Frontier Group Holdings, Inc.

Good day and thank you for standing by. Welcome to the Frontier Group Holdings fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to the speaker today, David Erdman, Senior Director, Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to our fourth quarter 2022 earnings call. Today's speakers will be Barry Biffle, President and CEO, Jimmy Dempsey, EVP and CFO, and Daniel Scherz, Senior Vice President, Commercial. Each will deliver brief prepared remarks, and then we'll get to your questions. First, though, let me cover the 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 filed with the SEC. We will also be discussing non-GAAP financial measures which are reconciled to the nearest comparable gap measure in the appendix of the earnings announcement. And so with that, I'm going to give the floor to Barry to begin his comments. Barry?

Thank you, David, and good afternoon, everyone. Frontier posted strong fourth quarter results, achieving an adjusted pre-tax margin of 5.7%, our third straight quarterly profit. Results were underpinned on a record ancillary revenue performance along with meaningful improvements in our unit cost and utilization. followed by the winter storm Elliott during the busy holiday travel period. However, we're able to minimize impacts through the recoverability of our modular network and the dedication of Team Frontier, who work tirelessly to ensure our passengers arrive safely at their destinations. I'd like to extend my gratitude and recognize our team's efforts as they overcame treacherous weather conditions, worked extended shifts, and managed customer disruptions to get them to their destination safely. At our investor day last November, We've highlighted how leisure travel demand has undergone a fundamental shift and how we're uniquely positioned to exploit it. Customers have more flexibility and more propensity to travel than they did during the pandemic, and its compelling evidence points to the resiliency in the leisure travel sector. We expect the benefits from the resilient demand to be amplified by industry capacity constraints, but predominantly by pilot shortages and supply chain bottlenecks. But this creates a significant opportunity for Frontier. Although we're not immune to these issues, forward book, dominated by the A321EO, together with our robust pilot recruiting and training platforms, uniquely provides us the foundation to harness the growth opportunity before us. Last year, we launched our cadet and rotary programs, and both are driving strong demand for candidates who want to apply for Concierge. Over 100 pilots have already been accepted into the cadet program, and we have nearly 5,000 applications last year through all of our hiring channels. In fact, the first cadets from the program will be joining us as birth officers in just a few Although aircraft manufacturers are dealing with supply chain issues, the delays we're experiencing from Airbus are between one to five months. While we're disappointed in these delays, they've effectively represented a manageable one-quarter shift on average across our workload. Our strategy has been to focus on areas that we can control. We're focused on hitting our near-term target of $85 mandatory revenue per passenger, and we achieved $82 for the fourth quarter, enhancing our confidence that hitting the $85 in the fourth quarter will happen. Moreover, we lowered our total adjusted chasm, including interest, by 8% from the prior quarter and widened our total cost advantage with the industry to an equivalent of over $70 per pass period. Our costs are our competitive edge, and we expect to maintain this advantage for years to come. Put simply, our strong ancillary performance and industry-leading unit costs are the variables that make it possible for us to capitalize on a strong leader market and stimulate profitable growth for the rest of the decades. All of the fatigue farms here are unified in this pursuit, and it gives me confidence to reaffirm our target of returning the airline to pre-pandemic profit per plane by the second half of 2023 on a run rate basis. With that, I'll hand the call over to Daniel for a commercial update. Thank you, Barry. Good afternoon, everyone.