intensity and some of the records are very difficult. I can tell you again, we're blessed to have the modularity in our network, and it hasn't rippled through other parts of the business as a result of that design feature. It is challenging. What it does in a world where we're largely staffed very well, I think on a relative basis, maybe better than others, weather stretches those folks, right? You end up stretching duty periods on the crew. You end up stretching the day for people that work on the ground if they have to sit there for hours on end, and wait for the weather to clear to finish unloading an airplane. Unfortunately, our customers oftentimes get in that. I think thankfully, though, seasonally, we should be moving into better weather over the next couple of months. Hopefully, all the supply chain issues that are here in the U.S. and all the other things normalize as well as the unemployment benefits run out. By the time we can get back to winter, everybody will have plenty of staff to deal with these issues. Oh, great. Very helpful, Barry. Just my one very quick follow-up. I heard you mention the detail about some of the southbound routes into LATAM. Given the FAA's downgrade of Mexico to Category 2, has that created kind of any incremental opportunities for Frontier, or is it way too short a timeframe to have any meaningful benefit from that? No, it doesn't change the calculus for us as we look at the different opportunities in Latin America, especially in Mexico. We've continued to add routes there, but I assume that's going to be short-lived. I understand the Mexican authorities are working on this, and they're going to work through that. I think this is just temporary. I don't think it creates any long-term strategic opportunity for anyone on the U.S. side. Okay. Very helpful. Appreciate the color. Thank you. Our next question comes from Jamie Baker of JP Morgan. Please go ahead. Hey, this is Ian Snyder at JP Morgan with two quick questions on behalf of Jamie. I'll jump right in with it. On the last call, you mentioned that work from home flexibility could theoretically lead to people taking more trips each year. Obviously, it's too early to know if that's happening, but are there any interesting trends you're seeing when tracking repeat customers? This is Daniel. It does seem a little bit too early to see. We were actually expecting this toward the end of this year to start to see, as we were waiting for the main return to office to see what amount of additional flexibility. It's the period when offices return to whatever the new normal is, that we will really get the indication as to what it does to travel patterns, and obviously, we're not there yet. That's helpful. Thanks. Go ahead. We still do believe that it's going to happen. There's a lot of permanent remote working that's going to take place. It's going to cause conferences and meetings and training travel that's going to be necessary. It also just gives them a lot of flexibility. I haven't seen any indications that we're not going to move to more flexibility. I think the theory still holds. Great. Thanks for that. Then just one more quick follow-up. On the leasing side, I know we got into this a little bit with the lease payment deferrals. We have had a lot of discussion with Pratt & Whitney on this. Could you give some color on the sort of A320neo offers you're getting, perhaps on a percentage basis of how current offers compare to your average lease rate for aircraft already in service? Are they 10% lower, 30% lower? Just some order of magnitude would be helpful for us. Yeah. Ian, look, the market during 2020 got challenged in the leasing world largely because of the liquidity squeeze that came from airlines into the leasing companies to fund their businesses in the short term. You saw pricing expand. You're seeing pricing head back or actually in some cases go below what you saw pre-COVID, which is really helpful. I'm not going to start getting into exact numbers in terms of what we're achieving on lease rates. We would be considered one of the better end credits in the leasing world for leasing companies in order to place their aircraft into or buy our aircraft off us and lease them back from. We feel in really good shape in terms of how we progress into next year from a leasing perspective and financing the fleet. I think it's very helpful that it's returned to pretty much pre-COVID levels, in some cases, not quite, but we're seeing some aggressive pricing out there, and that's driving below pre-COVID levels, which is very encouraging. That's great to hear and appreciate the color there. That's it for me. Thanks. Thank you. Our next question comes from Chris Stathoulopoulos of Susquehanna. Good afternoon. Thanks for taking my question. Appreciate the color on the impact you're seeing from the Delta variant. It looks to be more, so the system as a whole versus any specific areas. I'm wondering if you could comment prior to the acceleration in the Delta cases over the last two weeks, what your guidance might have looked like for adjusted net income margin? Hi, Chris. It's Jimmy here. We expected to deliver to you a guidance range maybe 2, 3 points higher on the top end than what we gave you today from a net income perspective. We gave you a break even to - 5%, and we probably were 2%, 3% positive on that about a week and a half ago. As we saw things progress over the weekend, we made a revision to our guidance. If you want to look at that in dollar terms, it's probably somewhere in the region of $20 million-$30 million in terms of revenue that it hurt, or it's going to hurt the business in the next couple of months. We feel pretty good about the progress that we're achieving on recovery. If you look at the business, we've had a negative EBITDAR through last year into the first quarter of this year. You have a positive EBITDAR of 13% in the second quarter. Our anticipation is that the EBITDAR levels will head back above 20%. Not sure how much above 20%, but a really positive trajectory for the business as it recovers and heads into 2022. That's probably stalled a little bit. We'll probably end up slightly below 20% from an EBITDAR perspective in the third quarter. We'll see how things develop from the Delta variant and how behavior changes in the next couple of months as we assess the rest of the year. Okay. Thank you for that color. If we do start to see these vaccination requirements for inbound travel or any renewed measures reinstated domestically, could you walk us through some of the ways that you could perhaps get agile with the network, whether that's reallocating flights or aircraft? What have you learned over the last 18 months of just having to constantly adjust the network? If you do have to make these changes, how perhaps you can be more efficient now into the fall versus where we were last spring? Thanks. Yeah, look, we're not here to speculate about the future. I think we all need to remember something. Let's not get distracted with the Delta variant. This is a temporary issue. We always knew these things could happen. It's going to take six to eight weeks as it did in the U.K., as it did in Southwest Missouri. If people enact some new things like requiring a vaccine, I actually think you look at the Broadway and they're sold out. Everybody's worried about protecting the unvaccinated's feelings. Let's start talking about the vaccinated. The vaccinated people feel better. About everybody on the plane or at their destination or at their restaurant or their cruise ship, they feel better about it when they know it. We believe, and while we've been studying it, we believe it's actually an accelerant for demand. I don't think you would make any long-term, strategic decisions on your network just off a six to eight-week issue. Thank you. Thank you. Our next question comes from Myles Walton of UBS. Please go ahead. Thanks. Good afternoon. Could you comment a bit on through the quarter trends, particularly as it relates to load factors, and maybe comparing June to April or May and what July is looking like? Hey, Myles, it's Daniel. We saw traffic recover sharply during the quarter as capacity continued to increase. We saw load factors continue to grow during the quarter. We've seen that trend continue into July, and obviously the peak month for summer travel. Are you anticipating the 3Q loads to be similar to the 2019 3Q loads? We are not yet recovered to 2019 load factors. While we are seeing recovery, we're not yet recovered to 2019 levels. Okay. Maybe Jimmy, the size of the sale-leaseback gains in the quarter, was it $25 million on the five deliveries, and is that a similar number that's baked into the 3Q guidance as well? I think it was a little bit less than that, but yeah, it's consistent. You're actually five aircraft in Q2, five aircraft in Q3. You actually have no aircraft in Q4, just to point out to all of you. You won't see any sale-leaseback gains in Q4 relating to aircraft. Yeah, it's effectively five aircraft in the last two quarters. Okay. All right. I'll leave it at two. Thanks. Thanks. To ask a question, please press star one on your touch-tone telephone. Again, that's star one on your touch-tone telephone to ask a question. Our next question comes from Eric Morgan of Barclays. Your line is open. Hey, good afternoon. Thanks for taking my question. Just wanted to ask one a little bit longer term on your growth plans, in the context of what your fleet is going to look like in a few years. You'll have the larger mix of the A321s as we get to 2023 and beyond. You have the letter of intent announced today as well. Just wondering if you could speak to how this change in mix of aircraft size impacts your growth strategy, if at all, just in terms of markets you can enter and any limitations or otherwise on your ability to stimulate demand. Thanks. What we're expecting in terms of growth rate in the next couple of years, as I said earlier, I think Hunter asked the question, in 2023 will be just under 20%, somewhere around high teens, in terms of percentages. The way the delivery profile works in the next four or five years beyond that, it starts to slow down in 2025, 2026, 2027, as you deliver aircraft. We have some optionality on incremental aircraft that we could bring from leasing companies that we've talked about before, and we've displayed today that we have 10 aircraft, but also the potential to extend a series of aircraft that we have that are on eight-year leases and that kind of expire in the 2026, 2027 period. That gives us an ability to tip some of those growth rates up a little bit. In relation to the size of the aircraft, yeah, our average seats for departure from today's announcement, for example, that we added 10 aircraft, our average seats for departure in 2023 will go to just over 200 seats. That's really positive from a unit cost perspective in the business. It actually opens up opportunities for us in destinations around the U.S. that we think are interesting. Maybe, Daniel, you want to talk about where we'd place that growth in aircraft. Yeah. Absolutely. No. Thanks, Jimmy. Look, we've deployed our current fleet of 321s, for example, across most of our network. We've tried it in various markets. They work in big markets. They work in small markets. They bring lower unit costs. The marginal cost on the extra seats is very low. We believe we can successfully deploy the additional 321s in almost every airport in our system. There are a few airports where operationally we have to use the 320, but broadly speaking, the A321 can fly almost everywhere in our system. As the mix of our fleet continues to move towards the A321, that's what you'll see us deploying system-wide. Great. Appreciate it. Thank you. We have a follow-up from Hunter Keay of Wolfe Research. Your line is open. Hi. Thanks. Just a couple of quick clarification questions. On the 30% growth in 2022, that was a year-over-year growth rate or year over two year? I realize it's almost the same thing. It's year-over-year. Okay. Thanks, Jimmy. I'm sure I know the answer to this question, too, but just want to clarify. The sub $0.06 CASM in 2023, that's obviously CASM ex fuel, not CASM ex fuel and interest expense, correct? Yeah. Look, we anticipate CASM ex-fuel in 2022 will be slightly above $0.06. In 2023, it'll be slightly below $0.06. Largely on the back of adding these aircraft into the business and also some of the things that we've learned as we emerge from COVID with the modular network. Great. Okay, that's it. Thank you. Thank you. We have a follow-up from Chris Stathoulopoulos of Susquehanna. Your line is open. Thanks for taking my follow-up. Just if you could comment on the fare dynamic that you're seeing and if there's anything notable perhaps at the system level or specific areas of your network. Thanks. In brief, we've seen the fare environment improving as demand improved, unsurprisingly. As summer demand came in and as demand kept improving, we saw system-wide fare improvements, both for ourselves but also for the industry more broadly. I think what we're seeing right now is we're coming towards the end of summer. We obviously see every year industry fares, our fares drop off as we head out of the summer peak into the fall shoulder. We're seeing certainly a bit of promotional evidence in the last week, in particular, as Barry's mentioned, that some of those offers are getting more aggressive, which we think again is also tied to the relative weakness in demand that Delta's causing. The Delta variant is causing, to be clear. Great. Thanks. Thank you. I show no further questions in queue at this time. Are there any closing remarks? No, I just want to thank everyone for joining the call today. I'm really pleased with our results in the second quarter. We remain very encouraged about the business going forward, especially as we look to 2023 when we expect to be sub $0.06 CASM heading to $63 in non-ticket, which will make our break-even fare we're targeting at $30, which we think is really powerful for our business. I just want to thank all of our employees and partners at Team Frontier for helping us produce great operations and continue to get things back to normal as we get into 2022 and have full utilization again. Thanks everybody for joining the call. We'll talk to you soon. This concludes today's conference call. Thank you for participating. You may now disconnect.