Good day, and thank you for standing by. Welcome to the Frontier Group Holdings, Inc. Q3 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Erdman, Senior Director, Investor Relations. Please go ahead. Thank you. Good morning, everyone, and welcome to our Q3 2023 earnings call. On October 19, we announced changes to our management team, and so I'm pleased to introduce today's speakers in their new roles. With me are Barry Biffle, Chief Executive Officer, Jimmy Dempsey, President, and Mark Mitchell, Chief Financial Officer. Each will deliver brief prepared remarks, and then we'll get to your questions. But first, let me quickly review the customary safe harbor provisions. During this call, we will be making forward-looking statements which are subject to risks and uncertainties. Actual results may differ materially from those predicted in these forward-looking statements. Additional information concerning risk factors, which could cause such differences, are outlined in the announcement we released yesterday or earlier this morning, along with reports we filed with the Securities and Exchange Commission. We will also discuss non-GAAP financial measures, which are reconciled to the nearest comparable GAAP measure in the appendix of the earnings announcement. I'll give the floor to Barry to begin his prepared remarks. Barry? Thank you, David, and good morning, everyone. I first want to recap the recent changes to our senior leadership team, including the promotion of Jimmy Dempsey to President and Mark Mitchell to CFO. Jimmy will now oversee commercial, customer care, and operations, research, design, and planning functions, and Mark will assume Jimmy's former role. Jimmy and Mark have been invaluable members of Frontier's senior leadership team over the years, and I'm excited about their contributions going forward. We also welcome Rajat Khanna to our, to Frontier as our Chief Information Officer and Matt Saks as our new Treasurer. Rajat has extensive experience, including IT leadership roles at the Lowe's Companies and at United Airlines, and Matt comes to us with significant cross-functional experience at Airbus. Please join me in welcoming Rajat and Matt to Frontier and congratulating Jimmy and Mark on their promotions. Frontier has a deep bench of executive talent, and we're well-positioned to help guide the growth of our airline into the future. Our Q3 results reflect a pre-tax loss of 5%, with non-fuel operating expenses at the low end of our guidance as we continued our rigorous focus on cost management. The quarter was impacted by elevated fuel prices, uneven demand recovery, and uneven industry domestic capacity deployment, as well as increased flight cancellations from weather and other operating challenges. Additionally, we observed softer than expected demand in the off-peak periods in the quarter. Looking to the Q4, stage-adjusted non-fuel unit costs are expected to sequentially improve. We've also seen booking volumes stabilize, driven by low fare stimulation, albeit at higher fuel prices. Into 2024, we believe demand patterns will normalize and industry capacity growth will moderate and rebalance across geographies. We believe unit cost leadership will be fundamental to long-term success, and we expect Frontier will be the lowest cost provider of a seat in the United States for years to come. Further, operating a high-utilization, highly reliable airline will be important to our success and long-term growth, as well as delivering a low cost and rewarding customer experience. I'll turn the call over to Jimmy to elaborate on our plan to dramatically simplify our operating model to align with the ULCC best practices and to fuel the next stage of Frontier's scalable growth. Jimmy? Thanks, Barry, and good morning, everyone. I will start with recapping the quarter. Total operating revenue for the Q3 was $883 million, reflecting RASM of 9.1 cents, down 19% from a strong prior year comp on 21% capacity growth and a 2% increase in stage. Fare revenue was $39 per passenger, lower than the $58 in the 2022 quarter, primarily due to the impact of the additional capacity, industry capacity, concentrated in certain of our key markets, weakness in the off-peak periods, and heightened flight cancellations resulting from weather and continued challenges in the operating environment. In contrast, ancillary revenue was $76 per passenger, only 3% down from the prior year quarter, demonstrating the resilient nature of our suite of ancillary products and services. While we have achieved the highest utilization in the industry this year, it's been challenging to reach higher utilization due to the post-COVID operating environment, including ATC staffing challenges and reliability that has underperformed as a result. In my new role, one of the primary objectives is to plan and allocate resources to achieve improved reliability, resulting in our ability to operate at high utilization and deliver lower costs. Transitioning to a more simplified operating design will result in industry-leading low costs, higher reliability, and the best value proposition in the industry. After careful analysis, we have determined that simplifying our business in a manner similar to European ULCCs will provide improved reliability and enable the airline to make continued progress toward pre-COVID utilization levels, despite similar operating issues experienced over the past decade. This essentially means returning aircraft to base nightly. As we expect consumers will seek greater value in travel, we recently launched Get It All For Less. As a first step, we've enhanced the Frontier Miles program to be revenue-based, rewarding customers for fare and ancillary purchases. We've expanded our elite status levels to incorporate many new features, including waived change and cancel fees, free bags and seat assignments, and a multitude of other benefits. Additionally, elite status is more easily attained, including our gold status, after spending just $3,000 on the Frontier Barclays MasterCard. In the coming months, we expect to broaden Get It All For Less to further enhance our customer value proposition. ... I'll now yield to Mark to provide a financial update. Thank you, Jimmy, and good morning, everyone. Q3 pre-tax loss margin was 5.1%, reflecting a challenging environment, as Barry covered earlier. Total revenue was $883 million, down 3% compared to the 2022 quarter, and fuel expense was in line with guidance at an average cost per gallon of $3.08. Adjusted non-fuel operating expenses were $646 million, or 6.66 cents on a unit basis, 3% lower than the 2022 quarter in an inflationary environment and at the low end of our guidance, reflecting our continued focus on costs. We have the lowest total unit costs in the industry, and we are focused on continuing to maintain our cost leadership through high utilization, improved reliability, and simplification of the operation. To that end, we've identified more than $200 million of annual run rate cost savings related to fundamentally changing the way we operate, as presented earlier, which we expect to be fully implemented by the end of 2024. We will provide more details as we progress through next year. We exited the quarter with $640 million of unrestricted cash and cash equivalents. As a reminder, we also have access to substantial liquidity through our unencumbered loyalty and brand-related assets. We had 134 aircraft in our fleet at September 30, after taking delivery of 8 A321neo aircraft during the quarter, five of which were financed with direct leases. Two aircraft scheduled to be returned in September were delayed into early October, and with another four deliveries expected in the Q4, all financed through sale leaseback transactions, our forecast to exit the year with 136 aircraft is unchanged. Turning to Q4 guidance. Capacity growth is anticipated to be in the range of 12%-14% over the 2022 quarter on stage length, which is expected to average 950 miles, 8% lower than the 2022 quarter, which reflects network optimization in response to today's heightened fuel prices and demand environment. Accordingly, we estimate fuel to remain elevated at $3.20-$3.30 per gallon based on the blended fuel curve on October 24th. Adjusted non-fuel operating expenses are expected to be between $655 million-$665 million, which, on a stage-adjusted CASM basis, is in line with the prior year and lower than the prior quarter. Taken together, our adjusted pre-tax loss margin in the Q4 is expected to range from 6%-9%, which, at the midpoint, is slightly wider than the Q3, mainly due to higher fuel expense. With that, I'll turn the call back to Barry for closing remarks. Thanks, Mark. I want to thank Team Frontier for staying focused on providing low fares done right in a challenging commercial and operating environment. We're disappointed in our results for the quarter and the outlook for the Q4, and we're taking methodical steps to ensure we deliver a reliable and rewarding experience to our customers to remain the lowest cost provider of a seat in the United States for the long term. We believe these steps will position the airline to return to profitability. Thanks again for joining us this morning. We're ready to begin the Q&A portion of the call. Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star one 1 1 again. We ask that you please limit yourself to one question and one follow-up. Please stand by while we compile our Q&A roster. Our first question is gonna come from the line of Savanthi Syth with Raymond James. Your line is open. Please go ahead. Hey, thanks. Good morning. I was kind of curious if you could provide a little bit more color on demand, maybe particularly the peak versus off-peak. If I, if I look at your unit revenue, it's, it's similar on a year-over-year basis to what you're seeing in 3Q, but you do have slower capacity growth and your stage length is kind of getting shorter. So I would have thought that that would have been the unit revenue tailwind. Well, the peak periods continue to be more resilient than the off-peak. But you know, what we're dealing with is an overall slowdown in demand, which has been cited multiple times now since we kind of brought it up over a month ago. We've seen that, and that is more acute in the off-peak periods. And then we're also seeing kind of an uneven deployment of capacity in the United States. So there's, you know, there's a lot more capacity versus 2019 in Las Vegas and a lot less in Minneapolis, as an example. So that unevenness is impacting Frontier the most. As we study that, we're probably more impacted by that unevenness than anybody else in the space. But to answer your question about the peaks, the peaks continue to remain very resilient. If I might just as you kind of look to kind of capacity and your plans here, especially as you kind of restructure the approach, how should we think about 2024? Is it still kind of similar to kind of 4Q level of year-over-year growth, or should we see that moderating our expectations? So we did moderate our growth somewhat in the Q4 versus, you know, even just a few months ago as expectations. As we look to Q1, which is gonna be back to where we see the biggest challenges in the demand environment is in Q1. As I mentioned, off-peak is not as resilient as the peak. We are targeting mid-single digit growth for Q1, but we are maintaining our mid-teens growth for the year. And I think more specifically, you know, we will be targeting growth kind of away from with these places that have been saturated in the more underserved markets as we move into 2024. Very helpful. Thank you, Barry. Thank you, and one moment for our next question... Our next question comes from the line of Duane Pfennigwerth with Evercore ISI. Your line is open. Please go ahead. Hey, thanks. Appreciate the time. If we could just sort of play back, you know, three key revenue outcomes and maybe the, you know, variance relative to your initial expectations, could you maybe bucket what you feel like are contributing factors and maybe one bucket being holding out for higher yields when basically your competitors really went for load and maybe weren't doing that to the same degree? One, the ops challenges which you highlighted, and maybe you have a sense for how acute kind of the revenue outcomes were in the markets that had seen those the most. Three, maybe just some suboptimal network bets that didn't play out the way you anticipated. Maybe there's other buckets, but would appreciate if you could walk through some of that. Well, I think, I think first and foremost, Duane, thanks for your questions. I think, I think number one, you know, throughout the pandemic and post-pandemic, we've seen the fall be much stronger than it has turned out. And so that was kind of a surprise, for that, maybe we can call it normal, but I think it was more abnormal from a downshift than we've seen in a relationship of the peaks versus past. We also did see, and it doesn't help, when you've got, maybe, you know, one or two carriers that are behind materially on load factor, and they're very large, and their promotional activity kind of did rob a lot of demand at a time when, yes, we were planning on getting some bookings, so that didn't help. But that is normalized now. So those are two big factors. And I don't know about our execution. I mean, you know, we chased and we always chase what we think is gonna be the highest margin. The challenge is, and we've gone back and studied this, you know, kind of after 9/11, after the Great Recession, and any time you have a big contraction in capacity, and you have a whole bunch of capacity return, it's not all perfectly allocated because we don't coordinate with other airlines. That's not allowed. And so you've got places like Las Vegas that they're just saturated. I mean, if you compare the capacity versus 2019, it's up dramatically, and in fact, the occupancy rates midweek are actually down. So you've got a tough situation. Contrast that to Minneapolis, where you haven't seen even a full recovery. And so when we track the airline performance in the United States, it's much closer and much more well explained when you look at the competitive capacity that most carriers are carrying or dealing with in their markets, and Frontier is the most impacted by that. Now, history shows that this typically, in 6-18 months, starts to correct itself, and we'll be eager to see that rebalancing take place. Appreciate those thoughts. And then just, just on, ops, you know, we'd heard about this kind of modular network approach for a while, and frankly, there were long stretches of time where your operations were, you know, quite good relative. So I guess, what went sideways this quarter, despite the modular design? And sorry if you're repeating it, but what is different about the new approach, the new simplified approach versus the modular network approach that you talked about in the past? I think the challenge that we've had, Duane, is we had great success with the modularity. And coming out of the pandemic, it was great, and we'd gotten to 50%, you know, modularity out and back. The problem is that the ATC staffing and, you know, the delay minutes, as an example, we saw a significant increase. I mean, it was something like 10x the amount of ground delay program minutes that we were dealing with in the system this summer. And so even though we'd gone modular, we didn't do enough. And so when we look at where we are very challenged, reliability-wise, it is dramatically impacted in the multi-day trips. And so where we're at now, we are simply going to deepen the modularity and go straight to a kind of a best-in-class ULCC model of Europe. And we're finally at a size and scale that makes sense. You know, for us, they have to be a little bigger. You know, if you know much about Ryanair or Wizz, I mean, they can make a base with just a few aircraft. That doesn't really work with our reserve coverages in the United States, but we're at the point that we can do that. And so we will be in a situation where we don't have anywhere near the multi-day trips, and we're targeting in the 90%+ range by the time we get to spring, which will help us mitigate this. And I'll just give you an example. Even with the 50% out and back, we had a situation where if we planned for today, for tomorrow night, where aircraft would be, because of the disruption with ATC, we saw consistently over a third of our aircraft not end up where they were supposed to be the following night. That has massive disruption to your maintenance plan. It causes you to need excess mechanics, it causes you to need more parts, and it's a big step towards the recoverability. So we feel like it not only unlocks the reliability of the airline, but it unlocks our ability to increase utilization. Because when we look at, you know, Europe, they've dealt with Euro control and in a tougher operating environment for decades, and that is why we have to adopt that model. It's the only model we believe that is gonna work high utilization in this country. Okay, thank you for the thoughts. Thank you, and one moment as we move on to our next question... Our next question is going to come from the line of Brandon Oglenski with Barclays. Your line is open. Please go ahead. Yeah, good morning, and thanks for taking the question. Barry, I guess if you can step back, you know, what do you tell investors that have been with you since the IPO? Because it's been a pretty tough run here. And if we look at your order book, you know, over 200 aircraft on order, yet 130 today, that's a lot of growth the next 10 years. And I know you're pulling it back in the Q1, but so many things like uneven demand, off-peak weakness, fuel pressure, ATC delays, they seem to be continuing. So what structurally changes in the next year or two that gets you back to that pre-tax double-digit margin range? Well, I think it's pretty simple. One, I think you're going to see, as I mentioned, the rebalancing of the capacity in the U.S. You're not going to have, you know, these wild swings of up 20% in one city versus down 15% in others. I think that's going to rebalance, and that's going to be significantly beneficial to Frontier in absolute and on a relative basis. I think you're also going to see a shift in normalization and demand. I mean, international is in vogue, but that isn't going to last, and so that's going to rebalance as well. History shows you that. That's worth, you know, 3-4 points each, and then we ourselves are going to take our own self-help, and we're going to grow away from the saturation. It's worth several more points. As we've laid out, we're going to actually reduce our costs significantly, which is going to drive a couple more points of margin, and that's also going to drive greater reliability, which also increases your revenue. When you're canceling 2-3% of your flights, you know, the costs stay the same, but the revenue goes down. Obviously, we've got, as Jimmy mentioned, our Get It All For Less promise that we rolled out this week, which we think is going to pay massive dividends with the loyalty approach, which happens to be with Barclaycard. But we're going to control the things we can control, and that's going to deliver profitability, and we believe that that low cost will win. I appreciate that, Barry. I mean, are you going through a wholesale change on the network next year? Is that what we should think, like getting out of markets like Vegas and Florida incrementally? Nope. No, we're not getting out. So, so let me be clear. We are not getting out, and we're not leaving anywhere, but we will concentrate the growth that we plan, so in the mid-teens, it will be away from places that are saturated. It's going to be in places that are underserved. Okay. Sorry, I should have rephrased, like, not getting out, but incrementally moving away from those markets with relative- No. new capacity. Is that right? No, no. We are the lowest cost provider in Las Vegas. We're not going anywhere. We do believe that, that the industry will probably slow its growth and probably contract there, but we will not be contracting. We will just, the growth that we add to the company will be in underserved. We'll not add more capacity to markets that we believe are oversaturated. Okay, appreciate the response. Thank you. Thank you, and one moment as we move on to our next question. Our next question is going to come from the line of Michael Linenberg with Deutsche Bank. Your line is open. Please go ahead. Yeah. Hey, good morning, everyone. Hey, Barry, just back to your view on next year. You know, talked about mid-single growth in the March quarter and then aiming for mid-teens for full year, so you would obviously have to ramp up as we move through the year. Are there any sort of, you know, whether it's margin targets or return metrics, that you'll have to achieve in order to then, you know, sort of green light that type of growth? You know, maybe it's by the June quarter where you start to ramp up, because I'm sure there's metrics you probably want to hit before you want to accelerate that. You're thinking around that. Thank you. Yes. Yeah, thanks, Mike. We are not guiding for 2024 margins at this point. Okay. Too early. Just a question to Mark, and congratulations on your promotion. I want to go back just on the guidance. You had mentioned that the pre-tax margin guide for the Q4 versus the third, you said a lot of that had to do with the higher fuel price assumption. Are you assuming sort of similar demand, that what we saw in the September quarter continues into December? Is that a fair assumption? Yeah, I mean, I think, you know, as was highlighted, you know, in the initial remarks, you know, booking trends appear to have stabilized. And so, you know, what you see, you know, in that guide range is primarily, you know, the impact of the higher fuel costs. Okay, great. Thank you. Thank you. One moment as we move on to the next question. Our next question is going to come from the line of Stephen Trent with Citi. Your line is open. Please go ahead. Stephen, you're on mute. Yeah. Good morning, Rita. Can you hear me okay? Yeah, we can. Okay, sorry about that. I'm having a little trouble with my phone. And, congrats. I share Mike's comments, congrats to Jimmy and Mark on those new moves. That's great stuff. Just one or two for me here. Could you tell me with your 2024 plan, you know, what are your basic assumptions about the air traffic control situation and sort of infrastructure investment in U.S. airport? Any change there, or you're assuming everything stays as it is now? Yeah, thanks, Steven. Actually, we're assuming it gets worse, and that is why we had always planned by 2025, 2026 to get to above 80%-90% kind of out-and-back simplified network, but we have to accelerate that. We've studied this extensively for now 6-8 months. We have studied how they manage this in Europe, you know, very similar situations. We believe that the air traffic control gets worse, because if you look at the staffing levels relative to the departures, it's going to be more constrained than it is now. We are planning around that by ensuring that we no longer have the kind of dependencies and the risk of running multi-day trips that are vulnerable, you know, with 3-4-5 hour GDP programs. All right. I really appreciate that, Barry. And just one other quick question. Could you refresh my memory regarding what percentage of your fuel exposure is West Coast refined? Steven, it's Jimmy here. It's less than 20% of our exposure covers the West Coast, and we also have an exposure of about 10 or 15% in Denver as well, which is incorporated into that kind of higher crack spread and higher jet fuel cost. But over half of our exposure to fuel is around the US Gulf Coast. Okay, perfect. Thanks very much, Jimmy. Let me leave it there. Thanks. Thank you, and one moment as we move on to our next question. Our next question is gonna come from the line of Helane Becker with TD Cowen. Your line is open. Please go ahead. Thanks very much, operator. Hi, everybody, and thanks for the time here. Is there a way for you to quantify what the Barclays card spend is and whether it's up, down, or the same as it was six months or a year ago? We don't actually disclose that, but I can tell you we're very pleased with the performance of credit card partnership with Barclays. We are investing significantly in the loyalty. As we announced earlier this week, our Get It All For Less promise includes changes to how people earn on the program, our elite status levels, but also the fact that you can actually earn gold status by just spending $3,000 on the credit card, which unlocks free bags, free seats, no change fees, no cancel. Just a lot of value. And so what we believe is that there is no one in the space that if you travel a few times a year and spend at least $10,000 on a credit card, that you earn as much as you will on us in terms of free travel. And when you couple that with what we're doing on the modularity and where we're gonna be concentrating our bases, we also believe that we're gonna see much more market maturity as we continue to be much more relevant for customers in our bases. Okay. That's, that's hugely helpful, actually. The relevance is very helpful. But the question I have about the comment you made on underserved markets and kind of thinking about growing in those markets, I understand why you would want to do that, and it makes perfect sense. But do you need to have smaller aircraft to do that? Because those markets may not be as robust or as demand-driven as some of the other markets that, you know, you are serving already. No. I feel like American can only- No, it's a good question. Go places, right? Well, it's a good question, Helane, but no. You know, look, when you've got the A321neo in our configuration, it provides the lowest seat cost in the industry, and it enables you to fly more places, whether it's just a couple times a week for small markets or several times a day. We have an amazing amount to stimulate- Got it. You know, amazing ability to stimulate demand. But I think what you should look at is just take the cities in the U.S., take all the airports, and just go in and look at the Q4 capacity by city, look how many seats in each city, and compare that to the same quarter in 2019, and you'll see a dramatic, dramatic difference. You know, you're talking probably 30-40 points swing between the top and the bottom. So if demand is similar and you have a 30% swing in capacity, that can, that can be a 20-30 point jump in, in RASM, or it can be a 20-30 point drag on a relative basis. So that's what we're talking about when we say uneven capacity deployment in the U.S. And I think you'll find something very interesting if you do that analysis. You'll find that there's a large correlation between the airlines that are doing well and the ones that are struggling margin-wise, when you compare where their concentrations are. That's why we say, you know, and history shows that these things will normalize over the next 6-12 months. Right. That makes sense. Yeah. Okay. That's really helpful, Barry. Thanks for all of that. Thanks, Helane. Thank you, and one moment for our next question. Our next question comes from the line of Jamie Baker with J.P. Morgan Securities. Your line is open. Please go ahead. Hey, good morning, everybody, and congrats to Jimmy and Matt, Rajat, and... I'm sorry, Jimmy and Mark, Rajat and Matt as well. It's already been a long morning. Can you update us on CapEx for the next couple of years? Obviously, you know, everybody hoping for a better year next year, but, you know, just in the event that 2024 ends up resembling 2023, particularly after you reach a pilot deal. I just want to make sure I understand your ability to raise incremental capital. I know you cited the credit card program and IP, so, you know, I'm just guessing that liquidity is on your mind as well. Yeah, Jamie, it's Jimmy here. Look, you know, we—it's not, it's not a secret that we've spent a lot of time over the years fostering relationships across the leasing community to fund the growth in the business. And, you know, we have about 22, 23 aircraft delivering next year, and we've a really good pipeline on sale and leasebacks on, on those aircraft all the way through to the end of next year. Mm. Most of our aircraft are committed really in the first seven or eight months of next year. We feel really good about the material capital spend on aircraft assets. The other capital spend that we have in the business is clearly engine shop visits, and then just funding the growth in the business. They tend to be much lesser in terms of CapEx spend than the aircraft themselves. Albeit, the LEAP aircraft is coming in the next few years into its window, where you'll see some more engine shop visits develop for those aircraft. The other thing that we're watching quite closely, although we are, you know, we're unclear right now, is the impact it will have on Frontier is really what's happening with the GTF. You know, Frontier delivered its first GTF engine in September 2022. We're outside of the initial window where inspections on those engines are occurring at the moment, but we do anticipate, and we'll have to do some inspections towards the back end of 2024, and into 2025 and beyond. And so, you know, albeit, we think it's gonna be a minimal impact on Frontier as in relation to how we understand it at the moment, it's obviously a fluid situation. We're watching it quite closely. And so that'll determine our spares ratio and various different things, engine capacity in the airline. Okay. So no definitive CapEx guide, but we should be thinking about sale leaseback, you know, activity as we model for that. That's the summary? Yeah. I mean, that market has been really good to Frontier, and it continues to be so. So I mean, obviously, interest rates are higher and higher for everybody, and we operate within that world, but, you know, the pipeline of operating leases that we have coming are pretty good. Okay. We're quite comfortable with. Good. And then second, you know, Barry, you talked about lower axial CASM next year. What, what's your confidence on getting there if you mark your pilots to market, and let's just assume you did that on January first, for illustrative purposes? I'm not asking you to negotiate in public. I'm just asking you to speak to your confidence in achieving lower axial CASM after a pilot hit of what's, you know, sort of best case scenario, I'm guessing $50 million of annual incremental expense. Well, I'm not guessing, I'm analyzing, but, you know, probably a figure potentially north of that. Well, we plan on, as we outlined earlier, saving over $200 million on 2023 size with the simplification of the operation. So we believe we have adequate capacity to more than cover any- Okay ... pilot labor cost increase. Okay, perfect. Thank you very much. Thank you, and one moment as we move on to our next question. Our next question is gonna come from the line of Andrew Didora with Bank of America. Your line is open. Please go ahead. Hi, good morning, everyone. Barry or Mark, you know, maybe two parter for you. You know, what are the buckets of the cost opportunities within that $200 million that you cited in your prepared remarks? And then, Barry, like, the road back to profitability or stopping the margin degradation, can it really just be accomplished on the cost side and utilization side, particularly with pilots coming, or is it really just a revenue issue whereby you just kind of have to rethink your longer-term capacity plans of kind of in the high teens? You know, just trying to dissect those two parts. Thanks. Yeah. So this is Mark. So from, you know, the two hundred million that we highlighted, so, you know, broad strokes, you know, as we simplify, you know, the schedule and the operational design, you're gonna have, you know, as a benefit of that, you know, lower crew travel, a better ability to utilize, reserves and just, you know, better predictability of people and parts, you know, that are gonna drive, you know, cost benefits through the organization. And then with that, you're also gonna position the organization to drive higher utilization. You know, and so I think that's really the foundation of the two hundred million. Yeah, and as far as the growth rate, I, I don't see a challenge with that. I think if you look under the hood, you know, we feel confident with the cost savings that we're gonna have, as even net of the pilot cost. Like I said, you know, you're gonna see the uneven deployment of capacity and the market saturations start to normalize. That's a huge benefit to us. You're gonna see the rebalance, you're gonna see people come back and travel more domestic than they did on a relative basis to Europe. That's just gonna happen. And so those two together are a massive benefit. And then you've got our own self-help that we're gonna grow in places that are also underserved ourselves. So, I think you couple that with the better reliability, what we're doing with our loyalty on the revenue side, and we believe that we will get back to profitability and get back to great margins, and therefore, we don't have a challenge with the growth rate. ... Got it. And then, Barry, I'm just curious if you have any updated thoughts. I know there have been continued, you know, articles out there in the press just with regards to the government and kind of the excise tax on ancillary revenues. You know, what, how do you think that plays out? And at what point, you know, what would trigger kind of a change in terms of how you account for that? Thank you. I apologize. I didn't see the article that he's referencing. But what specifically were you? Just the excise tax on ancillary revenues, the potential of putting tax on that. Yeah, so that actually has been out there for a long time. Yep. And I think there's really good, I think, kind of precedent on this that goes back, I think, to the 1950s, actually. So you know, look, if it's optional and it's not part of the core service, I think the statute is very clear. Okay, thank you. Thank you. One moment for our next question. Our next question is gonna come from the line of Connor Cunningham with Melius Research. Your line is open. Please go ahead. Hi, everyone. Thank you. A couple questions on revenue. You know, there's been a lot of discounting happening right now in the US domestic market. You know, as you run fare sales, I'm just curious if the uptake rate has been any different than it has been in the past. Just trying to understand, you know, the difference between load factor and so on, as you kind of go forward. Thank you. I'm gonna let James Finner, our Vice President of Revenue Management, answer that. Yeah, you know, I think as we look at the results, you know, certainly we saw a bit of a slowdown in the H2 of August and into September. But we've, you know, been pleased with the results as we've continued to run promotional activity through the last 6-8 weeks, and are optimistic as we see a trend, particularly for the peak periods, as Barry mentioned, are more resilient here in the Q4. You know, we believe low fare stimulation is fundamental to running the ULCC and remain focused on that. Okay. And then on these new markets that are underserved, you know, when I think about that, like I kind of think that they're underserved for a reason. So as you guys look to go into those markets, is your expectation that the spooling period is gonna be a lot quicker than it probably has been in the past? Just trying to understand if there's gonna be a drag on RASM as we start to add these new markets and so on, because new market development, you know, tends to be, you know, at the margin dilutive. Just trying to understand that. Thank you. Well, yeah, I've read some things about this. I think there's some misunderstandings in the marketplace on this. When you're always growing, right, you always have a percentage of your airline that's immature, and that is kind of a permanent, if you will, kind of degradation to your RASM that you take on. This is why some airlines you see, you know, and there's one in particular you can go look at, that stopped their growth this year, and people have slowed it down or even contracted, and they've popped the RASM. The challenge with that is it's temporary, because once they go back to growing, they take the drag on RASM. Now, in our case, what we're seeing is that, yes, new growth in the oversaturated market, I'll continue to use Las Vegas as an example, the new growth is actually not performing at levels that we were accustomed to. But we're also seeing our mature markets seeing significant incursion and reduction in RASM on mature markets. So, you know, there's I think there's this confusion about it, that it's the growth that's the problem. It's not our growth that's the problem. It's the uneven deployment of capacity into a lot of our core markets in Las Vegas and certain Florida markets, as an example, that has caused the degradation. Okay, thank you. Thank you. One moment for our next question. Our next, our last question comes from the line of Christopher Stefanakis with Susquehanna Financial Group. Your line is open. Please go ahead. Hi, good morning. Thanks for taking my question. So, Barry, in your prepared remarks, you spoke about your belief that industry capacity is going to rationalize next year. And, you know, there are fewer carriers today in the U.S. than there were 10, 15 years ago, so perhaps less of an opportunity here for some irrational behavior. But, you know, the marginal cost per seat is such where well-capitalized carriers can continue to add inventory into the market here. So just, you know, help us, or if you could, kind of explain your view there, particularly when we look at, you know, Southwest this morning, looks like their order book is growing, and of course, you have a full order book. So just kind of want to better understand the comments around it. I appreciate the history and analogy, I think, to Europe, but here in the US here is perhaps a little bit of a different dynamic. Thanks. We're less convinced of the overall capacity, and we'll let those bigger airlines decide what they think is the right amount of deployment. What we're seeing week after week in the schedule change adjustments and some of the most recent commentary is the expectation for their capacity deployment is coming down, down, down. And we're seeing it, for example, we've seen you know, attrition in pilot rates slowing down as a result because they're slowing down their hiring of pilots. There's evidence that the big airlines are actually slowing down their capacity. What I was really more referencing was not the total capacity, however, and I was talking about the unevenness of the capacity deployment. Ultimately, if everyone showed their cards, I think you would find that, you know, some of the oversaturated Las Vegas and oversaturated Florida markets, it doesn't matter who you are, the route PNLs on those routes, regardless of airline, are probably a little bit under pressure. And so we see that capacity being redeployed at a minimum and possibly, in some cases, just eliminated. So at best, it's they maybe retire the aircraft, but at worst, it's just get redeployed. So that unevenness will get itself sorted out, and that's really what I was referencing, not total capacity. Okay, thank you. And then on the comments for next year and thinking about capacity allocation, to be clear, you're not arguing around a wholesale change here to some of your core markets, and you're looking at some of these underserved markets, which, to the earlier question, comes with its own set of challenges. But if we take a step back and think about your net route growth next year, so with no wholesale change to markets like Vegas and alike, and these new underserved markets, just, if there's a number or kind of directionally, how we should think about your net routes, for 2024. Thank you. Yeah, I don't think that the overall routes is gonna change that much. I think when you look at, you know, the percentage of our capacity that's in immature markets, you know, it's hovering around 10%, and it could go a little closer to 12% with some of the new markets. But when they're in underserved markets, we think that that's gonna do really, really well. But it probably wants to be a little more when we look at, you know, kind of the underserved places. Okay, thank you. Thank you. This concludes our question and answer session for today's conference, and I would like to hand the conference back over to Barry Biffle for any closing remarks. Yes, I want to thank everybody for joining, and we look forward to updating you at the next quarterly call. Thanks, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect.