Frontier Group Holdings, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Frontier Group Holdings 2022 earnings call. At this time, all participants are on 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 need to press star 1-1. I would now like to turn the call over to your host, David Erdman. You may begin.

Thank you, and good afternoon, everyone. Welcome to our second quarter 2022 earnings call. Today's speakers will be Barry Biffle, President and CEO, Jimmy Dempsey, EVP and CFO, and and Daniel Schurz, Senior Vice President, Commercial. Each will deliver brief prepared remarks and then we'll get to your questions. But first, let me quickly cover the customary Safe Harbor provisions. During this call, we will be making forward-looking statements which are subject to risks and uncertainties. Actual results may differ materially from those predicted in these forward-looking statements. Additional information concerning risk factors which could cause such differences are outlined in the announcement we published earlier along with reports we file with the SEC. We may also discuss non-GAAP financial measures, which are reconciled to the nearest comparable GAAP measure in the appendix of the earnings announcement. And then lastly, we will be participating in several investor conferences in August and September, and we certainly hope to see you at one of those events. And so I'll give the floor to Barry to begin his comments. Barry.

Thanks, David, and good afternoon, everyone. Needless to say, it's been an interesting few months since our last earnings call. While public attention was largely centered on the merger, behind the scenes, we realized the highest quarterly revenue in history at $909 million, 43% above the comparable 2019 quarter, and a record ancillary revenue of $75 per passenger. The strong revenue performance in the second quarter enabled us to overcome elevated fuel prices and generate an adjusted pre-tax margin of 3%. We were able to lessen the impact of the weather and air traffic control limitations through proactive measures, which led to an improvement in our completion factor as the quarter progressed, with a completion factor of 99% during June and over 99% during the busy Fourth of July week. In addition, unlike many other carriers, we are not experiencing disruptions due to shortages related to pilot and flight attendant staffing levels. In fact, we have surplus staffing today and a capacity to train 80 additional pilots a month. Contrary to common paradigms and misconceptions about the ULCC segment, we're a highly attractive landing spot for the pilots, given our career growth and resulting pay opportunities as compared to the legacy carriers, along with a desirable footprint of bases, including the opening of the Phoenix crew base later this year. To further strengthen our pilot recruitment capabilities, we're working with a major flight school to develop a cadet program which will provide an opportunity to train 250 zero-time flight applicants per year who might otherwise have chosen a different career path due to employment uncertainty. Upon completion of training, we will assist in placing them into flying assignments to continue to build experience, and we'll be able to hire them once they reach requisite flying times. As we look forward to the third quarter, we expect the demand environment to remain strong, with RASM growth anticipated to be over 20% versus the comparable 2019 quarter, supported by continued strength in our ancillary revenue per passenger. We will continue to focus on generating profitable growth in the business as we increase utilization and successfully overcome the challenges with the pandemic. Accordingly, we expect to turn a second consecutive quarterly profit in the third quarter with an adjusted pre-tax margin in the range of 1% to 5%. I'd like to thank Team Frontier for their continued dedication, professionalism, and commitment to provide safe and reliable service to our customers. They are at the core of our low fares done right model. With that, I'll now hand the call over to Daniel.

Thanks, Barry, and good afternoon, everyone. Second quarter revenue performance was exceptional on many levels. Revenue growth of 43% over the comparable 2019 quarter was driven by a 29% increase in RASM from 9.27 cents to 11.97 cents. along with a 10% increase in capacity over this 2019 quarter. Revenue per passenger grew an impressive 24% to $139, with ancillary revenue contributing nearly $75 of that amount, a record for the business and above our expectations. Ancillary performance was driven by recent product expansion and enhancement, along with strong attachment rates. We will continue to expand and enhance our ancillary offerings to allow our customers to personalize their travel experience, and to allow us to continue to offer ultra-low fares. Given our strong performance and future plans, we're now targeting ancillary passengers to reach $85 by the end of 2023. We achieved an 84% low price during the second quarter, an improvement of 10 percentage points over the prior quarter. Utilization was an average of 10.9 hours per day, roughly in line with the prior quarter, and we expect a gradual trend towards the 12-plus hours we realized in 2019, consistent with our recovery plan. In response to high fuel prices, we designed our second and third quarter average stage length to be between 960 and 980 miles, which is considerably below historical levels. We expect to return the airline to pre-pandemic average stages starting in the fourth quarter. As we build back capacity, our ASM growth relative to 2019 is expected to accelerate during the current quarter, with capacity up 5% in July, 8% to 9% in August, and 14% to 16% in September. resulting in a higher proportion of our seats being deployed in an off-peak month and creating an approximate 3% drag on RASM in the quarter. Touching on commercial highlights, we recently announced expanded service to and from Las Vegas. Beginning August 9th, we'll launch service from Harry Reid International Airport to Baltimore, Buffalo, Hartford, and Kansas City. With these new routes, Frontier will serve 57 destinations from our Las Vegas base, making us the fastest-growing airline and one of the top leisure destinations in North America. In response to strong demand since we launched service at Houston Hobby in May, we're adding a daily non-stop route to Denver beginning in September. Just last month, we expanded our international and Caribbean service from our Tampa base, launching non-stop flights to Montego Bay and San Juan, along with expanded service to Cancun. And lastly, on August 8th, we'll formally break ground for our innovative new terminal at Denver International Airport, where we're planning construction of 14 ground-loading gates, which will facilitate expediting and planing and deplaning through the front and rear aircraft doors, leading to shorter turn times. This and other streamlining initiatives across our network are designed to improve operational performance and enhance the customer experience. And with that, I'll hand it over to Jimmy Dancy.

Thank you, Daniel, and welcome everybody. Second quarter results were in line with our guidance. The strong demand environments drove record-setting revenue growth compared to the same quarter in 2019, and along with the exceptional ancillary performance, enabled us to turn our first adjusted profit in over two years. We've employed rigorous financial discipline through this difficult period to ensure Frontier has a strong platform to deliver profitable growth. Results in the second quarter were impacted by elevated fuel prices, resulting in $335 million of fuel expenses at an average fuel cost of $4.41 per gallon. The total operating expense was approximately $900 million, including $9 million of transaction and merger-related costs and $7 million related to an asset impairment, while adjusted non-fuel operating expense was $550 million. This resulted in the CASMX field of 7.24 cents, which was impacted by lower utilization, lower average stage, higher station-related costs, and the short-term cost of surplus crew. Though our CASMX field is currently elevated, we're still targeting a return to sub-six cents during 2023 as our utilization of stage length normalized and seats per departure increased with the planned introduction of the 321 Neo to help mitigate inflationary pressures on the business. We ended the second quarter in a strong financial position with $766 million of unrestricted cash and cash equivalents. Frontier is in the enviable position of having access to a substantial liquidity source by leveraging our co-brand credit card program and related brand assets should the need arise. As planned, we have enhanced our pre-delivery payment facility to align with the short-term obligations under the Airbus order book, whereby the facility was increased from $200 million to $280 million. We entered the second quarter with 114 aircraft in our fleet, after taking delivery of three A320neo aircraft during the quarter. We expect to take delivery of another four aircraft in the third quarter and eight in the fourth quarter, including the first of 36 A321neos by the end of 2023. Looking forward to the third quarter, we expect a continuation of the favorable demand environment we saw in the second quarter. Capacity is anticipated to grow by 8% to 10% over the comparable 2019 quarter, RASM is expected to improve by over 20% in the third quarter versus the comparable 2019 quarter, bolstered by continued strength in ancillary revenue per passenger. Fuel costs are anticipated to be between $3.75 and $3.80 per gallon, based upon the blended jet fuel curve on July 22nd. Adjusted non-fuel operating expenses are expected to be between $565 million to $585 million in the third quarter. The increase from the prior quarter is due largely to capacity growth. Adjusted pre-tax margins expected to be in the range of 1% to 5%, constrained by the 3% RASM drag Daniel mentioned earlier. With that, I'll turn the call back to Barry to deliver closing remarks before we move to Q&A.

Thanks, Jimmy. Before closing, I'd like to offer my thoughts on the termination of our merger agreement with Spirit. Obviously, we're disappointed in this outcome and that Spirit shareholders will miss an opportunity to meaningfully participate in the rebound of leisure travel, of which we're in the early stages. Our board took a disciplined approach throughout the course of our negotiations. Rather than overpay for spirit, the board prioritized the interests of Frontier, our employees, and our shareholders. As a standalone entity and potentially America's ultra-low-cost carrier, Frontier has a fantastic platform for profitable growth underpinned by a strong balance sheet, an unmatched 321 NEO order book, a clear path to CASMX below six cents, and exceptional ancillary performance with plenty of room to run. Collectively, these elements are key contributors to the resiliency of our business model. I could not be more confident in our future, especially given the growing demand for affordable air travel. Our proven and resilient ultra-low-cost model continues to provide the foundation for our strategy and long-term value creation. Even with rising fuel prices, we continue to keep costs and fares low while generating record revenues and providing reliable services. We have one of the highest completion rates in the industry, and our recent performance further validates our business model and strengthens our confidence. We appreciate everyone's time this afternoon. We will not be commenting any further on the termination of the merger agreement, nor a potential tie-up between Spirit and JetBlue. I am, however, happy to take questions about how we grow our business and add shareholder value as America's ultra-low-cost carriers.

Ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Jamie Baker with JP Morgan. Your line is open.

Hey, good afternoon, everybody. So Airbus cut its production forecast today, also delayed the planned ramp in 320 production rates. Just wondering how you expect that. to impact planned capacity over, I don't know, the next 24 months or so. And, you know, whether there's any flexibility within the Indigo portfolio to shift around deliveries, um, so that you don't slip.

Yeah. Look, Jamie, um, we don't know. I mean, we've been a little focused on our own things right now, so I get it. Uh, but, uh, look, I mean, we, we have a, we have a large order book with, with Airbus and, uh, Obviously, we buy a lot of planes. I know a lot of people have maybe moved some orders around. I'm not sure what this has to do with us. Yes, we do have the ability, as has been disclosed before, to move aircraft among the Indigo portfolio carriers that participated in the Dubai order a few years ago. But we're unaware of any material differences versus our order book as we stand today.

Okay. And second, you know, there's no shortage of data at this point, you know, proving that sort of lower end consumers are certainly trying to find ways to economize. Your third quarter guide looks fine to us. Just curious if you're seeing any change in trip duration, obviously lobbing off a day of holidays is, you know, one way to save on, on the aggregate expense of, you know, or any changes in the booking curve. Um, Or maybe your data just implies complete immunity to slowing economic trends. Any thoughts there?

Well, I'll start and I'll let Barry add on, Jamie, Daniel. No, we're not really seeing any difference. We've seen no change in trip duration. We've not seen any slowdown in demand, and so we don't see this at the moment. So we're not being affected at the moment, and we're confident that we're offering the right value to customers to keep getting them to come and choose Frontier.

Yeah, we have seen two things that are interesting. One is kind of work-from-home phenomena. We have seen an extension of some people's itinerary. So I think in the In the composite, there may be some people, Jamie, that actually are cutting off a day. I've read articles just like you have about some hotels. Maybe they cut a day or two off their vacation, but they still go and save money. At the same time, you've got people moving around that are working from home but really working from somewhere else. And so they are actually expanding. So the average is, I think, maybe clouding that. The one piece of data we do have that is pretty empirical is that we have seen – an increase in incomes of our travelers. And so a significant increase in the 100,000 household income and a significant increase in the 200,000 plus household income, which suggests that you are seeing, you know, the buy-down effect to Frontier.

Okay, very interesting. Thank you, gentlemen.

And one moment for our next question. Our next question comes from Duane Funger with Evercore ISI.

Your line is open.

Hey, thank you. I wanted to ask you about new markets. I understand you've been busy and focused on other things, but as you sort of think through the implications of staffing shortages for the industry, staffing shortages for regional carriers, more white space in small markets, Are there any obvious targets or markets that you feel are really constrained or overly constrained from a capacity perspective? I certainly appreciate your comments about not wanting to go there, but you have spent a fair amount of time studying potential overlap. What would you might see as the opportunities that could develop? if they do pursue a relationship.

I'm going to let Daniel talk about the more recent kind of phenomena with shortages of regional capacity, and he's probably got some examples because I know he's been exploiting it.

Yeah. Look, we always go and watch what's going on in the industry. What we've seen actually is less, I think, regional service in the traditional sense. They tend to serve quite small markets, fundamentally probably a We do have markets that even for us are a little bit too small. But what we've also seen as airlines have consolidated capacity again this year is we've seen a pullback in certain markets. You can see notably, we've looked from our Vegas base, one of the reasons we went into the markets we went into is you can see a meaningfully reduced capacity in some of those markets as other airlines have consolidated the way they're flying. So, for example, Las Vegas, Buffalo, Las Vegas, Hartford, substantial markets, much less competitive service than you would have seen pre-pandemic. There are other examples in our key leisure bases where we're seeing similar phenomena, and those are the ones we're going to take advantage of.

As far as your second question, thanks, Duane. I said we were going to talk about our exciting future as America's ultra-low-cost carrier. So I'll answer your question in that vein. So in the event that they do emerge, you take a carrier that's probably one of the most similar to us, you slap on 40% more costs, and that creates a lot of runway ahead of us.

And thanks for that. Maybe we'll get you to expand a little bit. You know, there was a period of time, and I don't recall the exact quarter or when, but, you know, to manage your costs, to focus on your costs, you sort of de-emphasized some expensive, you know, northeast airports, for example. You know, would it ever make sense to come back to, you know, a LaGuardia or, you know, could you envision having a bigger footprint in South Florida? if assets became available?

Yeah, look, absolutely. I mean, look, I mean, you're referencing what we did in Newark and some other places. It's not that they were expensive. In addition to being expensive, we were unable to put together an efficient operation with the landing slots that we had. And so we would absolutely, if we can get the right opportunity in LaGuardia, we would be really excited about it. I think consumers would be too.

Appreciate the thoughts. Operator, next question.

My apologies. My line was muted. Our next question comes from Michael Lannenberg with Deutsche Bank. Your line is open.

Oh, hey. Good afternoon, guys, and congrats to getting back to profitability. My first question, just on looking at the the differentials, the year over year, year over two year in sort of your base fare versus your ancillary. And it is interesting, you know, you're obviously successful in pushing both up, which is a good thing in a highly inflationary environment. But that ancillary increase was roughly double. And I'm just I'm curious about, you know, either Barry or Daniel, you know, just there are different products, different price elasticities. Presumably one is more stickier than the other. But it was a big increase. You know, we're talking about $20, $25 or so, plus or minus a few dollars. What were the big components or is there just an inflationary piece in there where, you know, just bag fees are now $3 to $5 higher and seat fees and insurance fees are all $3 to $5? Is that really what's flowing through here? Because it does look like a step function change, if you could add color gradients.

Right, right. So look, we took advantage of the pandemic to continue developing new products. So it's a mix. It's a mix of everything. It's the inflationary effect. It's new products we've introduced. It's the continued work we've done, and I think where we lead the industry and how we optimize our pricing of our cancelary products, reflecting what customers want. And it's just the continued work to improve this. And that's why we now have confidence. Given what we've seen, we now have confidence to increase our target to $85 by the end of 2023.

And I would just add, Michael, you know, we learned in the pandemic, we used to think that 50-50 was a good split. And you said it just a moment ago, and we use this word, literally, you'll hear this around our office multiple times today. We talk about the stickiness. of non-ticket. And the truth is fares and fuel are largely out of our control, but non-ticket is not. And so what we like about non-ticket is that we can get closer and closer. I mean, I can't guarantee profits, but we can get closer and closer to protect our profits going forward. So that's why we've laid out today that we plan to get to $85 by the end of next year, and that is to not only get us back in solid profitability in 2023, but make sure that we can maintain it for decades to come. Great.

Just my second, Barry, because you brought this up, and it seems like you guys are sort of on the leading edge here with respect to zero-hour pilots and helping them get through training and getting them to, I guess, that 250 hours. And the question that hasn't been well answered is, okay, they're at 250. At what point do you get them to 1,500? And I know there's Part 135 opportunities, but there's only so many that are out there. Um, it sounds like you study this, what is it, a two year, three year? What's the timeframe from getting from 250 to 1500? It seems like, you know, everybody talks about it and it seems like you get them through the program and they're ready to fly, but it sounds like it's a few years. Can you just give us at least a little bit more sort of your thoughts on that?

Yeah, I'll start it off and, and we thought there might be some questions. So we were, we were fortunate today to have Brad Lambert, our vice president of flight operations. But there's a couple phases. You've got to get your private at roughly 40 hours. You've got to get to commercial 250 CFI, double I. And then, yes, you can get an ATP at 1,000 if you have 60 college hours of aviation. You can get it at 1,250 if you have 30 college hours. And you can get it at 1,500 if you don't have any college hours of aviation. And the cadet program that we're rolling out will target, you know, using some of the college hours to limit that. But Brad, we're really excited about it, and Brad can tell you more about the kind of opportunities that we're going to work with them to do here and abroad to build their hours from 250 up. Great.

Hey, this is Bradley. Hey, Brad. Hey. So we've definitely got opportunities, obviously, with 135 carriers. You're right, there's limited capacity there. But the nice thing about our agreement with ATP is they are the biggest, I'll call it, manufacturer of pilots out there in the country. And there's lots of opportunities there for them to instruct and build time very quickly. So we look at the program 24 months or so, but again, we want to control our destiny, and we think we've got enough opportunity for them to build the flight time up to the UATP minimums.

Okay, great. The 24 months, that's what we're looking for. That's actually very helpful. Thanks.

And we're also looking for international opportunities as well. You know, there's a lot of other countries out there that accept USA licenses, and we can fly them at 250 hours, build time up to that UATP minimums.

Very good. Thank you.

The main thing I would just say, Michael, is we're just going to no longer entertain these speculations that we're going to run out of pilots. We're going to source our pilots and have control of it.

One moment for our next question.

Our next question comes from Scott Grubb with Wolf Research. Your line is open.

Hey, thanks. Good afternoon. So as you think about the standalone growth potential, I guess what I'm trying to understand is what do you think your capacity growth looks like over the next several years in an environment where spirit is standalone and then where JetBlue acquires spirit? I don't know if that's in violation of what you want to talk about, but I guess I'm trying to understand how your growth story is different now on a standalone basis, and how do you navigate sort of that regulatory uncertainty potentially over the next year plus? Do we have to wait for some of that accelerated growth?

So, look, we already have an aggressive growth plan. Next year, as we return to normal utilization levels, we anticipate 30 percent growth in 2023 over 2022 as we fully get the airline back to normal utilization. And then going forward after that, we already have a fleet plan that provides for 15 to 20% a year growth. What happens in the environment, what happens in potential accommodations, we could always accelerate it, move it closer to 20, if necessary above 20. We will watch for opportunities by controlling our cost as discussed, by driving our non-ticket, we are controlling our destiny and we can make the choices about where we fly. Okay.

Did I hear that the plan is to grow 30% next year versus 22?

Yeah, Scott, it's Jimmy Damsey here. Yeah, given that we've constrained capacity across this year, next year, as you move back to full utilization, you get to 30%, slightly above 30% growth.

Okay, great. And then maybe just last thing, just as I focus on the report and the guidance, can you just talk about the monthly... the monthly TRASM trends, and I know you're talking about 20% plus, but if you feel like it should be closer to the upper 20s you did in Q2, any color there.

Thank you. We are seeing right now typical seasonality. We're not going to go into more detail on that. What we're seeing for Q3 is just typical seasonality patterns. But because the issue, as we discussed, is because we have the higher amount of capacity growth at the end of the quarter, because we're growing 5% in July and 14% to 16% in September, that is creating a drag on the overall RASM for the quarter of around three points because we've pushed more capacity growth into an off-peak month. Gotcha.

Okay. Thank you, guys. Appreciate it.

And one moment for our next question. Our next question comes from Savi Seth with Raymond James.

Your line is open.

Hey, good afternoon. Just to follow up on Jamie's question earlier, it looks like maybe even this year your kind of aircraft deliveries are getting a little bit delayed. So are you seeing that delay this year? And just as you kind of plan out your capacity, what's your confidence level and how much of that 30% is dependent on fleet deliveries versus just getting utilization back up?

Roughly half of it is fleet deliveries, and the other half comes from increased utilization.

Okay.

Yeah, and Savi, near term, we've seen some delays. I mean, it's been relatively modest. It's nothing, like we're obviously on the Airbus program. It's nothing compared to the Boeing program. You're seeing six-week delays, four to six-weeks, eight-week delays in aircraft deliveries for some of the aircraft. but all relatively near a term store.

And we typically, yeah, the delays have generally been in days and weeks. And so, you know, we typically put in a 45-day, up to 45-day kind of cushion between a delivery and when we have it scheduled to fly.

That's helpful. And if I might, one thing you've shown last year and this year throughout is kind of a nimbleness to kind of react to the demand environment or whatever the environment brings with COVID or anything else. Just kind of curious, you know, what kind of environment you're assuming in that 30% and if you do see a slowing down or kind of a recessionary environment, what you're kind of comfortable maybe moderating that to or how should we think about that?

Well, look, I think we're always probably the fastest to react if things were to dramatically change. But I think our confidence in the 30% is driven by a couple things. One, we're headed to sub-6th chasm. So if anybody can be successful with airline business, it'll be with low prices if demand were to fall off. And so we'll be one of the few that can afford to actually carry low prices. And it will be further subsidized, not just on the cost side, but by the the fact that we have the $85 target by the end of next year in non-ticket and we're already producing 75. So we're pretty confident in the growth. Obviously, we'll reevaluate that if there were a deeper recession than what we're seeing. But so far, the demand looks very good and we've seen some seasonal changes, but nothing major. And I think what seems to be missed in the airline space is even if there is a recession, the capacity cut in the airline space is even if there is a recession, the capacity cuts are already built in. I think if you track back what we should have had with normal GDP growth over the last three years, we are significantly lower than where you would normally see capacity. You would normally see capacity. And so if you get a 10% to 20% cut from a recession, well, the cuts are already in. So that's why you're seeing a lot of the pricing power across the industry, even as other industries are having a tough time right now.

That's good, Glenn. Thank you.

And one moment for our next question.

Our next question comes from Helen Beckwith-Cowen.

Your line is open.

Thanks very much, Operator. Hi, everybody, and thank you very much for the time. I just have two questions. To follow up that comment, Barry, that you just made about capacity reduction already factored in. What do you think that the hiring will look like at the airline in an environment where things do slow? Would you pause the hiring or would you just continue to forge ahead?

No, I think we would be the last airline to stop hiring or even slow hiring because when you're the lowest cost producer in the space, you're the first one that should be growing.

Got it. That's helpful. And then the other question I have, I'm not sure how you can, you know, the answer, but what responsibility do you think the pilot union itself, like Alpha National has for training pilots? They seem to want a lot of, I don't know, assurances, but they don't seem to want to accept responsibility for building up the pilot ranks. Do they bear any responsibility in your negotiations with your pilots? Can you get them to accept some of that?

I guess I'm not understanding your question.

Well, think about it this way. If you want to become a pilot, the $250,000 cost is 100% on you. And part of the reason for that is the rules around which you can become a pilot. It's not that easy a career path, right, if you don't go military or something like that. So don't you think ALPA itself bears some responsibility for helping an 18-year-old or a 22-year-old get the necessary hours in order to build a career?

I don't know. It's ALPA's responsibility. I think it's the... Maybe they have some. Maybe everyone has a responsibility across the entire aviation community. I mean, just to clarify, it's not $250,000. It's less than $100,000 to get your commercial. Yes, if you paid for all of your hours and you didn't get any type of job, yes, it would cost considerably more, maybe in the $250,000, $300,000 range. But The challenge with that, you're not gonna be as good a pilot as someone that we can handhold through our cadet program, place at a great place where they get good training and they get real life experiences flying from a commercial perspective. But look, I think we as an industry and overall need to take responsibility, but I can just tell you what we're doing. We see the shortages coming down the line and while we haven't had challenges, We're just taking control of our destiny, and we're going to have the sourcing that we need, no different than we source airplanes, no different than we source engines, parts, everything else. We're going to source training of pilots from zero hours. And to be quite honest, I mean, in the last few hours, it's been one of the most exciting times at Frontier. I mean, our head of HR is right across smiling right now. I mean, he's been inundated today. We have a bunch of flight attendants that already are like, hey, I've always wanted to be a pilot. And so this is really exciting to have a program that kind of handholds them, gets them through it, helps them get set up with a really good training program, and then gets them the right type of experience that they need to be safe pilots. And so not only are we going to control the sourcing of our pilots, but we're also going to control the quality and the training so that we can ensure that they'll be successful and safe pilots for us. And we hope that we can partner with ALPA when they come in, but they are generally not involved until once they become an active line holder or actually a pilot at Frontier.

Got it. Okay, that's really helpful. Thanks, Barry. Have a nice day.

And I'm not showing any further questions at this time. I'll turn the call back over to Barry for any closing remarks.

Well, thanks, everyone. We appreciate everyone joining us today. And, again, as I said, we're excited to be America's ultra-low-cost carrier. Really excited to talk to you soon. Talk to you next quarter.

This concludes today's presentation. You may now disconnect and have a wonderful day.