So let's keep the airlines content going, and very happy to have Frontier Airlines' CEO, Barry Biffle, with us. Barry, what a difference a year makes versus last year. You guys put out a pretty nice 8-K this morning, so maybe you want to like run us through what the key takeaways were on that. Yeah, look, I think things are finally coming together. You know, we're seeing it on the revenue side. In July, we were still down year over year, almost broke even in August on RASM, and then now we're, you know, solidly up in the mid to upper single digits in September. So we've clearly seen the bottom on the revenue environment. And on the cost side, we continue to perform there as well. So we continue to see really a lot of goodness in all the initiatives that we've got. Nice. So maybe just to kind of dig a little bit deeper into that, kind of how would you characterize the demand environment right now? Obviously, the industry had its own supply issues, that's a different thing, and obviously, you guys have done your own network reorg, and so you've had some idiosyncratic tailwinds as well. But just purely from a demand perspective, what are you seeing out there? Yes, we think the demand is really strong. I mean, the issue in this industry has been simply supply- Yeah And there's just been too much of it. And, you know, we're starting to see our RASM, and of course, our margins start to come back as a result. So at this point, if you're not seeing a positive RASM, it's because you have too much capacity. Nice. And you think the industry is doing the right thing to take that capacity out? I think broadly, I think there are carriers that are taking it more serious than others, but, I think everyone will eventually figure out what causes this. The market will find a way to- Yeah to remind those guys. We will come back to that topic in a second, but just kind of sticking on the demand side, kind of as you think of post-summer, like late summer, going into Labor Day and kind of into the fall, kind of, is that trending similar to what you expected? Kind of, this time last year, we were talking about evolving seasonality and how, you know, there may be a pull forward of summer demand, big cliffs kind of in corporate travel, as well, kind of in the fall. Is that all normalized now, kind of going into peak season? I'm just gonna caveat this with, we only know what we see. Sure. Of course. And so we're seeing over the last six weeks a pretty good improvement versus where we had expected. Okay. Obviously, increasing our guide, we're performing a little better. Mm-hmm. I don't know how much of that is the demand environment and how much is it all the revenue initiatives. Yeah. I mean, our loyalty is really starting to do well. Our credit card program is doing well. I mean, we're seeing big things on the BizFare that we launched. We're seeing improvements because of the New Frontier- Yeah that we did for our merchandising. So, you know, you get a half a point here and a point there, and all these things add up, but I don't know how much of it's demand versus what we're doing, but clearly, demand remains robust. Got it. Let's talk about what you are doing, which is starting with the network realignment, kind of. Obviously, this was precipitated by stuff you saw last year with the ATC constraints and new aircraft ready and such. What does that destination look like, and how far are you towards getting there? Yeah, so we are, I mean, almost, I would say, 100% complete in kind of the reorientation of how the schedule is constructed. Mm-hmm. We've opened several new bases, and so those are still in the process of maturing operationally. Mm-hmm. And we still have a few too many crew members here and not enough there, and so some of those things have to work themselves out. But I would say, you know, you're 90-something% done on that. And then on the revenue perspective, it takes, you know, close to a year to get full maturity. Sure out of the new routes, but the cost savings are real. We're saving a significant amount as we planned on the hotel side. We've seen other savings on the cost as well. But it's done really well. Just to follow up on that: so you're saying the actions you're taking to realign the network are almost done, and then beyond that, it's a case of just letting them mature? Correct. So are we looking at some kind of cliff in the costs here, kind of as you finish those actions, or how do you think about the costs associated evolving? So we've actually achieved, I'd say, the majority of the cost. There's still some to bleed off- Mm-hmm that because I have... Again, we have too many crew members here, not enough there, and so there's inefficiencies that are born from that. So, it's not- we're not gonna lay off people or anything like that, but we just- you just have in the wrong places, so we pay for deadhead credits and so forth. Mm-hmm. But most of the costs are in, and that's why we've done so much better than we planned. And we've achieved over $150 million, I think, at this point, of the $200 million that we had targeted. So I know, I know, we're notorious in this industry for laying out, you know, hundreds of millions of dollars initiatives and not achieving it. I think the great thing to see here is that our team has done a great job of actually delivering, and you've seen it in our CASM, and that's caused our cost advantage to continue to widen. Yep. Honestly, kind of, pretty... The jury is not completely out, but I think it's a pretty remarkable achievement to see the transformation over the last twelve months. Any key lessons learned, surprises, so that you can pull off something so significant? Lessons learned, I mean, we, in thirty years, we continue to learn the same lessons. I think we talked, touched on it earlier. I think the big lesson here is too much supply is bad. Yeah. We continue to need to, every seven to 10 years, remind ourselves of that. Yep. Got it. And so, you spoke about a number of other initiatives as well, right? So can you, like, walk us through those, kind of ancillary revenues, kind of loyalty, kind of what were the other kind of big, revenue levers you're pulling as well? Yeah, sure. So we did a lot of things. Let's just take loyalty as a category. So we did a lot of things on the earn side of that, recognition, how you can, you know, get additional benefits and so forth, for usage. Right. Then we changed the credit card as well, and we've kind of made multiple benefits there. We started with giving you an initial elite status late last fall, but we've continued to enhance that. Then for example, in the last month, we now offer two cheap free checked bags. I know other carriers have done that, but we hadn't done that. It's a new benefit for us. And so those things are starting to drive more stickiness with the credit card- Mm-hmm ... more spend on the credit card. We've got the greatest spend we've ever had, and we've got the greatest acquisitions of the cards. But we're also seeing the usage on the airline improve from a loyalty perspective as well. Well, then we, if you go back to kind of the beginning of the year, we launched our BizFare, which is kind of a bundled fare in third-party distribution, and that's taken probably longer than we had hoped. But the challenge is when you work through the TMC environment, it's just hard to get all those contracts and just get the plumbing turned on, to be quite honest. So that's finally starting to turn on, really in the last probably four to six weeks. And then, you know, we've also got the UpFront Plus product that we introduced, which is the blocked middle seat, kind of a European business class, which we launched in the spring. And I'm pleased to say at this point, we're up to over 70% paid load factor, which for a brand-new product, we're really pleased with it. So those are kind of the product and loyalty. Then we did The New Frontier in May, which is kind of a new merchandising of the same products, but making them all upfront, so you, as a customer, can see those products and services, and it enables you to identify the Frontier, regardless of the products that you want. One bag, two bags, you want nicer seats. You can see all those options, and you can easily compare with the competition. And so we've been very pleased with that. I mean, it's a little bit of a drag at first, but we're kinda at that break-even point, and now we can kinda have the light to see that this is gonna be very accretive to us. Understood. Just to dig deeper into a couple of those things, why was now the right time to launch the bundled fare product and New Frontier? Kind of was that a response to the marketplace, a response to the regulations? Kind of why now? We've been working on that for over a year. Okay. The response. People thinking that we were responding to the DOT and the government was actually, that's just not true. Okay. To be quite honest, we probably couldn't have pulled it off that fast. We've been looking at it for over a year, and what we've seen, specifically, was that we've gotten to the point where half our customers weren't buying any ancillary, and we saw big drop-offs as they went through the decision process when they were purchasing. Mm-hmm. And what we figured out is some of them were surprised, and then we figured out some of them were really pleased. But regardless, they didn't know the total cost. And so by moving that up to the front, it made it very easy to shop and compare, and we think over time, and we're starting to see that data finally, that it will be accretive and good for conversion because people can see all the products and services they want- Mm-hmm ... in one low upfront price. Is it a share conversion opportunity only, or is there also opportunity to get more yield out of this? So I think we're gonna get... Ultimately, I think we're gonna get more volume- Okay ... which will drive more yield. Mm. Because we think that the conversion will be greater upfront, and that's what we've seen in the data. Got it. And so in general, the reception to New Frontier kind of has been kind of fairly positive from the customer? Because I'm sure there'll be some people who like the fare, the fact that you had a $29 fare, and you could choose what you want. You can still get that. I mean, look- Okay. Sure ... you can still get that, so if you just want a really low fare, you can get that, and I think when you couple it with our operational improvements, we've got the lowest complaint rate we've had in almost three years. Mm-hmm. So it's working. Customers like it. So less complaints means they must be pleased. Got it. One of your peers did something very similar. So are you seeing kind of a competitive response in the marketplace, and do you see kind of all the ULCC carriers kind of going down that route, or kind of how do you think this evolves? Look, I can't speak for what other carriers are doing. We're doing what we think is the right thing for our business, and we studied that for over a year and a half to come to that conclusion. So, you know, people can come to their own decisions and in their own marketplace. Got it. Where do you think the paid load factor goes on the European business class product? I think we should get well into the eighties. My hope is that it would be very similar to what we RASM as overall. Mm-hmm. And so we like to book well into the nineties. Yep. And of course, after no-show, right into the eighties. Got it. Switching to ancillary revenues, kind of, I think you're at about $0.85 right now. Kind of, I think the target is to get to, like, $1.25. Kind of, how do you think that evolves? Kind of, what's the timeline for this? And kind of what do you need to do to get there? So look, we have. I think we've kind of abandoned talking about ancillary alone. What we'd like to get to is $125 total. Total. Just $125 total each way, per customer. And we think that the main way to get there are actually the things that we've already done, and that is controlled discipline around the capacity- Mm-hmm ... and making sure that we've got, you know, don't have excess supply, which was deteriorating the fares. And what happens, and I'm gonna break my own rule about talking about ancillary, but what we see is that it, as the fares go lower, the ancillary goes lower. Mm-hmm. You'd almost think it... Intuitively, you'd think it be the other way around. Yep. While you save so much money, you'd be willing to buy other things. Yep. But the facts show that it's the opposite. The lower they pay, they don't buy anything else. And so, you know, having too much excess capacity, which depresses the fares, actually hurts ancillary as well. Has that always been the case, or is that a macro? I've seen that for close to 15 years. Oh, wow! Okay. Yeah. And any macro pressure on ancillaries or kind of yields that you're seeing or? No. So I think, I think in general, we keep studying this, you know, is there this trade-down effect? You know, I've seen Walmart, Costco, and so forth. Exactly. Yep. And normally we've seen that. If you go back to past recessions, there's some evidence, but it's not clear yet that we're seeing a lot of buy-down. So I think the economy is stronger than people have suggested. I mean, at some point, if there is a softer economy and recession, we should get huge- Yeah ... a buy-down. I mean, the facts show that this always happens, but I don't think we're seeing that benefit yet. ... Understood. So maybe moving to capacity, kind of your own capacity plans. Obviously, the investor day you had two years ago, kind of big growth plans that you had, which you've probably recalibrated. So kind of what are we thinking in terms of, like, a long-term ASM CAGR for you kind of going forward? Look, we formalized the delays that Airbus had, and I think people called it deferrals. Airbus actually deferred them. We just formalized it. But we think 10% is gonna be closer to the number. In fact, even next year, we're targeting a much lower growth rate. I mean, kind of our view is get back to 10% plus margins, and then we can discuss a taller growth rate. But at this point, until we're solidly in the teens on margins, we're not gonna be growing at the pace we were before. And so that's something you will revisit kind of several years from now? Or kind of do you think that this is something that can happen within the next couple of years? I think it can happen at any point. I mean- Depends on- Yeah. I mean, we can, we can do that. But in the near term, we're gonna grow in the single digits next year. Okay. The plan would be, you know, upper single digits to 10% the following year. That could go up or down based on what we see. I mean, our focus right now, number one, is to get back to double-digit margins. Yep. And unfortunately, there ended up being more supply even this summer than we had hoped, industry wide. But it looks like based on the trajectory we're seeing now, and kind of the guide we gave and what we're looking in the fourth quarter, I think we maybe just moved one to two quarters right, but I think we're well on track. Got it. So your guide said that you're getting to minus two to break even on margins for the third quarter. What is the path to 10%, kind of, and how much of this? Obviously, kind of as you take capacity down, that puts more CASM ex pressure and kind of you guys were a leader kind of the pre-pandemic. I think the benchmark has obviously moved with labor costs and growth and everything else. So what's the path to get to 10%, and when does that happen? Yeah, so look, the good news is that we think we've got more than enough CASM benefit tailwinds that we've done, that we've delivered, that we will more than offset kind of the reduction in capacity. Mm-hmm. So at this point, it's really just the maturity of the revenue initiatives, and now that they're starting to pay off, it's a clear kind of glide slope and takeoff trajectory. You can see this getting back to the double-digit margins just based on what we're doing. I mean, I'll be shocked if we're not there by Q2. By Q2? Okay. So, I think the general expectation is more of an end of twenty twenty-five thing. So you think it can be as soon as, Oh, no, I think by Q2. Okay. That's, that's pretty good. And kind of getting back to where you were, like pre-pandemic, kind of is that on the cards at all? Kind of do you think that- Oh, absolutely. Okay. No, that is job number one, is get the margins back to where we were. And if you look, our cost advantage is actually widened versus pre-pandemic. Yeah. So this whole idea of cost convergence is not happening. Mm-hmm. We have been actually widening our cost advantage, so there's no reason we shouldn't get back to pre-pandemic margins. Got it. Understood, and kind of as you look at the kind of opportunities with kind of, again, your peers kind of moving to a similar model, maybe some of the LCCs kind of, you know, premiumizing and trying to move north as well, from a yield perspective. Do you see kind of room for you to grow into kind of a higher category within the airline space, or is it more of a breadth growth, or is it more of a depth growth, do you think? Yes, so look, I think we'll continue to grow our scope, so there needs to be more low fares in more places. Yep. I don't think, you know, there's a premiumization. I think... Look, and yes, we launched an UpFront Plus, so I will- You have business class now, so ... Yeah, European business class. Let's don't overemphasize this. This is an opportunity for a little bit more space. Okay. We are not adding, you know, we're not joining an alliance, we're not adding lounges, we're not, we don't have a true first class. We offered a little bit more space, and we're finding that people are willing to pay that. We will follow what our customers do and say and what they're willing to spend money on. If they want even more space, we'll give it to them. But right now, we're intrigued with it, and our customers have seen it. I don't know that we're actually getting a new customer- Mm-hmm ... as much as we're finding that some of our existing customers will pay us just a little bit more, for a better experience. So yeah, that actually was my next question, which is kind of, is there room to broaden the customer base, or is it just tapping into...? So it seems like you're just kind of getting more out of the same customer rather than broadening the customer base. That's what the data suggests so far. Okay ... is that this was an opportunity that was just lying there within our existing customer base. I don't know that we're actually... We're not stealing share. Okay. I mean, if you're a business customer, you're flying United or Delta or American, I mean, you know? Yeah. We're not getting their customer. Understood. Any questions in the room? Barry, you paying attention? He's fast asleep. Somebody laughed just a little too much there. Going back to the 10% margin, you're saying that you could get there possibly in 2Q. Can you just talk about the bridge of twenty twenty-four, where we are today, and how you're gonna get there, through 2Q, and maybe what it looks like going into twenty twenty-six? Yeah, look, so I think it's pretty simple. So we've put out a guide that shows us roughly break even for this year. If you just take the capacity that we redeployed this year, right? You just take normal maturity. So it's roughly 20 to, you know, almost a quarter of our capacity went into brand-new markets. You're gonna get a 20-30% jump on that. So that's about a 5-6 point jump in RASM, which will just go straight to margins. There's so half of your jump, just to 10%, is just gonna come from maturity alone, and we're already starting to see that come through. The rest is gonna come from the initiatives that we've talked about, on the revenue diversification, the maturity of those.... plus kind of this last one, which is a little bit embedded in the last part of the year, only a few months, but, this a little bit more favoring the peak days, which we're seeing is a couple of points in CASM, but several points more in RASM. So that kind of more than bridges you above 10% more RASM, which will go straight to the bottom line. Any other questions out there? By the way, just in September alone, I mean, as I said, we're up in the mid- to upper-single digits, just in September alone, so the trajectory is there. Barry, you were very vocal last year, kind of talking about ATC constraints and how that's like a pretty major kind of headwind to the industry in terms of growth. Has anything changed? Has anything improved since? Kind of where do you think this goes from here? Well, so look, I think they've done a really good job in two areas, and then I'll talk about a third. So one, I think it appears to us that they've done a better job in their staffing. Mm-hmm. So even though they are constrained and they have less people, but making sure they have the right people and in the right places and even on the right days. Yep. Right? So, you know, it's the day after Christmas. Do you have enough people staffed, right? These are, these are big issues. The second area is that I think they've done a better job, kind of have a hotline, if you will, for move-ups, the things that could cause a cancel. So they have a big Ground Delay Program. "Hey, we can tell them, 'Listen, if you don't let this one move to the front, it's gonna cancel.'" And the big airlines do this very well. They trade express flights, as an example. Mm-hmm. Right? To kind of the offering to the ATC gods to, you know, "Hey, I'll give you these cancels if you move these up. Sacrifice. But we don't have that, so we just have to tell them, "Look, do you wanna cancel three thousand people in this city?" And so they don't always fix it, but they-- I think they've done a better job of that. The last area that still needs work, and I think this is an industry-wide issue, is we've got to figure out this general aviation on peak days. So Presidents' Day, right after Christmas, Thanksgiving, Sunday, you know, and we have a model for this, and we've talked to the ATC about it. How they manage the Super Bowl in cities- Mm-hmm ... and how they manage a Taylor Swift concert, they have a model for this, and they basically put in a temporary slot system into the general aviation airports, and that has got to be done. We've got to do that in South Florida. We've got to do it in Palm Beach. We've got to do it in the places that get hit during peak times in winter, as an example, and then I guess the other thing is that I don't think it's gonna be as big a deal because I think you're gonna see capacity come out. Right. Are you holding your breath that that happens anytime soon? Not the capacity coming out, the ATC. I think it's gonna become clearer and clearer that the general aviation issue is gonna have to be addressed. Got it. And I think, I think consumers are starting to figure it out, and I think the fact that the traveling public has not demanded, I mean, somebody flying. I mean, just think about it. If we cancel a flight from Miami to New York so that someone could actually fly off from Palm Beach to Teterboro with three people on a Learjet... how is that really fair? Don't talk to me about greater good. And I think as people start to figure this out, that that's the same airspace- Yep ... and that those people are manipulating how that it works. So just so everybody understands what I'm talking about: If I have a flight at 10:00 A.M., right? I have to file the flight plan at 10:00 A.M. If there's a three-hour ground delay program, we're gonna go at 1:00 P.M. But if you've got a Learjet 55 and you know there's a three-hour program and you want to leave at 10:00 A.M., well, you just file at 7:00 A.M., knowing that you're just gonna get moved to 10:00 A.M. Your customer never takes a delay. They show up at the airport 2:00 P.M., they don't think the wiser. They never experienced a delay. Now, I have crew duty periods that are more strict than 135 operations, as an example. So there's a decent chance, by the time... If I take a three-hour out, three-hour back, I'm gonna bust the crew duty period. So then that flight gets canceled. Yeah. That's how three people actually caused the cancellation of 230 people and ruined their entire vacation or their holiday at Christmas. As more people understand this and figure it out, I think they're gonna demand change, and I think there's programs that they have in place. They just need to control these airports. Because I would argue it's a safety issue anyway. There's too much activity in some of these airports. Just wait until this gets on Twitter. It's gonna be- I don't know. Yeah. I'll tell anybody that'll listen. Speaking of, kind of just changes needed, obviously, the DOT kind of issued a new cancellation, compensation rules and such, kind of how are you thinking about that? Kind of how does that kind of impact the way you schedule your network? Yes. So I don't think we've changed anything. I mean, we're obviously looking at it, but it hasn't made a major, major change to us. We continue to invest in our operations. We're really proud of what's happened with the schedules and, you know, I think kind of excluding CrowdStrike and Microsoft, I mean, in the last two months, we're seeing really big improvements year over year. Mm-hmm. Speaking of CrowdStrike and Microsoft, obviously, you guys quantified the impact there, kind of had nothing to do with you. But just generally in terms of tech spending, kind of what are the initiatives you guys have out there? Kind of, is it an app? Is it kind of new, like, pricing systems? Kind of what kind of... Obviously, that's a big theme here for the entire conference. What tech initiatives do you guys have in the pipeline? We have, we've made a big transformation in our technology group. Right. We had 16 different providers that we were using, and we've consolidated that down basically to three, and actually one really large one. Mm-hmm. That has streamlined a lot of our productivity, and so it's gonna enable us to launch. We should be launching our new app here actually in the next few months, and then hopefully by the end of the year or the first of next year, we will launch our new website as well. Mm-hmm. And so we have actually lowered our costs in technology on a year-over-year basis, but actually increased our throughput. So we're really excited about it. I mean, I think we allowed a lot of things that happened during COVID, you know, kind of a splintering of organizations and too many people working from home, and it just destroyed the productivity. Got it. So we've fixed that, and it's. We're really pleased with it. Got it. Maybe two big-picture questions for you to take us home here. I think about seven, ten years ago, there was this view that, you know, hey, the ULCC market here, kind of, when you think of the share versus how big it is in Europe, kind of there's a ton of opportunity to grow, and, like, all of you were growing very quickly, and since then, I think many of you have recalibrated almost your business model a little bit in terms of the offering, the growth plans. Where do you think... Like, what is the right size for the ULCC market kind of in the U.S., kind of relative to those prior benchmarks? I think the ULCC model probably still has significant room to grow. Mm-hmm. However, I think what we've seen is that the explosion of basic economy and Southwest, also low cost- Mm-hmm ... it's gotten over half the market. Yep. I mean, if you look at what the Big Three are selling and what they talk about as a percentage in basic economy, you take Southwest growth plus the ULCCs. You've got over half the seats in the country are cheap seats. Right. That's probably a little too much. Mm-hmm. I think you're seeing that in the data. If you look specifically, the most money-losing is probably in the Big Four. Mm-hmm. And so I think you're gonna see that contract, because at the end of the day, they can sell some amount, but selling, you start just selling over 20%, it's starting to become... It's impacting your average. So I think you're gonna see that come out. Got it. Do you think there's an opportunity for consolidation in the space? I don't know. We, we just saw Hawaiian and JetBlue. I think it's almost done. We'll see. But, that's not on the ULCC side, so. Oh, well, I guess there could be. We'll see. Maybe kind of last, kind of just to wrap it up, kind of opportunities and risks that you see here, kind of obviously, macro is a big one, but, what do you think? Like, a massive difference versus twelve months ago, we'll be sitting here twelve months again from now, kind of what do you think went right, and what do you think would definitely go wrong? In twelve months, I think that the industry understands what has dragged down their margins. Mm-hmm. I think excess supply is a challenge in the United States, and I think that will be sorted out. I think some are a little more aggressive than others. We've been very aggressive. You can argue we were one of the culprits, but we've been aggressive in addressing that, and I think the industry is coming to grips with it. Different carriers are in different stages of grief, and we'll see how fast that they work on it. I suspect you said the marketplace will force them. I think if your margins aren't coming back, then you probably need to revisit that, and I think people will. I think ultimately, if you look, I think you know, we probably have too many narrow bodies and probably not enough wide bodies. I mean, the fares are pretty, still pretty high international, and- Mm ... and, that's how marketplaces work themselves out, right? Right. Do you think that capacity rationalization is just gonna be a, "Hey, we fixed it in four Q, and we go back to the same issues in one Q," or do you think it's like the discipline's here to stay? It depends. I mean, I think it depends upon the carrier, but I would hope that people learn it hurts when I do that, and they don't continue their bad ways. I mean, look, we monitor pilot hiring every month. Yep. We've seen almost everyone stop hiring, and that's a good thing. All right. Just on that point, because I didn't touch on that, kind of how has the hiring environment changed? I mean, one of your peers earlier today said that that's no longer an issue, kind of given the capacity cuts and such. But are resources kind of easy to find now? Oh, I mean, we went from, you know, maybe a 50. We always carry a buffer because of our growth, but we went from 50 to 70 pilots to 300 too many overnight. Basically, I mean, this happened fast. I mean, all in the last six months, right? So you went from, we would have, you know, it. To give you an idea, we normally need about 600 pilots, and it, 'cause I lose about 300, and I was losing 25 a month. That is screeched to a halt. Mm-hmm. And so when the big guys aren't hiring, you know, they don't, there's nowhere to go. And so now I have a cadet program, and these kids are screaming at me that, "Well, when am I gonna get hired?" It's like, "Well, we're gonna go back to the old days," which is not a bad thing. But yeah, you know, we're starting to see, you know, we're back up in three, four, five thousand hours, is where we can hire at. Got it. Barry, it's been an amazing transformation over the next twelve months. Very excited to see what happens in the next twelve. Thanks again for the time. Great to see you. Thanks. Thanks for having us. Okay.