Welcome to the Frontier Group Holdings, Inc fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Q&A session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one 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. Welcome to our fourth quarter 2023 earnings call. Today's speakers will be 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. On today's call, we will be presenting supplemental materials, which can be viewed on the webcast platform with a PC or a smartphone. If you're not accessing the call from either, or if technical issues arise, you can follow along by downloading the presentation from our website at ir.flyfrontier.com/events-and-presentations. Before yielding, let me quickly review the customary safe harbor provisions, which are included on slides two and three. 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 published earlier, along with reports we file with the SEC. We will also discuss non-GAAP financial measures, which are reconciled to the nearest comparable GAAP measure in the appendix of the earnings announcement and in the presentation supplementing this call. I'll now yield the floor to Barry to begin his comments. Barry? Thank you, David, and good morning, everyone. Before beginning the brief slide presentation, I'd like to quickly recap the fourth quarter results. We generated a pre-tax margin of nearly 1% for both the fourth quarter and the full year. Our fourth quarter results significantly outperformed guidance on strong operational performance and cost execution, with our CASM excluding fuel 8% lower than the prior year quarter. We achieved a 99.5% completion factor on industry-leading average system utilization of 11.3 hours during the quarter and the highest on-time arrivals and departures for the month of December since 2015, excluding pandemic year 2020. Our operational performance during the December to January holiday season was also notable. We had 15% more departures than the prior year holiday season, making it our busiest in airline history. In addition, our completion rate and on-time arrivals and departures during the holiday period all ranked as our best post-pandemic performance. I want to take a moment to thank all of Team Frontier for producing such great results and taking care of our customers. While I'm pleased with the operational performance and that we generated a positive pre-tax margin for the fourth quarter and full year, I'm disappointed in the absolute result. We are therefore focused on taking meaningful steps to address the challenges that impacted our results during 2023 and on returning to double-digit margins. Turning to slide five, one of the largest challenges many low-cost and ultra-low-cost carriers faced in 2023 was the industry's oversupply of capacity in leisure markets, with Las Vegas and Orlando being two significant examples. Both markets have experienced rapid and disproportionate growth compared to 2019, when demand and capacity were far more balanced. As total U.S. domestic capacity increased just over 4% since 2019, total industry capacity in Las Vegas and Orlando grew by a combined 20% and are expected to continue to grow in 2024 based on current published schedules. This has resulted in a relative RASM and margin headwind to many LCCs and ULCCs, and Frontier is no exception. On Slide six, no one's more aggressive in engaging in self-help to address overcapacity in leisure markets than Frontier. By summer, we plan to reduce Las Vegas and Orlando combined capacity by 11 points of our system share year-over-year, reducing the share of these markets by one-third. To be clear, we're not retreating from our network footprint in either market. We are merely cutting what we believe is marginal, unprofitable flying to return both crew bases to a rational optimal position for our cost structure and remain the low-cost leader in both markets. Turning to slide seven, our network growth in 2024 is focused on exploiting higher fare, visiting friends and relatives markets. The market mix of routes by this summer will increase industry average fares in those markets by 5% year-over-year. Not only are we chasing higher fare markets, the total revenue pool of industry revenue in our network this summer will be up over 50%, despite only growing capacity 12%-15%, meaning we need a much smaller share of industry revenue, extremely constructive for increasing RASM. Additionally, the historical data suggests VFR routes tend to ramp quicker and reach maturity sooner than leisure routes. Turning to slide eight, another significant challenge we faced last year was the extended ATC ground delay programs, which negatively impacted our completion factor and utilization, particularly during the summer peak. To address this, we are executing on the network simplification strategy that we discussed on our last earnings call, with a focus on increasing the percentage of aircraft that return to base nightly to greater than 80% by peak summer this year. We expect this strategy to enable expanding our industry-leading utilization and improve reliability. A key element of our plan is leveraging our 13 crew bases, including our recently announced crew bases in Cleveland, Cincinnati, Chicago, and San Juan, Puerto Rico. Single-day trips flown from our crew bases support operational reliability, recoverability, and higher fares. Our relative cost advantage to the industry, outlined on slide nine, is a key factor in our ability to stimulate demand with low fares and it increased to over 40% in 2023. We believe unit cost leadership is fundamental to our long-term profitability, and I expect Frontier will remain the lowest unit cost provider in the United States, particularly as significant cost savings materialize from our network simplification strategy. We expect that our network simplification strategy will underpin the $200 million of associated annual run rate cost savings, which should be implemented by the end of 2024, as we highlighted on our third quarter earnings call. Further, our order book is heavily weighted to the high gauge A321neo, which will contribute meaningfully to our ability to control costs as we continue to increase gauge. Accordingly, we expect 2024 adjusted CASM ex fuel to be down 1%-3% on a stage-adjusted basis to 1,000 miles. As highlighted on slide 10, we plan to leverage our network, product, brand, and distribution to diversify our revenue and drive sequential RASM improvement. I've spoken extensively about network enhancements, so let's briefly review the latter initiatives. Last week, we launched our innovative BizFare product to cater to cost-sensitive small business travelers while providing a premium experience for one low price. We've rebranded our Stretch product to promote our premium economy seating, starting at $19, consistent with our recent launch of our Get It All For Less campaign. As we showcased last quarter, our relaunched Frontier Miles program features enhanced elite status tiers that can be earned faster and offers the highest credit card spend-based travel reward earn rate in the industry for each dollar of spending with the Frontier Barclays Mastercard. A new website and new mobile app, as well as NDC, are expected to launch by late 2024 and should provide significant distribution, merchandising, and conversion benefits, as well as improved brand positioning. Further, we've seen competitive overlap recede in recent months. To the extent carriers further engage in capacity rationalization, this would drive additional unit revenue benefit to Frontier, which will be accretive to our guide. However, we've only included the published reductions in our base case. On slide 11, network, cost, and revenue initiatives are expected to drive profit and growth in the business. We expect our pre-tax margin for the full year 2024 to be in the range of 3%-6%, with capacity growth of 12%-15% and adjusted CASM ex down 1%-3% on a stage-adjusted basis to 1,000 miles. First quarter 2024 guidance is reflective of seasonality and off-peak dynamics expected during the quarter. Our guidance is based on fuel pricing as of February 2nd. Turning to the final slide. With full year benefit of our network, cost, and revenue initiatives, we expect 2025 to be between 10% and 14% pre-tax margins. This includes the expectations of new labor agreements with pilots and flight attendants, as both recently became amendable. That concludes the slide presentation, and I'll now hand the call over to Jimmy for a commercial update. Thank you, Barry, and good morning, everyone. Fourth quarter revenue was $891 million, reflecting RASM of $0.089, down 15% on 15% capacity growth and an 8% decrease in average stage length. This represents a four-point year-over-year sequential improvement from the third quarter, driven by stabilizing demand trends. As we enter 2024, we are now seeing improving revenue trends, better than our earlier expectations, and see positive momentum as we transition to our new network and deliver on multiple revenue initiatives. We expect the revenue trends to continue to show positive year-over-year sequential improvement. We carried a record 8.1 million passengers during the quarter, with a 99.5% completion factor. As well, on-time arrivals and departures in December were our highest since 2015, excluding the pandemic year of 2020. During the quarter, as Barry mentioned, we made steady progress toward our objective to increase the percentage of out-and-back flying, including the announcement of four new crew bases at Cleveland, Cincinnati, Chicago, and San Juan, Puerto Rico. The Cleveland base is expected to open in March and will employ 110 pilots and 250 flight attendants in its first year. The Cincinnati base is scheduled to open in May and will employ 80 pilots and 160 flight attendants, while the Chicago base will serve both O'Hare and Midway and employ 110 pilots, along with 200 flight attendants already based there. Finally, San Juan will be our 13th crew base and will employ 90 pilots and 200 flight attendants in its first year. We've been the fastest growing airline in Puerto Rico, more than doubling seat capacity since 2019 and offering 14 nonstop routes from San Juan alone. Puerto Rico is playing a key role in our Caribbean and Latin America growth strategy, not only because it's a popular tourist destination, but, large populations of Puerto Ricans reside in the U.S. mainland, and they frequently travel to the island to visit friends and family or to work remotely. Frontier is well-situated to capture a disproportionate share of this volume, as we now serve more routes to Puerto Rico from the U.S. than any other carrier. Moreover, we recently announced a significant expansion of our network as part of our strategy to grow in higher fare routes. During the second quarter, we launched nonstop service from 38 airports, with our largest concentration of routes in visiting friends and relatives markets from Dallas-Fort Worth, Charlotte, Raleigh/Durham, Los Angeles, New York, Minneapolis-Saint Paul, and San Juan. Finally, early last month, we officially launched our reimagined Frontier Miles loyalty program, and we're seeing positive trends. Memberships and engagements, particularly at elite levels, have increased. We have also observed improved spend on the co-branded credit card. In fact, December spend was over 10% year... was up over 10% year-over-year and was the highest level on record. While it's still early, we expect to see continued improvement in spend throughout 2024. That concludes my remarks, and so I'll yield the call to Mark. Thank you, Jimmy. We generated a pre-tax margin of 0.7% on a GAAP basis and 0.8% on an adjusted basis in the fourth quarter, well above our guidance range on solid operational performance, as Barry touched on earlier, and cost-related factors. As a result of our fourth quarter performance, we also generated a pre-tax margin of 0.9% for the full year. Total revenue was $891 million, down 2% compared to the 2022 quarter. Fuel expense was roughly in line with the prior year quarter, as the 12% benefit from lower fuel prices and 3% improvement in our industry-leading fuel efficiency to 105 ASMs per gallon, was offset by the increase in consumption from capacity growth of 15%. Fuel expense for the quarter reflects an average cost per gallon of $3.18, which was slightly below the low end of our guidance range. Adjusted non-fuel operating expenses in the fourth quarter totaled $590 million, or 5.9 cents per ASM, 8% lower than the prior year quarter. The improvement in adjusted CASM, excluding fuel, was driven by a $36 million lease return cost benefit during the quarter from the execution in December of an extension of four A320ceo aircraft leases that were otherwise scheduled to return in 2024. Moving forward, we will continue to be opportunistic with our fleet management, including attractive aircraft lease extension opportunities. Our adjusted non-fuel operating expenses also benefited during the quarter from efficiencies realized across the business, given the strong operational performance and our continued focus on costs. While our fourth quarter pre-tax income was $6 million, we generated a net loss of $37 million, driven by the recognition of a $37 million non-cash valuation allowance against our U.S. federal and state net operating loss deferred tax assets, which wasn't contemplated in our effective tax rate guidance. Our adjusted net income of $1 million for the quarter excludes this adjustment as it's a significant special non-cash item. It's important to note that these NOLs generally don't expire and can therefore continue to be used against future taxable income. Given our full year adjusted pre-tax guidance of 3%-6%, we presently expect to utilize a substantial portion of NOLs this year. Any corresponding reversal to this adjustment as we generate taxable income, would also be excluded for non-GAAP purposes. We ended the year with $609 million of unrestricted cash and cash equivalents and $139 million net of total debt. In addition, we have unencumbered loyalty and brand-related assets, which we believe could generate significant additional liquidity if desired. We had 136 aircraft in our fleet at year-end, after taking delivery of four A321neo aircraft and returning two A320ceo aircraft during the quarter. We expect to take delivery of six A321neos in the first quarter of 2024, and a total of 23 A321neo aircraft in 2024, all of which are anticipated to be financed through sale leaseback transactions. With that, I'll turn the call back to Barry for closing remarks. Thanks, Mark. Our objectives for 2024 are clear: Every member of Team Frontier is focused on executing our network, cost, and revenue initiatives, improving our operational reliability, and delivering an enhanced experience for our customers with a network growth focus on high fare VFR markets. Alongside our commitment to remain the lowest cost provider in the United States, I'm confident these measures will drive higher margins in the business. Thanks, everyone, for joining the call today, and we will now open up for questions. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again, and one moment while we compile our Q&A roster. Our first question comes from Duane Pfennigwerth of Evercore ISI. Hey, good morning. Just on the unit cost guidance, can you give us some thoughts on how we should think about stage length, this year? Or is there a way to maybe, convert the guide to kind of a nominal, unit cost guidance? And just, just broad strokes, what would the underlying kinda tailwinds and headwinds be from a, from a unit cost perspective? Well, so Duane, I think what's important to note is our stage is going down. So I think to be intellectually honest, that's why we're pinning it to 1,000 miles, and we expect to be down 1%-3% on a stage-adjusted basis. But we expect it to be closer to 900 for the year. Yeah, and Duane, that guide... Go ahead, Duane. Yeah, no, just maybe broad strokes, the underlying kind of tailwinds and headwinds year-over-year. Yeah. So when you look at that, you know, guidance for for the full year, I mean, that is underpinned by, you know, the network simplification that we've touched on and getting our out-and-back flying to over 80%. You know, that is gonna drive the $200 million of annual run rate cost savings that we expect to have fully implemented, you know, by by the by the end of the year. You know, additionally, as we, you know, go through the year, you know, the the 23 aircraft that we're taking delivery of, you know, those are A321neos. So you'll continue to get, you know, the gauge benefit there. And so, you know, I think those are, you know, the main drivers of the, you know, the 1%-3% down, you know, in the CASM stage length adjusted. Okay, appreciate those thoughts. Then, I'm sure you get the question a lot, as a team. Maybe it's Barry, maybe it's Jimmy. But you know, to the extent that Spirit becomes available again, you know, can you just gauge your interest or to the extent you'd be tempted to reengage there? Is there any price on the equity where it would make sense from your perspective? Thanks for your thoughts. Thanks, Duane. It's the first time we've been asked that question. We are 100% focused on our business and delivering profits for our shareholders. So sorry, but we don't have anything entertaining to talk about. Very clear. Thank you. Thank you. One moment for our next question. Our next question comes from Savi Syth of Raymond James. Hey, good morning. I was kind of curious what your thoughts were as you kind of roll forward this network changes, you know, where utilization would go, and along those lines, I think, you know, how the pilot trends are looking in terms of being able to kind of meet the utilization targets. Well, I'll talk about the pilots, and I'll let Mark talk about the utilization. But on the pilot side, we've seen a dramatic change in the marketplace. I think, I mean, you've seen the regionals looking at this, and I think when you see the regionals being able to be staffed, I think that tells you everything you know about the shortage of pilots. So we don't see any challenges there. You start by you. Relative to the utilization, you know, in the fourth quarter, you know, we delivered 11.3 hours on a total system basis. As we progress with the network simplification, you know, we expect the utilization to increase, you know, as we go through the year, and, you know, we'll continue to, you know, to push to drive that higher. Appreciate that. And if I might, just a clarification question on Duane's color. Are some of the labor costs any kind of labor cost increases in the 2024 guide? I know you mentioned it is contemplated in the 2025 outlook. No, these, these just opened. I know a lot of people that have been open for multiple years are, are starting to include it. We didn't include it in 2024, but we have included it for 2025. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from Ravi Shanker of Morgan Stanley. Good morning, everyone. This is Katherine on for Ravi. Thank you for taking my question. About six months ago, at our Laguna Conference, you kind of talked about structural pressures from ATC and plane restrictions, which it sounds like you are expecting deliveries. But I was just curious what the lay of the land is today. You know, have those pressures eased? Are you trying to work around them? You know, is there an opportunity for a bigger reset in the operating model to kind of deal with the current environment? Yeah. No, thanks for the question. I mean, you know, we don't expect the situation to change. I think the weather's been a little more kind to the industry, but we do continue to see kind of hints of these, you know, extended ground delay programs. So I think the next test is kind of President's Day weekend, then you've got all the weekends through the spring break season and Easter. Particularly, you have to watch Florida and what that does to ground delay programs. But we are not waiting for the situation to change to improve our trajectory. We are taking control of the situation, and we are designing our schedule around these issues and expect them to continue through the spring and summer. You know, when we look at last year, you know, we had several percent of our, of our flights that were canceled in the summer, and the majority of those, like 90%, were related to multi-day trips. So we have to change the network to ensure that we combat these, these challenges and, and overcome the reliability issues. But we feel really good about it, because if we make everything look like the out and back that we had, we expect to continue to improve our reliability as we've seen in recent months. Got it. Thank you. Just as a quick follow-up, I was curious how close-in bookings are trending. I know there was kind of a slight drop-off last Labor Day, so any color on what you think normal behavior might look like? Thanks for the questions. Yeah, Jimmy kind of alluded to this. We'll let him answer that question. Sure. Look, like what we've seen over the last kind of four or five months is a you know a bottoming of booking trajectory in the early part of Q4, back end of Q3. And then we've seen it, as I mentioned in the prepared remarks, we've seen it transition to an improving revenue market as we progress through Q1. And so we're actually quite encouraged by what we see. We're obviously working very hard internally in terms of restructuring the network. That's providing a significant improvement as you progress through March, April, May, and June. And also, you're seeing very strong demand in the short term, improving close-in pricing. You know, built into our guide is a sequential improvement over the last few quarters on our unit revenues. Thank you. Thank you. One moment for our next question. Our next question comes from Brandon Oglenski of Barclays. Hey, good morning, everyone. Thanks for taking the question. Jimmy, maybe if we can follow up there. So I would assume that you have some acceleration built into your 2Q revenue outlook. You know, is that what you're seeing in the bookings? And can you compare and contrast that with, you know, Easter holiday timing? Not to be too near term here, but I guess it, it must be the network changes you're making that you're seeing the positive improvements. Is that correct? Yes. Yeah, I mean, if you look at the announcements we've made recently, you see a big network shift happening March, April, May, June. And that network shift is driving significant improvement in our revenue, in our revenue return. Like, one of the things that we're focused on is entering a bigger revenue pool, but also actually in markets that have higher fares. And so that is giving us a better revenue outcome that we're seeing across the business. It's early. You know, the big network shift happens during March, April, May, and June, as I said, and so we'll see that progress, but the early signs are very, very good. Obviously, Easter comes back, as you mentioned, into this quarter, and we've got to deal with that overall. That's positive for this quarter. Obviously, it's out of April. But we think some of the changes we're making actually will drive longer-term support for growth in the business, particularly around the utilization of peak periods where we're entering more VFR markets. I guess anticipated in that improvement into 2Q and 3Q, just from where you are in the first quarter, is, is more of it commercial or revenue-based, or is it also, you know, the expectations that your costs can come down, you know, and, and maybe a more controllable operating environment this summer? Well, yes. I mean, look, part of the guide today is clearly our costs are on a very good trajectory. They're on a different trajectory to the entire industry, where our unit costs are actually coming down. Obviously, we staged it adjusted to 1,000 miles just to give you a fair comparison. That's a really good thing. We're working very hard on the business on extracting significant amount of cost out. That's a lot of that is driven by the network shift that we're doing. That helps the business, but what we're doing is in trying to improve sequential revenue as you progress through this year. Clearly, year over year, as you get into the second half of this year, you have an easier comp from a unit perspective. But what we're seeing at the moment gives us a lot of hope or optimism around the improving revenue environment as you progress through this year. Okay, thank you. You're welcome. Thank you. One moment for our next question. Our next question comes from Michael Linenberg of Deutsche Bank. Oh, hey, good morning, everyone. Hey, I think on the last call, Jimmy, you talked about some of the potential issues that you could have later in the year with the GTF, and I know you had indicated that it was somewhat fluid and you were in conversations with Pratt. Do you have a better sense about, you know, any potential groundings that we see later this year, if at all, it's a 2024 event? Yeah, Mike, this is Barry. You know, we expect- Hey, Barry. No financial impact. We expect no financial impact from the GTF. Okay, good. And then, Barry, since I have you, my second, when I look at your network and I look at some of the routes that you do fly to, I know you've talked up VFR, but there are some markets that you're in where you actually have, you know, decent presence in what I would characterize as business markets. I know in the past you did cater to some price-sensitive on the business side. Maybe it was 5%, maybe it was 10%, but I'm only bringing this up because I... When I look at one of your recent offerings, some of your product offerings, there is a bit of a, you know, call it a business-type fare or, or, or sort of product that, that you are rolling out, maybe that's to take advantage of some of the network changes. Can you talk about that? And maybe, maybe there's some opportunity with, with your presence in these big markets, you know, Chicago and L.A. and Atlanta and et cetera. Any thoughts on that would be great. Thanks for taking my questions. Sure. So look, I mean, we're not making a major strategy shift to go after business. I mean, historically, we've been in the mid-single digits for business travel, and the majority of those, we believe, are small business. But yes, we've heard from our customers they would like to see a kind of bundled fare available through third-party channels. That's something we haven't had in the past. And so we have launched the BizFare, which includes, you know, a bag, carry-on bag, and includes actually premium economy seating, if it's available, as well as flexibility, no change, cancel fees. So, it's a great product for small businesses, saves them money. Obviously, we don't have the frequency that the big airlines do, but I think for some people that want to save money, it's a great product. But we just didn't have anything if they did have a managed travel partnership with a travel agency. We just didn't have a solution for them, and now we do. So look, you know, you can kind of do the math. If you just get a few points of this at 30%-50% higher fare, Mm-hmm ... it's a great way to diversify our revenues and improve- Yeah Our overall RASM. Very good. Thank you. Thank you. One moment for our next question... Our next question comes from Scott Group of Wolfe. Hey, thanks. Good morning. So I wanna just go back to fourth quarter for a second, just on the cost side. So if you look at just cost ex fuel, third quarter was $645 million, fourth quarter, it dropped to $590 million, and then the Q1 guide, it goes right back to $650 million. So any help on what happened in Q4? Yeah. So, yeah, Scott, to give you the broad strokes on Q4, right? So that $590 million, you know, as I highlighted in the prepared remarks, includes the $36 million benefit from the four A320ceo lease extensions that we executed. If you adjust for that, right, you're at $626 million. And, you know, from there, you know, if looking at that number to what we're guiding in the first quarter, you know, that takes into consideration the seasonality that comes to play in Q1, right? So payroll tax related seasonality, de-icing, I mean, you've got a growing fleet, you know, as well, right? And so, you know, those additional costs. So, you know, at the end of the day, I think that's the walk from, you know, Q4 and then into Q1. Okay, that's helpful. And then can you just talk about... I know you said you're assuming improving RASM throughout the year, just what, maybe, your overall sort of RASM growth expectation is, and just how to think about, right, the cadence of margins from down 4%-7% in Q1, to down to up, you know, 3%-6% for the year. I just wanna understand, like, where you think you're ending the year on a margin run rate. Yeah, we don't actually guide RASM, but look, I think you can look at the initiatives that we've talked about and kind of play those out. They continue to roll out as we move through the year. So you would obviously expect the cadence of that is that you will continue to see more accretive RASM improvement as you move through the year, as the initiatives mature and go out. I mean, you take the BizFare, for example, that we just talked about a moment ago. We just launched it last week. I mean, it's we're starting to discuss with certain corporations, you know, getting it on their shelf and getting there. But, you know, there's just a lot of different paths to revenue diversification that we're focused on, but they all have slightly different timings as we move through the year. I mean, I guess ultimately what I'm trying to get at is: where are we going from a margin perspective the rest of this year? 'Cause I'm trying to get to 10%-14% next year with labor. So just how... You know, anything you could do just, like, to sort of help on the, on the bridge. Well, we've given you the first quarter, and we've given you our year, so you can kinda... While we didn't break out quarters two through four, you can kinda do the algebra to figure out what that takes to hit that number. And I think if you, if you take that into the second half of the year, you will see that the run rate of that is, delivers well against 2025. Yeah, and then keep in mind, as you look at 2024, and as we deliver on the network, you know, simplification plan and the revenue initiatives and cost initiatives that are there, and you move into 2025, you're getting the full year benefit, right, of, you know, all of those items that are being put in place in 2024. So, I mean, I think that's important to note as you consider 2025 versus 2024. Gotcha. Okay. Thank you! Thank you. Thanks, y'all. One moment, one moment for our next question. Our next question comes from Stephen Trent of Citi. Good morning, gentlemen, and thanks for taking my time, excuse me, taking the time to answer my questions. I was wondering, from a clarification perspective, could you refresh my memory, maybe this is a question for Mark, if you guys will be including any sale-leaseback gains in OpEx? Thank you. Yes. I mean, we have consistently and, you know, consistent practice in the past, and as we go forward, sale-leaseback gains are a credit to operating expenses. Any sort of high-level view, sort of a ballpark on, you know, where that could end up for this year, for example? We don't call that out, but I think the best thing to think about, Stephen, is that the reason why it's there is because had we debt financed, it's the most fair way to compare it. So they get the benefit on the debt financing side, we get it through the sale leaseback, but we don't actually call that specifically out. But it would be similar to people that have debt. I mean, the P&L impact would be similar to those who debt finance. Yeah, no, it makes sense. Makes sense. No, I appreciate that. And just one last question. I know there's in a sort of cross-border view, you have one of your competitors having its code-share with a Mexican carrier potentially getting not renewed by the Department of Transportation. You know, how are you guys thinking about your relationship with Volaris in that regard? Thank you. We're really excited about our partnership with Volaris. It's been disappointing, obviously, given the challenges over the last few years and their category, that we haven't been able to exploit that partnership. But we're excited to get that back turned on this year, and we expect to do great things with it. We're larger now. We have greater brand presence. We have more distribution power coming. But you know, we're seeing them growing as well in their position. But you know, we never had ATI with Volaris. It's just a true partnership where we have a codeshare and overall marketing partnership. So we're excited to get it turned on. I guess, you know, if you think about it, I guess we'll have a little bit more of a level playing field if, if, what they're saying, comes through. Okay, appreciate it, Barry. Thank you. Thank you. One moment for our next question. Our next question comes from Conor Cunningham of Melius Research. Hi, everyone. Thank you. Just back to the underserved markets and all the changes that you're making there, it seems like you're indicating that a lot of this stuff is unit revenue accretive, which I think is a bit surprising to some of us. You know, is the brand and the fares just being that well received? But, you know, historically, you would think of a spooling period being, like, over a year, two years. So just any thoughts around on what's being on why the success so far? I think if you, in normal course, I think those assumptions are correct. But having been a part of, you know, processes like this over the last 30 years, I think you have to consider that where we're pulling this capacity from is a negative opportunity cost. So when you're not doing well financially on those, the redeployment, in many cases, is almost immediately accretive, when you move to better market opportunities. I mean, I'll give you an example. If you're flying something four times a day, and the fourth frequency didn't add any more revenue, but you had all this cost, moving that frequency somewhere else, that gain to the network is 100% incremental. Okay. That, that's helpful. Makes sense. And then on all these new products that you're talking about, BizFare, premium economy and the all the loyalty changes, you know, I was just wondering if you could probably, if you could give some context to just the contribution. You're talking about a seven-point improvement in pre-tax margin. So what portion of these new products is what's occurring in 2025? Thank you. Yeah, I appreciate the question, but we haven't actually broken that out in detail. But I can tell you the majority of the benefit both this year and next year is gonna come from the network and the shift to the VFR flying and away from the oversupplied leisure markets. And then each one of the others, you know, are smaller contribution. We haven't expected huge things from the BizFare, for example. We think that takes a while to mature. Obviously, the frequent flyer things take time to mature, but the early signs are fantastic, right? I mean, you know, as Jimmy mentioned earlier, you just take the credit card spend alone, I mean, within a month of launching it, the spend's up over 10% year-over-year, so which is just huge. So, but sorry, we're not giving a breakdown of each one of those components. It's all good. Thank you. Thank you. One moment for our next question. Our next question comes from Andrew Didora of Bank of America. Hi, good morning, everyone. You know, Barry, look, I know your back half margins are going to look drastically better than what's coming through in 1Q. But maybe going back to Scott's question, can you just provide a little bit more color on sort of the bridge on how you get from back half margins to your 2025 goal? And I guess, you know, what kind of headwinds are you assuming from labor? You know, how are we thinking about, you know, kind of incremental revenues? You know, any color you can provide on kind of bridging back half 2024 to 2025 margins, I think would be very helpful for folks. Sure. Well, look, as I, as I said a while ago, we've given the first quarter and we've given the year, so you can, you can do the simple algebra and solve for X to, to figure out what that has to be. Obviously, as, as we've discussed, the diversification of the revenue has multiple components that actually unfold through, through the year, and so obviously, that will have better, greater benefit in six months from now than it will two months from now. And so I think when you, you play that out, that actually, and then you annualize that in, in the back end into 2025, you can easily cover what we expect to be somewhere in the round of $0.0025 for the headwind of, of, of our labor deals. We believe that we can solidly get back to the 10%-14% range for 2025 as a result. Okay, got it. Mark, just the $36 million benefit you had in 4Q from the lease extensions, does this just go away? How long were these leases extended for? Does that $36 million kind of come back in 2025 at all? You know, how should we think about that? Yep. Yeah, so these were 8-year leases that we extended out, you know, 12 years. And so, you know, that $36 million is out, you know, far into the future. So that, that's not a 25 item. Okay, got it. Thank you. Yep. Thank you. One moment for our next question. Our next question comes from James Kirby of JP Morgan Securities. Hey, good morning, guys. Just following up with Savi's question earlier with the pilot pipeline. There are media reports earlier last month on just slowing down the training and pushing some out. Is that a function of less flying, or is that just a function of less turnover? And any color you can share there? ... Yeah, we've seen, thanks for the question. We've actually seen, against what our earlier expectations were, kind of a slowdown in attrition. And so we've seen that coupled with, you know, other, you know, kind of canaries in the coal mine around the industry. So you've just seen a big change in that. And so to give you an idea, you know, we've needed, in round numbers, around 30 pilots a month, right? And to get those with attrition for the last several years, we generally hire 60, right? And so what happens is that if you if your attrition dries up, you could, because of the timing, it takes, you know, call it 6-8 months to get to the full kind of training of a new first officer, then you have a training of a captain and kind of to create a crew. So if you see a material change in the attrition, you could actually very quickly be 200-300 pilots, way too many. In addition to that, we're seeing efficiencies in the out-and-back schedule, which is gonna actually change, you know, kind of our needs of pilots per airplane. But then I would just also add that we have actually, you know, we invested significantly in our programs to bring in pilots. So we have a cadet program, we have a rotary transition program for the military, we have our college programs, and so we just have a really robust pipeline, and we're seeing a lot more stickiness with the people. So, like, people we've hired in the last, like, year and a half, two years, have a much lower attrition rate than people that we hired more than a year and a half ago. And the other thing is we have over 700 cadets in our pipeline right now. So if you just do the math, in cadets alone, we have over two years worth of supply. So it's, I think the marketplace has changed dramatically in the last one to two years. Got it. That's, that's great clarity. I appreciate that, Barry. Second question, if I recall correctly, your prepared remarks, you mentioned competitive pressures receding in certain markets. Just wondering if you can elaborate on what type of markets those are. I believe you mentioned it's not embedded in guidance, but, you know, is that a trend you see continuing as the year goes on in terms of rationalization of capacity? Yeah, look, so we, I mean, so let me be clear. So we've seen some capacity recede against us. Probably the biggest examples, we saw Spirit leave out of Denver. We've seen capacity against us in Puerto Rico and other places start to recede. And look, we can look at DOT just like everybody else can and understand that the fares that some of these carriers were seeing were some of the lowest quartile of their revenue, and the best way to stop losing money is stop doing things that lose money. So I think people are making rational decisions around the system. We expect people to continue to do that, but we have only captured in our guide the changes that we've seen thus far. We would expect to see a continued kind of rationalization of oversupply, especially in a lot of these leisure markets. Got it. It's just- I appreciate the questions. Sure. Thank you. One moment for our next question. Our next question comes from Christopher Stathoulopoulos at SIG. Thank you, everyone. Good morning. So I guess, Barry, I'm gonna try to get to the margin question in a different way. And it's important here, given the change here in your network, deemphasizing LAS MCO. But if we take out the benefit of product, which is gonna take some time to mature, and we think about the cadence of RASM for this year and for next, you know, ultimately, again, outside of if we just hold product constant, a piece of that or a big piece of that arguably is gonna be about, you know, where you're flying and how we can argue for or against any sort of, you know, seasonal outperformance, et cetera, with respect to yield. My question is, if you could just put a finer point on, you know, where you're growing, and to your point, we can all look at the DOT schedules today, but wanna better understand that. Then, you know, ultimately, as we think about the moving pieces for next year, is that sort of a similar composition? You know, part B or C, do you need to make any changes with this shift with respect to the aircraft type or anything, insofar as nuanced around crew scheduling and the like? Thank you. Thanks. So no, we don't expect any change to our aircraft or... I think our scheduling is becoming simpler, because of what we talked about with the simplification of the network. As far as the markets that we're chasing, I mean, it's very clear. I mean, we mentioned this earlier, but, you know, the average fare across the system, so you take all of the markets that we will be flying in this summer, and you look at those markets compared to the same markets last year, and the average fare is up 5% on the total. So that just tells you that with the new flying, we are chasing significantly higher. I think, you know, the fare is more in the $15-$20 buck range, higher on the things that we're actually going into. So these are, you know, significantly higher priced markets than we're into today. The second thing is, I'll point you back to another thing that we said in the slides, is that the revenue pool itself, so the total revenue pool in all of the industry, that we're flying year-over-year, will be up over 50%. And so when you're only growing 12%-15% and the revenue pool is going up 50, you need a smaller share of a much bigger pie. So it just kind of really de-risks the business in a big way, and I think, you know, it kind of lowers competitive friction, if you think about it. But specifically for the routes, I mean, obviously, we have talked about, you know, our 13 bases, and we're gonna grow significantly, especially from the ones that we've announced recently. We just announced a bunch of new routes out of San Juan. We announced a bunch of new routes out of Dallas-Fort Worth, which is a base that we just opened last year. And we've got more announcements in the weeks to come. We've got some this week, some actually next week, and then probably a few more announcements later this month. But I think you'll find in general that all of these are markets with considerably higher fares than the marketplace we were in last summer, which we think will be significantly improving our RASM trajectory. Understood. Thank you for that color. And my second question, the 80% or more than 80%, excuse me, out and back, if you could bridge that for March's anticipated two-thirds, you know, what needs to be done to realize that? And more importantly, is how do you sustain that? Thank you. Thanks. Actually, we just went through this yesterday, and in fact, if you look at our March schedule, we're actually already there at the 80% range to out and back. We're not scheduled with our crew there, and that's because, for example, the Cincinnati base doesn't open until May, but we actually have the flying already kind of set up as if it was out and back, but there will be a lot of people still in the hotels. So what happens is, we flow through the next several months, is the schedule doesn't change materially from an out and back perspective of the metal. But what happens as we open the bases and we have the crew members based in those cities, they become an out and back crew pairing. So, you've actually already kind of done the majority of the simplification. It just gets easier every month as you flow through, and we get there by June with the final opening of San Juan, which we expect. So Cleveland is in March. We've got Chicago and Cincinnati in May, and then we have San Juan, Puerto Rico in June. Great. Thank you. Thank you. At this time, I'd like to turn it back to Barry Biffle for closing remarks. Hey, I just wanna thank everybody for joining us today. We're really excited about the results that we're putting forth in our guide and as well as our expectations as we move through the year and into next year. A lot of great things going on with the company, so we appreciate everybody joining us today, and we look forward to updating you on our progress and our success at next quarter. This concludes today's conference call. Thank you for participating, and you may now disconnect.