Spirit Airlines, Inc.

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spirit Airlines fourth quarter 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, just press star one again. Thank you. I would now like to turn the call over to Deanne Gable, Senior Director, Investor Relations. Deanne, please go ahead.

Thank you, Greg, and welcome, everyone, to Spirit Airlines' fourth quarter 2023 earnings conference call. This call is being recorded and simultaneously webcast. As soon as it is available, we will archive a replay of this call on our website for a minimum of 60 days. Presenting on today's call are Ted Christie, Spirit's Chief Executive Officer, Matt Klein, our Chief Commercial Officer, and Scott Harrelson, our Chief Financial Officer. Also joining us are other members of our senior leadership team. Following our prepared remarks, there will be a question and answer session for analysts. Today's discussion contains forward-looking statements that are based on the company's current expectations and are not a guarantee of future performance. There could be significant risks and uncertainties that cause actual results to differ materially from those contained in our forward-looking statements. including but not limited to various risks and uncertainties related to the acquisition of Spirit by JetBlue and other risk factors discussed in our reports on file with the SEC. We undertake no duty to update any forward-looking statements, and investors should not place undue reliance on these forward-looking statements. In comparing results today, we will be adjusting all periods to exclude special items unless otherwise noted. For an explanation and reconciliation of these non-GAAP measures to GAAP, Please refer to the reconciliation tables provided in our fourth quarter 2023 earnings release, a copy of which is available on our website under the investor relations section at ir.spirit.com. And now I will turn the call over to Ted Christie.

Thanks, Deanne, and thanks to everyone for joining us on the call today. As we look back on 2023, while our financial results for the full year were unsatisfactory, I am proud of what our team accomplished, and we are well on our way to make the necessary strategic shifts that will enable Spirit to compete effectively in the current demand environment. First of all, I thank all our Spirit team members for their dedication and commitment in caring for our guests and each other while overcoming the operational and financial challenges we faced in 2023. And a special thank you to all who carried the extra burden of preparing for the court case and working on merger integration planning while attending to their regular full-time duties. The professionalism and enthusiasm of the SPIRIT team is unmatched, and I am honored to work alongside such remarkable people as we deploy our plan to return to sustained profitability. Regarding the merger, when JetBlue first made the offer to us in 2022, and we subsequently signed a merger agreement, which had overwhelming support from our stockholders, our board of directors anticipated it would be a long, litigious road to obtaining regulatory approval. To compensate for that, we negotiated meaningful protections for the company and our constituents against an adverse regulatory outcome. Nonetheless, we believed, and we continue to believe, a merger between JetBlue and Spirit is a compelling combination, not only for our business, but also for the American consumers. As such, we strongly disagree with the court's ruling to grant an injunction against the merger. Together with JetBlue, we filed a notice of appeal and our request for an expedited review has been granted. We will not be commenting further or entertaining questions about the merger on today's call. Moving on to a recap of 2023. At the beginning of the year, we made the decision to allocate resources and go full throttle on hiring the necessary number of pilots and building the infrastructure to support getting back to full fleet utilization by year end 23. We also recognize that we needed to de-risk the business and give ourselves the means to digest the high growth rate we had coming out of the pandemic. However, due to contractual obligations, the first practical opportunity to slow our pace of forward deliveries was in 2024. Therefore, in the summer of 2023, we negotiated a deferral of 11 aircraft originally slated for delivery in 2024 and smoothed out the remaining deliveries between 2025 and 2029. to slow the pace of our growth over the next few years. At the time, together with achieving full fleet utilization, we believed this would be enough to set us up for a return to profitability in 2024. Things, of course, changed as the year progressed. We did not foresee the number of parked NEO aircraft in 2024 and beyond due to GTF NEO engine availability, further complicating and delaying our ability to achieve full fleet utilization. In addition, Shifts in the balance of supply and demand for domestic air travel in leisure markets during last summer and fall had a very profound negative impact on revenue trends for the second half of 2023. In October, we stated we were prepared to make the necessary strategic shifts to enable Spirit to compete effectively. And we began to do just that and are executing on a plan that we believe will provide us a platform for margin health. We are making changes to network construction, peak versus off-peak flying, and geographic and market concentration, and we'll assess the success of various components and make some inevitable adjustments. We are not prepared to share all the details of our plan with you today, as we await some clarity on our appeal. However, Matt and Scott will share some of the actions in progress that are already having the desired impact. Before I hand it over to them to provide details on our fourth quarter financial performance and first quarter 2024 outlook, I want to comment on the recent speculation about Spirit's ability to make it as a standalone carrier should the merger not close. This misguided narrative has been advanced by an assortment of pundits. However, back in the real world, we are focused on facts. Liquidity is always king, and we have enhanced our levels to give us the necessary flexibility to successfully close with JetBlue or to pursue our standalone plans. Above all else, margin repair is the key, and we have been making network adjustments and cost decisions to recover our margin production. First, Matt, over to you.