Allegiant Travel Company

Q1 2021 Earnings Conference Call


spk_0: good afternoon and thank you for standing by and welcome to the queue on twenty twenty one allege and travel company earnings conference call at this time operate this offense i you know the same only note after the speakers presentation or they will be a question and answer session you ask a question during the session you will need the past ah our one on your telephone keypad if you require any for your assistance de stress star zero i would now like to hand a conference overview of speaker today missionary well said thank you please go ahead
spk_1: baker cherry welcome to the we didn't travel company a quarter twenty twenty one earnings call on the call it me today are more a gallagher the company's chairman and chief executive officer john redmond the company's president craig anderson or even p and she financial officer scott sheldon are he became chief operating officer kathy angelo are ethiopian chief marketing officer true elder ftp of revenue and planning and a handful of others the help answer question we schedule today call for seventy five minute to ensure the present time for question we will start with them commentary and then open it up for question we ask that you please limit yourself to one question and one follow up the company a comments today will contain forward looking statements concerning or future performance and for teach plan very of risk factors could cause the underlying assumptions of a statement that are actual results to differ materially from those express or implied by are forward looking statements favorite factor than others are more fully disclosed that are filing for the at the feet any we're looking statements are based on information available to us today we undertake no obligation thought they publicly any forward looking statements weather as a result their future events new information or other wipe the company him been battered not the place undue reliance on forward looking statements which may be based on assumptions and events that do not materialize to view this earning three weeks as well as the rebroadcast of the call feel free to visit the company's investor relations site at i r dot elite an air dot com with that i'll turn it over to maurie
spk_2: i did you get up in everyone thinks you're going to join hope you on come on first thought when we take moment thank all of our team members for spouses families are as they continue for pessimism you difficult times have been the true love warriors for our side of the house your thoughts thank you again have i'm extremely we're excited about our future our morsel that i have been in previous quarters or expect profit to continue to grow in the coming months based on data were seeing i would say wield up a twenty twenty one are beyond i believe will be as good or better and i could have hoped you know que one we had done pps and forty two sons and or even a total of sixty eight million for the quarterback who thing it was very positive each month of the quarter was a positive even a number understand both none of these numbers include our psp amounts of the ninety two million dollars oh our share with you some interesting facts and i've seen and god concerning the impact to the pandemic see how it's affected us and others are one or balance sheet as much better shape do before we are the pandemic particular has released a curse when the end of que to our cash balance will have more than doubled to a billion dollars in the this is measured since the end of two thousand and nineteen our while a cash balance has been growing our net debt balance has actually declined over fifty million dollars by the end of year we could be approaching five hundred million dollars of net debt down from nine hundred and fifty million at the end of two thousand and nineteen an interesting stat i was so taken with last year was we generated two hundred and thirty five million dollars of positive cash from are operational statement off our casual things for twenty twenty as a whole industry during this time last eighteen billion dollars from operations and i might have this includes a hundred million dollars of losses from the other you lc season lastly as a still have factoid during a q one without any psp we only had a fifteen million dollars even a loss or negative five point five percent margin remainder of the industry's he been a loss for this quarter just standard was nine billion dollars on fifteen billion in revenues or a sixty percent negative margin oh my conclusion format is our personnel our model and are excellent management team have done yeoman's work during this difficult year we were the first to get back to positive growth we did this to the previous quarter we were the first to achieve positive even on late last year we are among the first to achieve positive vps and we did that again this quarter we're fortunate to be a domestic leisure oriented carrier leisure is came today business in international traffic continue to substantially underperform profile of our customer in their behaviors new important distinction in our model our leisure customers are made up of millions of individuals family small independent units the make personal individual decisions to travel and spend their funds business traffic has a different a decision process while there are millions of business travelers as we know their decision to travel in most cases is ultimately control by the company senior management namely given dramatic circumstances company business travel is stop we'll see this cinema three times in the past twenty years nine eleven obviously great financial crisis shut down a good chunk of business traffic and obviously this past year with the pandemic these have been fulfilled stop traveling business traveling decisions for business customers this has been devastating the airline and travel industries particular those focused on that business customer allegiance as with through to these massive shutdowns and while we were certainly impacted by the pandemic this past year we can really didn't even feel the gfc all these your customer profound are flexible model allows to bounce back faster than everyone else including our the you lcc compatriots the super the backbone of how we have built this great company we had a terrific two thousand and nineteen and we're off to an excellent start an early twenty point we just had waited glad a year to we could get back to it back caesar been a terrific countless as we all know and combined with people strong desire to get out go has made for a really nice rebound that we're seeing these days are we believe our income levels the remainder of twenty twenty one and twenty two and be on will meet or exceed our last for you year of nineteen we want to be a leader in this effort and take advantage of our great model in the coming years and plan flags has we attack more than one thousand tired of markets that we have our rat's we have targeted we looked or game substantially in the past three to four years or brand is extremely well position we made some bold moves that have worked out extremely well was a leader stadium has been all we could have hoped for a more i continue being a drum for amounts flexibility which allows us to both three can rebound it continues to demonstrate as benefits allowing us to separate ourselves from the competition this is particularly evident we review the industry's operating margin results for the past twenty years from our beginning in two thousand and one with averaged over fifteen percent and operating margin during this twenty year period on the next closest carriers alaska and southwest have been a ten percent margins perhaps the best time the past few months has been the elevation of our status from a noun to a verb from what i've heard we were the standard gun comparisons with the recent ip a roach no efforts as was from the group of startups that are showing up at this point twenty years ago most of the life based in concerts and airline which is fine by me no one paid attention to us but today we are the the model fall of this is the ultimate compliment from your industry peers he calls the i can't tell you how proud i am again of this group of team members particular those who carried one on the frontlines this past year they've been to heroes and are part of the world every day they have boarded doppler airplanes and carried or passenger safely and on time during these trying days gone
spk_3: i take your image very a good afternoon everyone as i get in the previous earnings call i gotta be helpful to provide some directional data points help you understand how we see things in two thousand twenty one killer the nothing leisure focus business model we're in a better position than other carriers thought beyond a month without hope and prayer being part of the commentary having said that the directional guides assumed no significant changes the environment we are operating in the industry in the country are seeing a slow and steady return to normalcy and expected to continue as more restrictions are lifted all financial data provided is on an adjusted basis which excludes of course
spk_2: the benefits from the care that than pst furthermore kill the soon that a dollar ninety nine a gallon
spk_3: we expect our cat found to be around a billion at the end of each quarter going forward for the balance of twenty one and course will and the ever improving that death the looking at cause we see full your cat the next one thing he won twenty one supporting that you are to eat for aircraft should be down more than ten percent versus two thousand and nineteen even our average number of aircraft are expected to be up over twenty percent by year end
spk_2: furthermore argue to chasm tax would be less and six regel provide for the comes commentary on q one
spk_3: it can max every quarter and only one shit a positive either dog and que to even dog will be around one hundred million
spk_4: if here every quarter for twenty one should be positive as well
spk_3: regarding the airline growth i mentioned to my comments in the lab earnings call we have never been more excited about the growth opportunities and twenty one and beyond to that end it is our attention to grow the airline by the end of two thousand and twenty four to north of one hundred forty pipeline it goes without saying of a lot of planning and it goes into such growth and we have been working on that in earnest for last several months
spk_2: our deep knowledge of the domestic leader customer coupled with our aircraft acquisition experience and strong and getting stronger balance sheet i'll i'll have to execute on such a strategy better than anyone
spk_3: in regards to sunseeker we've been getting quite a bit of interest the late and would hope to get something done that would allow the project to start before the ended year
spk_2: we're exploring many different approaches at the how the additional funds will be raised so the comment on how the phantom reduction could shake out or or look like would be premature
spk_3: while his feet or recovery may be surprising to some that not all it has come about due to the dedication hasson and hard work from are incredible employees you're simply the best in our results are proving it without alternate over scott sheldon
spk_5: thank you john and get up in every one thanks for joining the call
spk_6: let me first
spk_5: i'm sorry up and same thanks and expressing how proud i am of the entire weekend team number partners dropped the network
spk_2: or operational results in the first quarter were terrific this hudson unique challenges it goes without saying a key members and partners are truly the ones that make this business
spk_5: successful in this entire management teams links you know each and every day and grass
spk_4: i'm living on what a difference a quarter makes fine production continue to build as we turn the page on twenty twenty
spk_5: for the first time in what seems like forever we experience or first normalize operating quarter and more than year as when it up with just over three percent capacity growth compared to the first quarter of nineteen or core operating operational performance metrics rub virtually across the board with the exception of of completion which i'll touch on that and second
spk_4: our teams execution produce seasonal seasonal that spurred easier on a fourteen at seventy two percent and eighty point seven percent respectively
spk_5: once again on a on a full schedule as compared the first quarter of making excluding the impact on extend the weather delays which was particularly bad this quarter or control a fourteen was exceptional and ninety three percent horrifying activity returned to pre covered levels in the first quarter a wasn't without significant challenges or controllable completion percentage which ended up just north of ninety nine point five percent for a quarter was horrible hours to work on arms the key driver ah a key driver of this were bottlenecks encountered in bringing flying assets back on the line the match first quarter capacity demand particularly the ramp up in late february march as as much carriers throughout twenty twenty we deferred as much heavy maintenance and induction work as possible to minimize cash for
spk_4: intel or is a much better line sign on demand of these different created much new york needed cash savings it also created a backlog of aircraft with enhanced work scope requirements required to return service during the quarterly inducted five i used aircraft and had as many as thirty two separate heavy maintenance events
spk_5: not an ideal scenario as our core immortal partners i am and parts suppliers and when just the companies have been followed around back to full capacity the end result was north of eighty five means cancellations the lack of aircraft and drove just over six million in a regular op's cost and clothing i'm excited to maintain them on then we built as
spk_4: whoop as we move into the second quarter and under the back half the year we wondered induction heavy maintenance constraints from the first quarter and we peer be back on a normal cadence which is credible over that happy years aggressively scheduled an immoral pipelines are getting tired our plan is largely them the risks thing to the tireless efforts and creativity of our maintenance planning
spk_5: induction an engineer engineering teams
spk_2: equally as important as looking forward to having our third party suppliers and partners back online and operating at full capacity currently the majority of our handling terrorist writers are experiencing staffing challenges namely they're finding it difficult to recruit and retain the necessary headcount to run their businesses are pre coven labor rates at which is it
spk_5: direct result of the multiple stimulus rounds on the direct labour from our powered flight attendants mechanics who are either furloughed or on extended terror extended voluntary time law programs have been recalled and we're pushing them for respective pipelines as we speak training classes for all disciplines will begin in summer and into the fall all to meet march peak in summer of twenty two flying know that altered over skype the thanks scott
spk_7: prior comment that past quarter clearly marked deposited a turning point in customer sentiment and demand for leisure travel back in the first week of january only one third of our customers that they believe things were getting better in terms of carbon nineteen yeah i mean mars that number had nearly tripled and around ninety percent said things were
spk_8: getting better
spk_4: and fundamental customers and then driven by a combination of vaccine progress and destination reopening what highly correlated with when and when how we thought man return that the my the before he showed marked improvement
spk_7: whitmarsh poking level that already mentioned performing around twenty nineteen level however it's worth calling out about the man is increasing upward it's also expanding our our beginning of the more normal i leisure travel search and bunking behaviors and then perfect timing for the first week of twenty twenty one was nearly half of what it was and twenty nineteen yet we finished the quarter and then purchase timing for the last week a large has greatly increased and was virtually identical to that thing we can twenty nineteen
spk_2: to the dynamic the volume of like search has been performed by customers the dot com continues to help pay twenty nine came level especially permit the late summer months the getting additional ways of a leisure travel the man are continuing to reenter the market and are searching for travel time period and thermo
spk_9: i'm comfortable with
spk_4: allow customers to argue while or but the legion this year more than seventy percent report having already been vaccinated
spk_5: then call think almost to and winning back those customers to plough legion and twenty nine came but haven't found that the pandemic began and our priority focus and inflamed the report that we've already recapture nearly twenty percent of the customers android calorie and that those who are still my thought a report overpowered me that they hadn't fallen no other airline during this time and consider a legion their top choice by a wide margin overall letter airlines considered for their next trip once again aren't you're right it can to her approach has remained a critical differentiator not only for selling directly to
spk_4: but also communicating directly whet our customers and name only have to think of that past year aren't close to capturing the man continue to be rooted in car that the plan by heavily leveraging are owned media channels namely our website and email marketing both of which he came first quarter web traffic increases vs twenty maintain that thought that once again achieving credibly low health and mark
spk_7: any hop on a per poking bait that there were eighty percent below pre pandemic level and lastly with i have digital camera app that complain that in both our new website and new mobile app we can focus the launching are brought a non current loyalty program later this year and you're spending our leisure offering an elite and dot com not only an existing hotel and round or category but
spk_4: also launching vacation rental inventory more than eighty thousand property nationwide with our new it's partner booking how dot com and of course we look forward to soon offering travel packages for a leak and stadium of and this fall
spk_7: moreover we continue to explore as that like called arcadian fell channel partnership that an invalid to broaden our leisure travel ecosystem and then give a privilege partner relationship that enable us to reach millions the new customers and markets that we in those partners collectively so or when that all time to jerome
spk_10: they have gotten thanks everyone for joining us this afternoon
spk_2: we continue to see sequential revenue improvement in the first quarter with scheduled service and total revenue each down thirty eight point two percent or the first quarter twenty nineteen are and play revenue for passenger with down to zero point two percent against the same time frame and remain a great story considering it's half of scheduled service rep this contributed in a large wade or told fair per passenger been downs of eight point nine percent
spk_7: we ended the quarter with significant momentum through the back half of march that carried into april april revenue will be quite close to the march number even despite less capacity for the first time in company history
spk_4: a lot of is there what more mentioned are april though factors were roughly ten points higher than march and in fact despite moving beyond the peak spring break and easter time frame
spk_7: loads that improved in each of the last eight weeks furthermore both of those week for all the pod that a at them here over to year at the grand into the peak in total april and may will be roughly flag capacity or twenty nineteen before the growth resume in earnest during gym predicting the to queue at them guide a plus to to plus six percent or twenty nineteen
spk_3: the of that growth is slated for the new it illegal city of portland oregon which began their with in april along with jackson hole wyoming and key west florida which take flight in gym
spk_7: those are among the fifty one new routes beginning service in the quarter we are thrilled with the booking performance of our new content eyebrows and what they add to the elite at network along with their them guide we're getting to queue schedule revenue a little service revenue to be between down six and down ten percent or twenty nineteen i'm ecstatic to see numbers in the single digits and i really look forward to putting that fine in time fix the margins having greatly impacted by the amount of supply and lower demand in the market and we responded by looking to deploy more flying and in particular valuable pk flying to the better current returns on the schedule third aside
spk_2: while we had a great run affects be flying through the college basketball march madness tournaments that a fairly more of a one off benefit for twenty twenty one and fix the revenues are likely to remain under pressure
spk_7: the strength and demand were thing continues the with conviction in the potential for the back half the year we have the crew and the aircraft inflate the girl approximately twenty percent and our current selling schedule to remember summer reflect that attention
spk_11: that selling schedule include the announcement of our newest dave and austin texas
spk_2: the third often with october twenty third team that had success growing a wide range of route opportunities and are related to make it stronger presence in the future of our network and what that like petrova greg they drew and good afternoon good afternoon everyone we continue on our path of leading the way and restoring earnings power as we deliver on or tried and true business model that provides affordable convenient and reliable out air travel to residents of underserved city over the years we have consistently produced industry leading with returned for our shareholders we are long term focus bunch and taught to think like owners particularly when the tone said at the top i more he has since our companies inception had been had now only been at the helm that also are single largest shareholder
spk_5: when of our key focus metric is restoring are you bid our production dupree pandemic levels which has more than six million annually bit apprehensive crap starting with the current tone of the business
spk_2: during the first quarter or average daily bookings came in just under five million per day which translated into an average daily revenue of three million the quarter and it's strong as march came in like a line with average daily booking that feeding six point five million per day ahead of twenty nineteen levels and driving more cash flow in retail increase by hundred mil and were thirty three percent from december to march this despite the travel voucher for it forces being down eighteen percent additionally we saw a couple key metrics during the fourth first quarter which already outperform twenty nineteen results one is capacity or focus on one hundred percent leisure hundred percent domestic and are only nonstop flight plus strengthen the man resulted in march capacity of nearly one point nine billion is them the highest single mom
spk_5: month in our history
spk_2: another is cost our first quarter adjusted chasm max which excluded pfp benefit is six point three six cents or five percent below the same period between eighteen and perhaps worth noting are just a chasm next for the court is by far the lowest recorded by carrier it has half of the industry's reported average of twelve point seven
spk_4: sense
spk_2: we are excited and getting back to pre pandemic results and the catalyst that enables us to lead the way in the flexibility of the business model
spk_3: our one of the kind low utilization and hi variable cost pressure a that some generating a hundred and sixty eight million cash from operations during the first quarter which has more than the first quarter twenty nineteen and helped push or ending march outcast balance of to seven hundred and thirty million
spk_7: additionally we have two hundred sixty million in cash that comes in after march roughly one hundred and fifty million from our noel's ninety eight million for psp three and a fourteen million top up for psp to
spk_11: pro forma the two hundred fifty million is cast proceeds brings our first quarter cask found that the nearly one billion thus resulting in a march performing that deposition abruptly six hundred thirty million or thirty three percent reduction from your and twenty nineteen balance
spk_2: moving to our second quarter outlook we expect to and that five aircraft are in the quarter to bring our total and service leak county hundred and five by genes in an increase of nineteen aircraft to go to junior twenty nineteen
spk_5: these additional aircraft are already been put to work of capacity during the second quarter as expected to be up around four percent year over two year
spk_2: it has also notable second quarter daily bookings had of get to be april continue the roar with average daily bookings around six and a half million per day which they percent higher than april twenty nineteen
spk_7: a strong rebound we're seeing in our business supports our second quarter scheduled service revenue got down six to ten percent year over two year which translates into revenue per day four point eight million nearly sixty percent higher per day in the first quarter and within striking distance of point eighteenth average read revenue per day
spk_5: and based on the midpoint of our capacity guide we expect our just a chasm actually come in under six cents during that a quarter so combining are expected daily revenue a four point eight million in the second quarter with are expected past performance suggest and and adjusted ebitda margin of around twenty five twenty five percent for the gym quarter that twenty five
spk_2: percent he had a margin exclude the benefit of be of paid if you include the benefit of the a the it suggests and even a margin of more than thirty five percent turning to flee during the first quarter we acquired three aircraft at an average all and price of ah f sixteen point five million patel if aircraft were paid for with cast and remain i am thumper which brings our current unencumbered aircraft counter twenty nine and the you day three twenty market are we team and in no source supply build coming across there
spk_5: death the prices reflect a thirty percent discount on average to pre pandemic levels based on current commitments respect him year with the hundred and eight aircraft which supports our ability to increase capacity in the back after twenty one by as much as twenty percent as drew his team see no shortage an opportunity to put aircraft the work this level capacity suggests are just a chasm act for the back after the year should be around the most accent level and the event we come across same week that and the band of my in the demand a barman are highly variable cost structure along with athlete flexibility provides us a built in safety valve to let off the gas and needed
spk_2: not only at our industry leading cause structured manage expanded due to the structural cost savings removed during the pandemic other carriers have increased their lever significantly more than we have are expected four year twenty one interest expense should be around fourteen percent less and for your nineteen additionally are full year twenty one scheduled that maturity and interest payment using our twenty nineteen passenger counts is actually six dollars per passenger less than it wasn't twenty nineteen and i have to take our word on how well positioned we are recently as a t upgraded our corporate rating and changed our outlook the stable i believe among the first rated us airlines to see such a change and terms of cap acts or full your twenty one guy remains largely unchanged with the exception of our other topics category
spk_4: and that we increased by twenty million for the opportunistic purchase a spare parts and an average price or part a fifty percent less and pretend i'm levels
spk_2: and are close with teeth not recently we completed the cell of eighty five percent of our chief naps is a subsidiary to tell your capital and had an undisclosed amount we are excited to partner with tell you they are committed to positioning she's not for a bright future with plans to further and best accelerate growth of the business
spk_12: i'd like to take a moment to thank our t snap team members who have done an incredible job building the platform creating a deep in growing customer base and bringing the program to it's next evolution with fifteen until he owes good stewardship the future will be very bright and with that will turn it over to the question
spk_0: most of my nerves as a reminder as long as he have cost sent these past taiwan on their telephones and mom will foster system or mythical ballot in any master
spk_13: your first question comes the line as my main made him back some these you're lying is still open
spk_14: oh hey up everyone good quarter and a question of how he mori and or john in a lot more you you alluded to you know competition out there on what is it in alien occasion is the sincerest form of flattery and in the fact is we do have a fairly you know several new entrants it seems like there's more and them is waiting in the wings and they are targeting your market segments and they're not i don't think we're getting any carriers that are going to start flying say san francisco telco it's all about austin and national the florida and vegas et cetera et cetera
spk_2: i'm curious that you know how you're thinking about it even just in the last couple weeks i think we've had to airlines announced new service the phoenix may sound we've seen someone announced additional state new service into contact order st pete either sort of the elite at mainstays and so how do you think about long term opportunities to think that you know it
spk_15: this area becoming more fragmented you lcc say becoming more fragmented that maybe consolidation is more likely over the next few years a fairly broad question he loved one or both of you having one answer thanks
spk_2: arthur balfour we got a half an hour ah their own boy will catch up later we'll call can ah on euro a i think like class by this last year and is ironically as a financial year rather than operational your your see an opportunistic financial place that are are you know though the markets been very receptive to an amount of you know with the put the ip owes you have a lot of money they can tell they're known quantities there for the most part but dot on the new front i you know their each other own personality ah jews been following a very quickly he may have some opinions as in the near term but you know andrew ah you beat we we know each other he knows how to do what we do ah but butter you know we've gotten to a very big a while we're certainly are their pay attention to people were you know that's not our first the first thing we look at this point in time and which thou with breeze so side of the house ah i'm they have an ambitious gross casual but ah with their airplane size and some things i'm i'm not terribly concerned about flying against one hundred and ten seat airplane with they'll start with the who to twenty's a good airplane ah they claim to be against and longer hall thinner markets so we'll just have to wait and see i don't think it's so much us i think that the the the really interesting players have the big three react you know what they've they've on just what to the santa they've got a ton of death ah data core structures twice what and of ours are our ah me i just don't know how those guys and of come down the hill not to say they won't ah done a long term
spk_3: so the issue i don't know isn't so much worried about start ups is i figure go see the o l c c side able to deploy game a lot of marketshare potentially over the next couple years and that's what were we are so bullish on because we can really stand alone in what we do and now we've done it
spk_2: and have been up we were ready for this and twenty or twenty nineteen and twenty twenty and like i said he just took a year off the roof we're stepping on the guess i'm john if you have thought he i think when you look at it we've never been afraid of competition but when you financially where we stood firm time ago versus where we stand now no more made in his college will kind of alluded to but we've never been stronger what a farmer balance sheet an issue the company frankly so we're well positioned not to take on anyone really get the startups it literally
spk_3: i don't have a brand know and know that brandon a marketplace
spk_14: so they're coming him as a brand that no one's ever heard of in is more points out neighbor the plane type that not as a cost effective as ours and some cases so i think we're going up or both and going forward were in great position of to do it
spk_16: ah and and growing quickly
spk_2: great great thanks i just pick one greg aircraft my expense greg it's it's a fairly new concept for you guys as i think of that you mention that the last three sales were financed that a cash you're taking a few more later this year is are they operating leases or should we assume march quarter is a good run
spk_17: ray
spk_5: you know for the rest of the on aircraft and them you
spk_16: and that things michael for the question yeah the three that we acquired am in a first quarter not op leases so those are other purchases we do have a couple athletes is that will be bringing on the know the next upcoming twelve months or so or would i'd say that that number that you saw the march quarter
spk_0: and where we sit today from l a
spk_18: rendell expense perspective is it is a good number but for the remainder the year great thanks everyone michael your next question to the line up and you one fanning like from ethnic or i see i line is now thing
spk_11: hey good afternoon thanks
spk_7: thanks for the time on so your guidance implies ah nice sequential improve it in ransom we really haven't had it an opportunity for a while to talk about ransom so it's it's nice to see sequential improvement there i wonder if you could comment on the balance between load factor
spk_2: he noted that ten point program in april
spk_19: albert balance between load factor and yields because it it does feel like ah perhaps your your average fares on don't drop off as much as as they might normally would from from want you to to que
spk_7: yeah thanks to endure here are my i think we're kind of in the middle of the inflection point yeah we we put we try to keep
spk_18: fair and yield relatively and line under the theory that i'm and bobby experience that that dropping a fair one stimulating enough incremental load threat for to make sense for up a mad as the demand cool and generals growing more seats are out there were thing more and more in roads to wear dropping fair and free that stimulation make more than throughout ah
spk_20: and i think right now and kind of that the inflection point there were your field hold up really i think fairly well over the first probably half of this month before as again the summer and see that kind of version take place i more a kind of alluded to some of the the came as of love their but i do expect to see ah rest seventy i in june
spk_18: continue her that as that improvement that we seen from march april
spk_3: yes it's control and prevention rather men and sequentially chasm so that not look like gun
spk_2: it feels like a good outcome
spk_21: really fucking talk about outlook
spk_18: not or the balance of the year on and me related leave what would it take for you all to think about bringing back a pf guidance because you know we're going to have to think about you know positive vps here again really the first one to to contemplate that
spk_22: oh and one if he has planted mean we've had some conversation about that i'd imagine we'd start looking at that hollywood next quarter
spk_7: yeah it does have thought that that's a nice transition back to a really positive way to look at the business so yes a drink because i did mention t that it can be positive their reporter
spk_23: for the for down for the year
spk_2: you either john thanks and then just with respect to arm you know kind of the growth outlook your gave us qq you know how have your cases about the second half kind of change relative to pass calls not he was still very much in line with what we could get them in the either january february call on it if anything i think ah yeah we have a bit more condition and what the back half a year can bring i feel stronger about our daily a the near that that twenty for that martha for not providing official guide but have you can toward are selling schedule of these before we intend to be on look like
spk_24: nor did i get my comment
spk_0: obama dwayne ah like i think las vegas
spk_2: is is a temporary of the leisure marketplace in the country is any place and here we go down to the strip i was down there last weekend i mean i had to wait on a green light to make a left turn again i am see traffic like that in a long time a headline today when opens one hundred percent ah or a percent of other people are inoculated eighty eight or something like that young age it's you just didn't feel and in our town here that the leisure leisure world's back and and thankfully las vegas has been a one the weaker cities all over the last year just because it's been shut down so much i think orlando obviously comes back stronger with the disease of the world so all i'm to the
spk_7: idea that we're back as a as a statement of the day i think is this not today it's not to it's tomorrow the next day
spk_2: thank you very much
spk_25: your next question comes to the lying of answered the door off from bank of america a line is no open
spk_7: hi good afternoon everyone on for the questions arm is my first question is for for drew i guess with what you're seeing interesting thought on leisure travel light in your booking care of lengthening and everything of you think you're an inflection quitting your business where i kind of reverts to more normal seasonality with that
spk_19: to queue strongest three que the weakest or do you getting to the ability to continue to grow revenue service sequentially from here based on what you're seeing movies or traveler
spk_7: yeah i think we saw the ability to grow sequentially
spk_2: out of the what we're making it harder and harder on the with with each quarter but i don't think we're back to fully normalize world there ah ya and he died and lap the camera october or we a great shoulder and off peak demand and and i think what the that of each year the shorter term as at all he heard have a patterns or little bit different yep our patterns are a little bit different and they've been in the path that i do think that there's a leave from short term runway to to kind of they'd get them incremental left and then what we know only been off peak her shoulder
spk_3: before you presumably returned to more normality i and a maybe a year to
spk_2: can interesting and then armed get mori of can of strategic question here about with with what you've seen from earth from the leisure travelers give any regret for not anything sunseeker on your original timetable and i guess what will happen why would you have to see for you to go through with it on your own yeah thanks for the question i've got i've got a lot of regret car wish you were to finish the door we be in great shape right now with what's going on in southwest florida on or off you all the experiment to see the numbers down there but couple weeks ago i was looking at a hotel rooms they were three factor a higher can't get real current down there it's ah the people we have down there are just had never seen anything like this so are having said that we made the right decision not to do in and are go forward approaches gonna be he'll stand on it's own ah with it's own death and of things like that though god john can talk about you know where seen some good activity in that part of the world is definitely
spk_0: are being recognized for what it is as a vacation destination it's unbelievably good we knew it made sense some time ago course they made a decision and make even in a lot more sense now is everyone's seen
spk_26: hurry earlier in my comments made the comment that we are expect to start that project back up again before the end of year given the conversation we're having to date there's quite a bit of interest in the and seen at project in and get yet completed so stay tuned and law had more to report your down the road the just now there's too many different directions they
spk_19: this opportunity can take from me to make any take your comments on any one but i was dismayed pretty much a global one that we think we're going to get started back up before the end of the year thank you
spk_2: and federal
spk_11: your next question comes in the line backer i'm calling a line is now open
spk_7: and thanks i'm not afraid our hi everybody and thank you also had the time
spk_26: two questions one is as you think about in our passengers coming back and airfares vs ancillary now obviously the out on the passengers in academia i'm sorry so are you you know is it is there a percent that you're thinking about that you want and sorry to grow to to on versus there and and i think in an answer for crush me between question about load for says yields he talked a little bit about it that that hurry think about ancillary the child with i would love and flair to be a hundred percent of of the portfolio in that
spk_7: yeah never going to to be there
spk_5: we've we've been fairly follow at or above fifty percent now for and replied five six quarters of even including a pandemic time
spk_27: i actually want to could i continue to grow a we we launched our bubble flurry program shortly before the pandemic of and frankly haven't had much time to see that grow at we would like of is your kind of back into more scramble known
spk_4: i think there are several evolution the that that will help those as well as and performance from the new website a lot of think that as got the angelo mentioned a during his remarks other things he'd working on ah for the not necessarily a targeted presented your mind other than look get that they apply the get them and will be in the battle royal opposition
spk_5: also and in my father question is i'm you're talking about anything just months or maybe it was scuttled and talking about on finding it hard to attract people are are the are you are the only ends in your em our own said to your maintenance or aren't they
spk_28: finding nothing have to raise
spk_26: hey to attract people are they sending the look outside the country and are not know what percent of your own meet you in our of your maintenance you're doing in the united states for sit outside bet
spk_5: no must have than a third party yeah i think my comments on the on the manual labor rated itself miss more you know above and below mean and around service providers on who are emerald business was spread hours and nine different locations and six era countries though it was it was difficult there were slow to ramp up and just parts and logistics the you know that was probably a long time and hand if you look at you know kids that we would use to convert or max accent
spk_4: that weather for me not played into it but it's it's more on the ground handling side is that is the near term on right react was great for us
spk_2: the rosen
spk_0: okay and then are you find yourself a follow up to that are you finding it hard to find people to work in the airports for you were or some you're a lower wage workers nurses your height you know i imagine the higher wage workers maybe not your heart
spk_26: not you get your seen across the board the mean they obviously it a it's a apartment workforce ah there's a lot of companies out there that are starting well north of what are really rates would be even if we outsource it and so at some point you know you're you're you're gonna have to start creeping up that a that direction
spk_0: and for right now if you look at sanford st pete
spk_2: nationals really tough been so these larger cities that we operate into
spk_7: in our service providers are having a hard time finding bodies and so we're having to chase rate up on here in the near term you know whether that sticky long term have yet to be seen yeah lane at the give at unit is happening all industries to pursue at the lower wage levels is because the the unemployment benefits or whatnot so we could all we can be seeing this problem
spk_2: in the us you know through september frankly just because of some of these policies so you're left wait and see but of but you see it cross industries that the episode these rates you can find a new her driver set am very trap i'm finding that out and okay thank you very much or if any your next question from from the line up digital seventeen in decency foia yelling is now open i think that good and on maybe prefer more your or drew just won't want to talk about you your bullishness on the outlook the performance of the business through covered
spk_19: and yet catholic the goal of getting to a hundred forty five aircraft by the under twenty four that that's fairly measured growth ah and so is that kind of what you think is appropriate over the next few years is that
spk_10: the that the base case or their the i kind of thing that that throttle growth in terms of aircraft availability or or or things like that and can you grow more than that
spk_19: ah yeah we can suddenly go more than that thought we want to be measured one of the interesting things we are finding his as we get to love the size we have thought he own you're not have to go find fifteen twenty airplanes a year and used been and girl we think that over overtime that could present some problem so no idea out ahead of our skis too much the other piece of this is a few go back and look at southwest overtime they grown ten to fifteen percent a year when you have very chunky growth for you accelerate many prime back off during the resources to to accelerate quickly where you need to train the cruise you need to have you know all
spk_3: the stuff particular with used airplanes it's one thing order a new airplane we have to be more measured in are planning evaporate so i love there's a side of me to the says the my goes to the tortoise ah that's been the south my story continuously for fifty years so we can finally go more we think that's a good about a growth for us in the coming years or
spk_7: alla drew talk about markets and ability to go into him but the it's a it's a good number to put out her at this point yeah derby it comes out about it it's over ten percent keg or there ah you're in the short term you were talking about twenty for centered on the back half of the share that would have likely continue into the beginning of next year the because a of the camp and change that dramatically though we can give a lot of near term availability to to grown at it's really the market president to do that ave ever built structurally right now with the aircraft with the crew
spk_5: by the headcount counter to be able to accomplish that
spk_7: diet town kind of tackle more a comments now let's look good for the back half the here right now and and you'll continue to push forward at at a better rate that in hiring a private is comfortable with
spk_3: in august one shoutout out to decrypt the not my came with all began to play that if you buy it will fly dollars for a school and how can you know vote i wonder what that is it the either the governor of the accelerator they are you all look at it is really the way to retirements by so we can push him up or slow down
spk_29: a depending on how we feel on what the market feels like so that's always a governor or an accelerator
spk_2: okay adnan scott de angelo did you ran through some of the third party rev an opportunity you look at i think you all are doing around five dollars per passenger and third party product excluding did the or portion or with the opportunity there longer term next call three or four years when you consider kind of better selling what you're already selling and then in the vacation properties whatever sunseeker turns into a what what's the medium term opportunity there yeah so i think that day the medium opportunity now with the digital cameras are on that enabled us to showcase more inventory cross hotel rental car and now vacation rental but more importantly i take a more personalized approach to to that so having more to tell the better i getting the right thing in in from the right person and then that that third like on that still will be you know the stay tuned for brain on additional thing that that we can make part of the the ecosystem i know traditional and we think about marketing and all of the the traditional advertising but if you think about what i get that a loyalty program layer on top of that and then the ability to a delicate put it in or we be a week and ran into the thing that people love
spk_29: whether that the resort they stay out whether that the sporting event or concert that they go to an end or whatever other leisure activity ah they need air travel to get done all the same more that a traditional advertising would do that friends were dead on a much
spk_2: harper way you to get lives and think of allegiance your dad an airline that goes up again either new in transit door income and so gentle know number there but we we are now the platform and certainly going to direction i'm in that the medium term for that improvement yearling a joke i just know that onto that your our ability to improve our brand in the last couple years has really been it's exceptional arm and that's really important for we want to go with the third party revenues on him and have talked to scotland and all it what his team out there for that particular piece and he's pushing which is very important i think is were moving towards
spk_30: as much frictionless our efforts and as you can do to get into this stuff and we all shop at amazon or we know how friction free that is and ah you know it's amazing to me today you can't buy an airplane ticket when i haven't put your credit card and every time
spk_0: think about that in today's technical world you know where is just with amazing thing that you still can't have that type of customer engagement if you will and part of it it's rationalized you know you got expedia of people go through their you cut your eyes don't control their customers nearly as well as lot of other people do and that's our goal is to
spk_31: have a direct control those are those are just the subtleties that become very powerful long term and bring him here one scots big things as if what you got that guy to lose him you know cabin keep coming back so that's been a big piece of what we're doing as well and it was okay
spk_0: that that that toppled to john if i could just squeeze in that the come tehran sunseeker it is an option now that you will put legion capital into that project to get that restarted
spk_32: yeah again we're we're we're having so many different conversations and sony different term she's been exchanged that yeah i on i don't wanna jump out too far in it you know to give a can director might end up being somewhat misleading when a good when you look at a final deal i just know ah i'd the it yet a good feeling that something's gonna happen that can allow us to get started for the in the others that enough interest there were making a lot of progress on having conversations with these folks but they all have different designs on have put something together these dating and i don't think you have to wait that long it here
spk_33: more out of us but up but i just thought has some give a martell fully ended year but but it could be much sooner the job just a word reviews no meaningful capital will go into it at this point so get not thought this and we won't do some but you know who were we before it was gonna be all off our balance sheet or the piece of it that's not going to be the case
spk_4: this time okay thank you
spk_7: your next question something a line mackenzie bike noble security nice you're lying is now open
spk_3: and here he thinks that time you guys on this actually
spk_7: and then the try to as chose that question maybe little bit differently here but you know the scott the asset light partnerships were legion benefits from a privileged relationship
spk_5: i'm just sorry what does that mean exactly is that a reference to sunseeker by any chance or something else and now and okay now i'm happy to pay a high level with without any any spoiler alert we look for harder they can come to the table they give up on something and a leisure ecosystem to sell on
spk_32: but moreover and have a life partner at their own other own that outlet and the market that we serve that they can introduced us to sell the the partnership character for on anything that better than a breadbox likely have fallen yeah it's something that that we can be
spk_7: you know fellow at that like fashion ah marjan back and but also then kick back on the other time and brings with it millions of new customers that we can go car market to and and they're buying their product they can send them are way so a perfect world is everyone in our ecosystem i'm worried
spk_5: go to earth guess he felt around the carousel and in them both with the by buyer and right
spk_4: split having any group in were some utterly my fellow thing that elite and i am but at the same way when you have that hotel somewhere else when you buy that game and or concert ticket ah
spk_32: definitely we know where you are and we know by definition of what you bought that pick up where where you're going to be able to prevent a then and the right option for air travel to that that's that's what that line certainly think go be one of those that old energy doubt that know there was no ah some allusion to that that was other partnership that we we hope to ah i often the upcoming future that down our or true what i would characterize the them are dead
spk_25: nothing and and channel distribution relationship
spk_19: i'm just following up on and isn't he can you translate that into some aspiration on metrics and you know how they might roll up to the system metrics to stick to try and bring that home someone yeah i mean the
spk_2: kinsey here are they good know number could give a broken down old friend is rapidly certainly in all the new that we dated about five times the conversion which was mad that them down in both counts going out and then the average transaction time i john more thousand people attack those thing so have counts arm and a third party on revenue per per i pin or for pat ah that that your outlines would be the to metrics that you'd expect to be impacted by that i see okay on second question here you know it looks like you know from the schedule theta forty percent of the and a sense in the second quarter going to fall in the month of june you know it has implications for revenue and chasm next for the young for the quarter sell you know it looks like june could maybe account for fifty percent are are more the revenue the quarter but oh please correct me on that but more interesting is the and the chasm act so you know it can't with capacity up sixteen percent in june eight i think is what the schedules are sane of versus nineteen and you're saying the chasm subs six cents for the full second quarter and i guess i'm wondering is that you know that seems to imply a chasm x close to five and a half the sense for the month of june and yeah i'm just kind of wondering how that you know wrinkled out through the i'm yeah faded out through the media the year and i guess you know where i'm going with this his nose june chasm act been impacted by heavy maintenance and you have to sort of it is your provide all a bit more perspective because it seems like there should be a step down and chasm acts in the month of june that that actually get straight line to the rest of the here
spk_32: from it maybe your got a kick it out very high level yeah you're right where we're looking about forty percent of
spk_4: a of them to happen in the month of june
spk_10: the i think at that the coordinated gonna come down a lot of weight that has units and bible for now i'm i'll grab want the handling part of the the cup of on yeah dan thank you for the question and you know yet the june quarter will will come and really drawn from a chasm max perspective i think yeah
spk_11: no one a little when we look at the cadence quarter by quarter i would think the june korea would actually be the lowest and i say that because as we look into the back half of the year i'm your we're we're anticipating a couple things wine
spk_2: the increase profitability with would roll through your to profit sharing so that that gonna drive it up a little bit more as compared to what were you know program project right now for the first half of the year
spk_11: it and then you also you're gearing up are anticipating gearing up for growth into the into twenty twenty two in the back half of the year so i think that to will provide a little more and you to cost pressures the bear to the second quarter
spk_7: they emulate we feel good about where we're coming in at the second quarter i think of an interesting data point perhaps worth noting he has like on the dna friend dahmer the fix cars the is you look on a unified bases wrapped in the first quarter that had a little bit of a headwind but as you take up utilization a little bit more that gonna drive down and provide some
spk_32: rank there and i think in the first quarter from a salary benefits perspective you saw that tapi in the first quarter just because and i think i mention the on the last call
spk_0: we have with our pilots you we recognize rpg oh up front and the bury it in the first quarter and then you just you run that out to the rest of the year so it's almost twelve million dollars and the first quarter alone and pt oh and then we'll get some benefit on that in the second quarter but then once you get into the back half of year again you're you're starting to hire are expecting to hire some crew members
spk_34: the support that way to grow to yeah habitats more detail that helpful but i think just did a high level that should be at a good indicator the cadence when it comes to unit costs by quarter and what some of the pressure points or tillman maybe yeah thank you for the clarification an idiot by you to squeeze in one last quick house cleaning that question he noted the am
spk_32: percent of second quarter fine it's and you know new routes less than twelve months i think there's fifty one new markets
spk_35: i'm just curious how those yields are spilling or said the system married i'm thinking is probably not all of a lot of of difference actually of that there though with a little bit different as you can imagine a dirt you're trying to interview you'll have varying levels of a competent by route as you move and but either way you're the core goal in in the first aired to ensure that you can fill the plane
spk_3: it and so will sacrifice field initial in order to make sure we can accomplish that
spk_7: though you feel feel a little bit of a headwind from that i don't know that you'll see it at a certain level i'm your desire thirteen percent or sober at them to you will be on around there for twelve month so yeah i'm happy with where that the were focused more on being able to fill a plane to build load on on that them them yarn get yield ashley
spk_36: very good thanks for the time he goes
spk_3: your next question from the line of keys and was research or line is now open
spk_37: hey are very
spk_35: your at your guiding revenue excluding charter another the obviously you mentioned your soul
spk_2: the majority snap like what is the say about charter what were you writing including charter which i revenues and first world for a fine to marry are you saying that we should expect that business ultimately to go away some point a deemphasizing and wage excluded from the guide yeah hundred that the reason why want to go the schedule service only as work or putting our growth of a at them into the get overthrow the former think the better return and i wanted to ensured a lot of focus on on that piece of it
spk_38: the fix the realm and and i mention that the my opening comments margins and or down barely significantly across the board there in first quarter and we had a dollar amount of march madness flying which the that not the other fix the number in march
spk_0: but the like a machete got a one off for twenty one i'll be we won't get a lot of great insight into what fixed he will do in the back half year until we get old little bit further along with college football contracts so for now a young i wanted to keep focused on yo a that and server they have them to growing here why your that service rough guide on a
spk_39: nick kind of booth with that
spk_15: to your point the the other red line will largely moved to zero as we move forward with a that he that fails that become and the minimum you know that be a not going away i think we're just trying to be good stewards of our athens in the short term and the better returns on get there is there are now
spk_11: or that folder and then them
spk_2: maria realize what other than offer question but we've been talking about three years and wondering how you my talk about succession planning i know it's generally quant and middle of a crisis but you sound so excited now it may be even harder to leave given the opportunity and phonies tell
spk_17: are you thinking about our future feel
spk_7: oh it's guarantee i'm gonna leave so that partially or without first yeah
spk_2: question when say my succession say around the table here someplace i'm going to do school get the spin the unparalleled out and will sit down one day and do it that way or something nine need some but suddenly been a long run and i can be happy with the management team a here and ah no i'm still more to show more intend on being that her son will never go away but i don't have to be your day to day certainly ah and this group years some are good stewards of of this sub this group business so yeah say dude
spk_14: okay more thank you
spk_16: your next question comes into line as kathleen o'brien some goldman sachs your line is now open
spk_14: he good afternoon everyone thinks that i'm i'm you don't need that of a follow up to the medium term more metered growth story i'm in up with their part and aircraft available at at the pretty attractive prices is pretty cool that you that night earlier and impaired mark
spk_2: on is up in a mormon opportunity to add to your fleet here and and lock in lower ownership casa the coming years or are you really just like those maintenance all like you mentioned earlier on that that call that are sitting at you guys really think the current fleet planet sufficient for what demand of gonna be think that the katie of create grabs are kick it off and maybe others a jump then it is they like am no think any go away to describe it when you know john gave that twenty twenty four aircraft guide that ten percent as we were still going to be opportunistic in bj in his league team now they're seeing what we just a lot of opportunity to bring on tuesday three twenty and there's there's a bunch out there that that fit our and a fit our profile make a lot of sense to bring on in you know i mean it did i would think of those incremental gonna grow a
spk_19: and maybe it's about ten percent
spk_39: the were certainly looking at that and we with the lot of opportunity there are they from a spare parts perspective
spk_40: similarly yeah we we've seen some opportunistic purchases there were off a fifty percent of prevent damage levels so excited about that with our bring in though then to help support know ramp up a growth i think sky sheldon it has maintenance team and organization is a great job of positioning as to be able to get the of aircraft into the pipeline moving forward
spk_41: the in a in a good amount of time i'm but i mean i wouldn't i guess what to do and saying we're going to be opportunistic and if we see the i'm nate aircraft deals come our way we're going to continue to look at those i think it's a great opportunity for us to continue to look the abidjan or ownership cost give them what we're seeing here and i'm you know stay tuned but we have quite the orange in the fire
spk_42: at great and i can maybe to sneak that to quicker my one then again here i'm i guess birth that really quick clarification did you say to have chasm acts of going to be low six cent brains
spk_26: or day mcgarry thing now you know that right katie fighting to just a second half should be just below six six route to read a great and then maybe this the second little loudly one here i'm in a look like on and term your npl on current quarter you saw positive impact of new looking out paid under the drawdown of credit feuds and prior period any any thoughts and hellish expect that the triangle and forward to say in your current for booking they launch the time
spk_2: yeah i'm into a you're going to kick it off the were saying drew them down from the county perspective made if you see any forward but you know what what we found this last quarter katie it in terms of redemption that was just gross numbers that ago that forty million ah much reduced to by ninety percent that read about your level so what i would say if we're not issuing nearly as many as we did last year of you're starting to see an thought those be redeemed that a nice rate and we did extend our expertise during the middle of the pandemic her early on in a pandemic i should say to two years so that that keeping about a little bit longer but the cadence of i'm coming down at pretty nice the whereas in i think by the mid have made twenty two many to you're gonna get back to that normal percentage of a tl in terms of credit badgers and then at the a joint or change featured in germany or much on and on an yeah yeah we change changing back an unmitigated cents on may one of the they came back at twenty five dollars worth our original are printed them or seventy five dollars of the was you know is really and idea bring back something that was not barrel that the not all the way that gotta help one with that the threshold that on on our side but but to restore some amount of the are there and and the that far very very early on the no real pushed back on that from
spk_5: that thank you so much
spk_2: operator prince ali kidding me
spk_5: yes yes i'm craig if i can at in every ask them bit bit on the on the chasm next question you reach the upper end of that cadillacs that you were looking to achieve and
spk_39: can i walked through expectations for your knees across like i'd line items on the next couple years or is at a bit of a longer term these can try to understand like what my get used to the lower end of that target or perhaps what might wanna cause you to move up from that low six six sense that you are seeing in the second half
spk_7: share the i think the question the yeah i think i think an area that i get pretty excited about his in terms of helping improve or a tailwind to are you know cause is is that and i mentioned earlier was on the ownership side just some of the deal that we're seeing a potential aircraft deals were seeing aren't coming our way it has resulted the pandemic of
spk_5: kate could meaningfully helpless try that down
spk_4: in addition to that from another tell in perspective i get pretty excited of was no sheldon in a team to and on the off side of the house
spk_5: you know doing things to make sure running a good airlines expensive when you're running a not as good airline so that's always helpful we talk about sky wise to the investment and sky wise which is i predict the main of platform
spk_2: think the team today we have about twenty five aircraft they're retrofitted with the complete capabilities of sky wise by the end of the year we think that will be up to seventy five percent of our fleet and that next year that to be about ninety five percent i mention that the because that not only helps us around run a better airline with dispatch reliability and things of that nature
spk_4: your had also allows us to handle maintenance when we want to you know not in an unscheduled type environment again saving our past that's it that's a really big deal for us now we're seeing some headwinds that we're looking at currently and i don't know this is here to stay candidly saw the is on the stations front now given that you know what the pandemic in a few of our airports in which
spk_43: perhaps that you know there was a budget deficit that they're going back and trying to reclaim that for the moment i'm who were in our seen some pressure there but as he gives industry to pass he picked back up potentially that could help and a level that back off i but what i say ultimately saw the as i think you know where we're at from across perspective run a good spot or not here to tame we need to be it
spk_44: five percent i'm sorry in on a five handle of chasm acts as a nice to have you know by cannily if that was like are and i'll be all we were just increased utilization from eight hours a day to twelve hours per day now we've been taught to look at this from profitability perspective and there's two sides to the equation yeah the revenue and the car side and so ultimately that's what we're doing and we're going to talk
spk_45: maximizing are profitability and if down the road we need to spend a love to make two or three are willing to do that because you know that that's where we're going to be keenly measured on but i don't have a lot of information about five their if i have a answer to help answer your question or hit earth provide any other details
spk_46: now that was great as edit by tankian am and if i might friends ascot to quickly clarify i that the new rental and monterey that you're talking about it you know how meaningful is that and as you know what are you doing that may be your competitors can't do is a similar to just always been better what kind of putting people in hotels could have a direct relationship or
spk_47: there's something differentiated about the new really new opportunity to the moment always did gonna be crawl long run but i think with defined by the booking when know for vacation rentals it's much different than hotel on average thirty three to six months where it we be when with hotel that much shorter specifically lot bigger town
spk_48: tell us which could be you want to go grab one this weekend type of the window so i think strategically going for the big thing that think about it and give them something to both attract and sell to a customer are much further out than our hotel inventory that the second thing rope by get on hotel
spk_47: have been a great story here in la vega think recently as you look around all the coastal market that we fly into and or all the national parks the reply to on both very basic that story during coming out of the pandemic are increasingly on vacation rentals or a big hard
spk_49: ah how you can sell to those customers right did not lot of park hyatt sitting right in that of yellowstone and so i think that you know those are the strategic thing that it does not and up being able to to sell and sell it at scale and that them when it comes over time and we didn't talk to my bed the
spk_47: your child to do that though hopefully a helpful and i think the other than it's worth with worth pointing out who is the the average train file on that kind of friend action is much higher in the due to the length of stay be a much longer on vacation rental so we make a lot more money on a long length of stay pie product then you do a short length of stay plotted yeah even in the early days within the that several thousand birds the hotels which you know be an old more and i'm not the hundreds below single digit thousand and thirteen point the margins are the same in a quarter or for ah meaning that they have a new margin ah over ninety per it ever
spk_7: really all that power to the bottom line for just a highly creative ah keep the business that has no real carrying ah joe he believes he can from the right path are good to buy a family to knock out
spk_2: i answered my question thank you sorry tune for our own kidding
spk_50: it'll call and half an hour
spk_7: brandon are you on the line
spk_2: yeah his brain into the or theory yeah
spk_3: the the money and
spk_7: think that think i'm not having the operator but i'm out
spk_2: join the crowd or are just as like of the know it's been a long con and i did join lethal party with this was our scouts but i think you guys said income and remaining twenty one should exceed twenty nineteen levels that is why the confirm that and i guess at the fall of to that question when you get did throats the margin guidance and second
spk_5: order your how do you think about margin progression in the back half of year especially in relation to the ability to actually be growing you know twenty percent above where you were in nineteen thank you
spk_47: bread and hit if craig why don't i am me on your first question chest he knows we're seeing the positivity in the back half medic the way we're thinking about it
spk_51: in our star may be true wants to come in on the revenue friend but you know it is if we look at that where our guide get you on the second quarter i think that gets you the let's just call it roughly two back to the be as i guess we look at the back half of the year though when you see that growth that we're talking about and in the team has conviction around his you know
spk_2: twenty percent a year of a two year you're entering into the back half of the year at seventy percent load factors and i saw i think what drew and team in are getting excited about is the ability to yield up and drive revenues there and we were certainly not trying to put a forecast out there but what we're saying is we're cautiously optimistic on on where where we're going to go on that front and i think

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