Good day, and thank you for standing by. Welcome to the Frontier Group Holdings, Inc. Q1 2024 earnings 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 the session, you will need to press star one one on your telephone. You will then hear an automated message advising you that 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 first speaker today, David Erdman, Senior Director of Investor Relations. David, you have the floor. Thank you, and good morning. Welcome everyone, to our first quarter 2024 earnings call. On the call with me this morning is Barry Biffle, Chief Executive Officer, Jimmy Dempsey, President, Mark Mitchell, Chief Financial Officer, and our new Chief Commercial Officer, Bobby Schroeter. Before yielding, I'll recite 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 us such differences, are outlined in the announcement we released earlier, 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 this morning's earnings announcement. So I'll give the floor to Barry to begin his prepared remarks. Barry? Thanks, David, and good morning, everyone. First, I'd like to welcome Bobby Schroeter to the team and introduce him as our new Chief Commercial Officer. Bobby has extensive experience in the industry with nearly 25 years combined at Spirit, US Airways and America West. He's in the process of relocating his family to Denver, and in his new role, assumes responsibility for our commercial teams reporting to James Dempsey. We're fortunate to have him on Team Frontier. Along with the recent additions of Alex Clerc, our Senior Vice President of Customers, and Rajat Khanna, our Chief Information Officer, we now have the strongest senior leadership team we've ever had. Turning to the quarter, we reported an adjusted pre-tax loss margin of 2.8%, significantly better than our guide on cost and revenue performance. The adjusted pre-tax loss margin was within one percentage point of the prior year quarter, despite continuing to encounter far greater excess capacity in some of our key markets, as we previously highlighted. While we're not insulated from inflation, we continue to hammer on cost with the objective to maintain and widen our relative cost advantage to the industry. To that end, we exceeded our expectations the first quarter, and our cost advantage to the industry widened to 42% on a trailing twelve-month basis. Cost divergent between Frontier and the industry is indeed real. We're on track to achieve our target of 80% out-and-back flying by June and the corresponding $200 million of annual run rate cost savings by year-end. With that, we're reaffirming our guide of 1%-3% reduction in our adjusted CASM ex fuel, stage adjusted to 1,000 miles. Redeployment of our capacity from oversupplied markets is on track and progressing as planned. To this end, we opened our 10th crew base in Cleveland last month, while Cincinnati and Chicago will launch later this month, and finally, San Juan, Puerto Rico, in June. The addition of these crew bases supports our ability to achieve our target of out-and-back flying by June and drives further network efficiency. Our San Juan base will not only support demand growth from the U.S. mainland to compete with significantly higher-cost carriers, it will also serve as our gateway to other Caribbean destinations. In the second quarter, a significant portion of our flying will be in new markets, more than double we would expect in a normal year. As these new markets mature over the next year, we expect a meaningful improvement in our system RASM. Further, we have a range of revenue initiatives, including various distribution and merchandising enhancements, as well as launching loyalty and premium products, all of which diversify our revenue sources. Jimmy will go into more detail on these products as part of the commercial update. Despite the immaturity of new markets, we expect to generate a 3%-6% adjusted pre-tax margin in the second quarter. We're also reaffirming our full-year guide of 3%-6%, despite fuel prices, which are $0.10 per gallon higher than they were in early February when we gave our guide for the year. As we move to 2025, we are confident in our 10%-14% adjusted pre-tax margin due to our cost tailwinds, expected network maturity, and overall revenue diversity initiatives. Finally, I'd like to thank every member of Team Frontier. They deserve recognition for their significant effort to achieve the milestones I highlighted today, and for the remaining cost discipline and staying focused on our top priority of delivering a safe and reliable experience to our customers. I'll now turn the call over to Jimmy for a commercial overview. Jimmy? Thanks, Barry, and good morning, everyone. I want to echo Barry's comments and welcome Bobby to the team. Briefly recapping the quarter. Total operating revenue increased 2% to $865 million on capacity growth of 8%, both compared to the 2023 quarter, resulting in RASM of $9.2. Departures increased 14% on a 9% shorter average stage length, and total revenue per passenger was $124, down 1%, all compared to the 2023 quarter. During the quarter, our transition to out-and-back flying developed as planned. By March, we were operating at a 67% out-and-back network and achieved 75% in April. This progression is a key driver in our ability to reduce our cancellation rate by 10% and improve on-time arrivals by over 5 points January through April, year-over-year. A key milestone was the opening of our Cleveland crew base, which was successfully launched in mid-March, and by summer, we'll serve a total of 30 destinations from Cleveland. Our planned schedule is to achieve 80% out-and-back flying by June, supported by the planned opening of the Cincinnati and Chicago crew bases in May and San Juan, Puerto Rico, in June, bringing our crew base footprint to 13 by the end of the second quarter. One of the most significant long-term investments is in our San Juan base, where we see a massive opportunity for flights to the mainland United States, given our cost advantage versus the competition. In addition, the geography of San Juan provides a logical gateway to the broader Caribbean region, where we believe our low-fare stimulation will have a dramatic effect on traffic flows within the region. We want to thank the government of Puerto Rico and their elected officials for helping make this investment possible. Today, we fly to more destinations from San Juan, Puerto Rico, to the mainland United States than any other airline. And by this summer, we will serve Santiago, Punta Cana, and Santo Domingo in the Dominican Republic, as well as St. Thomas, St. Croix, St. Maarten, Barbados, and Trinidad within the region. Overall, we remain focused on maximizing total revenue, as evidenced in the first quarter by our trade for yield over load factor, which resulted in total revenue exceeding our expectations. We believe that further revenue initiatives will not only diversify our revenue, but improve overall demand and increase load factors as we move through the coming years. We launched our reimagined Frontier Miles loyalty program late last year and have seen the highest spend on record per cardholder because of these enhancements. It's very early in our journey to close the gap in our loyalty revenues, but we believe there are several dollars per passenger of opportunity over the next several years. Following our recent introduction of BizFare, we recently launched our UpFront Plus product for customers that value a premium product. UpFront Plus is a new upgraded seating option with extra space and comfort in the first two rows of the aircraft. Customers in UpFront Plus will enjoy a window or aisle seat with extra legroom and a guaranteed empty middle seat, providing additional personal space and comfort at an exceptional value. It's very similar to the intra-European business class product. The new offering, combined with our premium seating options, expand our ability to offer choice to our customers. Later this year, we will introduce NDC, a new website, and a mobile app that will include improved merchandising, day-of-travel, and post-travel experience for our customers. We believe the distribution of merchandising changes will increase our revenue per passenger and load factors over the next several years. That concludes my remarks, so I'll now yield to Mark to provide a finance update. Thanks, Jimmy, and good morning, everyone. Total revenue was $865 million, 2% higher than the comparable 2023 quarter. Fuel expense was $263 million, 10% lower than the 2023 quarter, at an average cost per gallon of $2.93. The year-over-year decline in fuel expense was the result of 15% lower fuel prices and 2% greater fuel efficiency, enabling us to achieve an industry-leading 105 ASMs per gallon, partly offset by higher consumption from the 8% capacity growth during the quarter. Adjusted non-fuel operating expenses were $633 million, or $6.71 per ASM, due to better-than-expected cost performance. On a stage-adjusted basis to 1,000 miles, adjusted CASM ex fuel was down 3% compared to the 2023 quarter due to three additional sale-leaseback transactions in the quarter, along with our aggressive cost management across the organization that helped mitigate year-over-year inflationary impacts. As Barry mentioned, our relative cost advantage to the industry widened to 42%, and we remain on track to achieve our annual run rate cost savings target of $200 million by the end of the year. Our first quarter pre-tax loss margin of 2.8% was lower than anticipated, due primarily to better cost and revenue performance than expected. We ended the quarter with $622 million of unrestricted cash and cash equivalents, and $156 million of cash, net of total debt at quarter end, slightly higher than our net cash position at year-end. We had 142 aircraft in our fleet at quarter end, after taking delivery of six A321neo aircraft during the quarter. We expect to take delivery of another six A321neos in the second quarter and 11 A321neo aircraft in the second half of 2024, all of which are expected to be financed through sale-leaseback transactions. Turning to second quarter guidance, capacity growth is anticipated to be in the range of 12%-14% over the 2023 quarter on stage length, which is expected to approximate 900 miles. We expect fuel to remain elevated at $2.80-$2.90 per gallon based on the blended fuel curve on May 1st. Adjusted non-fuel operating expenses are expected to be $705 million-$720 million, driving an expected sequential decrease in our adjusted CASM ex fuel on a stage-adjusted basis to 1,000 miles. Adjusted pre-tax margin in the second quarter is expected to be in the range of 3%-6%, including the impact of higher fuel prices and our network transition. As Barry mentioned, we are also reaffirming our full year 2024 adjusted pre-tax margin range of 3%-6%, despite the expectation of higher fuel prices. Additionally, we are also reaffirming our guidance for CASM ex fuel during 2024 on a stage-adjusted basis to 1,000 miles, to be lower by 1%-3% versus the prior year. With that, I'll turn the call back to Barry for closing remarks. Thanks, Mark. I'm proud of the significant progress we're making in revenue and cost performance. ... The hard work and dedication of Team Frontier are showing that low costs have always mattered, and they will continue to matter. Thanks again for joining us this morning. We're ready to take the Q&A portion of the call. Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to 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. Please stand by while I compile the Q&A roster. Our first question comes from Brandon Oglenski with Barclays. Brandon, go ahead with your question. Hey, good morning, guys, and thanks for taking the question. Barry or Jimmy, can you guys talk to some of the network changes that you've made and, you know, the results that you're seeing in forward bookings, especially in the second quarter here, given the improvement in the margin guide on top of, you know, a lot of capacity growth? Yeah, sure. I'll go ahead and take it. I think you know, if you look at the changes we've made so far, they really just started in April in terms of the additions, and they kind of continue to roll through the summer. But I'll tell you, we're really excited. We've got a lot of new routes that we just started just in the last few weeks that are running in 90s load factors. So I think that our network planning team has picked well on many of these. So we're really excited about how it's shaping up, but it's very early, right? I mean, you know, we, as I said a while ago, with over double the amount of new flying that we would normally have because of this repositioning, you know, it's a significant... You know, we estimate five to 10 point drag on RASM with this investment, but it's the right thing to do to get the network optimized. Barry, I guess going ahead from here, do you expect to be profitable every quarter going ahead, especially with, you know, reiterating a much higher margin target for 2025? Yes. Okay, appreciate that. And then, on the $200 million of cost reduction, can you give us, you know, some idea of where that's gonna impact, the cost line as you get to more out and back flying in the network? Thank you. Yeah. Hey, Brandon, this is Mark. You know, so on the $200 million cost savings plan, you know, so, you know, we're on track, you know, as we indicated in the prepared remarks. And where you're gonna see that, I mean, you're gonna see really benefits across the operation. So you're gonna see, as we've talked about previously, lower travel-related costs. You're gonna see, you know, crew efficiency benefits. You're gonna see benefits on the station operations front. You're also gonna see, you know, a higher capture rate from a maintenance standpoint, you know, at our crew bases, which is gonna drive some improved favorability on the maintenance front. And then, you know, with you know, the initiatives that we have to simplify the network, you're gonna see an increase, you know, in utilization, you know, that's gonna provide benefit across the P&L. Thank you. Stand by for our next question. Our next question comes from Duane Pfennigwerth with Evercore ISI. Duane, go ahead with your question. Hey, thanks. Good morning, guys. This is Jake on for Duane. So appreciate the capacity guidance, but based on what we're seeing in the schedules, we would expect it to be higher in 2Q than you're guiding. Is there just a level of conservatism there around completion, or are you still refining the schedule? Yeah, I mean, look, we always put in something. There's gonna be air traffic control and weather issues, so we continue to put in what we believe is gonna be realistic capacity. Okay. And then just, you know, you have this load factor and yield dynamic. How would you think about that evolving over the course of the year? Like, would you expect yields to be positive again in 2Q? And then, I guess, what impact is that lower load having on ancillary performance? Yeah, go ahead, sir. Actually, I'll just answer the second part of the question first. Actually, the lower load factor actually had a positive impact on non-ticket performance in the quarter. You saw some recovery in the non-ticket through January, February, and March. Look, we obviously focus on the total revenue output that's coming from the business. We're seeking to optimize that total revenue output. In the quarter, we saw an opportunity to trade some load factor for yield, particularly in the off-peak months. So it actually worked out very well for us, and it exceeded our expectations in terms of revenue output. But, like, going forward, you know, we'll always optimize it. It'll depend on the situation and the environment that we're in, and certainly in peak periods, we'll be pushing for very high load factors. All right. Thank you. Stand by for our next question. Our next question is coming from Ravi Shanker with Morgan Stanley. Ravi, go ahead with your question. Good morning. This is Katherine on for Ravi, so thank you for taking my question. As you guys had mentioned in your opening remarks, you recently introduced the UpFront Plus seating option, and premium's obviously been a large focus. So how has that kind of been trending since introducing it? And what do you guys think the non-corporate premium domestic opportunity for Frontier is like? And, you know, do you think that gets more competitive amongst peers? Look, we introduced the UpFront Plus just recently. It's been in place for a few weeks now. We're actually quite encouraged by its performance. It's really exceeding our expectations. It's giving our customers an opportunity- ... to buy effectively more space at the front of the aircraft. We think that's really, really helpful to our customer base. And so we're quite excited about it. That plus the business fare option that we gave to customers earlier in the year, we think is a nice complement to the business that we have today. Clearly, we're still focused very much on unit costs and delivering very, very strong unit costs. But these options, we think will be helpful to giving choice to our customers. Just as a quick follow-up, with domestic yields down in the first quarter and some harder comps coming up, what are you guys seeing in the domestic space as we move into 2Q and maybe in the back half of the year as well? Thank you. Well, look, I think you see overall capacity going up. I think, you know, Frontier is probably leading the charge and probably bucking the system because we pivoted away, you know, we're 6-8 months now into this pivoting away from the oversupply in Florida. So for us, we see a really good landscape setting up for the markets we're in. We see the fares in the markets that we're going into higher than the existing system, and so we see a lot more kind of ripe opportunities for market stimulation where we're headed. I can't really speak for the rest of the industry, but we see good demand for summer, and we're excited about the network changes and what that can do as these things mature for our revenue over the next year. Thank you. Standby for our next question. Our next question comes from Savanthi Syth with Raymond James. Savi, go ahead. Hey, good morning, everyone. You mentioned, you know, the ability with San Jose to kind of expand into kind of connecting into some of those Caribbean markets. I was curious if you could talk about what you're seeing in that short-haul leisure, given that some of your competitors have talked about a lot of kind of overcapacity in that market, and kind of why you find this kind of a attractive place to add capacity. We see a really attractive opportunity in Puerto Rico, Savi. You know, our cost base gives us a real opportunity to stimulate that market where there's been you know, very high fares for a long period of time. So we see great opportunity there. It's very early days in terms of the investment in Puerto Rico. The base opens in next month, and so but the early results, as Barry mentioned, across the new network changes look promising for our business, given our cost base. And so we're quite excited about opening up in Puerto Rico. So, Jamie, is the international segment then, beyond just maybe Puerto Rico, doing fairly well, despite some of the comments by the industry? Oh, we've done well on our intra San Juan up until now, just because it's relatively small. I think some of that commentary, I mean, look, I don't know what they're talking about. We're not seeing that. You know, could be some other destinations in the region, but not necessarily where we're starting service to. That's helpful. And, if I might, just with the comment, Barry, that you mentioned about, you know, the new markets being double what they normally are. Although it's probably, and I guess I'm surprised that it's having a five to 10 point drag on RASM, given that I would think that the reason you're going into these are because they're better. So I just kind of could you add a little bit more color on, like, what the percentage is and, and how you think that that should kind of progress? Yeah, sure. So here, here's the thing: We are chasing higher yield opportunities, right? So if we fast-forward to a year from now, we're gonna love these markets, because once they're mature, they're likely, in many cases, to produce a higher RASM than our existing system. However, when they're brand new, literally, like some of them still starting in the next week or two, I'm doing an inaugural in another week. Like, they're brand new, and so they're likely to produce a third or even half the revenue that a mature market will when they're brand new. And so all we're saying is that when you have double the amount you would normally have in brand-new markets, that is a bigger drag than normal, and we have calculated this. We believe this to be in the high single digits of a drag on our company's RASM, and it flows straight through to margin, in because of this much new capacity. But it will mature as we move through the year, especially when we get towards the fourth quarter and into the first quarter, we expect significant improvement, and you should see a natural, kind of seven, in that case, kind of a natural, you know, seven-eight-point improvement in our RASM over the next year as these markets mature. That's clear. That's very helpful. Just, just to clarify, Barry, what's the percentage of markets under development in 2Q? Well, we believe it's over 20% is in new markets. Okay, that's helpful. Thank you. Standby for our next question. Our next question comes from Michael Linenberg of Deutsche Bank. Michael, go ahead with your question. Hi there. This is actually Shannon Doherty on for Mike. For my first question, Barry, how many aircraft are you planning to take this year? Presumably, you may be getting impacted, just like every other carrier, by delivery delays, even Airbus, right? So I'm just trying to understand the capacity growth in the back half of the year and corresponding CASM ex. ... Yes. So, real fast, I'm gonna let Mark answer the actual numbers, but, are the aircraft delayed from our original order? Yes. However, are the delays known and have they been known now for over six months? And the answer is yes. So, there-- we're not seeing the disruption- Mm-hmm. that we were seeing before. So yes, they're late, but that was really just a problem, call it a year ago, when everything got moved to the right. We're now at a point where, yes, we have airplanes that are delayed from now, that were maybe just supposed to be delivered now, but I'm now catching a delivery that was delayed, that was supposed to be here three or four months ago, if that makes sense. So it's not as impactful to the business anymore. We've seen this really smooth out. And Mark, the- Yeah, from a numbers standpoint, I mean, we're still at 23 deliveries for this year, you know, A 321neos, you know, six expected in the second quarter, 11 in the back half of the year. Very helpful. Thank you, guys. And then my second question, you know, what drove the 6% decline in aircraft utilization? You know, are you still pursuing to get to 12+ hours with the network changes? You know, we're getting to the 80% out-and-back flying. It sounds like you got to 75 already. I thought that, you know, we would have had much better aircraft utilization by now, but maybe to your earlier point, because the markets are still ramping, any color here would be helpful. Yeah, Shannon, we're still managing the oversupply that we saw in the back six months of last year, particularly in the January and February period. And so, in managing that, we took utilization down, like we've done previously in the January and February off-peak periods. But we're expecting utilization to be up in the high elevens, twelfths for the rest of the year. Thanks. Standby for our next question. Our next question comes from Helane Becker with TD Cowen. Helane, go ahead with your question. Thanks very much, operator. Hi, team. Thanks for the time. Two questions. One, at one point, your flight attendants were objecting to the new schedule because they would earn less. Was that issue ever resolved? Yeah. Thanks, Helane. So, so we actually negotiated on this very issue. They, they had wanted a guarantee of a minimum amount of multi-day trips in the, in, in past negotiations, and we did not agree to that. So it's not, it's not really a dispute. It's, it's been settled. We do know that there are flight attendants that, that prefer multi-day trips, right? And that, that prefer to get the per diem and stay in hotels. This is a challenge for some of them. However, when you look at our growth, as we grow, if you think about it, every day, even though it's only 20%, call it multi-day trips versus, you know, call it 40%-45%, maybe six months ago, we cut that in half, but every day we grow, the percentage of the total grows, and, and within a year or so, we'll likely be close to the number of people that want multi-day trips, will be able to have them. And when you look at the fact of what we've done in our hiring for the last 6 months, we have targeted specifically into bases, especially these, these out and back, like Cleveland is a great example. Like, almost everyone in Cleveland, we hired locally, and they are doing out and back from that city. I know it's a challenge for a small minority that still want the out and backs, but as we continue to grow, we expect those that want it, within a year, all of them should be able to get it. So we don't see it as it being a major challenge. Okay, that's really helpful. Thanks for explaining that. And then my other question is, you guys talk a lot about your cost advantage relative to the peer group, and I'm just wondering, how much does that advantage matter anymore, given everybody's changes in the way they're operating their route networks? Well, I think it matters a lot. I think we have clearly shown, Helane, you know, I know that there's been this, you know, thought of bifurcation that the network carriers are somehow in a different place than now low-cost carriers are now in trouble. I think it, I think number one, the capacity deployment and the oversupply and the imbalances of that across the network is very clear and well understood now, which had a greater impact to the low-cost carriers. But I think more materially, I think when you look at those that call themselves low-cost carriers, but yet their costs have been going up 5%-10% a year, that eats into margins. That eats into margins. The fact that we're hell-bent to be number one and continue to widen our cost advantage is why we're starting to outperform, why we have the three to six guide for Q2, despite a 5%-10% drag of new markets, and why we're confident with the cost tailwinds that we're gonna have from completing the out and back, the $200 million that Mark and I have talked about over and over and over, plus these things, that cost advantage is what's gonna deliver us and get us back to 10%-14% margins in our target next year. Okay, that's- So costs matter, and they always will, Helane. Okay. No, that's really fair. I appreciate it. Just one quick one for Mark. How do we model the sale-leasebacks for the rest of the year? Yeah, so from, you know, an overall perspective, I mean, I think, you know, if you just follow the fleet, you know, profile, you know, that we've outlined, so, you know, 23 deliveries this year, all sale-leaseback financed, you know, six expected in the second quarter, 11 in the back half of the year. You know, so I think that's the way to look at it. ... Okay. All right. So divide that 11 by two-ish? Yeah, I mean, we haven't guided specifically, but I mean, I think, you know, it's not a bad approximation. Okay. All right. Thanks, team. Stand by for our next question. Our next question comes from Jamie Baker of JP Morgan. Jamie, go ahead with your question. Hey, good morning. So a follow-up on that. It looks like you had $71 million of sale-leaseback, you know, proceeds in the first quarter that you used to offset CASM. I mean, it feels like the business model is becoming increasingly dependent on aircraft financing decisions as opposed to the, you know, RASM and CASM stuff that you know, we're all kind of, you know, accustomed to. So I guess my first question is, you know, when sale-leaseback proceeds begin to fade, have you given any thoughts on how you might manage the business differently? Thanks, Jamie. This horse has been pretty beaten pretty dead. We covered this significantly, I think, a few months ago, but the bottom line is this: if you buy aircraft and you're able to deliver them at likely below-market rates, you're gonna get a gain. And we have illustrated that whether you do this through a sale lease back or whether you do it through debt finance, the economics and the net income is the same. So your gain that we're calling out is simply because of the accounting rules that changed a few years ago. Mm-hmm. But if you actually, or but if you're being fair, you would give the same gains to American, United, Southwest, and back those out. To your point of when they fade away, well, that's not happening anytime near in the near term. We have 200 aircraft on order. We have a clear, clear path. This needs to stop being talked about as a negative, Jamie, and talked about as an asset and a positive to the business. You need to look at the guaranteed cash flows that come from this over the next decade. This will not change, and we don't plan on changing this unless the, the financing market changes. It's a core part of the business. The cash is real, the earnings are real, and it's the same as if we had debt financed. Well, I guess the question, though, if you were debt financed, wouldn't that be more similar to amortizing the gain over the life of the lease? So I guess put differently, if you had amortized the gain over whatever leases you struck in the first quarter, it wouldn't be a $71 million benefit. Do you know what the approximate benefit would've been? 'Cause it's, I mean, it's obviously gonna be a much smaller number. Well, those aircraft would be a much smaller number, but then you would have brought in the gains from all the other aircraft that you've delivered over the last 10 years. This is why we keep saying it, and there's a really good presentation we put out on this. No, no, I remember. Okay, well, that's why we did it. If you go back and look, we showed you whether you did this over the old accounting, whether you did it through debt finance, or whether you do it the way it's being done now, which we're following proper accounting. It's the economic answer, the net income answer is the same. Okay. So- All right. Appreciate the color. Whether I think- And Jamie, just to add to what Barry said, you know, the market value for aircraft, particularly the A321neo, is really, really strong. You know, the issues that have been happening with the manufacturers in terms of delays in aircraft, you know, the market price for selling an aircraft into the leasing community is higher than it's ever been. It isn't diminishing. Sure, the financing costs associated with that are going up with higher interest rates, but that market price of the aircraft is very, very strong, and we happen to buy aircraft at a material discount to the market. And so that's why we're getting the benefit. There's a real asset value intrinsic in our aircraft order, and you see that every quarter. I think, let's get back to focusing on what's important. I mean, what we're excited about is we gave you a guide for Q1 that included it. Mm-hmm. Nothing changed with that, and we had really great performance, and that is leading us to where we are now, with what we believe is a solid guide for Q2 in the year, even despite a high single-digit RASM hit and margin hit, which gives you the confidence to get back to the 10-14 points that we've labeled as our target next year. Mm-hmm. Okay. That's what we need to focus on. Yep, and I don't disagree as to the strength of the aircraft market, and we're not looking for that, you know, to reverse anytime soon. I mean, on that point, we are in full agreement. So thank you. Stand by for our next question. The next question comes from Connor Cunningham of Melius Research. Connor, go ahead. Hi, everyone. Thank you. On the 13 crew bases that you have and the couple that you're introducing now, I'm just trying to understand the cost mismatch that is currently kind of happening in 2024. Like, as you open up Cleveland, for example, and then you kind of move more to this out-and-back network, is there a cost mismatch where you're actually holding too many costs, too much cost this year before it starts to kind of, you know, become a good guide next year? I'm just trying to understand the dynamic on the cost side as you open up new bases. Thank you. ... Sorry, do you want to answer? No, go ahead. Go ahead. Yeah, yeah. I mean, yeah, I don't think there is a cost mismatch. I mean, I think the $200 million cost savings target that we have, that run rate that we expect to get to by the end of the year, it is underpinned by this network simplification and the shift to over 80% out-and-back. That simplifies the operation, that provides efficiency across the operation. And so we think it goes hand in hand, and we don't think that there is a mismatch. And just to add to what Mark said, the actual cost of opening the base, there are dollars involved, but they're relatively small in the context of moving really valuable assets around the network, and putting them in places where actually they're making real, real money. And so the upfront investment in a base opening is relatively small from a cost perspective. So there isn't a material cost drag from the opening event itself. Okay. There's actually cost- Okay. cost savings that come quite quickly after you open the base. Okay. Okay, all right, perfect. And then just on, on your pilots, you know, the market's obviously moved a lot. You know, you have some airlines that are shedding pilots now or furloughing pilots. Can you just talk about, you know, where you are in terms of your negotiation? What have been the sticking, anything new that's kind of happening there? I mean, I obviously don't want you to negotiate in public. Just curious on what, what's, what's kind of going on right now, and are expectations around when that could potentially, get rectified. Thank you. Well, well, the landscape is completely changed, right? I mean, airlines have canceled classes, attrition rates have completely dried up, and, and if you want the canary in the coal mine, you actually saw this a while back. The fact that the regional airlines have been able to get staffed and hiring again, tells you everything you need to know. There, there's not the shortage. So yeah, there's not the pressure that there was building. As far as our negotiations, it is very early. I mean, we just started. And so, and we're in mediation, and, you know, the history of these things are, you know, one to two years. Most of them are kind of centered around the two-year timeframe. So, I wouldn't expect us anytime soon to be able to get through that process. It's, it's just a process. Once you sign up for mediation, you're kind of locked into it, so it's gonna take a while. Appreciate it. Thank you. Stand by for our next question. The next question comes from Stephen Trent with Citi. Stephen, go ahead with your question. Good morning, guys, and thanks for taking my question. Two quick ones for you. One, as you look at these new products, you know, that you mentioned with the UpFront Plus, I think you said it was called, and you look at this new route network, you know, what sort of competitive response are you seeing from the network airlines or others as, you know, you launch on these new routes? Thanks. Yeah, thanks, Stephen. So, you know, look, I think we're seeing what you normally see. I mean, you know, one person's a great opportunity for high revenue opportunities with under-served or high-priced markets is another airline's definition of incursion. So we see normal reactions out there. But I think the truth is that the industry is focused on margins. And so I think, you know, you know, any irrational things that you see, I think generally over time, I think most rational carriers will respond with different pricing and capacity as a result. But yeah, we're not seeing anything out of the normal. Great. Appreciate that, Barry. And just one other question from a regulatory standpoint, and I haven't even 100% seen all the details around this myself, but I guess the DOT made some rule changes about, you know, airlines having to compensate customers for delayed flights and lost bags and this kind of thing. You know, do you sort of have any color on what's the latest on that and, you know, to what extent the industry might push back on that? Yeah, look, I know there's some pushback on it, and a lot of it has to do with, you know, I think there's concern about the technology that's available, especially with third party, to be compliant with the transparency. On the refund side, I would say that, you know, look, we refunded over $300 million last year, all in these same categories. We believe largely in compliant with what they're looking for. We don't see any financial impact from this. And I'll just dovetail on the transparency. You know, we've got some big changes this year. We've got a new website coming out, we've got a new app coming out, and we've also got some kind of improved merchandising that we think will not only be good for us from a revenue perspective, but I think it will really address much of these transparency issues and make it very clean and upfront. So I think we can hit the spirit of what they're looking for, but I think the way they've written it, I think the reason why some of the industry is having a challenge is because I think there's not the technology in place today to do exactly what they're looking for. But hopefully, we can all get there. But again, we see no financial impact from this. Okay, appreciate it. Thanks, Barry. Stand by for our next question. The next question comes from Christopher Stathoulopoulos with Susquehanna Financial Group. Christopher, go ahead with your question. Thank you, operator. Good morning, everyone. Barry, want to go back to your comments or your prepared comments around supply dynamic. If you could put a finer point on- ... that, as it relates to key pieces of your network, a lot has changed here. You've been very clear about how you're thinking about optimizing the network going forward. But also, you know, looking at the last, I don't know, few weeks of sales promos here, you know, coincidentally or not, they seem to be overlapping with a larger network peer, and should kind of we interpret that, that you're having confidence here with your, you know, product, particularly as it relates to, these revenue initiatives, business rework, loyalty, and, and things like that? Thank you. Well, look, you know, I said a while ago, low costs have always mattered, and the cost divergence is real. And at the end of the day, this enables us to sell to customers that can't afford possibly a network carrier. We're in a different business in that regard, and we think that we peacefully coexist in many places with the big airlines because they offer a different product, and they cater to a different clientele. Yes, we have some new products that I think, you know, probably appeal to your more affluent travelers and those that want a little more comfort with the UpFront Plus or the Premium product. But the truth is that we don't have a frequent flyer program that gets you to Dubai. We don't have, you know, eight frequencies a day en route, so we're not really for the, you know, the corporates that they chase. But yeah, I think we serve a different market, and I think most of the more sophisticated legacy carriers have actually figured that out. Okay, and then your comments before, I think, I think there was an earlier question on this yield and load factor dynamic, and, you know, if you could, you know, speak to, you know, how that's progressing, if it's sort of, consistent system-wide, or is it, perhaps, you know, more market-specific, and is that, you know, a dynamic that we should expect to, slowly, shift as we, get through the balance of the year? Thank you. Well, well, well, look, we always look to optimize revenue. I mean, we have teams that this is their big thing, right? I mean, this is what they do. They optimize revenue every day, and we found that in Q1, that a greater focus on yield and less on load was a better outcome for us. And we've seen that we had a pretty good beat, and so obviously, it worked. However, it's not good long term to have that kind of deficit to the load factors, and I think you're seeing that as a symptom of we still had too much capacity that was impacted by the oversupply in Florida, as an example. And so as we move through the year, we would expect to regain all that load factor, and I think by the time you get to Q1 next year, I think we will largely close that gap back because of the changes we're making to the network and getting out of the oversupplied areas. Okay, thank you. Stand by for our next question. Our next question comes from Savanthi Syth with Raymond James. Savi, go ahead with your question. Hey, hey, thanks for the follow-up. Just, you brought up a good point earlier that, you know, your 1Q cost performance was quite commendable and kind of better than expected. Just curious, why your full year outlook hasn't changed? And any thoughts on, like, what drove the 1Q outperformance that can maybe continue? Yeah. Go ahead. Yeah, I mean, yeah, so, so as we look, you know, from a, a cost out performance, you know, standpoint in the, the first quarter, you know, versus our expectations, you know, as, as we continue to, you know, target and work towards that, that $200 million cost savings plan, which, you know, which we're on target for, and we started to see, you know, some of the early benefits, you know, in the first quarter come through across the business, and so that's what you saw in the, the first quarter. As you look, you know, on a full year basis, you know, I mean, we still, you know, we're holding to that 1%-3%, you know, given that, you know, the strategy that we put forward, I mean, that is what we're still holding to. And so, you know, at this point, you know, that guide still holds. Okay, thank you. Showing no further questions, I'd like to turn it back over to Barry Biffle for closing remarks. Hey, I'd like to thank everybody for joining us today. We're really excited about our trajectory on cost as well as revenue and how we're improving in operations. I wanna thank all of Team Frontier, and we look forward to hosting you on our next call. Talk to you soon. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.