Our next presenter is Frontier Group Holdings, and their SVP of Commercial, Daniel Shurz. Daniel is actually gonna kick off with some slides to walk through some of the recent network changes that they talked about on their earnings call, and then we'll sit down for Q&A. With that, I'll turn it over to Daniel. Thank you very much, Andrew. Good morning, everyone. I'm happy to be here today. Happy to be in Boston and talk a little bit about Frontier and our continued recovery and our continued movement towards higher margins. Standard disclaimer, I will be talking about some forward-looking guidance. Results may materially differ from what I talk about and the safe harbor language that I think you're probably all aware of, but just to make sure. Look, I think we've got this great story, and I think we wanna remind everyone. We're a growth airline. In a business that broadly speaking is not really a growth business, we're a growth company. We've had strong relative RASM performance. Our ancillary performance is truly second to none globally, and we continue to grow our performance. We have the lowest total unit costs and the gap's widening. We're gonna get margins back. We're gonna get margins back towards and then to pre-pandemic levels. At Q1 2019, slides are gonna speak for themselves. We've grown more since the first quarter of 2019, this is first quarter 2023 data, than any other airline. For 41%, we've continued in the pandemic to take delivery of aircraft. We have large aircraft orders. The airplanes kept coming. We kept deploying them. During the pandemic recovery, that meant being aggressive with experimenting with new markets. You can see the relative maturity of the network improving. There's been a trend since the beginning of 2022 where overall immature capacity has continued to drop. As demand recovers, we continue to see opportunity to increase capacity on existing markets. Our immature ASM share has dropped. We've seen great revenue growth since 2019. Our total revenue in Q1 2023 was up 55% from Q1 2019. We're driving strong total revenue performance with that capacity, with the right market deployments. If you look at the 12 months ending Q1, for the growth airlines, we have the strongest unit revenue growth. We have the best combination, we believe, of growing capacity and healthy unit revenue performance. This model still works. We're a growth company, and we're able to grow unit revenue and grow it strongly. This has been underpinned by very strong ancillary revenue performance. We are the global leader in non-ticket revenue per passenger. We have, we have innovated with the best optimization in the industry, with continued new product deployment, obviously, most recently our GoWild! Pass. We're on track to hit our fourth quarter goal of $85 a passenger, and we continue to work, we continue to work on products and ideas that will drive us to our long-term goal of $100 a passenger. Talking specifically about recent changes, we've been watching, obviously now the slightly more than 12 months of domestic, of full domestic demand, leisure demand recovery, and trying to understand what the new, what this new world looks like. What we've seen is in the off, in the off-peak periods, the difference between peak day RASM and off-peak day RASM has grown. It's grown from peak days having a 19% unit revenue premium over off-peak days to a 26% premium. It's a relatively substantial change. What we're doing in response to that is effectively sculpting the capacity appropriately to the days of week. We'll get to this. There's not a fundamental shift in the business model. It's an adjustment to reflect the market, the market dynamic, the market demand trends and obviously cost trends we're seeing. If you look at this graph, this, now this is probably the one that requires the most explanation 'cause there's the most on it. In green, in green, you can see the ASMs by day of week in the second half of 2022. In the dashed bars, you can see the plan for 2023. We're gonna be flying the same or slightly higher effective utilization on the peak days in the second half of this year, and we're gonna be flying less on Tuesdays and Wednesdays. It's not that historically we flew the same on Tuesdays and Wednesdays as we did peak days in the past. We already flew less on Tuesdays and Wednesdays. With the reduction in relative revenue performance on those days, we're doing a detailed analysis. We are getting much more granular in how we do this. We're looking month by month, and in some case, two-week period by two-week period, to understand what the right way to design the network is. We're making sure on the peak days, when it's absolutely the right answer to fly the fleet as intensively as possible, we're making sure we fly as intensively as possible. The stage length comes down a bit, little bit with, a bit with this, with this change, because we're designing the network to be operationally reliable. Part of that has been increased modularity since the pandemic. For some of the long-haul markets, the answer is there is no easy way to fly less than daily operations. Long-haul markets either work seven days a week or they don't, and we're making some adjustments there. By, look, in off-peak periods, by pulling down the network a bit further on the off-peak days a week, we're giving the opportunity to de-risk the operation because we're increasing our operational recoverability on those days and getting the fleet into a better position to fly on the peaks. Even with lower midweek flying, we were the highest utilization airline last year, and we expect to be the highest utilization airline this year. We're still targeting overall 11.5 - 12 hours. It's an adjustment. It's a little bit lower than we were pre-pandemic, absolutely. It is not a fundamental shift in the business. It's reacting in detail to the environment, maximizing our profitability in the process. Let's not forget about costs. We are the lowest unit cost producer in the industry on a total unit cost basis. Our cost advantage relative to the industry has been widening. We are gonna continue to focus on delivering lower unit costs. Our guidance for the second half of the year includes the expectation of continued reduction in our unit costs. We expect this gap as a result to widen further in 2023. That's also part of how we get to where we need to be. You combine this. You combine the focus on ensuring we're flying profitable flying, maximizing our revenue opportunity. You combine that cost performance, and you can look at this, we are working our way back to pre-pandemic margins. We've guided to 7%-10% in Q2. You can see compared to the Q1 bar, the central light green bar is the 2023 margins. We close the gap from Q1- Q2, and we close the gap further in the second half of the year from where we are in Q2, and get very, very much closer to our pre-pandemic margins. That's obviously despite very continued high capacity growth. We expect this to continue to improve as we go forward. The business really is getting back to pre-pandemic performance. The ULCC model and ULCC specifically is absolutely gonna be able to perform in this environment. We're, we're very, we're very excited about the future. We have, we continue to be a high growth business. We have over 220 aircraft on order. We absolutely intend to return as we get the comparisons to normalize to sort of the 15%-20% annual growth rate. We've got the best relative combination of RASM and growth we think in the industry. We continue to be number one in ancillary revenue, and we continue to improve our ancillary performance. Our unit cost performance is gonna improve relative to where we are now and increase the gap. We're gonna get our pre-tax margin back to, ultimately back to pre-pandemic levels, and we've got a resilient business model. With that, I'll sit down and get the tough questions underway. Daniel, thank you for that. Always helpful to get some more detail around these network changes. I guess maybe kind of starting off, you know, before you, we had, we had Allegiant up here, right? They run a very similar model in terms of kind of flexing up during the peak, kind of keeping flying low during that kind of Tuesday, Wednesday trough. You know, we've been hearing from other airlines kind of maybe some structural changes that they're seeing post-pandemic. Is that kind of better, you know, peakier peaks and troughier troughs? You know, Frontier has always been very quick to adapt to changes that they see out there. You know, do you anticipate others to make changes like this? Do you see just the competition on those peak days really, you know, really picking up as others adjust to maybe this new reality? I think, and you can see it's obviously, you can see from our data it's easier to reduce than it is to increase. Yeah. I think you mentioned Allegiant, who this has been their approach for a very long time, and obviously they do it far more extreme way than we're planning to. You've heard Spirit mention in the most recent earnings call that they're having moved away from cutting Tuesdays and Wednesdays, they're moving back in the direction of reducing. I don't think we're gonna broadly see a lot of incremental, a lot of incremental peak day capacity. I don't think it's easy to get it there. I think we will see, which obviously ultimately helps us limit how much we have to cut. I think we probably will see some industry move towards further differentiating off-peak days from peak days. Does the system, not necessarily your system, but does the, you know, the net, like, is there enough slack in the system? I mean, I know you're relatively smaller. Like, your increases aren't going to change things. If there is that gradual movement towards this peak time flying, is there the slack within the system to take that on? I think broadly the answer is yes. I think we obviously saw When demand recovered last year, when demand recovered very rapidly last spring and summer, We saw various places in the overall air travel system that weren't exactly prepared for that. Yeah. I'd point to This time last year, you'd have been asking me about Jacksonville. Sure. Staffing there. Yeah. You look at what happened during spring break peak this year, and there were occasional delay problems, but pre-pandemic there were occasional delay problems. Yeah. This year it performed like it used to. Last year, it certainly didn't. I think broadly speaking, there is capacity. Look, are there always some places in the air transport system broadly where there are more limitations? Sure. Yeah. We already know that and we work around that. Broadly speaking, yes, there's capacity. There's capacity. Got it. Yeah, when I look at the bars in terms of the day of week that you had up there, obviously bigger difference in the bars on Tuesday and Wednesday as opposed to the weekends where you're adding, it's marginal, right? You know, I know it's marginal, but during kind of really, really peak times, how does that change or how do you think about the risk of just the recoverability of the airline at, you know? So if you look at... So those bars cover the second half of the year. What you're actually seeing underneath that, if you dig further into the detail, we were already flying the most peak periods, obviously in the second half. Think Thanksgiving. Yeah. Think Christmas. We're already flying at sort of maximum utilization on the peak days in those periods. They are the highest, they're the highest revenue generators once you get in the off-peak half of the year, as it were. We're not expecting to push even higher. I look at. I point back, and I point you back to sort of all the work we've done around modularity, around trying to building operational resilience into the way we design the network, as opposed to having to worry about it after we've built the schedule. Look at our relative recoverability when we have challenges. When we have weather-driven challenges on a given day now in one of the bases in our system, I always like to look at the next day and spot how we've basically recovered. Yeah. To full operations because we built the network in a way that allows us to do that. I don't think we're adding more risk. Got it. Actually, maybe talk to your current operation. I haven't seen anything, you know, anything major, kind of changing there, and I feel like it's sort of been the theme of the panel so far. Everyone we've had up here, it seems like a lot of the operational kind of headaches that we've seen over the past few years certainly seem to be easing even after a pretty busy kind of March, spring break, Easter season. We I think look our final test, as it were, of are we okay operationally was our return for the first time to sort of 13.5 hour average daily utilization on a schedule basis, over 13.5 hour average daily utilization in the month of March. Mm-hmm. If you look at our performance, if you looked at our performance since the beginning of the year, if I showed you a graph and asked you to tell me when we increased utilization, you wouldn't be able to. I don't think you'd get it right because our actual operational metrics have improved since we went to higher utilization. I'd say, look, everything all the pieces you heard about last year, the only things that have come up this year have been much smaller. Staffing levels in airports, staffing levels from a crew perspective, staffing levels from a maintenance perspective, they're all healthier for us than they were 12 months ago. Mm-hmm. The operation's running more smoothly, unsurprisingly. Just when you, when you take into account all these changes you're thinking about, like, the question I get from investors often is like, how costly is this, is this going to be, right? Because, you know, I have big picture, right? 2023 capacity came down, your OPEX midpoint, you know, ex-fuel move, moved higher. Just maybe talk to that. You know, the bridge between the two. I know you should get better RASM out of these new routes, but, you know, cost creep higher as well. Look, I think, yes, obviously reducing stage length, you know, sort of if you, if you don't stage adjust will obviously increase CASM on its own. Reducing capacity obviously does put pressure on unit cost. Obviously also we have the ongoing delays in delivery of aircraft that are also placing a little bit of pressure there as well. Yes, What you will see as the year goes on is continued improvement in sort of absolute unit cost performance. Yes, we've seen obviously across the business like other airlines, we've seen inflation in a number of the input costs, meaningful inflation since pre-pandemic. We're focused on how to get more efficient as a business. We're focused on what are the different solutions. How do we use technology more effectively? All the different pieces. We have got to keep driving costs down. Look, we're making these network adjustments sort of on a granular basis. We're not making big swingeing cuts to the network and then not worrying about what happens with anything else in the business. We're looking at the truly worst performing flights and their cash performance and making decisions accordingly, which is why we're almost certain it's gonna be total margin accretive. Maybe changing gears from the network changes to just the demand environment. I know you just, you know, had your earnings call now just a couple weeks ago, so I'm sure things have, things haven't changed too much since then. Look, our economics team here at Bank of America has been, you know, citing maybe some slowing trends and particularly in terms of the higher income consumer. I think what would be helpful, could you maybe just talk to what your core demographic is, what your typical income cohort is, just to give folks an idea of the type of consumer that, you know, Frontier attracts, 'cause I think people would be surprised that it's that, you know, of where it actually is? Yes. Using our most recent data, well, we constantly survey customers on a variety of metrics. Over half of our customers today have household incomes above $100,000. Our mean is unsurprisingly therefore slightly above $100,000 on household income. What we're seeing I think in the domestic market is continued health, continued healthy demand. We were 12 months ago, we were sitting in an environment where the domestic market sort of was in a pent-up demand situation. You had an absolutely incredible- Yeah. Spring and summer of 2022. To be fair, what I think what we were seeing, what we saw during the fall and through the winter was sort of capacity continued to return to the industry more broadly. Demand was heading towards normal. I think we're gonna see a very good summer without question. Yeah. It's summer. I think it's probably gonna be a more normal summer. We're not seeing any signs of weakness. I do think there's still a desire. There's a combination of a desire to travel. I do think the added flexibility that the average white collar employee has in America today compared to pre-pandemic is supporting somewhat of an underlying increase in ability to travel. I think, look, simply perceived value of travel. If you can leave on a Thursday night for a weekend trip instead of a Friday night. Yeah. Even if you still have to come back on Sunday. Yeah. Taking the trip total value of taking the trip is higher. I think that's helping, I think that's gonna help airlines in broadly, ourselves obviously included, in a relative sense compared. At the moment, we're seeing demand being continued to be healthy. Yeah. I guess, I mean, I haven't seen this in airlines in, certainly since I've been covering it, but, like, we've basically gone an entire year plus of really no pushback on higher fares, right? Do you think we're finally like, is your sense is that are we at that point where consumers are like, you know, maybe questioning or pushing back on, like, the constant increases that we've seen since... Yeah. You know, basically Omicron ended? Obviously we have, obviously, right, we had a, we, yes. For the, you could say it differently. What you saw last year for the first time I can remember in my 20+ years in the industry is fuel prices went up, and we were able to get. Right. We were able as an industry to get revenue to go up enough. I mean- To more than cover. I mean, you priced it in real, almost in real time. Yeah. In a way that we've never- Yeah. Never seen before. Look, compared to 12 months ago, fuel's down. I think you can see that you can look at all the industry data you can pull from various sources. You obviously pull some of this. Fares are not trending further up. Yeah. Yes. There wasn't any sign of demand weakness, to be fair. You're right, but it was a slightly odd comparison to say that because we didn't have a normal 12-month earlier period to compare last summer to. I think you're gonna see healthy demand at fares that are still good, but they're not, we're not. There's no there's not likely to be another step up. Right. There's no obvious driver for it. Right. What are the differentials you're seeing in terms of that fare environment based on kind of geographies? Is your short-haul international still kind of outpacing domestic, or? Broadly strong. Within our network, the last thing to recover was the last piece to recover was the VFR, the short-haul VFR international. Mm-hmm. That didn't really recover until the fourth quarter of last year. Broadly across the network, we're seeing good demand in most markets. We continue to see. Absolutely, we continue to see good short-haul leisure international demand. As I say, with the recovery in short-haul international VFR. Mm-hmm. We're very happy to see that. You can see obviously, we've seen very good performance in Puerto Rico. We've been growing capacity this summer significantly. Right. To take advantage of what is a strong market there. You can see growth across our system. We're seeing growth in lots of markets. Got it. Understood. I just wanted to ask quickly on the GoWild! packages. Mm. Been out there for sale for some time. You know, I've seen, I think the price you're charging for them have been coming down. Do you feel like the network changes that you're going through, does it make the GoWild! packaging a more difficult sale? No, I don't think. No, not really. I think GoWild! is, it's an incredible value, right? I'll use this moment for a slight sales pitch. $499 for unlimited access to the Frontier network for the summer. Even with... In fact, if you try and fly domestically on mid and long-haul flights on some of our competitors right now, one round Yeah. One round trip is gonna be the same price as a GoWild! Pass. I think we're finding that there's definite interest. It's caught the imagination of customers. There's nothing else like it in the market today, but there's never really been anything else in the market like this, like this before. look, everyone's gonna make their decisions on their, when they buy it, on the relative perceived opportunity to use it. While yes, we are pulling back a little bit on Tuesday, Wednesday capacity, we're still growing as an airline. We're still gonna grow by over 20% this year. There's more every month, there's more total availability of Frontier seats in the market overall. Actually, the trend is it will get more attractive to customers, or it'll be easier to convert customers to buying it as we continue to grow. Yep. Yep. I guess one last question that I have have for you before we wrap up. I think maybe two calls ago, you guys posted your call right when, you know, kind of maybe some of these DOT issues were heightened in and around families sitting together. You know, recently been reading articles about from the DOT with these mandatory kind of passenger compensation issues. You know, how real is that? Do you think, you know, do you think that becomes a reality? Look, I think I'll take this a couple of different ways. It's an unusual situation. The DOT has issued a press release about notice of proposed rulemaking that they haven't actually issued. Yeah. I'm sure we will see. I'm sure we'll see the notice of. The way this works, obviously, they have to propose something and then they go out for comments from the public and from stakeholders. It may or may not turn into reality. I mean, having not even seen the NPRM text yet, it's. I'll reserve judgment. Sure. On exactly what the likelihood of it happening is. look, we believe fundamentally that, so there are obvious solutions in the marketplace to help customers when things go wrong. One of the obvious examples is sort of we're disadvantaged a little bit as an airline because the big airlines all have flight interruption agreements with each other. broadly, the DOT wants to encourage better outcomes when things are disrupted. They need to take an interest in ensuring that those agreements apply across the whole industry, for example. Right. I think there's definitely opportunities for them to improve the situation. I think it may not be what, may not be the first thing they think of in terms of the ideas, but we're definitely gonna push towards the direction of do the things that are most obvious and ultimately lowest cost, but still good for customers. Great. Okay, a minute left. Anything, anything in the room, or should we wrap it there? Okay, thank you. Thank you, Andrew. Appreciate it. Thank you very much, Andrew. Pleasure.