American Airlines grows workforce, adds summer route at Miami airport

In this article, we will be taking a look at the top 20 most profitable airlines in the world. To skip our detailed analysis, you can go directly to see the top 5 most profitable airlines in the world. Even though the airline industry has arguably been the most integral in improving globalization across the […] In this article, we will be taking a look at the top 20 most profitable airlines in the world. To skip our detailed analysis, you can go directly to see the top 5 most profitable airlines in the world. Even though the airline industry has arguably been the most integral in improving globalization across the last several decades, and even though it has a reputation of being too expensive, it is actually the industry with the lowest profit margins. Because of this, the airline industry is unable to adapt to downward pricing pressure or economic instability, as witnessed during the pandemic. When the Covid-19 pandemic hit, most countries forbade travel and went into lockdowns, severely impacting the hospitality industry, with airlines being particularly hard hit. In fact, from 2020 to 2022, when the worst of the pandemic passed over, the airline industry is estimated to have lost more than $200 billion, resulting in tens of thousands of job cuts even among the most profitable airlines in the world. Photo by emiel molenaar on Unsplash However, 2022 saw the resumption of global travel as most countries removed restrictions which resulted in pent-up demand being released across summer and airlines recording one of the most profitable quarters in airline history in Q2 2022. Even though the Russian invasion of Ukraine and the ensuing year-plus war result in airspace issues, airlines have managed to persevere and the outlook is quite bright. Of course, you can’t discuss 2022 without discussing the economic uncertainty that dominated the year, resulting in a horrendous year for the stock markets, with rising inflation and aggressive interest rate hikes combined with an impending recession resulting in a negative mindset for investors. Despite this, airlines recorded the highest price per mile in history, and even though volume hasn’t reverted to pre-pandemic levels, the rise in prices has resulted in higher revenues for airlines with many returning to profitability after a couple of years of losses, which is great news for the most profitable airlines in the world. According to CNN, Europe, one of the premier destinations for tourists, is already seeing high levels of tourism, even though summer has barely started. This is only going to get worse as schools start breaking for summer and more and more tourists start traveling, with tour operators selling out months in advance. According to Allianz Partners, Americans traveling to Europe will increase by 55% as compared to 2022, with Italian cities dominating the most popular destination lists. Even though volumes are increasing significantly, prices don’t seem to be coming down, which might lead to the richest airlines in the world simply getting richer. Many of the most profitable airlines in the world are also well-known for the level of service provided, and are often counted among the best airlines in the world based on assessments by various magazines and websites, with the World Airline Awards being considered the most prestigious. Some of the best airlines based on various categories include Singapore Airlines and Qatar Airways. A large part of an airline’s profitability depends on the routes it flies. Even at a time when profits have been under pressure, some routes will still earn airlines hundreds of millions of dollars, with the most lucrative route in the world being worth over $1 billion, according to Forbes. The top 10 most lucrative routes earn revenues of over $6 billion between 2018 and 2019, with British Airways earning $1.16 billion on its route between London and New York. In fact, half of the most profitable routes are based from London’s Heathrow Airport, one of the most popular airports in the world in terms of number of passengers. Recently, the airport saw its busiest month since the pandemic started, and this is only bound to increase in the next few months as summer truly grips Europe. However, one thing that investors in airline stocks are concerned about is the industry’s contribution to climate change, with many governments emphasizing and preferring travel by train. In fact, France recently banned short-haul flights where a train journey of 2.5 hours would suffice. While many believe this is just lip service and doesn’t impact climate change significantly, other similar bans could follow, which will be disastrous for European airlines. While short-haul flights being banned in the future is a possible negative outcome in the future, the rest does seem quite positive. According to the International Air Transport Association (IATA), net profits of the airline industry are expected to double to nearly $10 billion in 2023, at a net margin of just over 1.2% while operating profits are expected to exceed $22.4 billion in the same time period. The current expectation is that over 4.35 billion people will fly in 2023, much closer to 4.54 billion people who flew in 2019. Further, revenues are expected to cross $800 billion in 2023 for the first time since the pandemic hit, all of which shows that the airline industry is well on its way to recovery. IATA’s Director General stated ““Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year.” This has also resulted in a much more positive outlook by Delta’s CEO Ed Bastian who said in the company’s Q1 2023 earnings call “With solid first quarter performance and visibility into the strength of summer travel demand, we are confident in our full year guidance for revenue growth of 15% to 20% year-over-year, earnings of $5 to $6 per share and free cash flow of over $2 billion, the three main guideposts we shared with you last December. For the June quarter, we expect to deliver the highest quarterly revenue in our history, a 15% operating margin and EPS of $2 to $2.25 a share. Our forecast operating profit of $2 billion matches Q2 of 2019, demonstrating that the earnings power of this franchise is intact.” However, despite the recovery posted by airlines, it is important to note that even some of the biggest airlines in the world have still not returned to profitability. This is why, some of the most profitable airlines in the world are still currently making losses, though if trends continue, that will not be the case for much longer. To determine our listing, we ascertained the 25 biggest airlines in the world through Fortune 500 and annual reports of each airline, and ranked them based on either their TTM net profit from continuing operations, or net profit as determined through their annual report, especially for airlines that aren’t listed. Where the company’s financials were in another currency, they were translated to the USD. Numbers in brackets indicia 20. All Nippon Airways Total net profit / (loss) (in millions): $(1,034) All Nippon Airways, Japan’s major carrier, recently entered a deal for a commercial partnership with El Al Israeli Airlines. 19. Spirit Airlines, Inc. (NYSE:SAVE) Total net profit / (loss) (in millions): $(554) Spirit Airlines, Inc. (NYSE:SAVE) is an American ultra-low cost carrier which saw nearly 60% of its total flights delayed recently after an issue with its website, airport kiosks and app. 18. Cathay Pacific Total net profit / (loss) (in millions): $(378) Cathay Pacific used to be a major competitor to Singapore Airlines but has stagnated in recent years, as evidenced by the fact that Singapore Airlines turned a huge profit while Cathay Pacific is still facing heavy losses, though still has seen significant improvement from 2020, where its losses were over $2.7 billion. 17. JetBlue Airways Corporation (NASDAQ:JBLU) Total net profit / (loss) (in millions): $(362) JetBlue Airways Corporation (NASDAQ:JBLU) is one of America’s most popular low-cost airline carriers. Recently, JetBlue Airways Corporation (NASDAQ:JBLU) was forced to end its partnership with American Airlines by a court. 16. Japan Airlines Total net profit / (loss) (in millions): $(66) Japan Airlines is one of the country’s biggest airlines, and is issuing a 10 billion Japanese Yen bond, after deciding to operate its own freighters. 15. Air India Total net profit / (loss) (in millions): $ (1) The flagship carrier for India, Air India recently launched flights to Amsterdam. 14. Alaska Air Group, Inc. (NYSE:ALK) Total net profit / (loss) (in millions): $58 The first airline in our list of most profitable airlines in the world to actually make a profit is Alaska Air Group, Inc. (NYSE:ALK), which owns Alaska Airlines and Horizon Air. Alaska Air Group, Inc. (NYSE:ALK) has seen its stock price soar even as it adds more nonstop flights to several destinations. 13. SkyWest, Inc. (NASDAQ:SKYW) Total net profit / (loss) (in millions): $73 SkyWest, Inc. (NASDAQ:SKYW) has been one of the best performing airlines in 2023, more than doubling its value in just 5 months, as demand for flights continues to increase while the airline is also working on fleet-modernization. 12. Emirates Airline Total net profit / (loss) (in millions): $89 Owned by the United Arab Emirates, Emirates Airline is one of the most luxurious airlines in the world. In 2022, the airline engaged in a major row with Heathrow Airport after the latter set a limit of 100,000 passengers per day after being unable to deal with higher numbers during summer. 11. Air France KLM Total net profit / (loss) (in millions): $112 Air France KLM owns the flagship carriers of France and the Netherlands, and according to Simply Wall Street, low returns on capital for the company are likely to signify troubling times ahead. 10. American Airlines Group Inc. (NASDAQ:AAL) Total net profit / (loss) (in millions): $127 American Airlines Group Inc. (NASDAQ:AAL), one of the biggest airlines in the U.S. and the world, was recently forced to end its partnership in the Northeast with JetBlue, though it was given more time by the judge to carry out the same. In the current year, American Airlines Group Inc. (NASDAQ:AAL) has gained 25% in share price already. 9. China Airlines Total net profit / (loss) (in millions): $400 China Airlines, the state-owned flag carrier of Taiwan, has unveiled new international flight routes which should add to its profitability. 9. EVA Airways Total net profit / (loss) (in millions): $400 The Taiwan based airline is generally not counted among the largest airlines in the world, but in terms of profitability, its right up there, with only one loss making year in 2020. 8. Southwest Airlines Co. (NYSE:LUV) Total net profit / (loss) (in millions): $539 Southwest Airlines Co. (NYSE:LUV), considered to be the biggest low-cost airline in the world, is also among the most profitable airline companies globally. One concern faced by Southwest Airlines Co. (NYSE:LUV), shared by other airlines, is the lack of airplanes as both Boeing and Airbus, two of the largest aircraft producers, fail to keep up with demand. 7. United Airlines Holdings, Inc. (NASDAQ:UAL) Total net profit / (loss) (in millions): $737 There are several American airlines among the most profitable airlines in the world, including United Airlines Holdings, Inc. (NASDAQ:UAL). United Airlines Holdings, Inc. (NASDAQ:UAL) recently became the front-of-shirt sponsor of Wrexham AFC, the football club purchased by Hollywood stars Ryan Reynolds and Rob McElhenney which earned a fairytale promotion in 2023. 6. Lufthansa Total net profit / (loss) (in millions): $854 The largest airline in Germany and its flagship carrier, recently agreed to purchase 41% of ITA Airways, Italy’s premier carrier. Currently, Lufthansa’s flights are at 70% of their pre-pandemic level. Click to continue reading and see the top 5 most profitable airlines in the world. Suggested articles: NATO Military Spending by Country: Top 20 Countries 15 Largest Aluminum Producing Countries In The World Top 20 Countries with Highest Water Consumption Disclosure: None. Top 20 most profitable airlines in the world is originally published at Insider Monkey......»»

Here's The Climate Dissent You're Not Hearing About Because It's Muffled By Society's Top Institutions Authored by John Murawski via RealClear Wire, As the Biden administration and governments worldwide make massive commitments to rapidly decarbonize the global economy, the persistent effort to silence climate change skeptics is intensifying – and the critics keep pushing back.  This summer the International Monetary Fund summarily canceled a presentation by John Clauser, a Nobel Prize-winning physicist who publicly disavows the existence of a climate “crisis.” The head of the nonprofit with which Clauser is affiliated, the CO2 Coalition, has said he and other members have been delisted from LinkedIn for their dissident views.   Meanwhile, a top academic journal retracted published research doubting a climate emergency after negative coverage in legacy media. The move was decried by another prominent climate dissenter, Roger Pielke Jr., as “one of the most egregious failures of scientific publishing that I have seen” – criticism muffled because the academic says he has been blocked on Twitter (now X) by reporters on the climate beat.  The climate dissenters are pressing their case as President Biden, United Nations officials, and climate action advocates in media and academia argue that the “settled science” demands a wholesale societal transformation. That means halving U.S. carbon emissions by 2035 and achieving net zero emissions by 2050 to stave off the “existential threat” of human-induced climate change.  In response last month, more than 1,600 scientists, among them two Nobel physics laureates, Clauser and Ivar Giaever of Norway, signed a declaration stating that there is no climate emergency, and that climate advocacy has devolved into mass hysteria. The skeptics say the radical transformation of entire societies is marching forth without a full debate, based on dubious scientific claims amplified by knee-jerk journalism.   Many of these climate skeptics reject the optimistic scenarios of economic prosperity promised by advocates of a net-zero world order. They say the global emissions-reduction targets are not achievable on such an accelerated timetable without lowering living standards and unleashing worldwide political unrest.   “What advocates of climate action are trying to do is scare the bejesus out of the public so they’ll think we need to [act] fast,” said Steven Koonin, author of “Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters.”   “You have to balance the certainties and uncertainties of the changing climate – the risks and hazards – against many other factors,” he adds.  These dissenters don’t all agree on all scientific questions and do not speak in a single voice. Clauser, for example, is a self-styled “climate denialist” who believes climate is regulated by clouds, while Pielke, a political scientist at the University of Colorado in Boulder, and Bjørn Lomborg, the former director of the Danish Environmental Assessment Institute, acknowledge humans are affecting the climate but say there is sufficient time to adapt. The dissenters do, however, agree that the public and government officials are getting a one-sided, apocalyptic account that stokes fear, politicizes science, misuses climate modeling, and shuts down debate.   They also say it is a troubling sign for scientific integrity that they are systematically sidelined and diminished by government funding agencies, foundation grant-makers, academic journals, and much of the media. Delving into their claims, RealClearInvestigations reviewed a sampling of their books, articles, and podcast interviews. This loose coalition of writers and thinkers acknowledges that the climate is warming, but they typically ascribe as much, if not more, influence to natural cycles and climate variability than to human activities, such as burning fossil fuel.   Among their arguments:   • There is no climate crisis or existential threat as expressed in catastrophic predictions by activists in the media and academia. As global temperatures gradually increase, human societies will need to make adjustments in the coming century, just as societies have adapted to earlier climate changes. By and large, humans cannot control the climate, which Pielke describes as “the fanciful idea that emissions are a disaster control knob.”  • Global temperatures are increasing incrementally, and have been for centuries, but the degree of human influence is uncertain or negligible. Climate skeptics themselves don’t agree on how much humans are contributing to global warming by burning fossil fuels, and how much is caused by natural variability from El Niño and other cycles that can take centuries to play out. “The real question is not whether the globe has warmed recently,” writes Koonin, “but rather to what extent this warming is being caused by humans.”  • Rapidly replacing fossil fuels with renewables and electricity by mid-century would be economically risky and may have a negligible effect on global warming. Some say mitigation decrees – such as phasing out the combustion engine and banning gas stoves – are not likely to prevent climate change because humans play a minor role in global climate trends. Others say mitigation is necessary but won’t happen without capable replacement technologies. It’s unrealistic, they say, to force societies to rely on intermittent energy from wind and solar, or wager the future on technologies that are still in experimental stages.    • The global political push to kill the fossil fuel industry to get to “net zero” and “carbon neutrality” by 2050, as advocated by the United Nations and the Biden administration, will erase millions of jobs and raise energy costs, leading to a prolonged economic depression and political instability. The result would be that developing regions will pay the highest price, while the biggest polluters (China and India) and hostile nations (like Russia and Iran) will simply ignore the net-zero mandate. This could be a case where the cure could be worse than the disease.   • Despite the common refrain in the media, there is no evidence that a gradually warming planet is affecting the frequency or intensity of hurricanes, storms, droughts, rainfall, or other weather events. The United Nations’ Intergovernmental Panel on Climate Change has expressed low confidence such weather events can be linked to human activities. Still, “it is a fertile field for cherry pickers,” notes Pielke.   • Extreme weather events, such as wildfires and flooding, are not claiming more human lives than previously. The human death toll is largely caused by cold weather, which accounts for eight times as many deaths as hot weather, and overall weather-related mortality has fallen by about 99% in the past century. “People are safer from climate-related disasters than ever before,” statistician and author Bjørn Lomborg has said.  • Climate science has been hijacked and politicized by activists, creating a culture of self-censorship that’s enforced by a code of silence that Koonin likens to the Mafia’s omerta. In her 2023 book, “Climate Uncertainty and Risk,” climatologist Judith Curry asks: “How many skeptical papers were not published by activist editorial boards? How many published papers have buried results in order to avoid highlighting findings that conflict with preferred narratives? I am aware of anecdotal examples of each of these actions, but the total number is unknowable.”  • Slogans such as “follow the science” and “scientific consensus” are misleading and disingenuous. There is no consensus on many key questions, such as the urgency to cease and desist burning fossil fuels, or the accuracy of computer modeling predictions of future global temperatures. The apparent consensus of imminent disaster is manufactured through peer pressure, intimidation, and research funding priorities, based on the conviction that “noble lies,” “consensus entrepreneurship,” and “stealth advocacy” are necessary to save humanity from itself. “One day PhD dissertations will be written about our current moment of apocalyptic panic,” Pielke predicts.   • The warming of the planet is a complicated phenomenon that will cause some disruptions but will also bring benefits, particularly in agricultural yields and increased vegetation. Some climate skeptics, including the CO2 Coalition, say CO2 is not a pollutant – it is “plant food.”   Curry, the former Chair of Earth and Atmospheric Sciences at the Georgia Institute of Technology, expresses a common theme among the climate refuseniks: that they are the sane, rational voices in a maelstrom of quasi-religious mania.   “In the 1500s, they used to drown witches in Europe because they blamed them for bad weather. You had the pagan people trying to appease the gods with sacrifices,” Curry said. “What we’re doing now is like a pseudoscientific version of that, and it’s no more effective than those other strategies.’  The climate change establishment occasionally concedes some of these points. No less an authority than the newly appointed head of the UN's Intergovernmental Panel on Climate Change has urged the climate community to cool its jets: “If you constantly communicate the message that we are all doomed to extinction, then that paralyzes people and prevents them from taking the necessary steps to get a grip on climate change,” Jim Skea recently said to German media. “The world won’t end if it warms by more than 1.5 degrees [centigrade]. It will however be a more dangerous world.”   In testimony before the Senate Budget Committee in June, Pielke said human-caused climate change is real and “poses significant risks to society and the environment.” But the science does not paint a dystopian, catastrophic scenario of imminent doom, he added.   “Today, there is general agreement that our current media environment and political discourse are rife with misinformation,” Pielke testified. “If there is just one sentence that you take from my testimony today it is this: You are being misinformed.”  Still, the overwhelming impression conveyed is one of impending disaster, with the menace of global warming rhetorically upgraded in July by U.N. Secretary-General António Guterres to “global boiling.” Climate scientists announced in July that the planet is the hottest it’s been in 120,000 years, an old claim that gets recycled every few years. Meanwhile, three vice-chairs of the Intergovernmental Panel on Climate Change warned of mass starvation, extinction, and disasters, saying that if the temperature rises 1.5℃ above pre-industrial levels, “children under 12 will experience a fourfold increase in natural disasters in their lifetime, and up to 14% of all species assessed will likely face a very high risk of extinction.”   Many of these predictions are based on computer models and computer simulations that Pielke, Koonin, Curry, and others have decried as totally implausible. Koonin’s book suggests that some computer models may be “cooking the books” to achieve desired outcomes, while Pielke has decried faulty scenarios as “one of the most significant failures of scientific integrity in the twenty-first  century thus far.” Curry writes in her book that the primary inadequacy of climate models is their limited ability to predict the kinds of natural climate fluctuations that cause ice ages and warming periods, and play out over decades, centuries, or even millennia.   Another critique is the use of computer models to correlate extreme weather events to multi-decade climate trends in an attempt to show that the weather was caused by climate, a branch of climate science called climate attribution studies. This type of research is used to bolster claims that the frequency and intensity of heat waves, floods, hurricanes, and other extreme weather events could not have happened without climate change. An example is research recently cited by the BBC in an article warning that if the global temperature rises another 0.9 centigrade, crippling heat waves that were once exceedingly rare will bake the world every two-to-five years.   One question looms: Does a warming climate contribute to heat records and heat waves, such as those that were widely reported in July as the hottest month on record and taken as overwhelming proof that humans are overheating the planet? The United States experienced extreme heat waves in the 1930s, and the recent spikes are not without precedent, climate dissenters say. Pielke, however,  concedes that IPCC data signal that increases in heat extremes and heat waves are virtually certain, but he argues that the societal impacts will be manageable.   Koonin and Curry say that the global heat spikes in July were likely caused by a multiplicity of factors, including an underwater Hunga Tonga-Hunga Ha’apai volcanic explosion last year that increased upper atmosphere water vapor by about 10%, a relevant fact because water vapor acts as a greenhouse gas. Another factor is the warming effect of the El Niño-Southern Oscillation, which has shifted to an active phase recently.   Koonin says that greenhouse gas emissions are a gradual trend on which weather anomalies play out, and while it’s tempting to confuse weather with climate, it would be a mistake to blame July’s heat waves on human influence.   “The anomaly is about as large as we’ve ever seen, but not unprecedented,” Koonin explained on a podcast. “Now, what the real question is, why did it spike so much? Nothing to do with CO2 – CO2 is … the base on which this phenomenon occurs.”  Climate dissent comes with the occupational hazard of being tarred as a propagandist and stooge for “Big Oil.” Pielke was one of seven academics investigated by a U.S. Congressman in 2015 for allegedly failing to report funding from fossil fuel interests (He was cleared). A New York Times review of Lomborg’s 2020 book, “False Alarm,” described it as “mind pollution.”  Climate advocates see climate skepticism as so dangerous that Ben Santer, one of the world’s leading climate scientists, publicly cut ties with Lawrence Livermore National Laboratory two years ago after the federal research facility invited Koonin to discuss his skeptical book, “Unsettled.” Santer, a MacArthur “genius” grant recipient, said allowing Koonin’s views to go unchallenged undermined the credibility and integrity of climate science research. For similar reasons, the IMF postponed Clauser’s July presentation so that it could be rescheduled as a debate.   Another critique: scientists arbitrarily forcing the facts to fit a prescribed catastrophic narrative, often by ignoring plausible alternative explanations and relevant factors. That’s what climate scientist Patrick Brown said he had to do to get published in the prestigious journal Nature, by attributing wildfires to climate change and ignoring other factors, like poor forest management and the startling fact that over 80% of wildfires are ignited by humans. Brown publicly confessed to this sleight-of-hand in a recent article in The Free Press.   “This type of framing, with the influence of climate change unrealistically considered in isolation, is the norm for high-profile research papers,” Brown wrote. “When I had previously attempted to deviate from the formula, my papers were rejected out of hand by the editors of distinguished journals, and I had to settle for less prestigious outlets.”  These frustrations serve as a reminder that the world has entered what the United Nations and climate advocates call the make-or-break decade that will decide how much the Earth’s temperature will rise above pre-industrial levels. This decisive phase is “unfolding now and will intensify during the next several years,” according to Rice University researchers. “Accordingly, what happens between now and the late 2020s, in all likelihood, will fundamentally determine the failure or success of an accelerated energy transition.”  In response to this call for global action, political leaders in Europe and North America are vowing to reengineer their societies to run on wind, solar, and hydrogen. In this country, California is among a dozen states that have moved to ban the sale of new gasoline-engine cars in 2035, while states like Virginia and North Carolina have committed to carbon-free power girds by mid-century.   In the most detailed net-zero roadmap to date, the International Energy Agency in 2021 identified more than 400 milestones that would have to be met to achieve a net-zero planet by mid-century, including the immediate cessation of oil and gas exploration and drilling, and mandated austerity measures such as reducing highway speed limits, limiting temperature settings in private homes, and eating less meat.   In the IEA’s net zero scenario, global energy use will decline by 8% through energy efficiency even as the world’s population adds 2 billion people and the economy grows a whopping 40%. In this scenario, all the nations of the world – including China, India, Russia, and Saudi Arabia – would have to commit to a net-zero future, generating 14 million jobs to create a new energy infrastructure. Nearly half the slated emissions reductions will have to come from experimental technologies currently in demonstration or prototype stages, such as hydrogen, bioenergy, carbon capture, and modular nuclear reactors. Reading this bracing outlook, one could almost overlook the IEA’s caveat that relying on solar and wind for nearly 70% of electricity generation would cause retail electricity prices to increase by 50% on average and destroy 5 million jobs, of which “many are well paid, meaning structural changes can cause shocks for communities with impacts that persist over time.”   A critique of the IEA’s scenario issued this year by the Energy Policy Research Foundation, a think tank that specializes in oil, gas, and petroleum products, warned of “massive supply shocks” if oil supplies are artificially suppressed to meet arbitrary net zero targets. The report further stated that “if the world stays committed to net zero regardless of high costs – the recession will turn into an extended depression and ultimately impose radical negative changes upon modern civilization.” (Disclosure: The report was commissioned by the RealClearFoundation, the nonprofit parent of RealClearInvestigations.)  Already, societies have fallen behind their emissions reduction targets, and it’s widely understood that fast-tracking net zero is an unattainable goal. Transforming existing energy infrastructures within several decades would require installing the equivalent of the world’s largest solar farm every day, according to the International Energy Agency. Carbon-free energy accounts for only 18% of total global consumption, and fossil fuels are still increasing, according to a recent analysis. The IEA reported this year that investments in oil exploration and drilling have rebounded to pre-pandemic levels, while global coal demand reached an all-time high last year. Globally nations are spending more on clean energy than on fossil fuels, but fossil fuels are still vital to economic growth; for instance, the IEA noted that 40 gigawatts of new coal plants were approved in 2022, the highest figure since 2016, almost all of them in China.   “We live in this world of exaggerated promises and delusional pop science,” Vaclav Smil, the University of Manitoba environmental scientist and policy analyst, told The New York Times last year. “People don’t appreciate the magnitude of the task and are setting up artificial deadlines which are unrealistic.”  A government push to reduce greenhouse gas emissions by cutting back on livestock farming has led to public protests in the Netherlands, a conflict over resources that Time magazine predicts will spread elsewhere: “This may be just the beginning of much wider global unrest over agriculture. Scientists say dealing with climate change will require not just gradual reform, but a rapid, wholesale transformation of the global food system.”   Climate dissidents say what happened in the Netherlands is a foretaste of the political backlash that is inevitable when net-zero policies start becoming implemented and people have to travel across state lines to buy a gasoline-powered car.   “The urgency is the stupidest part of the whole thing – that we need to act now with all these made-up targets,” Curry said. “The transition risk is far greater than any conceivable climate or weather risk.”  To Koonin, these challenges indicate that the catastrophic climate narrative will collapse when put to the test of practicality and politics. The more sensible route, he said, is a slow-and-steady approach.   “There’s going to be a deep examination of science and the cost-benefit issues,” he said. “We will eventually do the right thing, but it’s going to take a decade or so.”  John Murawski reports on the intersection of culture and ideas for RealClearInvestigations. He previously covered artificial intelligence for the Wall Street Journal and spent 15 years as a reporter for the News & Observer (Raleigh, NC) writing about health care, energy and business. At RealClear, Murawski reports on how esoteric academic theories on race and gender have been shaping many areas of public life, from K-12 school curricula to workplace policies to the practice of medicine. Tyler Durden Sat, 09/16/2023 - 23:20.....»»

Nerdy, Inc. (NYSE:NRDY) Q2 2023 Earnings Call Transcript August 12, 2023 Operator: Good afternoon. Thank you for attending today’s Nerdy, Inc. Second Quarter 2023 Earnings Call. My name is Bethany and I’ll be the moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, TJ Lynn, Associate […] Nerdy, Inc. (NYSE:NRDY) Q2 2023 Earnings Call Transcript August 12, 2023 Operator: Good afternoon. Thank you for attending today’s Nerdy, Inc. Second Quarter 2023 Earnings Call. My name is Bethany and I’ll be the moderator for today’s call. [Operator Instructions] I would now like to pass the conference over to our host, TJ Lynn, Associate General Counsel with Nerdy, Inc. Please go ahead. TJ Lynn: Good afternoon, and thank you for joining us for Nerdy’s second quarter 2023 earnings call. With me are Chuck Cohn, Founder, Chairman and Chief Executive Officer of Nerdy; and Jason Pello, Chief Financial Officer. Before I turn the call over to Chuck, I’ll remind everyone that this discussion will contain forward-looking statements, including but not limited to expectations with respect to Nerdy’s future financial and operating results, strategy, opportunities, plans and outlook. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Any forward-looking statements are made as of today’s date, and Nerdy does not undertake or accept any obligation to publicly release any updates or revision to any forward-looking statements to reflect any change in expectations or any change in events, conditions or circumstances on which any such statement is based. Please refer to the disclaimers in today’s shareholder letter announcing Nerdy’s second quarter results and the company’s filings with the SEC for a discussion of the risk. Not all of the financial measures that we will discuss today are prepared in accordance with GAAP. Please refer to today’s shareholder letter for reconciliations of these non-GAAP measures. With that, let me turn the call over to Chuck. Chuck? Chuck Cohn: Thanks, TJ, and thank you to everyone for joining us today. In the second quarter, our strong start to the year continued, and we delivered revenue and profitability ahead of our expectations. We also made substantial progress in advancing our always on recurring revenue product offerings and the application of AI for HI or artificial intelligence for human interaction to our business. As we head into the upcoming school year, it is worth noting what has changed over the past year and how we believe those changes position us for growth in the periods ahead. One year ago, we were entering our first back-to-school with Learning Memberships, a new all access subscription offering that aimed to support learners across academic calendar years, subjects, and learning formats. We had just introduced the concept the quarter before, and Learning Memberships had just driven 2% of consumer revenue in the second quarter of 2022. Fast forward to today, and Learning Memberships accounted for 73% of total company revenue and 88% of consumer revenue in the second quarter of 2023. As of this June, a 100% of new consumer customers joining the platform are doing so through a learning membership subscription, marking the completion of our evolution to the new recurring revenue business model 6 months earlier than expected. We now expect that nearly 100% of recognized consumer revenue will be from learning membership subscriptions by year end. We underwent a similar evolution over the past year in our institutional offering Varsity Tutors for schools. We shared one year ago that we were building new always-on products that were built for district-wide scale that would enable us to help more learners than ever before. We also shared that we were seeking to bring together our different offerings to address a multitude of needs for school district partners and students. This would require building the product offering and shifting our sales strategy to focus on deeper and more comprehensive partnerships with these larger school districts. We are pleased to share that our strategy continues to work and that the strong momentum from the first quarter continued into the second quarter. Our Institutional business delivered revenue of $8.4 million, an increase of 43% year-over-year, representing 17% of total revenue in the quarter. Bookings in the quarter totaled $10.5 Million, an increase of 175% year-over-year. We shared over the past year and at the start of this year that we expected our new always-on recurring revenue offerings to be far superior to our legacy package model. In addition to allowing us to provide a better and more personalized experience to learners, our new operating model would be far more efficient, allowing for us to drive operating leverage, simplify our sales model and shift additional resources towards net new innovation, including the application of AI for HI. Those anticipated business model benefits are now being realized and driving substantial improvements in our operating results. The new and simpler operating model made possible by our always-on recurring revenue offerings combined with the benefits we are realizing from the application of AI, has allowed for us to significantly reduce the labor needed to operate the platform. These changes have meaningfully enhanced our contribution margin profile and simultaneously allowed us to fund increased investments in product and engineering, including AI, to more aggressively pursue our product roadmap and drive both growth and profitability in future periods. I am pleased to share that in the second quarter, we delivered $48.8 million of revenue, an increase of 16% year-over-year, exceeding our guidance range of $45 million to $47 million and representing an 1,100 basis point acceleration in growth over the previous quarter. We saw positive new customer acquisition and engagement trends in the second quarter, with new consumer membership and package customers acquired in the quarter growing 19% year-over-year. As we progressed farther into the summer, June and July represented the highest levels of year-over-year growth for new consumer membership and package customers this year. We completed our evolution to 100% Learning Memberships for new consumer customers in June with the transition of the professional audience occurring 6 months earlier than originally targeted. Our customer lifetime values continued to show significant improvements relative to the old package model driven by our evolution of Learning Memberships and the application of AI for HI. These drivers were key contributors to our strong operating results and improved profitability. We delivered positive adjusted EBITDA of $1.3 million, a $10.9 million improvement year-over-year in the second quarter, beating our guidance range of an adjusted EBITDA loss of $3 million to break even. That represents a more than 2500 basis point improvement in adjusted EBITDA margin year-over-year. We have continued to make substantial progress on accelerating the use of AI throughout our business, including launching membership experience improvements that leverage generative AI as well as accelerating its use to drive substantial operating efficiencies and internal productivity improvements. Moving to our Consumer business, the learning membership model has demonstrated superior unit level economics, longer duration and higher lifetime value customer relationships, higher gross margin, and is a more scalable and efficient operating model. Learning Memberships also serves as an easier platform from which to drive innovation and incremental growth, given our ability to add new product capabilities into the existing All Access subscription offering, thereby making the offering more appealing and engaging ultimately driving conversion of new members and the retention of existing ones. Learning membership revenue continued to grow at a rapid pace in the second quarter. Revenue during the second quarter from Learning Memberships grew to $35.6 million, a $5.9 million or 20% increase from the first quarter of 2023. We ended the second quarter with 31,000 active members paying approximately $350 per month, representing $130 million annualized run rate at quarter end. This August, in time for back-to-school, we are introducing a significantly upgraded and enhanced learning membership digital experience that makes it easier for learners to more fully engage with their learning membership. These updates are aimed at enriching the experience, encouraging achievement, reinforcing personal accountability to learning, and improving the discoverability of learning formats and subjects. From many years of experience, we know that when customers engage more deeply with our products, including across multiple learning formats, multiple subjects or multiple students per household, it is highly predictive of stronger long-term retention and higher lifetime value of those customers. The new digital learning membership experience transforms the way members engage with our platform, making engaging in discovery with the platform more intuitive and user friendly by serving as the new homepage and central destination for learning members. It allows members to effortlessly access their upcoming live tutoring schedule, easily track their past learning interactions in a subject, and track progress and achievement towards learning goals. The new digital membership experience enables easier discovery of new subjects and will encourage users to explore additional areas of interest through personalized AI-generated learning recommendations that predict and suggest the next product interaction across learning formats and subjects that are most likely to drive engagement and customer value. The new experience also brings together all of the key account management information and resources into a simple user experience that provides easy self-service membership management tools to better meet the changing needs of learning members. We also expect these new self-service tools will help drive operating efficiency. Now let’s turn our attention to Varsity Tutors for schools and our Institutional business. Consistent with our strategy heading into 2023, our focus on larger and more expansive partnerships with larger school districts, including the inclusion of our high dosage, teacher assigned and on-demand products into a single district partnership is yielding results. Institutional revenue in the quarter was $8.4 million, an increase of 43% year-over-year, representing 17% of total revenue in the second quarter. We completed 48 contracts in the quarter, totaling $10.5 million of bookings, an increase of 175% year-over-year. Year-to-date, our average contract value is above $100,000, more than double compared to the same period last year. Our continued growth in the second quarter and expanding portfolio of reference accounts, compelling efficacy data that demonstrates the effectiveness of our solutions and enhancements to our unique product suite provide us confidence that we are well positioned as we enter the key back-to-school selling season. Over the last six years, AI has been foundational to our ability to improve quality, enhance personalization and decrease the cost of our offerings. We’ve been using AI for years to power our ability to identify the highest quality experts, assess learners’ foundational knowledge, help ensure the right expert learner match and drive operational efficiency. Last quarter, I shared that the speed of innovation occurring at Nerdy was both stunning and invigorating, and that we were actively infusing generative AI into our products to supercharge and personalize human interaction, drive operating efficiency, and generally enhance the effectiveness and efficiency of our platform. I also shared that we had made significant investments in instrumentation and data capture and that through those investments had built up a large proprietary data set over the past 10 million hours of live instruction delivered through our live learning platform. We also shared that over the past six plus years, we had developed practical experience driving enhanced personalized learning interactions as well as efficiency gains through the application of AI. As a result, we believed we stood to benefit tremendously from the latest advancements in generative AI. 90 days later, that speed of innovation that was initially stunning is now quickly becoming just how we work. Our teams are both encouraged and pushed to leverage AI in their daily work and all employees have access to in-line generative AI tools in addition to system and workflow driven approaches to support high volume activities at scale allowing our teams to focus their time and energy on new innovation and growth opportunities. To illustrate the speed of innovation occurring along with where AI related investments are being made beyond some of the more visible consumer facing applications, we shared several examples in our shareholder letter, a few of which I’ll share with you today. The first is related to leveraging generative AI to produce high quality learning content at scale. In order to scale learning content to the 3,000 plus subjects we currently support and the corresponding tens of thousands of skills, we needed to construct an AI-based approach for evaluating learning content. We designed a robust system that generates practice content across a spectrum of subjects and skills leveraging generative AI. The system is unique as it integrates a human-in-the-loop feedback process, ensuring both accuracy and difficulty aligned with educational standards, while curating data sets we can use for improving our own AI models. Every subject is different and needs a unique data set in order to tune and optimize our AI models for both accuracy, difficulty and academic learning standard alignment. We are rapidly deploying learning content across approximately 200 of our most in-demand subjects with more than 66,000 AI-generated practice problems, answers and explanations having been created and vetted in the last month or so. They will be available for learning membership customers to use this back-to-school season in a variety of learning formats such as quizzes, computer adaptive tests and more. By year end, we expect to be able to 10x the quantity of high quality learning content generated by the new AI system. In addition to new capabilities being deployed, we’re also continuing to enhance the existing generative AI capabilities we’ve spoken about in the past. During the quarter, we made enhancements to our AI tutor chat system, focusing on both user experience and educational effectiveness. By employing an upgraded AI model and refining metrics to evaluate each conversation, we’ve sharpened our understanding of the AI tutors’ strengths and areas for improvement. These updates reflect our commitment to pedagogical adherence and the individualized needs of each student. We also continue to see strong engagement with our AI lesson plan generator. Over the last 90-days, we’ve had experts on the platform leverage it more than 45,000 times for lesson plans in their sessions with learners. We’ve continued to increase the quality and relevance of this AI-generated content, and 92% of these lessons were rated 5 stars. Another example relates to using AI to power chatbots. We saw significant interest from our internal product and operating teams in different functional areas to begin using sophisticated AI-powered chatbots to allow users to get answers faster. We created a templated approach for developing, training and deploying chatbots to support customers and internal teams. We have seen strong results thus far, and AI-powered chatbots have been deployed for a variety of different uses on both sides of the platform and for internal teams. Our IT customer support bot, for example, addresses technical issues learners and experts experience like issues with audio and video. It is currently resolving more than 50% of all interactions, arming live agents with better diagnostic information, enabling them to solve the root issue faster, and we’d expect for these numbers to keep going up over time. These sorts of AI-enabled solutions to completing work are helping to drive substantial operating efficiency gains across the business. Whether it’s the mass production of hyper personalized learning content or the use of AI-powered chatbots for customer service interactions, the application of AI throughout our business is yielding a better experience for learners and experts and driving significant operating leverage. Looking ahead, we expect to see further wins on driving both conversion and retention as well as improvements in operational efficiency as a result of continued investments in AI. In closing, I want to extend my thanks to our team at Nerdy for their high quality work and focus on driving strong execution in service of our learners, experts, institutional partners and shareholders. We have an opportunity to redefine how people learn and build a business of significant value and impact in the years to come. Our strategic evolution towards always-on recurring revenue products and the continued implementation of AI for HI have helped put us in a strong position entering the 2023/2024 school year. With that, I’ll turn the call over to Jason to discuss the financials in more detail. Jason? Jason Pello: Thanks, Chuck, and good afternoon everyone. We shared at the beginning of the year that we expected our new always-on recurring revenue offerings to be far superior to our legacy package model and that the benefits would become apparent in the coming quarters, with accelerating growth and profitability that stemmed from more attractive unit level economics, longer duration and higher lifetime value customer relationships, higher gross margin, and a more scalable and efficient operating model. Today, I’m pleased to report that during the second quarter, those anticipated business model benefits are now being realized and driving substantial improvements in our operating results. In the second quarter, we delivered revenue of $48.8 million, results that were above our guidance range of $45 million to $47 million and represented 16% year-over-year growth. Our active member count of 31,000 as of June 30 exceeded our expectation and was driven by higher than anticipated levels of new client acquisition and strong retention among Learning Membership customers. Learning Memberships’ revenue grew to $35.6 Million during the quarter and represented 73% of total company recognized revenue and 88% of consumer recognized revenue in the second quarter. As Chuck mentioned, we expect nearly 100% of consumer recognized revenues will be from Learning Memberships by the end of the year. Our Institutional business delivered revenue of $8.4 million, representing 17% of total revenue during the second quarter, and delivered bookings of $10.5 million, an increase of 175% year-over-year. On a combined basis, Learning Memberships and institutional revenues delivered 90% of total revenue, which is a substantial change from last year when just 16% of revenues were from consumer subscription and institutional contracts. Moving down the P&L, gross profit of $34.1 million in the second quarter increased by $5.4 million and 19% year-over-year. Gross margin of 69.8% for the second quarter was approximately 160 basis points higher than 68.2% in the same period last year. Both gross profit and gross margin increases were driven by growth in our consumer business as a result of the strong adoption of Learning Memberships, which has led to lifetime value expansion and higher gross margin. As we evolve towards a greater mix of Learning Membership revenue, we expect consumer gross margin to continue to expand throughout 2023. Sales and marketing expenses on a GAAP basis were $14.9 million in the second quarter, a decrease of $3.1 million compared to the same period in 2022. Non-GAAP sales and marketing expenses, excluding non-cash stock-based compensation, were $14.2 million, or 29% of revenue in the second quarter. This compared to 40% of revenue in the same period of last year, an improvement of more than 1,100 basis points year-over-year. Sales and marketing spend and efficiency improvements were driven by the completion of our evolution to Learning Memberships, including the continued expansion of lifetime value, our focus on optimizing the level of marketing spend and a more efficient operating model in our consumer business, leading to attractive LTV/CAC dynamics. We also delivered substantial Varsity Tutors for school’s revenue growth, yielding efficiencies from prior investments in the institutional sale in go-to-market organization. As Learning Memberships become a greater percentage of total revenues and the Institutional business continues to scale, we expect to yield durable sales and marketing improvements as the business delivers, accelerating sequential year-over-year revenue growth each quarter as we move throughout 2023. G&A on a GAAP basis was $29.7 million in the first quarter, a decrease of $3 million compared to the same period in 2022. Non-GAAP general and administrative expenses, excluding non-cash stock-based compensation were $20.3 million, or 42% of revenue in the second quarter, which compared to 54% of revenue in the same period last year, an improvement of nearly 1,300 basis points year-over-year. In July 2023, the company communicated workforce reductions to certain variable hourly employees in expert vetting and matching roles and IT customer support. The workforce reductions are the result of efficiencies gained through new recurring revenue relationships with higher lifetime value customers that simplify the company’s operating model as well as automation efforts involving self service capabilities, the application of AI and other efficiency efforts. Cost savings realized from the workforce reductions across variable roles staffed in proportion to customer volumes are allowing us to increase the pace of investments in product and engineering, including AI, to more aggressively pursue our product roadmap and drive both growth and profitability in future periods. As Chuck mentioned, we delivered positive adjusted EBITDA of $1.3 million, a $10.9 million or more than 2,500 basis point improvement year-over-year, beating our guidance range of an adjusted EBITDA loss of $3 million to break even. Positive adjusted EBITDA was driven by improvements across every P&L line item on a year-over-year basis, including higher revenues, gross margin expansion, sales and marketing efficiency gains, and continued variable label productivity improvements stemming from our automation efforts in our business model changes that streamline operations. We believe we’ll be able to continue to drive further efficiency and operating leverage as revenue and active member accounts continue to grow through our work on enhanced self-service and AI capabilities. During the second quarter, we had negative operating cash flow of $4.5 million, which primarily reflects the continued burn down of legacy package deferred revenue and compared to negative operating cash flow of $19.3 million last year, an improvement of $14.8 million, that reflects the substantial improvements from our evolution to Learning Memberships. We have $90.9 million of cash on our balance sheet and no debt, giving Nerdy ample liquidity to fund the business and pursue growth initiatives. Turning to our business outlook. Today, we’re providing third quarter and updated full year 2023 guidance. For the third quarter and full year, we expect year-over-year revenue growth will be driven by the completion of our evolution towards recurring revenue stream in our consumer business, the corresponding increase in the number of Learning Membership subscribers and higher institutional revenues. Third quarter revenue guidance reflects the quarterly low point in revenue during the year, which is due to normal seasonality and the resulting lower revenues from Learning Membership, legacy package customers, and Varsity Tutors for schools that occur when K-to-12 schools and universities are on summer break. In fact, we experienced the summer trough or low point in active members two weeks ago, and total members started growing again this past week, a trend we expect to continue as new learning member acquisition grows, approaching the start of the school year and the end of summer break for all students. Full year revenue guidance reflects normal back-to-school seasonality, with effectively all schools in session after Labor Day in September, including anticipated higher levels of new customer acquisition and retention, coupled with higher institutional revenues during the academic calendar when K-to-12 schools and universities are in session. For the third quarter of 2023, we expect revenue in a range of $38 million to $40 million, representing 23% growth at the midpoint versus our Q3 2022 revenue of $31.8 million. For the full year, we’re raising our revenue targets from $193 million to $200 million to $196 million to $200 million, representing 22% growth at the midpoint versus our 2022 revenue of $162.7 million. Our positive momentum provides us with increased confidence in our expectation that we’ll deliver accelerating sequential year-over-year revenue growth each quarter as we move throughout 2023. Our adjusted EBITDA guidance for both the third quarter and full year reflects the continuing benefit from our recurring revenue products, which focus on long term relationships with higher value customers, an improving gross margin profile, and further operating efficiencies stemming from the completion of our evolution to recurring revenue business models. Third quarter adjusted EBITDA guidance reflects the impact of lower revenue due to normal summer seasonality and higher variable costs in the third quarter as we ramp into the back-to-school selling season. For the third quarter of 2023, we expect an adjusted EBITDA loss in the range of $8 million to $10 million. For the full-year, we’re raising our adjusted EBITDA targets from a loss of $7 million to break even to an adjusted EBITDA loss of $4 million to breakeven. Consistent with prior guidance, we expect a return to positive adjusted EBITDA in the fourth quarter. Thank you again for your time and with that, I’ll turn it over to the operator for Q&A. Operator? Q&A Session Follow Nerdy Inc. Follow Nerdy Inc. We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Our first question comes from the line Doug Anmuth with JPMorgan. Please go ahead. Bryan Smilek: Hey, it’s Bryan Smilek on for Doug. Thanks for taking my questions. Just to start, can you just elaborate on the early results and feedback you’re seeing from the Revamped User Experience launch in 2Q? And then could you also just provide an update on the benefits of monthly memberships and how you think about pricing going forward? Thanks. Chuck Cohn: Absolutely. Thanks, Bryan. Yes, so we’re really excited with the new digital Learning Membership experience. We’ve completely overhauled it with a specific focus on discovery and self-service tools. So there are a variety of different ways that you can get value out of your Learning Membership, ranging from, of course, live tutoring to group classes, to recorded on-demand videos, to asynchronous content. And then as part of this back-to-school launch, we’re going to be launching a large, large swath of AI-generated content in practice test format, diagnostic test format and others. And so there’s so much different content that we wanted to organize it in a way that was consistent with how students study. And so on their main dashboard page, students are able to discover a variety of different tools they can use and then dig into a particular subject and find all the different learning formats associated with that subject, because we know that most students prefer to learn across multiple different learning formats. So when this launched, we saw a pretty dramatic step function change in engagement among non-tutoring formats. And that’s really exciting because we know that historically, when learners engage in multiple subjects or multiple learning formats, that we see significantly higher retention and customer lifetime value ultimately. And so that’s exactly the metric that we are trying to move. And as we add a couple of additional capabilities beyond just the existing membership features that they have to date, like the AI generated content, like a couple of additional iterations on a couple of our key product modalities, AI tutor is getting a huge overhaul soon, we’re pretty excited about the potential to get yet another step function change, which we believe will ultimately lead to much higher levels of engagement and retention and ultimately customer lifetime value. Bryan Smilek: Awesome. Thank you. And then just on the monthly membership benefit towards overall pricing and top of funnel acquisition. Jason Pello: Yes, I think I would say during the summer both acquisition and retention exceeded our expectation. We think from a price point perspective, the value that we can provide through the Learning Membership with all of our modalities is appropriately placed. And then certainly, we feel like those level of new customer additions during the summer months continue to accelerate, with June and July being the highest, we’re well positioned going into the key back-to-school period and we feel really good about the setup that we’ve got going. Chuck Cohn: Yes, and we saw like one of the really exciting things is that as we continue to improve the customer experience and some of the product marketing associated with it, we’ve seen conversion at the top of the funnel continue to improve. And that’s resulted in an acceleration in new customer additions on a year-over-year basis throughout the last several months. So over the last couple of months, so call it June, July and even August month-to-date, we’re in the mid-to-high-30s, a north 35% growth on the kind of combination of tutoring, package and Learning Membership customers. So really excited about that. And then, as we mentioned in our prepared remarks, as of June, a 100% of new consumer customers joining the platform are doing so through Learning Membership, which, of course, is subscription revenue and more predictable and ultimately allows for us to add more value to that customer experience by continuing to bundle in additional products and features that are additive to that learning experience. So the fact that there’s this close connection between improving the value that we’re providing to consumers, seeing conversion at the top of the funnel accelerate and grow and then that driving new member adds that were ahead of our expectations is something that we feel really, really good about. So right now, there’s about 15% of students or so in the United States are in schools, started going back about a week ago. Over the next 5 weeks, the remainder will begin to start. But the fact that new customer acquisition is ramping up and the extent to which some of the new elements of our member experience and our offering overall are resonating, really exciting and encouraging. But we’re not all the way through the back-to-school season yet. We have really strong summer on new customer adds, good start to August and we feel good. Operator: Our next question comes from the line of Ryan MacDonald with Needham, please go ahead. Matt Shea: Hey, thanks for taking the question. This is Matt Shea on for Ryan and nice to see the EBITDA strength in the quarter as well. Wanted to double click on the guidance though, so I think we were a little surprised by the lower numbers in Q3 relative to consensus. And I think part of that is some questions around the new Learning Membership model and the consumer revenue. So curious with the seasonality that you described in the prepared remarks, can we think about that as really just compared to Varsity Tutors for school and some of those package customers and really that you’re not seeing that same seasonality with some of the Learning Memberships. And ultimately would just love to kind of get an update on what things were seasonal that you’re starting to see abate and what things are maybe seasonal that will continue to be part of the Nerdy model now and in the future? Jason Pello: Yes, I think one of the things to keep in mind though, while we beat revenue expectations during Q2, Q3 guide is consistent with our expectations from before Q2. One of the things to keep in mind is when we guided towards active members at the end of Q2, that was our first point going through the summer. And what we ended up seeing was that the low points and the number of active members actually happened about two weeks ago. And then last week we actually started to have again net new additions to Learning Memberships. And then, as Chuck mentioned, as we entered this back-to-school period, we’re only about a week in. We’ve got at least 6 more weeks before the majority of students, or the vast majority of students, are in school at both K-to-12 and universities post Labor Day. And so the quarter is a little bit backweighted. We just wanted to take that into consideration given this is our first order — or first back-to-school period, having the consumer offering being 100% learning members and also the timing and cadence of that seasonality. So look, as Chuck mentioned, active new adds during July and June were above 35% and we feel really good about the setup. But just again, not having been through a back-to-school period at a 100% Learning Memberships, and given that we’re only a week into the back-to-school period, we felt that that guidance was prudent and consistent with what we had previously stated. Chuck Cohn: Yes, look, we’re doing exactly what we said we would do. So we exceeded expectations on revenue and EBITDA in Q2, feel great about that. We finished with more active learners than we expected. That was a function of better new customer acquisition and retention than expected. And the low point kind of in the summer is that last week in July, which obviously falls between quarters and then from that point on ramps up. So last week started ramping back up with the school year. Big net positive that week. So we’re really well positioned for the start of the school year. But as it relates to, I guess your implication around raising guidance relative to expectations around the next two quarters, we just want to see a little more data. We feel really well positioned to start the school year. And this guide is consistent with our expectations. Jason Pello: Yes, the only thing I’d add is the positive momentum we had and the guide that we put out there delivers accelerating sequential year-over-year revenue growth each quarter as we move throughout 2023. And we expect to be adjusted EBITDA positive in the fourth quarter and growing to north of 40%. So we feel really good about those metrics, and I think they demonstrate the strength of Learning Memberships. Matt Shea: Got it. Appreciate that color. I think that all makes sense. And switching gears to the institutional business, it looks like with the Esser funds, those should all be or they’re all planned to be committed by the deadline at this point. So curious how additive that continues to be with some of your RFP volume and demand and then post that funding, do you have any concerns that the funding is driving some interest right now, and maybe that makes it tougher to drive deals once those Esser funds have been used? Or is it more just additive to conversations now? And you think that you can continue to have productive conversations whether Esser funding is on the table or not? Jason Pello: Great question. So, look, we’re coming off a great quarter. We had 43% revenue growth in the quarter. Our bookings $10.5 million, we’re up 175% year-over-year. We only launched for our seniors for schools two years ago. And one year ago, we launched this new always-on strategy focused on larger districts, bigger partnerships, more comprehensive solutions, a top down sponsorship from superintendents. And we feel great about the momentum to date and the extent to which our product is resonating. And I’ll answer your question about the specific funding types, but maybe to put it into perspective, right now we are serving less than 1% of public school students, and we’ve obviously built a tremendous amount of momentum over just this past year. And as we enter the back-to-school period, we feel like this strategy around putting teachers at the center of the relationship where, based on their own unique knowledge of what’s occurring in the classroom and who needs the most intervention, they’re able to prescribe tutoring to the students that need it and get leverage in their own life. So we’re solving kind of the two most important and acute issues that school district administrators face, which is student achievement, including learning loss, and then separately, teacher retention. And this product lines up incredibly well against both of those. And so as we head into back-to-school, we have a whole host of different product enhancements that we’ll be rolling out that are oriented around making the product even better and then also even more cost, efficacious as it relates to being able to help a larger number of students and making it more reasonable for an entire school district to be able to roll this out broadly. So right now, I believe about a third of those that’s your three funding dollars have been spent. That leaves $16 billion to be spent over the course of the next call it 15 months. And we feel really good about the position that we’re in and frankly, the extent to which this product solves such acute needs that it’s durable, long lasting in nature. And we feel like we’re just getting started. So we are hearing multiple year deals being brought up. That’s exciting. That’s something that we expected to have happened. We had one of those in the quarter that was material, and we feel good about the ability for this product to continue to scale. Matt Shea: Great, thank you so much. Operator: Thank you. Our next question comes from the line of Andrew Boone with JMP Securities. Please go ahead. Andrew Boone: Matt on for Andrew. Thanks for taking my question. Maybe two. Just on the Institutional business, can you just talk about your sales force and if there’s any other investments that need to be made there, especially as the business continues to scale. And then just now it’s obviously Learning Memberships at an inflection point, what further investments do you need to make? Obviously, the new portal is a key focus now, but are there any other additions that you need to make into that business as it continues to grow? Thank you. Jason Pello: Sure. Happy to answer that. Good question. So on the Varsity Tutors for school side, one of the things you’re starting to see happen is that we’re getting operating leverage at the investments that we made in our institutional go-to-market strategy and team over the course of the past call it 18 months or so holding that cost constant, now benefiting from the increased revenue, those are actually driving operating leverage. So the kind of team size in totality and the investment there is relatively constant. And then as we’re getting renewals, as that revenue base is growing, you’re starting to see the benefits fall through to the bottom line. So I would not expect that we grow the team substantially and feel good about the overall kind of total investment there. And then separately, on Learning Memberships, you’re going to see the fact that we’re adding new learning members as you ramp up through the school year, who are, of course, higher lifetime value than their package predecessors, drive sequential revenue growth in the coming quarters. So you’re basically layer taking what we expect to be higher customer lifetime value customers on top of one another, who then are higher — longer duration, higher value per month. And as a result, you get revenue acceleration. So we would expect kind of coming out of Q3, our seasonal low point, that you start getting pretty significant operating leverage associated with it. And while we’re adding in certain areas like software engineering and AI, thus far those investments have been self-funding and we feel really good about heading into 2024, the ability for this business to be quite profitable. Matt Condon: Great. Thank you so much. Operator: Our next question comes from the line of Mario Lu with Barclays. Please go ahead. Unidentified Analyst: Hey, this is [Jesse] (ph) on for Mario. Thanks for taking the question. Kind of piggybacking onto the last question. So you guys had another strong quarter in terms of marketing spend leverage and sort of that layer caking dynamic that you mentioned earlier. So how should we think about the sustainability of this lower marketing spend intensity and then going forward, is there more runway for marketing efficiencies or should we expect to level off from here in the out years? Thanks. Chuck Cohn: Yes, that’s a great question. I think as you mentioned, we’ve been able to drive substantial leverage through the first half of this year from a marketing perspective, given a combination of both higher LTVs on the one hand and those will continue to layer tank, which is going to be a net benefit going forward coupled with just efficient and optimized marketing spend. One of the things though that we’re going to do during the third quarter and this plays into the EBITDA guide is given the strength of the LTVs in the more efficient operating model, we are going to lean into some additional marketing spend to extend our reach during the key back-to-school period. We think it’s a prudent thing to do when customers are in the greatest need state for tutoring. And, again, given the strength of the LTVs that we’ve seen, we think it’s the right time to do it. Jason Pello: Yes. As it relates to your question on sustainability, I mean, the exciting thing about the growth in new customer adds that we’re seeing is that it’s been driven by conversion. So our product is resonating more with customers and we are making it more rather than we’re increasing the value that we’re able to communicate and provide. And that, of course, has incredible benefits from a unit level economic perspective and allows for you to drive immense operating leverage over time. And so as we continue to add new SKUs to appeal to different audiences, feature different elements of the membership to communicate value propositions that are specific to that type of customer that they’re likely to leverage, we’ve seen conversion improve and then unit level economics improve. So CAC going down and then new adds going up. And that is something that we think we’ll be able to continue to optimize over the course of many years to come. Just continuing to make the product more resonant and appealing, adding more value to the Learning Membership and as a result you’re driving delta marketing and operating leverage. Operator: Thank you. There are no additional questions waiting at this time and that concludes today’s conference call. I hope you all enjoy the rest of your day. You may now disconnect your lines. Follow Nerdy Inc. Follow Nerdy Inc. We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Spirit Airlines, Inc. (NYSE:SAVE) Q2 2023 Earnings Call Transcript August 3, 2023 Operator: Thank you for standing by. My name is Adam, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Spirit Airlines Q2 2023 Earnings Call. All lines have been placed on mute to prevent […] Spirit Airlines, Inc. (NYSE:SAVE) Q2 2023 Earnings Call Transcript August 3, 2023 Operator: Thank you for standing by. My name is Adam, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Spirit Airlines Q2 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the call over to Vivian Taveras, Manager of Investor Relations. Please go ahead. Vivian Taveras: Thank you, Adam, and welcome everyone to Spirit Airlines’ second 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 Haralson, 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 second quarter 2023 earnings release. A copy of which is available on our website under the Investor Relations section at ir.spirit.com. I will now turn the call over to Ted Christie, Spirit’s President and CEO. Ted Christie: Thanks, Viv, and thanks to everyone for joining us on the call today. I want to start by saying thank you to our entire Spirit team and our business partners for their commitment and dedication and caring for our guests and minimizing the negative impact from the rash of thunderstorms that have plagued us here in the Fort Lauderdale area and across much of our network in recent months. And while our reported DOT operating metrics for the quarter were negatively impacted by all the weather events, and a plethora of air traffic control initiatives. Our controllable completion factor for the quarter was very good, coming in at 99.7%. Turning to our second quarter 2023 financial performance. Operating margin was 3.3%, about 2 points below our initial guide. Total RASM for the quarter was strong and well above pre-COVID historical averages. However, demand for the peak summer travel period has not built as we expected, resulting in lower fare levels. We are comparing to a period of exceptionally strong domestic and near-field international demand in 2022, while at the same time, seeing a dramatic demand shift away from these regions towards long-haul international. Inclement weather and ATC disruptions in the peak part of June also contributed to the lower TRASM. These demand and pricing trends and difficult weather continued throughout July and are expected to continue into the fall. However, once the international summer travel season ends and kids go back to school, we expect demand will shift back towards domestic. This should mean a more normal pricing and demand environment for the peak holiday travel periods in the fourth quarter. Before Matt and Scott share further details about our second quarter performance and forward outlook, I want to update you on our issues with the GTF engine that powers our neo fleet. Last week, RTX shared that Pratt & Whitney had recently discovered a quality control issue during the manufacturer of a disc on neo engines produced primarily between Q4 2015 and Q3 2021. Out of an abundance of caution, Pratt has identified an initial 200 engines for accelerated inspection, and we were told that we had up to 13 engines in this group. The current plan is to begin pulling these engines from service after Labor Day, which will result in seven neo aircraft being removed from scheduled service. This is above and beyond the current set of aircraft on ground or AOG as we refer to them, which as of today sits at seven aircraft. For planning purposes, we are assuming these seven additional aircraft will be out of service post Labor Day through the end of the year. Matt will discuss this impact in more detail, but the close-in nature of the schedule reduction does have a significant impact on revenue for September. It is worth noting that Spirit is the largest operator of GTF-powered neos in the United States with the highest number of engines produced during the 2015 to 2021 period. Exposure to this issue is very unique and material for us and is having an impact on our margin. We should know by mid to late September, how many of the additional 1,000 engines Pratt has identified for inspection are ones we operate. Timing for the engine inspections on the next 1,000 is not yet known, but we believe it likely the inspections will need to be performed before the end of September 2024. Pratt has indicated that some of the 1,000 engines may already be scheduled for removal in 2024. So the net incremental impact may be smaller. However, we will learn more in September. We are still managing through a significant number of unscheduled neo engine removals due to an assortment of issues previously disclosed and discussed. Throughout the second quarter, we had six and currently have seven aircraft out of service and have assumed the same for the fourth quarter. That said, our maintenance planning team is gaining confidence by the end of the year, we should see discount reduce at least temporarily to about four aircraft. And while unscheduled removals should ease as we enter 2024, unfortunately, next year, we have a large spike in the number of scheduled neo engine checks as a result of a short time life-limited part, which means that we will have the equivalent of at least 10 aircraft out of service during most of 2024. This, of course, doesn’t include any additional aircraft we will have to ground as a result of the latest engine issue. This new issue is yet another frustrating and disappointing development. RTX has promised to make the airlines affected by this new neo engine issue hole. And for now, we intend to take them at their word and use that assumption in our planning. The details and timings of those reimbursements are unknown as of yet. We’ll keep you posted as we get further updates. Matt, over to you. Matthew Klein: Thanks, Ted, and a special thanks to all our team members. We carried a record number of guests and everyone involved continues to do a great job managing the high volumes while navigating the numerous weather and ATC challenges. I’ll start with a brief overview of our second quarter revenue performance and provide some color on the demand environment for the third quarter. Total revenue for the second quarter was $1.43 billion, up 4.8% year-over-year. Total RASM was $10.03, a decrease of 10.7% on a capacity increase of 17%. Load factor was 82.9%, down 3.1 points year-over-year. Compared to Q2 2019, total RASM was up 9.6% on a capacity increase of nearly 30%, a strong result, but short of our expectations. On a per segment basis, passenger revenue per segment decreased 20% year-over-year to $57.86. Non-ticket trends remain strong, and on a per segment basis increased 2.9% or about $2 year-over-year to a second quarter record of over $70. Based on trends we were seeing earlier in the year, coupled with the knowledge of what performed exceedingly well in the summer of 2022, we made the intentional move to increase the number of longer stage flights heading into the peak summer travel period. In the second quarter, in aggregate, these routes performed in line with pre-COVID historical averages. However, we were anticipating they would outperform those averages and have results similar to what we had experienced in the recent past. In addition, demand did not build into the peak summer period as we had anticipated, leading to lower fares across the network. When we look at our second quarter revenue guide compared to flow in results, approximately 25% of the revenue miss was associated with elevated cancellations in the quarter and the balance of the revenue variance was split between longer haul domestic performance, as I just described above, along with a general regional demand impact. Ted mentioned earlier that we had to make a significant change to our September schedule due to issues regarding the GTF engines for Pratt & Whitney. We received the update on the last day before we put our September scheduled event. This update required us to remove seven available aircraft from the fleet on less than 24 hours’ notice. Under normal circumstances, we would select a flying that is expected to have the lowest contribution to the network. However, in this situation, we had to remove flying that our already built lines of flying could offer up relatively easily since we didn’t have time to build out an entirely new schedule. This results in an operating schedule that isn’t exactly as commercially effective as we would otherwise set out for sale. We did remove nearly 5% of planned September capacity due to this specific engine removal issue, and we expect this new AOG issue will penalize revenue production in Q3 by approximately 1.5%, which is on top of the lost revenue for the original neo AOG issue, which we estimate reduces revenue by nearly 6%. So we do expect to smooth out our schedule in October, but the impact to top line revenue will continue until these issues are resolved. Turning now to third quarter guidance. We expect the demand trends in the domestic U.S., Latin America and the Caribbean to continue to be weaker than normal throughout the third quarter as a result of the carry forward of demand shifting to long-haul international and very difficult operations throughout the peak due to weather and ATC. Taking this into account as well as adjusting for the additional out-of-service aircraft, we estimate total revenue for the third quarter 2023 will range between $1.3 billion and $1.32 billion down 3.2% to down 1.7%, with capacity increasing 13.7% year-over-year. This equates to unit revenue being down 13.6% to 14.9% year-over-year in the third quarter. And with that, I will now turn it over to Scott. Scott Haralson: Thanks, Matt. After briefly discussing our Q2 results and Q3 guidance, I’ll share a few details about our recent fleet changes. Our second quarter operating costs were $1.39 billion. Nonfuel operating expenses came in at the better end of our expectations at $994.5 million. Fuel expense was in line with our guide. Fuel gallons were modestly lower, but average fuel price was higher than estimated. Compared to when we gave our guide in late April, crude oil prices improved crack spreads widened across the board, driving a fuel price per gallon for the second quarter of $2.62, slightly higher than estimated guide of $2.60 per gallon. On a year-over-year basis, lower fuel expense driven by a 39.1% decrease in average fuel prices, offset increases driven by more flight volume, additional aircraft rent and inflationary wage pressures. Total nonoperating expense came in better than we estimated, primarily due to a noncash benefit related to the mark-to-market valuation of the derivative liability associated with the 2026 convertible notes. As a reminder, when we give our non-op guidance, it excludes any potential change in the mark-to-market adjustment. Liquidity at the end of the second quarter was $1.5 million, which includes unrestricted cash and cash equivalents short-term investments and the $300 million of capacity under our revolving credit facility. During the second quarter, we retired three A319neos, took delivery of five A320neos and delivery of our first A321neo aircraft, ending the quarter with 198 aircraft in the fleet. We currently estimate that total capital expenditures for the full year of 2023 will be about $255 million. Looking ahead to the third and fourth quarters, the development of the new neo disc issue, together with our other remaining neo engine availability issues, drive lower overall capacity production that harms our efficiency. However, on a positive note, our pilot attrition has reduced and assuming this lower level of attrition continues for the remainder of the year we would have been at full fleet utilization by Q4. The recent frat news results in even less aircraft in our fleet being available for operations. And this means we will likely be overstaffed and carry more pilots than required for Q4 and into early 2024. With pilot attrition no longer being a drag on our utilization by the fourth quarter, we can now isolate the AOG issues and look at the core airline. The core airline that is excluding AOGs, should be back to full utilization by Q4 and is expected to be closer to run rate margin in CASM ex production. The drag on margin caused by the AOG aircraft should be viewed as neutralized due to RTX make-whole commitment. Now let me discuss some of the recent changes to the Airbus order book. Early this year, we were given delayed aircraft delivery dates for 2023 and part of 2024, piling up deliveries in 2024. In addition, it has been widely expected that these delays would continue beyond 2024. We also had some decisions regarding a few of our A319neo orders and option aircraft that needed to be made. Airbus has also been clear to us about their own production limitations and backlog of orders that will likely push new order deliveries into 2030 and beyond. Also, in the near-term, we need a general slowdown of growth to de-risk the business and give ourselves a chance to digest the previous few years of growth. Given all of these things and the fact that our original orders only extended into 2027, we started discussing a broader reevaluation of our future aircraft deliveries. At the end of the day, we agreed to make the following changes without changing the total number of commitments. One, we reduced 2024 deliveries by 11 and smooth the remaining deliveries between 2025 and 2029. Together with our direct lease commitments and the retiring of our A319, these changes slower growth in the near-term and provide us a consistent level of deliveries for the back half of the decade. Number two, we up gauged all of our A319neo orders to A321neos to be delivered between 2025 and 2029. And three, we moved the timing of our option aircraft decision by one year and smooth the timing of those options. A lot of moving parts here, all of which we believe are positive to both Spirit and Airbus. And we appreciate Airbus partnering with us together to make a meaningful agreement giving us a stable and predictable order book for the aircraft mix we view as most beneficial to Spirit. At the time we made these decisions, we estimated these fleet changes would produce the 2024 growth rate in the high teens. However, that was before learning about the latest neo engine issue. It will be a few more months before we fully understand what the impact may be on our 2024 capacity plans. Looking ahead to the third quarter, we estimate our operating margin will range between negative 5.5% to negative 7.5%. We estimate fuel cost per gallon will average $2.80 with total operating expenses ranging between $1.39 billion and $1.40 billion. Our third quarter guidance metrics are included in our investor update published today, a copy of which can be found on our website at ir.spirit.com. Before I hand it back to Ted, I do want to recognize our operators. The past few months have been a difficult weather and ATC environment and our crews, our airport staff, the operations control center staff and the other operation support personnel have been the ultimate professionals, and I wanted to give them a quick shout out. So now I’ll turn it back over to Ted for closing remarks. Ted Christie: Thanks, Scott. Although we made progress on improving our operating margin in the second quarter of 2023, we are clearly still underperforming our potential and face a challenging Q3. We acknowledge that some of this is due to decisions we made coming out of the pandemic. In hindsight, slower growth would have been more ideal during and coming out of the pandemic. This was largely impossible for us due to the pace of our contracted deliveries. That, coupled with high pilot attrition issues have been contributing factors and are struggled to return to full fleet utilization. It is possible that we are being overly conservative with how tight we are willing to run the network with the intention of supporting operational reliability but at the cost of penalizing utilization. Labor, weather and infrastructure issues have been volatile and unpredictable. But we are optimistic that some of our learnings over the past few years will help productivity in the back part of 2023 and full year 2024. Pilot attrition rates in June, July and indications for August are trending better than we expected, which is great. It also means that for Q3, we could have flown more hours on the peak days than we scheduled and has resulted in a missed opportunity. Nonetheless, assuming our pilot attrition rates stay where they are or improve further, our growth is no longer constrained by pilots, which bodes well for our core fleet, achieving full utilization in peak Q4. In fact, if we weren’t burdened with aircraft being pulled from service due to GTF issues, we believe we could achieve full utilization on our entire fleet by year-end. We believe we missed out on some passenger volume in June and July holding out for higher yields that did not materialize, and we have revised our approach for the fall. Not surprisingly, accurately predicting the new normal demand levels post pandemic has been challenging. We are making tactical changes to our network post the Labor Day holiday, including more variation between peak and nonpeak day of week flying, which in this demand environment, we believe is the revenue and margin maximizing answer. The fleet decisions we have made, including the early retirement of the A319s, revising the pace of our aircraft deliveries beginning in 2024 through 2029 and up gauging more deliveries to the A321 variant should all drive fuel and other cost efficiency benefits in 2024 and beyond and allow us to deliver growth more in line with expected demand growth. In conclusion, the dynamics of the airline business are constant. One thing that I have learned over my two plus decade career is that things in the airline industry can change quickly and often. Sometimes the answer is to pivot and sometimes the better answer is to stay the course. The current setup is simply not favorable to a domestic-focused airline, especially while still operating with some lack of efficiency and productivity. I believe these things will change in our favor, and we are taking steps now to be positioned to capitalize on. Frustrations aside, our team is doing a great job adjusting as necessary, and I strongly believe our expected 3Q performance is an anomaly. Most important for us, as we trend towards a normalized utilization rate. We expect our cost structure to return to industry leading levels and provide us margin tailwinds and a considerable advantage against the rest of the industry. And now back to Vivien to begin the Q&A session. Vivian Taveras: Thank you, Ted. We are now ready to take questions from the analysts. We ask that you limit yourself to one question with one related follow-up. Adam we are ready to begin. Q&A Session Follow Spirit Airlines Inc. (NASDAQ:SAVE) Follow Spirit Airlines Inc. (NASDAQ:SAVE) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions]. Your first question comes from the line of Conor Cunningham with Melius Research. Your line is open. Conor Cunningham: Ted just comment of shifting day of week, it’s been a big theme this — just ignoring the potential fair impact. But just — when you think about operational stress on the system, when you add more [Technical Difficulty]. Ted Christie: Hey, Conor, you’re — sorry, Conor, you’re cutting in and out, but I think you asked about day and week variation and the operational effect of that, is that right? Conor Cunningham: Yes. Sorry about that part. Ted Christie: Okay. No problem. So you’re right. I mean one of the things that we implemented as a result of our learnings from 2021 here was that we started to smooth the airline out a little bit more, because it is easier for particularly airport ops to understand and schedule the airline. But that is only one of the many things that we’ve implemented as part of our operational enhancement package. And I alluded to that in my comments that we have quite a few things that we’ve done to make our operation run, and I think it’s been having a nice effect. And so as part of the learnings from that, we’re looking at things that are most effective and some of the things that we did that weren’t having as much of an impact. And so we believe that while we’re not going to stress the airline too much going from peak to off peak. There is some opportunity for us to drive some of that, which will help unit revenue, and we think it helps the margin at the end of the day, particularly in the off-peak period. Conor Cunningham: Okay. And then on the GTF issue, you mentioned that perhaps talking about making a whole. I’m just — I know you expect that to play out. Is that — I mean I think Alliance talked about maintenance credits? Just any thoughts there would be helpful. Thank you. Ted Christie: No problem. Yes, it’s still early. This all developed quite quickly on us. As we said, we had to make quick changes to September, which is not favorable at all. But one thing I will say about Pratt, we’re a long-standing customer. This is a storied institution in the United States, one of the biggest industrials in the history of the United States, and we’ve had a long-standing partnership with them, and they’ve always stood by their customers, and they’ve always honored their commitments. And so we expect that to be true. They’ve intended to make us whole on this issue, and that is our expectations. But coming to the details of what that will look like and how it will take form, it’s still too early to tell. Operator: Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Your line is open. Duane Pfennigwerth: Hey, good morning. Thanks. Ted, your comment about holding out for yield was kind of interesting. I think there was a line in the press release about an acute reduction in demand. Can you talk about when you first saw that kind of acute reduction in demand? Is it sort of the other side of the coin of maybe holding out for yields? So I assume it was kind of late in the quarter issue? And any color on the markets where that was kind of felt most acutely, maybe Caribbean, et cetera? Ted Christie: Sure, Duane. Thanks. I’ll give just a brief intro, but I’m going to let Matt coloring around the edges. I think some of the points you made, and we used the words intentionally drive home as we saw was very acute. We feel like it’s isolated and noticeable and ties nicely with what we’ve witnessed and now heard people talk about rapid and distinct shift away from domestic and near-field international, which was very strong last year to long-haul international, which is obviously considerably outperforming this year. And our strategy around handling yield clearly was patterned off of what we were seeing over the last 12-plus months, and that did not play out well towards the end of June. But Matt, what would you add about geography and that sort of thing? Matthew Klein: Sure, Duane. I can — one perfect example, I think, as you touched and talked about Caribbean there for a second, is Cancun would be an example of some of the abruptness that occurred during the quarter for us is April, within the same quarter, April, we saw incredible demand strength, pricing power and sold out flights basically every day. And then less than two months later, we saw in June, which is still a very strong time for Cancun reverse with unit revenues, in some cases, down very high double-digit numbers percent change year-over-year. And that’s all happening within the same quarter, and that’s how abruptly things kind of moved. And we have a couple of other examples like that, but that’s probably the biggest example. And having said that, our capacity is up a little bit in Cancun. So some of that could be explainable, but not to the level that we actually saw. And the industry has added some extra capacity there, too. So it’s always about supply and demand. But in this case, the demand just fell off. And as we talk about yield and think about June, but then also into the third — end of June, and then into the third quarter. We took a position that we had been seeing really for the last 15, 16, 17 months of the demand will be there and will come in and the yields will be impressive. And that just stopped relatively quickly. It’s not that it went completely away. It’s just that it stopped at the same pace that we had seen. And really, we just — we held out a little bit too long expecting to see those yields come in. Once you make an adjustment to that, then you are sacrificing yield for volume, and then you need to see the volumes come in. So we are anticipating and starting to see the volumes come in. They’re just at lower yields than what we’d like to normally see for third quarter. We have described this as an acute situation, and we are expecting to see demand trends here in the domestic U.S., but also near-field international as well as U.S. territories bounce back. And look more normal as we get out of the summer into the fall, and then especially at the peak periods in the fourth quarter. Duane Pfennigwerth: Any themes on the originating city aspect to that demand change? Or did you see sort of variation depending upon what region of the country you’re originating from? Matthew Klein: No, not really, Duane. It feels like it’s spread. I mean being heavily East Coast oriented, has an effect on some of the demand where that demand decides to go, because as you would expect, Transatlantic, Europe is not too far away from the East Coast, relatively speaking. So there was an impact with that. But in general, we saw impacts, but East Coast really took it probably the most. Duane Pfennigwerth: That’s great. I really appreciate that color. And then just on the engine issue, and this may be impossible at this point in time. But of this kind of negative 6%, negative 7% margin outlook for the third quarter. How many margin points do you think these specific engine issues are costing you? And to the extent that there’s reimbursement sometime down the road, how would you size that headwind as of today? Ted Christie: Sure. So we think the easiest way to think about the margin impact of this issue is really driven by our utilization and productivity. And given where we are right now with fleet utilization, which takes into account all the aircraft on ground that we have today, we’re probably missing 7-plus margin points as a result of that, broadly speaking. Now some of that can be attributed to some of our own restrictions, which we alluded to before about how we’re running the airline. But the vast majority of it is because we have AOGs. And so we’re going to be obviously in discussions about what the impact it’s having on us. And it is unfortunately for us, in the United States, we’re really to stand out here. And so it will be an important discussion that we have with the folks at Pratt and RTX. But as I said earlier, we’ve got a very strong partnership with them. They’ve always stood by us, and they’ve always honored their commitments. And we have no reason to expect that would change here. Duane Pfennigwerth: Thank you. Operator: Your next question comes from the line of Scott Group with Wolfe Research. Your line is open. Scott Group: Hey, thanks. Good morning guys. So I know there’s a lot of talk about the shift international in days of week. But if I take a step back, is it just possible that we’ve now finally surpassed pre-pandemic domestic capacity. At the same time, corporate demand is somewhat diminished from where it was and legacies are forced to just be a little bit more focused on leisure. So there’s just too much supply relative demand for some of the smaller carriers, and we just sort of reached that inflection point to possible that’s what’s just happening right now? Ted Christie: Yes, good morning, Scott. So look, I mean, the nuances of establishing what impacts demand are difficult to arrive at as you would expect. But given what we experienced in the latter part of Q2 and what we’re seeing here in Q3, we wouldn’t describe it that way. We would describe it as clearly a shift in demand geographically. And so we think that that move probably costs us 400 basis points on the margin this quarter. And we don’t expect that that will repeat next summer or in the fourth quarter more closely in. And so I wouldn’t say nothing that we’re seeing right now says that we have a noticeable supply demand imbalance. In fact, if you look at what’s been happening over the course of the recovery from the pandemic, unit revenues across the Board are up. And admittedly, we’re considerably larger, but the industry is only modestly larger, and it would tell you that there’s, there’s plenty of demand out there. So I don’t know that we see data yet. I mean your supposition would say, is it possible? I suppose anything is possible, right? But it’s entirely possible that right now, there’s an artificial lid on demand, because corporate travel hasn’t returned and because people are fatigued with the operations that we’ve all been dealing with over the last year and a half. And it becomes exhausting when you sit at an airport and you’re delayed six hours because of air traffic control initiatives and ground delay programs. So I mean, there’s just as much as there’s always possibilities that there’s changes happening in the demand profile. I think there’s just as many that say it’s possible that we’re seeing some things that are artificially living demand. So again, we’re more focused on what we saw in the second quarter and what we’re expecting here in the third, and we think that that’s what’s driving the disconnect in our performance. Scott Group: Okay. That makes sense. And then just given the merger and I guess the uncertainty of the merger, how do you plan for capacity growth next year? What are your initial thoughts? And I guess, how much capacity growth you need to have a shot of getting CASM down next year? Ted Christie: Well, the good news is, and Scott can jump in here after I’m done, is that the primary driver of getting the CASM where we wanted to be is getting the productivity of the existing assets to where we want it to be. So that’s not necessarily about — I mean, obviously, that drives growth because utilization will in fact drive growth. But as Scott said, we feel that we would be at that in the fourth quarter, excluding the AOGs with Pratt. That will help us get to our expected more expected kind of CASM trajectory, and that should be a tailwind for us. So looking at 2024, it’s a little cloudy right now, because we originally thought we had a pretty good beat on what was happening with the fleet. We made the necessary adjustments, which I think were smart. And then, of course, we just received information two weeks ago that kind of changes that. So what would you add to that? Scott Haralson: I think that’s right. So Scott, I think it’s about utilization first and foremost for us. I mean we’ve been running a pill for the last few years trying to catch up to the amount of aircraft we’ve been delivering. And with the changes in the Airbus delivery stream that we negotiated, I think, put us in a pretty good spot to try to navigate all of the different variables that are moving and let us feel comfortable that we’re able to generate margins that will tell us that we should be growing again. I mean we got to earn that right to grow the airline. So we got a return utilization, return margin and cash reduction. And then we can start to lean forward. But I think we want to make sure we can digest the capacity. We’ve taken over the last few years, get utilization to where it is, and kind of get our skis underneath us, and then we’ll move forward. Scott Group: Okay. Thank you guys. Operator: Your next question comes from the line of Jamie Baker with JPMorgan Chase. Your line is open. Jamie Baker: Hey, good morning everybody. Thanks for the color on pilot attrition. Just wondering if you have any year-on-year numbers that you could share. Also, is the new contract having the desired effect of increasing applications or is it merely slowing attrition? Either way, it’s obviously positive? Ted Christie: Yes, it is positive. And the attrition numbers are stabilizing in ranges that versus where we were at peaks. And you’ll recall on our Q1 earnings call in April, we alerted that we were seeing some alarming attrition levels. And as a result, we pulled some capacity from the summer. Those ended up being the anomaly. So we’re now at levels that are much more akin to what we were experiencing in the early part of this year as a result of the deal and give us confidence that as we move forward, we’ve reached some stability. Now, I think obviously, a new contract does create stickiness for existing pilots. Our recruiting team is doing a fantastic job at navigating the environment and we’re having great success at attracting new pilots as well, full classes every time. And the engagement there is really strong. And as a one anecdote. We — like I said, we’ve noticed that there have been pilots leaving us and a number of other lower-cost airlines going to the majors. We’ve now experienced numbers of what we’re calling boomerang pilots, where they’ve left us, gone to another airline and are coming back. And I think it has to do with a mix of, obviously, the contract itself. The quality of life that we offer and the combination of those work life balance, benefits, pay and the word of mouth is spreading. So I’m encouraged by all of that. We can’t rest on our laurels. We’ve established new programs that give our pilots much more touch time and concierge type feel, and it’s working. And so for now, that gives us some confidence that it will no longer be the limiter. And it really comes down now to fleet. And that’s how we work to solve this problem with Pratt. Jamie Baker: Got it. Thank you. And that leads into my second question, and this is probably one of the most theoretical questions that I’ve asked you over the years. But if you could choose between the GTF issues completely disappearing tomorrow, gone, or having corporate demand immediately recover for the big three and not just to 2019, but back to where it should have been in 2023, which of those would you choose? Can’t have both and have one or the other? Ted Christie: I can’t have both. Okay. Well, I think my answer would be to have the Pratt issue resolved. It’s localized to us. It makes us stand out. We don’t like it, neither do they by the way. And it’s crimping what drives this business, which is productivity and low cost. So you’re right that having another demand funnel open up would be good for the broader industry. And I couldn’t argue that, that wouldn’t help the whole industry a little bit. But when thinking first specifically about us, I would feel better about having our house in order and our fleet where we want it. Jamie Baker: Okay. Very helpful. Thank you everybody. Operator: Your next question comes from the line of Stephen Trent with Citi. Your line is open. Stephen Trent: Good morning everybody. And thanks for taking my questions. Just quickly, I was wondering, I was intrigued by what you said about Cancun. On your Mexico flow, have you actually seen over the last year or so, any tailwinds in terms of cross-border demand considering that the FAA has not restored Mexico’s Category 1 aviation safety rating and [indiscernible] not linked up yet, et cetera. Just wondering if that’s created any opportunities for you? Thank you. Matthew Klein: Hey, Stephen, it’s Matt. So we have added a little bit more in Mexico overall. We haven’t really seen a lot of the cross-border sales benefit that you’re discussing or, I guess, asked about. Almost all of our Mexico demand is point of origin in United States. And believe me, well, I’d tell you that I wish we saw more coming out of Mexico. It’s the vast, vast, vast majority for us is a point of origin U.S. Stephen Trent: Great. I appreciate that, Matt. And just very quickly, when you look at the challenges, I mean, not just you guys, everybody with air traffic control and the other issues out there were storms. Any high level view with respect to longer-term strategy of maybe doing more with crew bases in certain regions versus today? Thank you. Ted Christie: Sure, Stephen. So you’re right. I mean the whole industry has been very vocal about the challenges we face, and I know weather is a driver of that. And it’s certainly appears to be noticeable that there has been a shift in the weather patterns. But we don’t believe that the weather patterns really fully account for the changes and what we’re experiencing from a level of disruption, delay in cancellation. And let me give you like an interesting data point. So pre-pandemic, in the second quarter of 2019, Spirit canceled about 700 flights for weather. And if you’ll recall, which you may not, but in the very early part of this — of the second quarter of 2019, we had a very difficult Easter period because of a storm pattern that moved through Florida. It was very noticeable and it turns out it was the first indication of some of the challenges that the JAK Center control center was having. So we’re about 30% bigger today than we were in 2019. So we should have expected to see around 900 to 1,000 cancellations in the second quarter of this year. Instead, we canceled 1,700 flights. So weather alone doesn’t describe what’s happening. What’s happening is that the staffing shortages at the variety of different control centers throughout the U.S., which has been widely publicized are limiting their ability to navigate the airlines around the challenges, and it’s putting us into a real bind. So what we’re trying to do and what we’ve done over the course of the last couple of years is we’ve done exactly what you suggested. We’ve put significantly more investment into things that previously were just easier to run. So adding crew bases has turned out to be one of the bigger wins for us, in fact. And we’ve added — since 2019, I think we’ve added maybe four or five crew bases. So it’s been a noticeable shift, and that’s helped the scheduling team create a little bit more ease of recovery. And that’s just one example of a variety of different things that we’ve done to insert buffer to create recoverability. We’ve reduced the average line days for our crews, they used to go out on average around four days and now they go on average around two days, and that makes it easier to recover there. All of this is intended to make the operation easier to recover and more reliable, but it doesn’t come for free. And so we, like the other airlines are doing our best to lobby with the Department of Transportation and the FAA to put the necessary infrastructure in place in the air traffic control system so we can start to run more efficiently, which will drive lower cost and lower fares, which is really the best answer for the country. Stephen Trent: That’s very helpful. Really appreciate the color. And thanks for the time. Operator: Your next question comes from the line of Helane Becker with TD Cowen. Your line is open. Thomas Fitzgerald: Hi, this is Tom Fitzgerald on for Helane. Thanks so much for the time. First question looks like you’re growing a lot in the third quarter in Phoenix, Charlotte and Los Angeles. I just wanted to get — just curious if you had any color on those markets in particular. And then just as a follow-up, just a quick modeling question. I know the base case assumption seems to be that the regional shift in — the regional demand mix will shift back to something more normal in the fourth quarter. Are you pre-COVID, you’d usually — 4Q revenue would decline a little bit sequentially versus the third. Last year was up. Is it just from a high level, would you expect it to feel like last year it would be slightly up versus the third quarter or still down a little bit. I just appreciate any color there. Thanks so much. Matthew Klein: Hey Tom, it’s Matt. So your first question regarding Phoenix, Charlotte and Los Angeles. We have seen pretty good success in these cities which is why you’re seeing the growth there. We did pick up an extra gate in Charlotte, and we’ve also picked up extra gates in Los Angeles, and we’re utilizing them. That’s what we do. And we’ve seen growth — our own growth in Los Angeles has been very effective for us. It’s helped build out our presence out on the West Coast a little bit more. It makes us more relevant in general in Los Angeles, which then helps the overall Los Angeles revenue generation and brand awareness out there. And Phoenix is just another leisure destination in the country that it’s time for us to start doing a little bit more work there, really. And then in terms of Q4 versus Q3, the answer would be, generally, yes, we’d expect to see trends that you mentioned kind of continue out there. So we would expect to see that kind of growth in Q4. Operator: Your next question comes from the line of Mike Linenberg with Deutsche Bank. Your line is open. Michael Linenberg: Hey, good morning everyone. Two questions here. I just — I want to go back to maybe Scott and Jamie’s question just about the big three and the fact that corporate is down and they’ve been allocating more assets into leisure markets. And I’m really curious though, like how much of the capacity or markets that you’re in where you’ve seen other low-fare carriers adding capacity and whether or not you sort of have a sense of sort of versus 2019, how much in your markets low-fare competition or capacity is up because it does seem like when you look at a lot of the different route changes that have made of late, it does seem like a lot of the low fare carriers are all targeting the same markets and in many cases, they are going after the same customer. How much of that is a factor or maybe it’s not, maybe it’s not much of a factor. I’m just curious about your take on that? Thanks. Matthew Klein: Sure, Mike. It’s Matt. I’ll try to tackle that one. So we have seen from pre-COVID really until now. Our overlap has generally been the same across the industry with a couple of exceptions. One is, as you just noted, our nonstop overlaps with Frontier have increased a bit. But with Southwest, we’ve gone down. So kind of a trade-off there amongst, I guess, you’d say, low fare carriers. And overall, we — generally speaking, we of course, when we decide where to fly and how we pick roots and pick new cities, we’re evaluating the overall landscape, and we’re evaluating what’s going on in general, and we do take into account who is already operating in certain routes because as we put together our forecast, we have a lot of history in understanding how we think the routes will perform and the competitive dynamics, while different city to city generally can help us predict what we think outcomes will be. So having said all that, in a normal environment, routes that we can target domestically not to sound a little bit arrogant about it, but a lot of times, it doesn’t matter who’s already there if our forecast play out and we think that we’re going to grow markets, which is what we do. It generally doesn’t turn into a big issue. The issue that we’re seeing right now is with this move towards international long-haul traffic. Some of the competition right now inside the U.S. is competing for what might be lower demand profile than what we were all probably anticipating, at least we were anticipating a different demand profile this summer. So generally, I think to answer your question is even though we do see competition and we are growing on top of other people and just like they are on top of us from time to time, generally hasn’t been an issue for us. This summer, we feel is incredibly unique that we’re seeing some of these impacts. And as we noted, we expect this to flip back as we get into the Fall and the peak holiday periods when just in general, customers just take shorter trips and they’re looking to stay more state side. And we expect that will then turn back into the normal demand patterns that we’re used to all seeing. Michael Linenberg: Okay. Great. Good answer. And then just thanks for that. And then just second, more of a modeling question. You obviously, a lot of moving parts here with the GTF issue. How should we think about 4Q capacity, your sort of revised capacity number for 2023 and then what does that mean for 2024, especially since you’ve cut back your deliveries for next year, just rough numbers since I know it’s early? Thank you. Scott Haralson: Yes hey Mike, this is Scott. I’ll take a stab and then Matt can opine too. So looking at sort of the move between second, third and fourth with the reductions that we’ve had from the GTF, the new GTF issues, probably looking at — you probably have a slight reduction in Q3. But with the increase in utilization, we would expect Q4 to be a good bit higher than Q3. We haven’t finalized the exact capacity schedule for Q4, but I would expect somewhat material move north in capacity. And thinking about ’24, I mean, obviously, the news is fresh on the additional GTF issues. So it’s hard to predict where 2024 will look like. But I did mention in the prepared remarks that with the moves we made with Airbus, we expect it to be in the high teens. So the expectation is a lot of that growth will be muted by the engine issues. Hard to know if we’re going to be in the single-digits or flat or low teens, hard to tell at this point, but my guess would be somewhere in the single-digits for ’24. Ted Christie: And one other point that I’ll make, Mike for the fourth quarter, and I said it in my prepared remarks, Pratt had indicated that we were going to see up to 13 engines in this initial allotment. And given the tight time frame and that it was effective, the inspections would be effective in September, we pulled seven aircraft out of service for the month. However, they’re continuing to refine the universe of engines, and it’s entirely possible that we may see some benefit associated with that, which means that our exposure in the initial allotment of 200 could go down. And if that’s true that would give us more opportunity in October, November and December with productive airplanes. And given that what we’ve just talked about with pilots, we definitely have those available ready to fly. So we don’t know yet. It’s all kind of in the soup, and we’re just going to have to update you as we learn more over the course of the next month. Michael Linenberg: Okay, very good. Thanks gentlemen. Vivian Taveras: Adam, do we have any other calls or questions? Operator: Your next question comes from the line of Dan McKenzie with Seaport Global. Your line is open. Daniel McKenzie: Hey, thanks. Good morning, guys. Picking up on that last point, the uncertainty around 2024 is pretty understandable. But going back to the script and the need to slow down growth and de-risk the business, has your thoughts about growth beyond 2024, also they’ve also moderated. How should we think about growth longer-term? Ted Christie: Well, I can start. And Scott alluded to some of these changes in the script. We still see a sizable opportunity. So that hasn’t changed. I think what we’re alluding to as far as the near-term is that we continue to grow pretty notably on a fleet basis throughout the course of the pandemic and haven’t been able to use them. We just haven’t been able to get the utilization where we wanted it to be. So taking a chance to digest those airplanes and get them up in the air and efficient will help the unit cost story, which helps the margin story. So the work that Scott and the treasury team did with Airbus was a cooperative effort between ourselves and the manufacturer to smooth out deliveries, give us more certainty into the latter part of this decade where airplanes are going to be very, very difficult to get your hands on and allow us to use the lessor community to supplement that one and if we feel like it’s necessary. So there’s a lot of moving parts in our fleet as is true for every airline. We’re retiring 319s right now. We’re going to get pretty close over the next five or six years to the oldest 320s, believe it or not in our fleet and starting to have to think about what happens with those and whether or not we keep those around. So there’s ups and downs that we’ll deal with, but the opportunity itself still hasn’t changed for us. So it’s just a question of pacing and that sort of thing. Scott Haralson: No, I think that’s right. I think we smoothed out the delivery stream. So prior to this adjustment, we were having some peaks and troughs that were pretty material. So this allowed us to smooth it out, give us a predictable base and allow us to, as I mentioned earlier, to sort of earn our way into the growth profile again. And we’ll use the lessor community like Ted said, give us some flexibility, we have some ability to extend and or retire early additional aircraft. So this gives us a good base to maneuver with as we think about going forward. I think the long-term story is still the same. We think there is opportunity for us to continue to grow. And so what was the best fleet mix and platform for us to do that. And I think we set ourselves up well for that. Daniel McKenzie: Okay. I guess just in terms of an actual growth rate, are we thinking that longer-term target — that growth target is still, call it, low double-digits? Or does it mid-double-digits? Any sort of perspective around that? Ted Christie: Well, if you just, I think mathematically roll out the airplanes, it’s less than that now. Certainly, as you get bigger, into the future. And that’s why I say, I think we’re evaluating the pace of things. Scott said it earlier, I think it was a great point. We have to earn our right to deliver the capacity and getting back to full efficiency and starting to deliver the margins we believe that we can is our first step. So this was a good idea to kind of for a lot of reasons, to smooth things out for ourselves and gives us a chance to kind of prove all of that, and we have the right team here to execute to it, but we need to get the job done. And I think that’s what this kind of recent modification allows us to do. Scott Haralson: Yes. I think the point there too is that the growth is not an isolated objective, right? We need the returns to be able to justify it. And so while we think that will be the case, we do need to make sure that we’re doing that before we deploy the capital. And so I think that’s just prudent management for us to sort of see the game plan first. Ted Christie: And we haven’t commented a lot on the pending transaction with JetBlue. But as you can see from the results that have happened across the industry really here, the dominant oligarchs are outperforming the rest of the industry and that’s not an accident. When you control that much capacity, it’s very difficult to compete, especially with the diversity of revenue sources, the strength of their loyalty programs, the strength of their credit card programs. We do our best to fight that every day with low cost and low fares, but you can just see from the numbers. And we think the best answer for competition is to create a fifth alternative. And clearly, with that engine, there’s going to be unique growth opportunities. And that’s the case we intend to make — and I think that’s going to be the best answer. If it doesn’t work and we’re stand-alone, we still feel good about our prospects. But it’s not to say that the recent experience hasn’t shown that there are some challenges out there. And I think we’re just doing what we would — you would expect us to do as management, which is to be a little bit prudent, make sure we’re pursuing the growth in the right way. Daniel McKenzie: Yes. Perfect. Second question here, this idea of an artificial lid on demand that you shared due to ATC issues. Is the thought that, that will persist until 2025 when the ATC is expected to be fully staffed? Or I guess, is it just more temporary just sort of tied to some issues today because it’s so severely understaffed? Ted Christie: Well, admittedly, I’m speaking purely on speculation and anecdote, but I’ve experienced it. So having flown — I fly a lot, and it can be frustrating when you’re stuck at an airport for three, four, five, six hours because of ground delays and all the things happening. And I think that may be making people make different buying decisions. And so I don’t know how long that persists. Clearly, during the summer, it’s at its peak. We don’t anticipate that during the fall or the winter where actually it’s a little bit easier to operate, we’re going to see that type of frustration. I think it happens a lot during this period, which is when everyone is traveling and the weather is bad. But I think it’s just a theoretical impact that I can tell you that first person experience, I’ve witnessed, and it’s very — you can understand how people might say, “You know what, I may not add that third trip to go see my family because I just can’t afford to spend nine hours back and forth waiting”. Daniel McKenzie: Yes, makes sense. Thanks so much for the time guys. Operator: Your final question comes from the line of Savi Syth with Raymond James. Your line is open. Savanthi Syth: Hey, good morning everyone. Just bit of a follow-up in terms of your thinking of 2024, but more so from how much of that pre-GDS, like when you were thinking of high teens, how much of that growth was going to come from utilization? I’m just trying to think about as you’re exiting this year and going into next year, you might not need as many kind of training and hiring costs and your utilization improves. So that should be a pretty good tailwind, but I’m trying to just quantify that a little bit more. Scott Haralson: Yes, hey Savi, this is Scott. Yes, I think you’re spot on with some of that. As we thought about the high teens, it’s really made up of really three things. And they’re both probably in the five to seven points worth of move. But we’ll probably grow the fleet above five points in ’24, you have utilization move year-over-year, which is probably five to seven points worth of impact. And we have average seats for everyone. And that’s probably another five-plus points. And so that gets you in the high teens. And so your point is right, really two of those are less impacted by pilots. But I think we’re — we feel good about our pipeline. We’ve talked about that before, no longer pilot constrained. So now this is just getting the airline humming again. So I think we’re in a good spot. Unfortunately, we do have to deal with the next batch of GTF issues, but we feel comfortable about the core part of the airline. Savanthi Syth: Regarding the GTF and like if you do get settled with the Maple, how does that flow through the P&L? Is that a special item and it helps your cash? Or how does that kind of flow through? Scott Haralson: Yes, Savi, we’re early in the discussions around what that might look like. So difficult to say. It could take a few different forms over different lengths of time. So we would have to figure out what the accounting would be based on the vehicle. But we’ll let you know when that materializes. Savanthi Syth: Thank you. Operator: I will now turn the call back over to Vivian Taveras for closing remarks. Vivian Taveras: Thank you all for joining us and for your participation today. Please contact Investor or Media Relations if you have any further questions. We look forward to talking to you soon. Have a great day. Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect. Follow Spirit Airlines Inc. (NASDAQ:SAVE) Follow Spirit Airlines Inc. (NASDAQ:SAVE) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Hawaiian Holdings, Inc. (NASDAQ:HA) Q2 2023 Earnings Call Transcript July 25, 2023 Hawaiian Holdings, Inc. beats earnings expectations. Reported EPS is $-0.47, expectations were $-0.61. Operator: Greetings and welcome to Hawaiian Holdings, Incorporated. Second Quarter 2023 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the […] Hawaiian Holdings, Inc. (NASDAQ:HA) Q2 2023 Earnings Call Transcript July 25, 2023 Hawaiian Holdings, Inc. beats earnings expectations. Reported EPS is $-0.47, expectations were $-0.61. Operator: Greetings and welcome to Hawaiian Holdings, Incorporated. Second Quarter 2023 Financial Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. At this time I’d now like to hand the call over to Marcy Morita, Managing Director of Investor Relations. Thank you, you may begin. Marcy Morita: Thank you, Daryl. Hello everyone and welcome to Hawaiian Holdings second quarter 2023 results conference call. Here with me on Honolulu are, Peter Ingram, President and Chief Executive Officer; Brent Overbeek, Chief Revenue Officer; and Shannon Okinaka, Chief Financial Officer. We also have several other members of our management team in attendance for the Q&A. Peter will provide an overview of our performance, Brent will discuss revenue, and Shannon will discuss cost and the balance sheet. At the end of the prepared remarks, we will open the call up to questions. By now, everyone should have access to the press release that went out at about 4 o’clock Eastern Time today. If you have not received the release, it is available on the Investor Relations’ page web page of our website, hawaiianairlines.com. During our call today, we will refer at times to adjusted or non-GAAP numbers and metrics. A detailed reconciliation of GAAP to non-GAAP numbers and metrics can be found at the end of today’s press release posted on the Investor Relations page of our website. As a reminder, the following prepared remarks contain forward-looking statements, including statements about our future plans and potential future financial and operating performance. Management may also make additional forward-looking statements in response to your questions. These statements are subject to risks and uncertainties and do not guarantee future performance and therefore, undue reliance should not be placed upon them. We refer you to Hawaiian Holdings’ recent filings with the SEC for a more detailed discussion of the factors that could cause actual results to differ materially from those projected in any forward-looking statements. These include the most recent annual report filed on Form 10-K, as well as subsequent reports filed on Forms 10-Q and 8-K. I will now turn the call over to Peter. Peter Ingram: Hello, Marcy. Hello. Hi, everyone, and thank you for joining us today. I want to start with the sincere mahalo for our line team, who have been working in a challenging operating environment for the past several months. The good news is that things are getting better and our team has once again demonstrated that when things get tough, they rise to the occasion. For that, I am incredibly grateful. Leisure demand remains robust throughout our network reflected in strong second quarter revenue performance and encouraging advanced bookings for the back half of the year. We continue to make important progress on the strategic initiatives that will make us an even better airline. And we are encouraged by improvement in some of the outside influences that have affected our operating environment. With some of the factors we don’t control falling into place, we are getting back to a work in which our team members can do what they do best, deliver exceptional hospitality to our guests. As you have seen in our press release today, RASM came in above the range that we guided to during our last earnings call, a testament to the robust demand environment. I’ll touch on a few highlights of our commercial performance then Brent will address in more detail. Revenue performance from the U.S. Mainland to Hawaii, the largest part of our network remains strong, continuing the trend we have seen for several quarters. There is no evidence of a slowdown or other signs of a looming recession in our demand indicators. Similarly, we have seen the continuation of recent trends on our international routes outside of Japan. With Australia, New Zealand and South Korea, all seeing solid demand in the second quarter. And on our Neighbor Island network, we continue to be decisively outperform Southwest on load factor, unit revenue and customer preference in an environment that remains challenging in terms of fares and supply. Where we have seen a divergence from recent trends in a favorable direction is on our routes between Japan and Hawaii. Since early May, Japan outbound demand has accelerated meaningfully for the first time since the onset of the pandemic. Combined with the historically high demand from U.S. point of sale, the result has been load factors and RASM that are comparable to historical levels. Now I will offer one caveat to this recovery. The performance we are seeing is currently on a capacity base that has been about 70% of what we operated in 2019. And JAL and ANA, the other two major operators between Japan and Hawaii have been operating a similar proportion of their pre-pandemic capacity levels. So we will have to see a continued growth in demand as capacity comes back, both as a result of demand and the likely conclusion of slot relief measures. But having talked about this since 2021 on these calls, it’s great to see Japanese visitors starting to return to Hawaii in numbers. And it’s important not just for us, but for many businesses here in Hawaii that have historically relied on what has long been the state’s largest source of international visitors. We’ve also seen a positive shift in our operations. For eight months, from last October through almost the end of May, we’ve dealt with the consequences of a major runway construction project in Honolulu. As I previously shared, the construction project resulted in a reduced arrival rate at the airport during peak periods and frequent ground holds for some of our Neighbor Island flights, which severely affected our operations and on-time performance. The good news is that on May 27, the most impactful phase of the construction project was completed, and the runway is open for daily operation. As expected, we delivered a significantly improved on-time performance in June and are trending even more favorably in July. We’re not resting here though. There are still some work to be done to get all the way back to the historical level of industry-leading reliability. So this is no time to take our eyes off the ball. What is most important though is that our team is now positioned to be successful again, which they really couldn’t be for 8 long months. I thank them again for their perseverance as we work through these challenges. We’ve also seen some improvement in the availability of our A321 aircraft, which have been constrained in recent months by our engine supplier’s inability to meet spare engine commitments as we detailed on previous calls. The worst period saw us with five of our 18 aircraft on the ground awaiting engines. More recently, we’ve experienced two and sometimes three grounded aircraft. Our plan prior to this morning had been for no more than two aircraft out of service for the next few months, improving to one in the fourth quarter. Today’s news from Pratt’s parent company’s earnings call announcing additional removals for this engine type, renders is plan subject to change. Since this development is late-breaking, we haven’t yet fully calibrated the impact. Our team has already started to work with Pratt & Whitney to understand the specific impacts on our installed fleet. And in the days ahead, we will assess whether we must take any schedule action to mitigate aircraft shortages. Even as the situation improved recently, we always knew that it remained dynamic. And while we receive financial compensation for unavailable aircraft, what we are really looking forward to is full availability of our fleet, an appropriate level of spare engines at our facilities and a much more predictable operation. We’re also making progress on many major initiatives we’re tackling this year. We’ve achieved major milestones on two such initiatives in the second quarter, transitioning our reservation system to Amadeus’ Altea platform and in-sourcing important aspects of our A330 maintenance from a third party. Altea will provide a stronger technology foundation on which to build new revenue-generating products and digital experiences for our guests. By in-sourcing management of our A330 maintenance, we’re taking full ownership of our A330 fleet reliability, which will provide a lower steady-state cost structure and better control and flexibility to accommodate changes in our business, especially as we bring the freighter fleet into service. Earlier this month, the first A330-300 freighter that we will operate for Amazon arrived in Honolulu. Over the next few months, we’ll use the aircraft for employee familiarization work. This is the first of 10 freighter aircraft we will be inducting over the course of the next 1.5 years providing us a new and diversified stream of revenue that will begin to ramp more materially in 2024. In May, we unveiled our Boeing 787-9 Dreamliner Interior and a new business class product, the Leihoku Suites. These 34 seats feature fully flat beds, privacy doors and shared double suites. This aircraft truly will set the standard for premium travel to Hawaii. Our team has done a great job of building in unique Hawaiian touches that provide a special experience from the front to the back of the airplane. We have recently learned of an incremental two-month delay on the delivery of our first aircraft, but this does not at all diminish our enthusiasm about what the aircraft will mean for us in the long-term. On a previous call, we shared with you our exciting news about plans to provide WiFi connectivity on our long-haul fleet using SpaceX’s StarLink. The Starlink team continues to work through the certification and modification kits for the A321 and A330, the first reach type. At this point, we don’t expect the first installation to occur until at least 4Q, and it will be 2024 before we have a steady stream of aircraft mods underway. Getting this product installed on our fleet, which will be free for every guest from day one, will set a new standard for bandwidth and speed, something we have even more confidence about now given documented performance of the technology on other fleets that are in service. As you can tell, we’re very busy right now. Our message to the team over the last year has been to buckle down and focus on what we can control. Encouragingly, we’re now seeing some of the externalities we don’t control, like runway construction and Japan demand move in our favor. All of these things position us for stronger performance ahead. And what positions us most of all is our team throughout the organization. They continue to do a great job extending a standard of hospitality and care that sets us apart. Lastly, I want to mention some changes that we’ve made recently to our commercial leadership team. We have consolidated responsibility over commercial to 2 long-standing leaders, Brent Overbeek, our Chief Revenue Officer; and Avi Mannis, our Chief Marketing Officer. Both have been promoted to Executive Vice President as part of this change. I have great confidence that their complementary skill sets and vision are going to drive our commercial performance over the coming years. Let me now turn it over to Brent to go over our commercial performance and outlook in more detail. Brent Overbeek: Thank you, Peter. Hello, hi, everyone. As Peter mentioned, leisure demand remained strong for most of our markets in the second quarter with our international routes standing out in particular. I’ll later expand in further detail upon each part of our network. Total revenue was up just over 2%, and we operated 11% more capacity versus the same period in 2022, which was in line with our guidance. In the second quarter, system RASM was down 8% year-over-year, which is slightly better than our guidance range as a result of the pace of recovery in Japan that Peter alluded to. North America finished strong as we experienced robust demand throughout the quarter. Load factor ended at over 90% for the second quarter operating on 5% less capacity compared to the same period in 2022. We would have liked to flown more to serve the strong demand, but we’re limited by the availability of A321 aircraft due to the engine availability issues previously discussed. Given today’s news from Pratt & Whitney, it will likely be a few more quarters until we have the entire A321 fleet available. And none of the forward capacity plans that I discussed today nor the guidance in our press release reflects the potential incremental impact of the newly announced issue disclosed this morning. In the Neighbor Islands, we continue to demonstrate that we are the market carrier of choice with strong demand and load factors throughout the quarter. Although revenue continues to be affected by competitive supply and unsustainably low fares. The most recent DOT statistics show us generating unit revenue that was 2.5 times Southwest with a load factor that was 32 points higher, proving that customers continue to value our superior schedule, high-quality service and loyalty value proposition. While fares remain below historical norms, they did increase 6% from the first quarter. We saw a tangible recovery in Japan during the second quarter. Our load factor improved to 77% for the quarter and peaked at 94% for the month of June. U.S. point-of-sale traffic remained historically strong, but it was even more encouraging to see Japan point-of-sale progress as we move through the quarter since this segment of the demand has traditionally represented the lion’s share of revenue on these routes. We have maintained good momentum in our international network outside of Japan. Local demand in Korea, Australia and New Zealand markets was healthy with additional strength from U.S. point-of-sale traffic from both the Hawaii market and the Mainland. Passenger revenue for our international market, including Japan, was up over 160% for the second quarter of this year, compared to 2022 when the initial wave of easing restrictions was commencing. Our co-brand credit card had another record second quarter sales with revenue up almost 11% over the same period in 2022. On the cargo front, as mentioned in prior calls, activity is normalized back to 2019 levels. Second quarter revenues were down just under 30% year-over-year, but to put in context, cargo operations performed better than 2019 for the same period. Now looking ahead to the third quarter. We are anticipating strong summer demand. To give a little more color in North America, our capacity is forecasted to be down a few percentage points year-over-year. Note again, this forecast does not reflect any changes to our schedules that we might need to make to absorb the newly announced Pratt & Whitney engine challenge. Advanced bookings remained slightly above 2022 while fare levels are slightly lower than 2022 for the same period, driven by some modest year-over-year fare declines in the shorter season. Our system capacity growth will continue to be driven by our international network, our longest stage-length entity with international ASMs up almost 44% over the third quarter of 2022. Since the relaxation of the last COVID-related restrictions in Japan, Japan point-of-sale bookings have begun to accelerate for the remainder of the year. As a comparison, at this point for travel within the third quarter, Japan point-of-sale bookings are double where they were compared to the same metrics over the second quarter. Bookings and fare levels for the Japan outbound August holiday period are strong with fare levels above 2019 despite the headwinds of a weaker yen. As Peter mentioned, we’re still operating with less capacity than our pre-pandemic schedule as are our competitors. Even as capacity does come back, we’re confident that our product and brand remain well regarded by Japanese consumers and that we will compete well in a resurgent Japanese market. Finally, moving to our Neighbor Island market. We will soon overlap last year’s introduction of $39 fares on every seat by Southwest, anticipate a year-over-year improvement in PRASM as we move into the back half of the year. In viewing our entire network, we expect RASM to be down roughly 4% on capacity growth of just over 6% compared to the same period in 2022. We also have other continuing headwinds impacting our RASM comparisons year-over-year. Spoilage continues to be a headwind of over 4 points this quarter and will likely continue to be a headwind for the remainder of 2023. When you combine that with a difficult year-over-year comparisons for cargo and the growth in stage length, it highlights the progress that we were making on the passenger side of our business. Looking beyond this year and into 2024, as Peter mentioned, we are excited for the 787 to join the fleet. The larger 300-seat cabin allows us to grow capacity without changing frequencies. The premium cabin on our 787s not only has an enhanced live flat seat product as mentioned, but also has nearly twice as many seats in the premium cabin as our A330s, allowing us to capture more of the demand for premium products in our markets that we’ve seen over a sustained period of time. Our first route will likely be from the West Coast of Hawaii, Water colleagues and training and maintenance and we look forward to being able to more optimally use the fleet on longer haul emissions as we grow the fleet. With the exciting prospects of our 787 fleet, rolling out StarLink delivering the benefits from our Amadeus investment and the momentum we’re seeing in our markets, in particular, Japan, we’re encouraged about what we can accomplish for the rest of the year and into next year. And with that, I’ll turn the call over to Shannon. Shannon Okinaka: Thanks, Brent. Hello, everyone, and thank you for joining us today. We ended the second quarter with an adjusted EBITDA of about $26 million, which equates to an adjusted loss of $0.47 per share. Looking back at the first-half of the year, while we acknowledge that there is still work to be done, our year-over-year progress is significant and very encouraging. Unit costs, excluding fuel, were generally in line with our expectations for the second quarter. Our pilot wages came in a little higher-than-expected due to operational disruptions that resulted in upgauges and other scheduled changes that caused closing changes to pilot scheduling, offset by maintenance credits we received for grounded A321s, due to engine unavailability. Fuel consumption was lower-than-expected due to slightly less flying during the quarter. Our third quarter costs remain elevated as we near the apex of our preparations before the 787 and A330 freighters enter into service. For example, we currently have about 25% more pilots on property than we did at the end of 2019 for about the same amount of capacity, many of whom are in training. We expect pilot productivity to improve as we begin generating revenue from the freighters and 787s. And the number of pilots in training and transitioning fleets will move towards more normalized levels. That being said, we expect our third quarter unit costs, excluding fuel and special items, to be about 8.5% higher than the same period in 2022. This is primarily driven by about 4.5 percentage points from increases in labor costs, which are primarily a combination of the new pilot contract and the higher number of pilots in training. About 2 points from a higher number of heavy maintenance events and 1 point from higher airport rates. Airport rate increases will be an ongoing headwind to unit costs as they are increasing, on average, at a rate higher than that of industry average, most notably our rates for Hawaii airports, where we have the most activity. As labor and other rates increase, we’re focused on finding efficiencies throughout the company. As we invest heavily in technology to modernize legacy systems, we have a distinct focus on accessing data to enhance our analytical capability. We have also negotiated work roles that will improve our productivity, not all of which have been fully implemented. And we’re investing in tools for our frontline to help them become more efficient and effective. Now that we’re midway through the year, we have clear visibility to what the remainder of the year looks like as our costs are tracking largely in line with expectations. With that said, we’ll be tightening our full-year CASM ex guidance range to a 3% to 5% year-over-year. As Peter mentioned, we received notification from Boeing that our first 787 delivery will be slightly delayed from November of this year to January next year, and will also impact our remaining 2024 deliveries. This delay will move some CapEx from 2023 to 2024 so we now believe our CapEx for this year will be about $280 million. The decrease due to the deferred delivery is combined with some puts and takes from changes in the PDP schedule and other adjustments. 2023 is a year in which we’re making substantial investment in our fleet, technology and guest experience, which are reflected in both our operating costs and capital expenditures. We’re investing in our future, and we’re executing on multiple initiatives to build a stronger business that will generate significant shareholder value. And with that, we can open up the call for questions. Q&A Session Follow Hawaiian Holdings Inc (NASDAQ:HA) Follow Hawaiian Holdings Inc (NASDAQ:HA) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. We’ll now be conducting a question-and-answer session. [Operator Instructions] Our first questions come from the line of Conor Cunningham with Melius Research. Please proceed with your question. Conor Cunningham: Hi, everyone. Thank you. On the Japan bookings, just curious what you’ve noticed anything different versus the 2019 travelers. Like do you have any data around just length of stay, potentially what your expectations are for their spending pattern. And then maybe if you could just touch on the advanced bookings of these. I assume a lot of them are really close and just given what you’re saying, but any color there would be helpful. Brent Overbeek: Yes, Conor. We haven’t seen any, kind of, material change in length of stay yet. Your comment on advanced purchase is we have seen a real material change as the markets come back, and it is coming back at a lot different pace relative to like 2019, we don’t have some of the advanced booking base that we would have. And so as we look out in the further quarters, that’s a little bit more challenging, but we’re really encouraged the pace we’re seeing. We’re going to have I think, a really strong third quarter and the pace that we’re building into the fourth quarter is really encouraging. So I think we’re on a good track. We’re seeing a little more individual bookings and so a little less through agencies, a little more direct with us, which is great because it allows us to market and merchandise directly to customers. And so we’re encouraged with all those trends. Peter Ingram: And Conor, I might just add specifically with respect to Japan. One of the differences, if you go back to 2019 and prior, is we would typically tell — sell a significant proportion of our inventory through blocks with the major Japanese travel agencies. And that would give us a sort of very early committed share of traffic. So the curve now is very different since we haven’t, at this point, reintroduced blocks through the travel agency, and we’re getting a much higher proportion of our shares directly through our website and through online travel agencies that didn’t use the blocks. So it’s more of a steady build up to departure data as opposed to having a big chunk of inventory that’s already accounted for with the blocks. And we’ve obviously got to calibrate ourselves for that demand curve, but we’re pretty pleased with what we’ve seen. And Brent mentioned the 94% load factor in June. I think that’s an indication that we’re capable of filling up the airplanes and certainly at least on the capacity that’s in the market right now. Conor Cunningham: Okay. Helpful. And I know it’s obviously really early on the whole Pratt issue, but just curious if you could provide any context around potential capacity headwinds that you’re thinking about there? And then on the flip side, Shannon, I think you mentioned that you’re getting maintenance credits. Is that how we should expect this to kind of play out for you going forward? Just again, any goalpost that you may have, and you realize that it’s only hours old. So any help would be helpful. Thank you. Peter Ingram: Yes. I appreciate that. Not only is it only hours old, but the announcement was when at least I was sleeping this morning. So I had to catch up a little bit when I got up. What I can tell you is that they’ve identified a number of engines and it’s specific by engine serial number that we’ll need to go through inspection. Some of them will be by the end of this year and some will be going out over the next nine to 12 months. I think it was the announcement that they made. As it pertains to us for the engines that will be looked at this year, it’s a fairly small number. So I don’t think there is major surgery that might be needed. And — but it’s too early for us to speculate specifically, because the impact on our schedule is a combination not only of what gets removed, but what we have fair support for, either from our engines coming back from the shop or from spares that are supplied by Pratt & Whitney to support the operating carriers that are out there. And I think one of the things, frankly, that Pratt & Whitney can do to support their installed operating base is work with Airbus on the allocation of engines to — between the proportion that goes to new production for aircraft that are not yet delivered and the proportion that goes to supporting that spares pool. So all of that, I think, is going to have to be sorted out over the next little while. We will — we’re eager to firm up a plan, because to the extent that we did have to make any changes to our schedule for the back half of the year, the time to do that is now. So we really do want to understand this quickly. But it’s sort of happening in real time right now. In fact, our team is on a conference call with the Pratt team as we’re sitting here on a conference call with you. So there will be more developments to come in the next little while on this. As far as the credits, I can just tackle that one, too, since I’m already talking. They do come in the form of credits back on our — what would otherwise be our power by the hour expense. And so they get reflected in the income statement as reductions to our maintenance expense lines. Conor Cunningham: Appreciate the detail. Thank you. Peter Ingram: Sure. Thanks, Conor. Operator: Thank you. Our next questions come from the line of Michael Linenberg with Deutsche Bank. Please proceed with your questions. Shannon Doherty: Hi, good afternoon. This is actually Shannon Doherty on for Mike. So just my first one. Now that we’re in the second half of the year, can you provide us some update for the start of the Amazon service. It sounds like from the opening script that the store may have been pushed back out just sometime in 2024. But have you thought about how you’re going to break out the cargo guidance? And any broader update here would be really helpful. Peter Ingram: No. The start hasn’t been pushed back. We expect to be operating in revenue service in October. The first aircraft has been delivered to us here, and we’re doing employee familiarization. So I think you may have confused that with the comment about the 787, which the delivery is being pushed back to ’24 but we didn’t actually expect to have the 787 in operation before early ’24 anyway. So no changes to our 2023 plans on either of those except for the timing of the 787 CapEx. This year, because our operations from Amazon — for Amazon will be fairly limited, it’s not particularly material to our financial results. To the extent it is, it’s been incorporated as investments as we go through the preliminary preparations we need to do. And so it’s a bit of an expense drag on us in 2023, and we’ll see revenue rent more materially as we go into 2024. Shannon Doherty: Okay. Got it. Thank you. And can you also share what the potential cost savings will be from transitioning the A330 maintenance in-house? Should we expect to see CASM ex be lower next year as we lap the labor training costs and maintenance events? That’d be helpful. Peter Ingram: Yes. I think there’s a couple of things. So just from the A330 maintenance transition, we do expect to have savings. So what would be third-party expenses will now be reflected in the combination of maintenance expenses on our lines and labor costs as we do some of that work ourselves, but the net of that is a savings. Overall, in terms of the impact from CASM ex, I think we’ll hold off on guiding 2024 right now. But I would say that there are other factors that influence it like the timing of maintenance events and heavy checks and all of those things are going to play and when we get around to guiding for a 2024 CASM outlook, we’ll be incorporating all of those factors. Shannon Okinaka: Yes. The one thing, Shannon, that I would add there is where we’ll see a lot of the savings, it will be hard to tease out in the financial statements because it’s really as we grow the 330 fleet with the Amazon traders, we can now grow that fleet with a lower per unit maintenance cost because we’re able to get better productivity through shared resources — internal resources. So that’s really, I think, more of a benefit on the cost side. Shannon Doherty: No, thank you both. Peter Ingram: Sure. Operator: Thank you. Our next questions come from the line of Helane Becker with TD Cowen. Please proceed with your questions. Helane Becker: Yes. Thank you very much, operator. Hi, everybody and thank you very much for the time this afternoon. My first question is, are you concerned about the revenue outlook or maybe the unit revenue outlook being down relative to capacity being up so much? Maybe capacity is not up so much, but up. Peter Ingram: Yes. Let me start with that, and we expect that there may be some questions here given some of the other earnings calls that have been going on this season so far and earlier today. What I would say is we’re pretty pleased with the revenue environment right now. We’ve got some changes this quarter in terms of the mix of our flying, with longer stage length flying as we bring more of the international business back year-over-year. And we had a couple of factors that Brent called out in this call in terms of spoilage and cargo revenue that we’re running at unusually high rates last year in the third quarter that aren’t in the third quarter. If you separate out the spoilage and cargo, our RASM is sort of flattish to a little bit up. And that’s compared to a strong demand environment last year. And I think we feel pretty good about that, and we feel pretty good about how bookings are coming in going forward. So I am not raising caution flags today. I think we’re in a good environment, and I hope, particularly as it relates to Japan, but things are just going to accelerate from here. Brent Overbeek: Yes. I think the only thing I would add is that we’ve got that positive — excluding those couple of items, we would be positive on the RASM side. And when you look at what our stage link growth, given almost all of our capacity growth is on the international side, pretty encouraging results and pretty good progress from where we had been and relative to the rest of the industry as we look out in the third quarter. Helane Becker: Okay. That’s very helpful. And then my other question is this. I was looking at some numbers today from the Hawaii Tourism Authority and they showed the second quarter travel to the islands was down 6.5% in the domestic market. And every month sequentially was worse than the month before. And I’m sure, Peter, you see that data as well and the whole team since you’re so close to it. But do you expect that Hawaii vacation to continue to be — or maybe the question is really, do you know what percentage of your travelers that come off the West Coast and from North America are people with second homes in Hawaii and kind of repeat travelers versus that aspirational vacation that you get from people that generally come from the East Coast? Peter Ingram: Yes. I think it’s a mix, and I don’t have precise numbers on those, although we could probably — by looking at — certainly for what’s booked on our website by looking at ZIP code data, we can probably discern a little bit how that mix has changed. I just don’t have that at my fingertips. What I would say in terms of the traffic numbers you mentioned at the beginning is a couple of things. One, industry capacity right now is a little bit lower than it was. It’s down a small bit on our capacity. I think some other carriers, as they have responded to very strong demand in other geographies have moved some of the capacity that they had when Hawaii was one of the few places that was working back in 2021, and the early part of 2022, they started to reallocate some of that capacity away. So it’s not being reflected in empty airplanes. Our airplanes are very full, revenue is holding up well. And I don’t have anything that I look at that sort of causes me to question whether Hawaii is going to continue to be a desirable aspirational vacation location for people. It’s the best visitor place to go in the world, and we expect it to continue to be that way going forward. Helane Becker: That’s hugely helpful. Thank you very much for all of that. I appreciate it. Operator: Thank you. Our next questions come from the line of Catherine O’Brien with Goldman Sachs. Please proceed with your questions. Catherine O’Brien: Hey, everyone. Thanks so much for the time. So your trimming capacity but seen Japan improved, was the capacity cut based on any change in your demand outlook? I know the GTF headlines aren’t incorporated into your changed outlook yet. So just kind of trying to figure out what drove that cut. And then maybe just a quick related one on the GTF IC 16 A321neos, the GTF engines, it’s close to 30% of your fleet. Is your understanding that most of those don’t fall in the inspection objective? Peter Ingram: Sorry, Catherine, you mentioned capacity cut, I’m not sure what you’re referring to on that. Catherine O’Brien: Maybe I’m backwards, on the full-year. Peter Ingram: For the full-year? Yes, for the full-year, it’s really a function of having much lower Japan flying in the front part of the year, I think. Brent Overbeek: Yes. And just to really — Catherine, just tightening up as we work through kind of the back half of the year where we were versus our expectations, calibrating a little bit on when we thought we would be back to a more robust 321 schedule, so it’s just kind of working through the timing of that in the back half of the year and then just tightening up for the full-year, so… Peter Ingram: I mean if anything right now, we’re — the constraint on how much we fly is not demand, it’s how many aircraft we have. We’re looking forward to getting the 787s next year and helping to give us more capacity to expand. Catherine O’Brien: That’s more like an operational adjustment versus demand. Peter Ingram: Yes. That’s correct. And then sorry, can you repeat the second part of your question? I think you had one about the engines. Catherine O’Brien: Yes, yes. So I mean, this is just from ASCEND data, so take with the grain of salt. But when I looked at it this morning, it looks like you had 16 A321neos with the GTF engines that’s about 30% of your fleet. Is your understanding that most of those don’t fall within the inspection directive? And listen, to repeat Conor, I know this is like hours old. So I appreciate any color. Peter Ingram: Yes. So the fact is all of — we have 18 aircraft. All of the 18 aircraft were delivered to us during the period that the, sort of, production issue was in place. I think it goes from 2015 to 2021. Not all of our engines on wing now, though, are currently affected because a number of those engines have been in the shop since then. Some of the parts replaced, some of the engines that are operating on our fleet today are engines that are lease spares that may have been produced outside that window. So we do think it’s a limited number of serial numbers of specific engines that need to be worked on. And again, our team is going to work through that in the days ahead with the folks from Pratt & Whitney. And I should just say that we hate it when these things come up, but we also recognize that the whole foundation of our industry is that we operate safely. And Pratt & Whitney has got a safety management system, and that’s the process they’re going through to decide which engines need to be evaluated. We have safety management systems and processes that are in place to make sure we operate. And that’s the first thing we’re going to do before we think about any adjustments that needed to be made to what we’re flying and how we’re flying the aircraft. Catherine O’Brien: That’s super helpful. Maybe if I could just sneak one revenue one in for Brent. Just thinking through your three main markets, how should we think about that, the sequential performance of underlying the system sequential improvement you’re expecting in 3Q versus 2Q. It sounds like based on your fare commentary, maybe North America decelerating sounds like Inter-island might be accelerating and then International. I wasn’t sure it sounded positive, but I wasn’t sure it’s given some of the comments on capacity, that would be super helpful. Brent Overbeek: Yes. There’s several moving parts in there, Catherine. I think it’s a fair characterization. I think we’ll be kind of flattish to down a little bit in North America from a sequential basis, but I would say mostly flattish. International continues to improve, and that’s really on the strength of Japan and the strength we’re seeing on the traffic basis there. And Neighbor Island, I think we’ll see a little bit of sequential improvement again, a lot of moving pieces in last year from a comp perspective from both 2Q and 3Q. And given kind of the lateness of booking in that market, we still have a little more runway to go in terms of how 3Q pans up. But I think overall, your assessment was pretty fair. Catherine O’Brien: Thank you. Operator: Thank you. Our next questions come from the line of Andrew Didora with Bank of America. Please proceed with your questions. Andrew Didora: Hey, good afternoon, everyone. First question just for Peter. Just given this whole kind of international theme this summer of U.S. travelers out bound, I would have to think it’s taking away some Hawaii vacations. Do you have any sense or any metrics that you provide that give us a sense for maybe how much volume or revenue has been kind of lost this summer as people travel abroad? Just trying to get a sense of how things could look as kind of travel patterns normalize a bit. A – Peter Ingram Yes. I don’t have something that specifically answers that question. But I’d come back to the point that our revenue has been strong in the North America routes. It’s very comparable to where we were a year ago when we were in a very strong demand environment. Some of a slight amount of our capacity is lower year-over-year as we’ve shifted back to some of our own international flying. And some of the other capacity from our domestic competitors has moved elsewhere as well. So that’s why you may see a little bit less in terms of total traffic to the islands this year. But I don’t think it’s demand weakness here so much as it’s capacity being allocated to other geographies as people shift to changing demand globally. So we feel pretty good about where we are. Hawaii is an incredibly desirable destination and we’re blessed to be here every day. Andrew Didora: Got it. Understood. And then two follow-ups for Shannon here. Just one, just in terms of CapEx. I think I caught the 2023 new number, but obviously some moving parts, kind of any guideposts that you have for 2024 right now? Shannon Okinaka: Thanks, Andrew. Not this point. Obviously, it will be higher. We’re taking in more 787s next year, but we’re still working through some of the details on things like the PDP is moving with the recent notification by Boeing. And so not quite ready to put guidance out yet. Andrew Didora: Okay. Got it. And then lastly, just in terms of Amazon. Sorry, I forget, are those — are the start-up costs this year included in your CASM ex? And then how should we think about kind of 2023 start-up and training costs for Amazon moving into 2024? Shannon Okinaka: Yes. I’ll take that one as well. Yes, we have all of the Amazon costs included in our CASM guide, that includes the start-up as well for the full year, the direct operating costs in the fourth quarter. As Peter mentioned, they’re pretty small this year, which is why we’re not splitting them out. I think for next year, we’ll definitely be able to talk in more detail and put some of that stuff out of the passenger business, because it does — here, we have cost and revenue that aren’t necessarily linked to ASM. So it’s not a great ratio to report on, it’s not that helpful to you. So we will definitely talk about that more a little later this year, early next year as to how we’re splitting that out and what the direct guide is. But next year for ’24, we definitely will have that put out better. Andrew Didora: Okay, thank you. Operator: Thank you. Our next questions come from the line of Chris Stathoulopoulos with Susquehanna. Please proceed with your questions. Chris Stathoulopoulos: Thank you. Peter, I just have one question, three parts here. Your mention of strategic initiatives in your prepared remarks, could you comment on that? And then also, I realized that this Pratt & Whitney news here is very new, but could you help us frame assuming you get to where you need to be with the fleet, how much potential upside there is there within utilization block hours per day or however you want to frame that? And then part C, I realize it’s early, but if you could help us think about core inflation for cost for next year. Peter Ingram: Yes. Let me tackle the first part and I may have to have you go back again and remind me of the second and third part. But in terms of strategic initiatives, this has been one of our themes as we went into the year, that this was a year we had started a number of projects coming into 2023 that were slated to be delivered this year. And things like our transition to Amadeus Altea, our A330 maintenance, bringing 787 on board, bringing Starlink on board. And so we really sort of identified as much internally as externally that we wanted our team focused on making sure we got those major initiatives over the finish line and delivered on our commitments. And I do feel good that we’re making good progress. The Amadeus transition was a sort of monumental technology achievement for us. And we have our safety management system work was something else we are working on. That’s been progressing over the last couple of years, and we’re in a much better place right now, bringing the A330 maintenance fully in-house and getting that over the line. We now unfortunately have the timing of 787 slipping a bit, but only by a couple of months, and there’s been a lot of great work by our team done. So that is moving a pace, and we’ll have that plan early next year. We’ll have the freighter business online this year, another significant project. So these are all important initiatives and really big investments of time and resource and in some cases, capital for us, but things that we know are going to pay off and make us a better airline going forward. Chris Stathoulopoulos: Okay. And then for the second quarter, curious where you were in terms of block hours per segment or however you measure your core utilization and where you’d like to get to, assuming that these Pratt & Whitney issues are worked out. And then the last part was, again, I realize it’s early, but how should we be thinking about core inflation for next year? Thank you. Peter Ingram: Yes. In terms of our sort of block hour efficiency, I don’t have the number on my fingertips, but I would tell you that with particularly early in the quarter with the lower Japan demand, we weren’t flying our A330s as intensely. We expected — or was always our plan this year for that to pick up through the back half of the year. In some ways, that was fortunate because that absorbed some of the challenges we had with A321 availability as we substituted those aircraft. So there is an opportunity for us to improve aircraft utilization next year. Offsetting that, one of the things we’ll be thinking about is making sure we have the right level of spare aircraft capacity to provide resilience. So it’s not just trying to squeeze everything out of that efficiency as possible, but it’s also making sure you’ve got the right level to have a resilient operation as well as good efficiency. In terms of employee efficiency, just to touch on that as well. I’d say there’s still opportunities for us to make some gains going into 2024. And particularly, as we have had less than full utilization of our flight attendant workforce without the Japan flying that has — that is heavier staffed in terms of flight attendance. And in our pilot ranks, we still have a lot of people, I think Shannon mentioned this in her remarks, who are either in training or instructing and that means they’re not flying revenue block hours. So one of the things we’re looking forward to over the next year or so is getting that back into a normal steady-state level as opposed to the accelerated level of training that we’ve had over the last couple of years. Chris Stathoulopoulos: And then on core inflation? Shannon Okinaka: I’ll take that a little bit on the cost side. So from about 2019 to where we stand today, we’re looking at a, call it, a 4% to 4.5% increase from a CAGR perspective on our costs. And that’s really — as we look across the industry, it’s generally in line with the industry and what we’re seeing around us. When you take our significant costs, primarily, labor, fuel and airports. On the labor side, the vast majority of our employees are covered under collective bargaining agreements, and we have fully executed agreements with all of our unions through 2023 and 2024, the next one to become amendable is in 2025. And so from that perspective, we’re kind of insulated from significant inflation that we may not be factoring in. From an airports perspective, we do workload and I mentioned earlier, that’s where we’re seeing pretty significant cost increases and especially in Hawaii. There’s a lot of capital projects in the Hawaii airports that are coming through our rent rates. And so we work pretty closely with the State of Hawaii on that. But I mean we’re also just investing a lot to try and kind of offset a lot of these cost increases. So while we don’t – I don’t have what our core inflation assumptions for our forecast at my fingertips, there’s a lot that goes on to really offset or mitigate that risk. Chris Stathoulopoulos: Okay, thank you. Operator: Thank you. Our next question is come from the line of Dan McKenzie with Seaport Global. Please proceed with your questions. Dan McKenzie: Yes. Hey, thanks. It kind of sounds like we’re all after the same information here. So at the risk of kicking a dead horse, Shannon, I know you don’t want to talk about capacity next year, but what it sounds like is directionally, next year could be a pretty big catch-up year. So I guess maybe we could just start with the fleet if we — it looks like that will be about 13% larger than 2019. And please correct me on that. But then just — and also just given the runway construction there, it seems logical the departures. And as you were sharing earlier, efficiency metrics could finally normalize next year. So is there any fly at least to this line of thinking? Peter Ingram: Maybe I’ll just give you some general comments to think about the capacity piece of that. A lot of what you’re going to see next year, some of the growth is just going to be the annualization of flying that we’ve been adding back over the course of this year, particularly as we have in our plans that we ramp up our operations to Japan over the back part of the year and into 1Q. That will be in place throughout the year next year. So really what we’re looking at in terms of growth beyond that sort of annualization is going to be a couple of 787s coming into the fleet over the course of the year. That will be spread throughout the year. So the last delivery may be later. They’ll have the A330 freighters coming on. And then the other thing we have the capacity to is we do have A330s of next year and over the next few years that are coming or to the end of their leases. And what we’ve always said about the 787 is it’s going to be a combination of replacement and growth. And we’ll calibrate that appropriately to make sure that we can absorb it and make sure the market can absorb it and it will be efficient growth for us as we get into those periods. Daniel McKenzie: Yes. Okay. That’s helpful. And then a second question here, just the — I’m wondering if you can clarify the story around premium seats. Where are we at today with respect to growth? And in 2024, big picture, what is the expectation in this part of the story. And I’m thinking most of the premium growth is going to be on the international side of the business. Brent Overbeek: So yes, I think, Dan, as you look into ’24, we’ll have still a relatively limited number of 787. So that premium growth will start to come in. That will be really more of a story kind of in ’25 and beyond. And I think as we’ve looked at the resource, the 787 is going to be a fantastic airplane, but we’re going to get most value out of it as where it can fly out of longer ranges and where we have high levels of premium demand, and those are places like Sydney, like Tokyo, like New York, Boston, those kinds of places. We’ll work our way into that over the course of next year. But I really think that the growing number of premium seats for us is really — we’ll see some of that as we trickle into next year, but it’s really probably a little bit more of a ‘25-story. While we’re excited to have a new product and the growth in the space that’s really where we’re going kind of in ‘25 and beyond. Dan McKenzie: Yes, understood. Okay, thanks for the time guys. Operator: Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Peter Ingram for closing comments. Peter Ingram: All right. Thank you, Darryl. Hello, again to everyone for joining us today. with some of the operational challenges behind us, we’re focused on delivering on our commitments and executing on our initiatives. We appreciate your interest and look forward to updating you on our progress in the months ahead. Aloha. Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day. Follow Hawaiian Holdings Inc (NASDAQ:HA) Follow Hawaiian Holdings Inc (NASDAQ:HA) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC) Q2 2023 Earnings Call Transcript July 26, 2023 Operator: Good morning, and welcome to GAP’s Conference Call. [Operator Instructions]. It’s now my pleasure to turn the call over to GAP’s Investor Relations team. Please go ahead. Maria Barona : Thank you, and welcome to Grupo Aeroportuario del […] Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC) Q2 2023 Earnings Call Transcript July 26, 2023 Operator: Good morning, and welcome to GAP’s Conference Call. [Operator Instructions]. It’s now my pleasure to turn the call over to GAP’s Investor Relations team. Please go ahead. Maria Barona : Thank you, and welcome to Grupo Aeroportuario del Pacifico Second Quarter 2023 Conference Call. Presenting from the Company today, we welcome Mr. Raul Revuelta, Chief Executive Officer; and Mr. Saul Villarreal, Chief Financial Officer. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company’s future performance or financial results. As such, statements made are based on several assumptions and factors that could change. This could cause actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report that was issued by the company. At this point I’d like to turn the call over to Mr. Raul Revuelta that for his opening remarks. Please begin, sir. Raul Revuelta : Thank you, Maria. We appreciate everyone who joined our call today to review GAP’s second quarter of 2023. During the period GAP transported nearly 16 million travelers throughout our network of 14 airports. This represents a 12% increase compared to 2022, which added to the first quarter put us above our original traffic grow guidance for the year. Edwards opened during the quarter for domestic and — International — led the weight with three new roads followed by Puerto Vallarta with two, while Lara Mexican and Montego with one inch. Well, Lara also were mentioning was half accelerated profit grow during the quarter with a 18% increase. This was related to domestic market growth of 19%, mainly due to the new roots to Montego Bay and Puerto Vallarta, as well as higher low factors from bi roots symbolize international traffic benefited from an increase in frequencies in key U.S. markets such as New York and California, route to Los Angeles, San Jose, and Oakland. As a result, international traffic grew by 17% during the second quarter. The quarter continues to be one of our main traffic generators boosted by the gross border express, which has captured 32% of the airports total traffic. The international terminal continues to be a fundamental part of the airport’s growth as well other factors such as the near shoring, effect of the big destinations with left the performance of their [ph] catastrophic at this location. The growth trend of Aeroportuario del Pacifico is very similar, given a strong domestic market fuel by increasing low factors and frequency. In terms of international passenger, we open up two new routes to Dalla and Houston, as well as the seasonal jet route to Madrid. our route to AK and to los. We’ll expect to share with you great news regarding passenger development for the whole network. During the coming months, we anticipate more than 14 new domestic routes in July, operated by [indiscernible]. Now moving on the aeronautical revenues. This line events increased by 14% driven by passing the traffic to all gas network. In the case of our Mexican airports, the increase was offset by the new increase in the produce price index excluding petroleum, which has led to no inflation increase in maximum tariff approval in our Mexican airports. As such, we were able to rate 99% compliance of our maximum tax. In addition, the consolidation of our Jamaican airports have a negative impact due to the appreciation of the Mexican peso by almost 12% over the U.S. dollars that has affected the revenue increase. Just to remind you, the two Jamaican airports represent 15% of the total aeronautical revenues. At this point, let’s take a look at non-aeronautical revenues, which reflected that outstanding performance growing by 18%. This resulted in a 10% increase in non-aeronautical revenue capacity. Most of the increase was attributable to the opening of new spaces at the Guadalajara, Montego Bay and Los Cabos airport. The increase was also due to the passing of traffic recovery and the renegotiation of contracts conditions with the tenant. This were mentioning that, despite of nearly 12% precision of the peso, which affected 20% of total revenues non-aeronautical revenues increases above the passenger traffic increase. In terms of business units, food and beverage increases by 27%. This outstanding performance was only in Los Cabos, Puerto Vallarta, and Montego Bay Airports. [Indiscernible] new spaces were incorporated at the Guadalajara and Montego Bay Airports. Additionally, for the upcoming months, we are working on the opening of the tariff at the Guadalajara Airport and up rooftop food and beverage space. Would you expect to be completed in November? At this point, that project is 80% a government. Convenience storage revenue increases about 71%. To expand our business line, we opened at three convenience stores during the last six months in Los Cabos and we recover one more in Guadalajara. Just the three stores in Los Cabos represent 20% of the total income from this business land, and is worth mentioning that one of these stores at the international terminal has a higher revenue for the network stores. This brings the total number of convenience store in our network to 29. Duty free, increased by 9% the increase below passenger traffic growth by mainly due to the Mexican compensation. All the revenues from this business are in dollars. It was also affected by the temporary closing of the walkthrough duty free store in Guadalajara, due to the construction projects that are in progress at the terminal. After tax increase by 71%. New client catchment dropped increase, which put us on fracture recovery following the COVID effect. VIP lounges increases by 14%, mainly due to the lounges at our tourist destination that continues to drive the business line. In addition, while has currently remodeling international VIP lounge, and we are also reconfiguring some inspection international bill launch in Los Cabos, due to the higher than expected demand throughout 2023. We expect instructions priors to conclude next year. Moving on to the EBITDA results, despite the 12% of the peso and the almost new inflation in the quarter EBITDA reached MXN4.5 billion for the quarter with an EBITDA margin of 17.4%. This was led by the passenger traffic recovery and solid commercial revenues and was partially offset by the 15% increase in the cost of service. As we have previously discussed, despite our best effort to comply with our cost contract policy, we have had to deal with inflation, the hiring of additional personnel, changes in labor low, and minimum wage increases. This factor has affected not only salaries, but also the tons of that are linked to personnel such as janitorial, security, and maintenance. We expect higher cost further down the line, due to the higher size and terminal expansion, in addition to the inflationary effects. Moving on to the CapEx, it continued to be carried out in accordance with the master development program, along with commercial investment. During these first six months, we have deployed MXN5.6 billion which was allocated mainly to the Guadalajara, Puerto Vallarta Just to remind you that GAP paid the second portion of this year dividend for MXN3.71 on July 13th as per the resolution made at our Annual Shareholders Meeting. Before I conclude my presentation, I would like to announce that, the revised guidance figures for the 2023 versus 2022. For the capacity, we expect an increase for 10% to 12% for the run out of capital revenue, an increase between 13% to 15%. For the non-aeronautical revenue, we started an increase between 16% to 18%, where our total revenue increased from 14% to 16%. EBITDA between 12% or 14% and EBITDA margin from 70% to plus, minus 1%. CapEx overall for all the year to MXN11.9 billion. Passenger traffic projection is based on the consolidation of risks developed to date. It also includes the increasing load factors and airline class frequency with the information that is currently public. Total revenues have been adjusted based on expected changes in traffic performance, applicable passenger speeds, a decrease in product price index excluding petroleum and a Mexican peso appreciation. This is in addition to the opening of new spaces as well as the negotiation of contract terms in commercial agreement as well as the development of other business lines operated directly by the company. Decreasing the cost of services reflects the operating requirements needed to meet airport services demand. In addition to that, it reflects infrastructure expansion and service quality improvements added to higher inflation, minimum wage increases and additional personnel required for operations, maintenance, security, and cleaning. CapEx reflects committed investments in GAP’s Master Development program and investment in commercial spaces. The process of acquiring land is moving really quickly. Hence, we are adding MXN1.7 billion to the original guidance, amounted to a total of MXN3 billion for Dalla decision at the Guadalajara. At this point, that is for my remarks, I will ask operator to open the floor for your questions. Q&A Session Follow Grupo Aeroportuario Del Pac Sab (NYSE:PAC) Follow Grupo Aeroportuario Del Pac Sab (NYSE:PAC) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions]. And we’ll take our first question from Guilherme Mendes with JP Morgan. Your line is open. Guilherme Mendes : Good morning everyone and thank you for taking my question. First question is a follow-up to the comments on the guidance. If you may just provide a little bit more color of what is behind the traffic update. I understand those factors and the additional capacity from the airlines. Just wanting to pick your brains on which regions are performing better if domestic, if international, or maybe some surprise on Jamaica going forward. And only CapEx if it’s only related to the land acquisition in Guadalajara or something. Something else. Just to make it clear. And the second question is related to the expected upgrades to category one of the Mexico Aviation Agency. So, what is the latest on that and what is company’s expectations in terms of the timing for it? Thank you. Raul Revuelta : First, I’ll go into the traffic performance. We are seeing a really interesting growth on traffic in some airport, some airlines. — has also new roots as could be me or Guanajuato, Tijuana. We’re saying, seeing a real interesting moment or boosting on the domestic traffic, for instance, in the leisure destinations and plus Puerto Vallarta. — for sure in some route, in some regions that will be more, I would say affected or more in line with the near shoring as could be Tijuana or even — we expect that begin to see more domestic traffic happening because if this trend continues, we’re seeing better wages, better salaries, that kind of employment in the region that will bring more money to the pockets of the people around this area. So, we’re going to see more traffic, for instance, on leisure, on domestic traffic flying from Montego Bay, Puerto Vallarta this kind of traffic we expect to increase due to the fact of better employment in the area. That is pretty first part. The other one that is not completely clear is how much of these additional of how many of these additional frequencies that [ph] has opening on the last month will be fully operating in the future as soon as the category one could be recovered. In other one, in other words, in other way both — have received new plane, have increased their fleet, but they could not put a fly on internet on U.S. market that plays. So, they are pulling that capacity for the moment on domestic markets. But one of the things that we’re going to see change in some way is as soon as the category one is recovery for Mexico. We’re going to have see some kind of shift from some specific domestic market to international market due to the fact that could open or could produce, could that frequencies on the future for the U.S. market. going through the category. I will say that, the last visit of the Guanajuato authorities to Mexico to review the — all the progress on the different observations to the Mexican authority. I think, that we are in the line, and we are in the last part of this long process. We expect that for the fourth quarter of this year, the category could be recovered, but again, we are talking about public information, and how the authorities are communicated, all the progress in this process. For the last related to the CapEx in the general change on the CapEx, we are also just adding the above our original plants, some acquisition of land for the Guadalajara airport, we are preparing the long-term reserve of the airport. That will allow us to have possible third term terminal number three on the future. And even if the demand is there — the third wrong way for their airport. But the specific or the most important part is that our biggest asset, we are preserving the value for the future, acquiring reserve for a maximum capacity growth in the coming years and in the long term. Operator: [Operator Instructions]. I’ll take our next question from Rodolfo Ramos with Bradesco BBI. Rodolfo Ramos: Good morning. Thank you for taking my question. I have a couple, if I may. The first one is, when you think about this faster recovery, traffic that you’ve seen, how does this — how do you think of the main variables that you will be discussing with regulators. This — and but mostly next year as part of your development plan, and also having in mind the investment requirements that you’ll need to accommodate that higher passenger growth. And then the second one is, you talked a little bit about the impacts of the Mexican peso appreciation on your commercial revenues. Can you talk us through your thought process on how it can impact your, business side on the aeronautical revenues? Thank you. Raul Revuelta: Thank you, Rodlofo. This is Raul. I mean, for sure the increase of passengers, when you put on projections, will be some additional pressure for a possible decrease on the maximum target. But in the other hand, when you bring this kind of boost of traffic, you will need an airport additional CapEx, and additional expenses for giving the — for the correct quality service at the airport or to comply with the quality standards of our concession. In that way, we are seeing the next negotiation of the master plan, completely basic in the methodology and the regulatory framework that we have. We will see important amount of CapEx just to catch up the needs that the airport had to face in terms of the new passenger growth. Another important key factor that we must understand is that, the changes on the fleet, not only the number of planes that Volaris and Viva Aerobus to the market, will affect not just the total amount of traffic in the future, but also are affecting the peak hours of our terminal airports, of our terminal buildings. It is important to understand because the airports and the terminal buildings are the same in terms of peak hours. And this pick hour site changing really fast even faster than the growth of the total or the absolute amount of passengers. And let me go a little deep on that. For instance, when we designed an area for a gate for a plane. We say, okay, we would need 150 feet. We need toilet area with this amount of places. We need this amount of square meters around the gate. In the past, for instance, with the 320s, we used to have an average of plane seats of 150, 170, even 180 seats per plane. What is happening with the new 321s of VIVA and Volaris is that our peak hours changes really fast. So, in the past, we used to receive in the same gate 150 plane ships of interject, and we are in the same route, in the same hour, in the same gate, today we are receiving an A321 of 20 or 45 feet from Viva and Volaris. So that is a completely change, in how we design our terminals and for sure for the coming years will need to bring additional investments for growing our terminal. So, in general terms, I would say that, that is what we have stated in terms of the market plan, energy about the impact on commercial revenue. Saul Villarreal: Yes. Thank you, Raul. Hi, Rodolfo. This is Saul Villarreal. The main effect in the commercial is the exchange rate. Absolutely, the appreciation of the peso is affecting only in our commercial revenues in Mexico is around 12%. With the consolidation of Jamaica and airports, the total effect is over the 20% of the total revenues. It means that, we should be growing 12% more of the 20% of the revenue. So, what we are expecting is that, according to macroeconomics to help in a stabilization of exchange rate around 17, 17.50, and that will impact our budget. That’s why our guidance — our total revenue is not growing at the same pace of the traffic growth. That is, in general, how will be the effect in the commercial and the consolidation of the Jamaican efforts. Talking about aeronautical revenues, let me tell you that the produce price index in Mexico is almost flat. If we compare the last 12 months of 20 June, 2022, the inflation was 9%. If we look at the inflation of the produced price index in last 12 months of June ‘23 is 0.9. So, it’s a big difference affecting also the effect of the — in the error revenues in general, just the effect of a exchange rate in the error revenues is the consolidation of the Jamaican airports. In the other hand, for Mexican airports, we have a fulfillment of 99% of maximum tariff, which benefits in the total and offset the decrease even due to the inflation and due to the change rate. That’s it in generally. Rodolfo Ramos: Thank you saul. Operator: [Operator Instructions]. We’ll take our next question from Anton Mortenkotter with GBM. Your line is open. Anton Mortenkotter : Hello guys I Congratulations on your results and thank you for taking my question. I have just some follow-ups on the CapEx front, just to be understanding, increase in the land acquisition — first, how much land was it? And is it — is all of this related to the Guadalajara airport? So, it falls under the MDP? Just trying to understand if it has been already told with the authorities and will for part, as an advanced investment on the MDP commitments or how it will be treated? Raul Revuelta : This is — it was for sure. It was previously, we received the previous authorization of the — this goal will be an advance of the new master plan. And we already received the authorization, we are talking and of an acquisition of the total acquisition going to be close to 150 sectors for the airport. And we are just expecting to finalize the total acquisition of all these lands for the end of this year, or mainly the first months of the coming year. But the most important part here is that all this land acquisition is part of the master plant is already out. We already have the authorization of the authority. And it’s also important to say that this land acquisition ends with an historical problem with around the airport. That is some, remember we were in the middle of legal processes for the last 25 years with that hero. So, one of the points that is also important is that we are not only acquired the reserve for the future, but also, we are finalizing all these legal matters and legal issues with support in Guadalajara. Anton Mortenkotter : And just another one of the, if you could provide some breakdown on the CapEx deploy during the quarter mostly on the commercial front. Raul Revuelta: Well, hi Anton. This is Raul. As we have a talk in previous conference calls, we have a very ambitious program of commercial investment during the year. We will have the main investment in the construction of the mixed-use building in Guadalajara, which is a very important project with 180 rooms of a hotel. We have more than 5,000 square meters of offices. We have a commercial retail. We also have the expansion of the parking lot in Guadalajara with more than 2000 spaces just for in this space. And we have expansion in other airports in terms of parking lots. So, we have also — and we are opening additional business lines of business spaces for community stores. And we are in the expansion of VIP launches. So, all this amount will be around MXN2.3 billion during the year, including some activities in commercial areas in Montego Bay that we are also adding a state, and we are also a leading area rehabilitation of some commercial areas. So that’s in general the commercial, and also just kind remind that the MVP in Mexico will be around MXN5.6 billion during the year. It is the peak of our investment of our master development program, and we will do investments in Jamaica for around MXN1 billion. And for land we’ll be around MXN3 billion. We would consider the full project that, if you remember in the beginning of the year, we announced in the guidance, the acquisition of land for around MXN1.2 billion. And now we are in almost MXN1.8 billion of additional land. Operator: We will take our next question from Pablo Monsivais with Barclays. Your line is open. Pablo Monsivais: Hi thanks for taking my question. I am sorry if you answered this already, but just wanted to have an update on the MVP agreement with Jamaica. Is there any update on that? Thank you. Raul Revuelta: Hey, Pablo. This is Raul. So, we have almost an agreement. We already receive from the authorities a notification. We are in middle of the final conversation just to try to have the formalization of the changes in the concession agreement. It is not yet a official. So, we cannot announce it yet. But as soon as we have the formal notification from the authorities, we will announce that. But we have almost the final stage of this process. Saul Villarreal: And in a couple of weeks, even one month and a half where I have the official, the final response for to the Jamaican authority. And so, we want to make it public. Raul Revuelta: Yes, correct. Pablo Monsivais: Great. And if I can squeeze one more question. On the terminal processing facility, as of now, can we — I mean, our operations already normalized, I mean, the increase in fixed expenses are already diluted with the additional passengers, or there is still some catch-up process there? I mean, what is currently the normalization time frame for this? Are we already there or we will still a few quarters away from that? Thank you. Raul Revuelta: Thank you, Pablo. I mean, in terms of the quarter, — processor building. We — for instance, I mean, we were announcing that a couple of months, coming back on November, we expect in November that, and Netherland [ph] will begin again in international operations at Tijuana, while it’s reduced. One of the key parts that we need to begin to see some also additional international frequencies from what’s happening in the terminal building on Tijuana, the new international terminal building on Tijuana, if they have the category one from the U.S. government to the Mexican government, because some of the routes that we have that the market is there to begin operations are also on the near area of Tijuana. But in the U.S. market could be Oakland, San Francisco, Las Vegas as the most important markets that are not serviced from Tijuana. But the key point here is valid. The terminal is completely ready for the operations of the international flight. We are seeing the first plane coming on international again in November. And as soon as we have the category, we’re going to see a more dynamic of new routes on the international area of Tijuana. So, I will say that, for Tijuana, not only this process of building for all the area, we are really optimistic because the area is growing in terms of economy, of employment. So, the natural thing that we are going to see or the natural way to see Tijuana coming in the mid-term would be — we’re interested in growth because the population has more money in their pockets in this moment just with a big impact happening already due to the fact of the new sharing in the area. So, I think that, there will come great news from the Juan airport on the midterm and long-term for sure. Pablo Monsivais: Great. Thank you, guys. Operator: We will take our next question from Stephen Trent with Citi. Your line is now open. Stephen Trent: Good morning, gentlemen, and thanks for taking the question. Just two quick ones from me. The first question is about your domestic traffic flow. Have you seen any disruption at all in your domestic connectivity with Mexico City metro area since the authority started pushing some traffic to Felipe Angeles Airport? Raul Revuelta: This is Raul. Not yet, we are seeing that the flight to Felipe Angeles is opening and it’s in the process of the ramp up for more openings. But what we are seeing is — we see the complete markets of the Mexico metropolitan area that is Felipe Angeles plus the Mexico City Airports plus Toluca Airport. We’ve put all together. I would say that increasing the traffic is really a low digit around 3% to 4%. I will see that, at least for the moment, we are seeing some kind of gradual shifting from Mexico City Airport to Felipe Angeles and even to Toluca. So, in the general terms, I would say that the area, we need to see it like a whole, the three airports, and we are seeing that it is aligned with this low digit growth in general terms. Stephen Trent: And just one other very quick one, I mean a little bit of a follow-up to Rodolfo Ramos’s question earlier. When you think about the totality of the movements in the Mexican peso against the dollar sort of any high level sensitivity as to what’s the impact on EBIT margin for every 1% or 5% moving in the peso against the dollar? Raul Revuelta: I will work with the seven first. In terms of the revenue, we are thinking, we are talking about around 20% of our overall of the total revenue that in some ways impact by the appreciation of the peso. In general terms, I will say that in the expensive side that in some way could offset some part. The biggest part of the expenses in Mexico, taking out the Jamaican for sure, but at least for the case of the Mexican airports, the persons are mailing pesos. So, we don’t really have some kind of offset because one of the question that everybody say, okay, if you have some kind of decrease or revenues due to the fixed rate or the depreciation of the pesos, but you have in some way compensated with some savings in the — on for imports or some kind of things on our services. But the truth is that the airports are mainly business really hide on efforts of personnel, not only airport directly personal gap, but also personal from a security for maintenance for cleaning. So, I would say that we are in the middle of a moment where we have a big impact coming from the reviews of the minimum wage in Mexico with increase on some benefits on holidays, on labor law, labor law these kind of things. So, what we are seeing, at least from the coming, at least part of this year, and maybe the coming year, is some pressure coming from the labor market in our expenses in pesos. For sure on the area of the revenues, it will depend, a lot of what would happen with the central bank in Mexico and the rate, if we will begin to see some kind of depreciation of the pesos in the coming months. But I will say that we are just in the middle of that sandwich. That will some way give us some pressure to the margins. Saul Villarreal: Exactly, we have two effects in revenues one is the produce price index affecting aeronautical revenues in Mexico. Mexico that is offset by the fulfilling of the maximum tariff at 99%, which is good, but in the other hand, we have the application of the pesos of around 12% affecting the 20% of our total revenue. As Raul said, in terms of expenses, we don’t have a significant contracts being nominated in the U.S. dollars. I will say that around 99% of the total expenses in Mexico nominated in pesos. So, we don’t have any compensated effect. Operator: I’ll take our next question from Gabriel Himelfarb with Scotiabank. Your line is open. Gabriel Himelfarb: Just a quick question about cargo. We saw that cargo units decreased year-over-year, so can you give us a bit of color on why it was a decrease? And also can you provide us a bit of color on how much capacity will be added to the Guadalajara airport once the planet investments are finished? Raul Revuelta: Okay, thank you, Gabriel. And going through the cargo was decreasing and it’s mainly decreasing in Guadalajara Airport. What is important to understand is what is really happening with the cargo is, in the cargo industry is like two kind of soft cargo, one that is called wet cargo and dry cargo. Dry cargo mainly electronics and this kind of high value cargo that are increasing or growing a lot in Guadalajara due to the near shoring and what is happening in the electronic, the dynamic the industry, dynamic on the rail. But in the other hand, the wet cargo that are mainly fruit, vegetables, flowers, meat, all this kind of production is decreasing. But the interesting here is that you could not mix, wet and dry cargo in the same belly of a plane. So what is happening is that all the electronics that have a much higher yield for the cargo airlines is moving or changing the trend for offer of additional offer for wet cargo. Saying, on other words, the total volume on the Guadalajara airport cargo is decreasing because the value of the cargo is increasing. So, the planes are going fully with electronics, and they are not moving the same level of fruits and vegetables that you to have. It’s just, I will say, a temporary move until the airport has additional capacity and additional planes, an additional fleet to absorb the wet cargo that could not be in the same plane that like — I mean, it’s like a general explain what is happening in Guadalajara. What is interesting is that, when you receive or when do you review the results of the yields of the cargo? It’s increasing and it’s historical point right now, I mean, the value of the cargo in the airport is in our record, the value, not the volume. But, I mean, a general explain of that. And in terms of the capacity, how much capacity will add to Guadalajara Airport? I mean, the most important part of adding capacity during this market plan is related with the curbside because we are putting on all operations to second runway. That will give us around 65% to 70% additional capacity per hour on the wrong way. We also expand our airports for commercial, for general aviation. We also add all the big area for hangers in the airport. All these movements of the general aviation are higher to a new land in the airport, will give us a chance to begin the construction of the second terminal building on the coming year. The idea of the beginning of the construction in coming year is that new terminal will be on operation after three years before we begin with this construction. So we are thinking that around the end of ’26, we are going to have the second terminal on building operations. Another part that will bring the additional capacity to the airport of Guadalajara is now is related with the parking lot. In December, we will open the first 2000 additional spots for the parking lot that will be a great relief to the area, to the experience of our passengers in the airport, but also to the commercial revenue specific on the parking lot. Today, we are 100% load factors when we talk about the parking lot in Guadalajara airport. So this additional 2000 spots would give us the chance to capture additional demand that we are not getting right now. So, in general terms that are the main capacity that will be added Guadalajara in the coming months. Gabriel Himelfarb: Okay. And once the capacity is added, that 65%, 70% is added, how much time will it take to reach the touch capacity until you have to add even more capacity? For how much will that additional capacity be effective? Raul Revuelta: Okay. I mean, on theory, because, again, it depends on the peak hour, the size of the plane. So there is many more variables to that. That is not like plane or flat downward for that specific point. But when we have the second runway on operations, and we have the second terminal, the terminal number two also operating, we got both of these assets. We want to have around 37 to even 40 million passengers capacity. That is an important part to understand that we could depend on the demand and depends on how fast could growth in the coming years, the traffic. But the idea is that we going to be really close to the 40 million passengers in terms of the capacity when we end with all the Guadalajara planning on the coming master plan. Other point interesting to understand because, in some way always, it’s important to remember that when you have a bigger building or a bigger of aprons or bigger everything runways, everything in the future you will need to see in some moment increases and cost because you have more areas to clean, more areas to maintain. But also the CapEx, because you’re going to have bigger WebEx reposition of capacity on the coming years because the systems, you could have it on operation 7 to 10 years, you will need to change the, some of the instance, the air bridge that has the — normally operates only 10 years. So, the thing is we are expanding our capacity, but that one never going to mean you will not have additional CapEx or additional CapEx requirement in the future. It’s just to have in mind for I will say everybody. Operator: We’ll take our next question from Alberto Valerio with UBS. Your line is open. Alberto Valerio: I have two on my side. The first one is if you could provide an update on how are the constructions of the mixed use space in Guadalajara going and when can we expect it to be operational? And my second question is on the international traffic in the leisure destination. So, we are seeing Los Cabos and Puerto Vallarta in the last month more to flattish to slightly dropping. So what I was wondering, what is your view and what’s behind that? Raul Revuelta: First in terms of Guadalajara and the second quarter going to be in operations on the first quarter of the coming year. The hotel, the building office, and the misuse building will be operating in January of the coming year. The packing, the first stage of the packing, lot expansion will be operations also in December of this year. The tariff that is a big expansion of the food and beverage area of Guadalajara airport going to be on full operations on November of this year, and that I would say that the biggest, and for sure the new hangar area will be fully operating on November of this year and that, talking about the construction working in Guadalajara. For the second one, what happened with Guanajuato a flat increase on passengers, I will give a step back for 2019. When we compare for instance, May of 2023 versus May of 2019, we have an increase of 37% on the amount of seats for the region for both for Cabos and Guanajuato. So that was a completely boost on the capacity, that in some way put a lot of offer in an airport for one day to another. In that moment, it was mainly related for a strategic decision for the U.S. airlines that was not operating to Europe and to the Caribbean in the middle of the COVID crisis. So, they shift a lot of their seats to Mexican destination of Cabos [indiscernible] that give us this big peak or increase on passengers. So, I would say that it is natural to see some flood months until the destination completely digest all these big amount of sips. I will put it in other ways, it’s a great news that all this additional capacity that the U.S. carriers shifted from the Caribbean to the Mexico markets is still in place today. That will be my first view. I will say we catch it for the long-term, what in the first stage was a temporal shifting of capacity. So, what we could expect is a couple of flatter months and around Guanajuato, we expect to begin to see again an increase on seat capacity, and it’s also related with the hotel and key capacities auto room key capacity on the markets. We will begin to see opening of new hotel development [indiscernible] hotel at the first quarter of 2025. That will bring to Vallarta a big amount of additional keys, all the new developments on Cabos in the way to Cabos pull more. I mean, the key point here is that the market at Cabos and Vallarta is really healthy in terms of deal of the airlines, deals of the hotels, and we will not see gradually additional offer of hotels coming to the area that will bring us additional passengers in the meantime. Operator: We’ll take our next question from Alan Macias with Bank of America. Your line is now open. Alan Macias: Just one question on your guidance and traffic guidance. I guess this implies that you’re expecting single digit year-on-year growth in the second half of this year. And I just wanted to understand the drivers behind this. Is it mainly more challenging comparison base normalization of traffic? Or are you expecting also a decrease in GDP growth, and also, if you are seeing any other factor as a stronger peso making Mexico less attractive for U.S. tourism or any other factor? Thank you. Raul Revuelta: Thank you, Alan. I mean, I will say that, the first part is, the second half of the year, we will have a most difficult more tough comparison versus 2022. It’s important to remember that, during the second half of 2022, for instance, were the first months that we begin to see positive numbers of Guadalajara for instance. So what we are going to see on the second half of the year is a comparable and more tough comparables tough comps in traffic in general way. Also for sure, we are going to have some pressure on the winter season, mainly in Cabos and in Puerto Vallarta related with that Mexican could begin to be a really some kind of expense here than other destinations in the Caribbean for instance. So — and the last part that we need to see happening is the additional fleet coming from Viva and Volaris would happen more to the end of the year that in the summer. Saying that, all the mix of this change or different variables is given us some numbers closer to around 7%, 8% for the second — an average of the second half of this year. I mean, in general terms that are the specific drivers of what’s going to happen on traffic for the coming months. Saul Villarreal: Yes. And in terms of this is Saul, Alan. In terms of the GDP growth, we do not expect this acceleration. On the contrary, we expect to maintain the performance of the GDP in the first half of the year. But as Raul explained, the effect on the traffic is not because of GDP, it is because of the comps of the previous year. The peso will be less attractive for Americas just for sure. But we are sure that there is an effect the passenger traffic trends from international, not only because of the currency, but also because of second home effect that we have seen in the last years. Many Americans are having second homes. It’s more attractive that each destinations for Americans in general. We saw a boom of real estate in our each destination. So, we do not expect any negative effect from the stronger peso. Alan Macias: Thank you. And any — what are the upside risk for traffic in your airports? Are you seeing the Mexico recovering category one for the U.S. authorities? Is that something that could happen this year or not? And is Guadalajara benefiting from nearshoring and if you’re seeing that as a medium long term driver for Guadalajara? Raul Revuelta: I mean, it’s happening the best way to see how the nearshoring is happening. Guadalajara is the — the vacancy on the industrial park is almost you. I mean, everything that is on development in terms of industrial parks is already digest by the market. It’s a big part on development of industrial parks happening even really close to the airport in the [indiscernible] area. So we think that all the near shoring effect, it’s beginning, and we could see it right now in Guadalajara happening, mainly in the electronics manufacturing that are the factories. And some of the plants that have been operating on Guadalajara for the last 10 or 20 years are expanding their lines of operations for expand their production. So, I think that we are seeing a coming months or years of interacting results for the economy of [indiscernible]. Well, we category one, we are seeing at the lie of the last quarter of this year in terms of the public information of Mexico authority that it could happen at the end of this year. Operator: [Operator Instructions] We have two questions related with the land acquisition in the webcast. Maria Barona: The first one is from Bruno Marine from Goldman. He’s asking if well, this additional CapEx of land acquisition be included in the MDP? Raul Revuelta: Yes, it was included as an authorization in advance for the master plan coming. So, we already received the authorization and will be count — this amount of land acquisition will be count for the calculus of the new master plan of the coming one. Maria Barona: And the other one is from Roddy Seymour from Brown Advisory. Unless the land parcel [indiscernible] falls into 2024, has there been any changes to 2024 CapEx plans? Would you still expect a similar CapEx per passenger as you previously expected in 2023? Is it likely for the next MDP also? Raul Revuelta: Yes, I mean, the only main change on our CapEx plan was related with the land acquisition. And we are still seeing for the common master plan, the certain level of CapEx per passenger that we have seen on this. Maria Barona: And I believe that this is the last question in the webcast. So, I will turn back the call to the operator. Operator: And we’ll take our final question on the line from Fernando Ricotta with BTG. Your line is open. Fernanda Recchia: Very quick here on my end. Just wanted you hear the latest update from [indiscernible] intention to reform the federal laws. We know that Congress is expected to resume activities in September, so just wanted to hear your updated thoughts on this topic, and also if you expect this to bring some impact on your next MDP revision. Thank you. Raul Revuelta: Hi, Fernanda. We have heard nothing from the authorities regarding the initiative changes that were announced in last March. We will be looking forward any change in, and as soon as we have more information and in case it affects or has some potential affectation to our physicians, we’ll do some statement. But for now, we don’t have any additional information. They said, in April, that for September, they will send it back to the Congress. But for now, we don’t have more information. And in the case for the next MDP, we do not expect any change for the revision of the MDP or the maximum tariff determination. The formula is pretty clear. The regulatory framework is pretty clear. We’ve seen our first numbers and we will continue with this process that takes around two years. So, we do not expect any change on that regards. Operator: We have no further questions on the line at this time. I will turn the program back over to our presenters for any additional or closing remarks. Raul Revuelta: Thank you everyone for joining us to our second results conference. The team remains available to answer any question you may have. Please enjoy the rest of the day. Thank you very much. Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time. Follow Grupo Aeroportuario Del Pac Sab (NYSE:PAC) Follow Grupo Aeroportuario Del Pac Sab (NYSE:PAC) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

United is planning to fly Archer's Midnight aircraft between airports and city centers, with the 10-minute rides priced similarly to an Uber ride. Insider's Taylor Rains sits aboard Archer Aviation's upcoming Midnight eVTOL.Taylor Rains/Insider Electric planemaker Archer Aviation is one of the most promising eVTOL startups in the US. Overseeing safety is the former acting head of the Federal Aviation Administration, Billy Nolen. His appointment comes ahead of Archer's upcoming Midnight eVTOL, which United plans to fly. One of the highest authorities on aircraft safety in the US just placed his bets on startup electric planemaker Archer Aviation, representing how close the world could be to this new era of air travel.In June, former acting head of the Federal Aviation Administration, Billy Nolen, stepped away from the regulator to become Archer's chief safety officer. While it sounds like mundane news, it actually appears to be a big endorsement for both Archer and the eVTOL market as Nolen has decades of flight experience and likely could have gone to almost any established airline or manufacturer. eVTOL stands for electric vertical take-off and landing vehicle.Plus, he helped write the framework for eVTOL certification and came up with the FAA program "Innovate 28," which hopes to see thousands of electric aircraft flying throughout the US by the 2028 Olympics in Los Angeles. Fortunately for Archer, that means it is likely now a few steps ahead of the competition: "I don't sign up for losing teams," Nolen told Insider at the Paris Air Show in June.Archer has already produced a full-sized mockup of its upcoming eVTOL known as Midnight, which Nolen said is still on track to start commercial flights in early 2025 despite some regulatory hiccups. Insider toured the aircraft in Paris to learn more. Take a look:Archer unveiled Midnight for the first time in May after two years of testing its prototype known as Maker.Archer AviationMaker is a two-seater eVTOL that set the foundation for Midnight.It first flew in December 2021 and has continued to be Archer's technology demonstrator, but is not expected to operate commercially.Equipped with six pairs of battery-powered propellers, the aircraft will undergo ground testing before its first flight later this summer.Archer AviationThe first aircraft is "non-conforming," meaning it is not produced perfectly in line with the FAA's standards. This is because the agency is still implementing the exact framework for how to certify eVTOLs as the helicopter-plane hybrid falls under a category known as "powered lift" instead of the traditional "airplane" — something that has delayed several US eVTOL programs.The position of the propellers on top of the wings is important for reducing emissions and noise.Archer AviationThis is particularly helpful in places like New York where city residents have long complained of noisy helicopters flying overhead at all hours of the day and night, like HeliFlite and Blade.Lowering noise and carbon pollution is a big draw for airlines that are hoping to get into the growing urban air mobility market.Archer AviationUAM is the use of low-altitude aircraft to transport people and goods between cities and rural areas, and has been growing in popularity as a solution to traffic congestion.While Midnight checks these boxes, it is also favorable because it is optimally designed to fly between city centers and airports in 10-20 minutes.Archer AviationBetween flights, Midnight only takes 12 minutes to recharge thanks to its powertrain.The aircraft's time efficiency is extremely important — especially as the UAM market is expected to grow to over $23 billion by 2035 and companies need to keep up.Moreover, Midnight is designed for winged flight instead of just hovering – making it more efficient.Taylor Rains/InsiderA spokesperson told Insider that hovering drains the battery faster than forward flight, so the winged design speeds that transition up to give the aircraft more range.As far as affordability, Archer CEO Adam Goldstein told Insider that pricing will be around $100 per seat — similar to an Uber.Uber rider.Mario Tama/GettyThe flight would replace a ride-share fare between city centers and airports — and airlines are jumping at the idea.In early 2021, United Airlines purchased $1 billion worth of Midnight eVTOLs and since announced the first proposed route between Manhattan and its Newark airport hub.Archer and United's route between downtown Manhattan and Newark Liberty International Airport, one of its primary hubs.Archer AviationThe airline soon after announced the second route between Chicago and the city's O'Hare International Airport. Both routes are expected to cut out driving, saving customers hours in traffic.Although United has yet to announce a cabin design, Archer showed off its Midnight interior at the Paris Air Show.Taylor Rains/InsiderAccording to a company spokesperson, Midnight was disassembled into three pieces for transport to Paris via ship and then reassembled onsite.Inside, there were five seats — including four for passengers and one for the pilot.I sat in one of the seats of the Archer Aviation Midnight.Taylor Rains/InsiderThe seats had a space-like look with a curved back and seatbelt. Equipped at each seat were a wireless phone charger, cup holders, and cubbies.Taylor Rains/InsiderAlthough it looked like a tight space from the outside, it wasn't too bad once you sat inside.To create a more personalized experience, Archer has included a welcome screen on each seat that displays the assigned customer's name.Taylor Rains/InsiderThe screen also includes information about the destination and takeoff time, while the wing provides some added privacy.A spokesperson told Insider that the idea is that people will eventually be able to call a Midnight eVTOL via an app and then guest information will connect to the screen.Meanwhile, the large windows will give people great views of the world outside, especially those flying out of Manhattan.Taylor Rains/InsiderAnd, there is room for passenger luggage in the aft cargo compartment. But it's not a huge space, so customers may need to keep that in mind when packing.Archer is planning to build its fleet of electric planes at a 350,000-square-foot facility in Georgia, producing up to 650 per year.The proposed Archer Aviation manufacturing facility is pictured in a rendering.Archer AviationCurrently, Midnight's demonstrator aircraft are being built in California, but production is set to move to the East Coast in 2024.The long-term plan is to expand the facility to 800,000 square feet, which is estimated to produce up to 2,300 eVTOLs per year.While Midnight is one of the most promising upcoming eVTOLs, the new type of air travel has created some safety concerns among customers.Taylor Rains/InsiderSimilar to when the famous supersonic Concorde started flying, the public could show hesitancy to fly on an eVTOL because it is a new concept in the industry.However, Nolen told Insider that once Midnight is certified, it "will be the equivalent of flying a Boeing 787 or an Airbus A350."Boeing 787 Dreamliner.APCertification requires rigorous testing and aircraft demonstrations, and it can take years to complete — especially when working with a complicated category of aircraft.He contended that Midnight is "in many ways safer" because it doesn't deal with hydraulics or pressurization, and its propulsion system is simple with few moving parts and many redundancies.Taylor Rains/InsiderUnknown to many flyers, commercial aircraft are designed to fly on just one engine. EVTOLs are being built in a similar manner to ensure if one motor goes down, there are backups to keep the craft flying.Midnight's one caveat is its single-pilot operation, which could impose increased safety risks.Taylor Rains/InsiderThe eVTOL will have a single pilot at the controls rather than two, which differs from passenger planes and means there is one less redundancy onboard.An Archer spokesperson told Insider that the controls are intuitive with autonomous features built in, like holding the inputted hover altitude.Granted, Midnight is a much smaller and less-complicated craft compared to commercial jetliners — but it's still probably bigger than people expect.Taylor Rains/Insider"It's always been cool seeing pictures of [Midnight], but seeing it in person brings it to life and makes people realize how big it actually is," the spokesperson said. "I think the scale of it helps people wrap their heads around flying in it."While Archer is clearly turning heads, it is facing strong competition from other startups.Volocopter's Volocity is a competitor to Archer in the eVTOL market.Taylor Rains/InsiderOther startups include Joby Aviation, EVE, Volocopter, and AutoFlight — all of which also showed off at the air show.In October, Delta Air Lines invested $60 million into Joby Aviation's upcoming S4 2.0 eVTOL.Meanwhile, Embraer-back EVE has already earned orders from companies like United, Miami's GlobalX Airlines, and Kenya Airways subsidiary Fahari Aviation.Read the original article on Business Insider.....»»

Ryanair Holdings plc (NASDAQ:RYAAY) Q1 2024 Earnings Call Transcript July 24, 2023 Ryanair Holdings plc beats earnings expectations. Reported EPS is $3.15, expectations were $2.25. Operator: Hello. Welcome to the Ryanair Holdings plc Q1 FY’24 Earnings Release Call. My name is Maxine, and I’ll be coordinating the call today. [Operator Instructions] I will now hand […] Ryanair Holdings plc (NASDAQ:RYAAY) Q1 2024 Earnings Call Transcript July 24, 2023 Ryanair Holdings plc beats earnings expectations. Reported EPS is $3.15, expectations were $2.25. Operator: Hello. Welcome to the Ryanair Holdings plc Q1 FY’24 Earnings Release Call. My name is Maxine, and I’ll be coordinating the call today. [Operator Instructions] I will now hand over to your host, Michael O’Leary, Group CEO, to begin. Michael, please go ahead when you are ready. Michael O’Leary: Okay. Good morning, ladies and gentlemen. You’re welcome to the Q1 results conference call. As usual, this morning, we posted the results release, an extensive MD&A and a video Q&A with myself and Neil Sorahan and that went up on the ryanair.com website at 7 O’ Clock this morning. So I refer you to that, and I’ll take it as read. I’ll give you a couple of comments on the results and a few thoughts and then we’ll open it up — I’ll ask Neil just to give his couple of comments on the MD&A and then we’ll open it up for Q&A. So you’ve seen this morning, we reported a Q1 profit of EUR663 million. The number is materially distorted because of — it’s compared to Ukraine affected prior year Q1 PAT of EUR170 million last year. Last year, you’ll all recollect Russia invaded Ukraine on the 24th of February, it caused a significant collapse in traffic through March and into Easter. And it also meant if you recollect, we aggressively dumped prices in the Q1 of last year. Prices we reported this time last year, average fares this time last year were down 4% on pre-COVID, as we were aggressively kind of trying to restore load factors through Q1 so that we could kind of underpin Q2. And I think that’s important, and it’s something I want to stress a couple of times today. So we had a very — we very aggressively dumped prices in Q1 last year. And so the kind of the growth of EUR170 million to EUR663 million is a function of the very weak prior year comps. This year’s Q1 was helped by a very strong Easter, strong demand, good pricing. We had a second UK bank holiday in May, so we were the beneficiary of that. So over the quarter one, traffic rose 11% to 50 million passengers. Revenue per passenger was up 27%, as again, that kind of average fares were up 42%, but that’s distorted by the fact that average fares were down 4% in the prior year Q1. Ancillary revenues were up 4% on a per passenger basis. We took, at the end of the quarter, we’re operating 119 Boeing 737-8200 Gamechangers. The total fleet at June was 558 aircraft. We’ve opened three new bases and 190 new routes for the summer ’23, three new bases in Belfast, Lanzarote, and Tenerife all of them performing well. We’ve extended our fuel hedging. We’re 75% hedged for FY’24 at $89 per barrel, a little bit above current spot rates. We’re 27% hedged for FY’25 at $74 a barrel. If we were able or willing to extend that hedges, if we could hedge all of FY’25 at $74 a barrel that would be a saving of almost EUR1 billion into next year’s earnings FY’25 earnings. Net cash at the quarter end was strong at just under EUR1 billion, up from the EUR0.5 billion at 31st of March and again, thanks to the excellent work that Neil and the team have been doing, our rating has been upgraded by both Standard & Poor’s and Fitch to — from BBB to BBB+. The big development in the quarter was obviously the 300 MAX 10 aircraft order, which we signed with Boeing in May. This order gives us a decade of further growth in Europe in a marketplace where capacity is constrained. The industry is consolidating, Ryanair has access to another 400 very low-cost aircraft. Another 100 MAX or Gamechangers to then 300 MAX 10 which will enable us to renew the fleet, but also grow traffic at a more controlled rate at 300 million passengers by FY’34. Just in terms of growth, again, I think we and the rest of our competitors continue to be a beneficiary of structural EU capacity reductions following COVID. There was numerous EU airline failures or fleet reductions during COVID. We continue this summer to see volatile oil prices and higher interest rates, which is discouraging weaker unhedged airlines from adding capacity. There is a shortage of aircraft, both new and lease that I think will run on until the end of this decade out to 2030. This summer in Europe, there’s no doubt we’re seeing the benefit of a very strong influx of American visitors to Europe helped by the strong dollar. We’re starting to see a meaningful return of the Asian traffic to Europe, which means that European short-haul capacity remains constrained, but demand is high. And so through H1 this year, we’re seeing strong demand, load factors high, airfares which were very strong in Q1. They would be modestly up in Q2, but not by what we had and what we saw in Q1. Remember, Q2 last year, we had a very strong Q2. We reported after — profit after tax in Q2 last year of EUR1.2 billion. And we expect average fares will be up, but it will be a small double-digit percent, something in the mid-teens. European airlines will continue to consolidate over the next two or three years. Lufthansa are moving to take over ITA in Italy. The sale of TAP in Portugal is now actively underway. There’s a large backlog of aircraft manufacturer, OEM aircraft delivery. And we believe that’s going to continue to constrain capacity growth in Europe for at least the next three or four years and will assist us as we continue to expand our fleet. I think will mean we’ll see growth with strong traffic demand. And I would hope to see modest airfare rises over the next two or three years. But I suspect they’ll be modest compared to the very strong pricing we saw in Q1. The critical thing here is in Ryanair, our unit cost advantage over all EU competitors, our fuel hedging, our strong balance sheet and our low-cost aircraft orders, which now will run out to 2020 — 2033, a decade coupled with our industry-leading operational resilience will create very significant growth opportunities, and I think there will be profitable growth opportunities for Ryanair over the coming years as we grow to 300 million passengers by FY’34. In terms of fleet, the Gamechanger fleet stood at 119 aircraft at the quarter end. It will rise to 124 at the end of July. We’ve already taken the first four of those July deliveries. Boeing hope to deliver the last aircraft either on the — we think Friday, the 27th or Monday, the 31st of July, so we will just have all 51 aircraft in for the peak August travel period. Boeing has suffered multiple supply chain challenges, which has caused repeated delivery delays. We had hoped to be out of these at the end of July. But already, we’re seeing, they’ve notified us of delivery delays in the autumn deliveries, which have been hit by the strike in Spirits in Wichita, the collapse of the bridge over the Yellowstone River. We already have agreed to Boeing that some deliveries will be delayed. Our last delivery for FY’24 — for summer ’24, which were to have been in April ’24 will now be delayed to June 2024. But hopefully, we can take all those aircraft by the end of June ’24 and therefore benefit with that continuing growth through the peak months of July and August. In May, we signed the order with Boeing to purchase 300 Boeing MAX 10 aircraft. These aircraft are astonishingly efficient. The order is subject to shareholder approval at our September AGM, but these aircraft offer us 39 more seats, 228 seats versus the 189 on the 737 NG fleet, but delivered 20% lower fuel consumption, 20% less CO2 emissions and they’re 50% quieter. These aircraft will transform Ryanair’s operating cost, will further widen our already considerable unit cost advantage over all competitor airlines in Europe and will materially, I think, incent will materially improve our growth for the next decade. We think about half of this order will be used to replace older NGs, which will start hitting 24, 25 in 2028 and 2029. But half of the order will allow us to sustain controlled, although more modest growth into the early 2030s than we have delivered over the past 10 or 15 years. Just in terms of outlook. Therefore, we expect FY’24 traffic to grow to approximately 183.5 million passengers. We’ve had to step that down 1 million from the original 185 million forecast because of these Boeing delivery delays through May and June. And what it also looks like we’re going to suffer some delivery delays in September and October as we start gearing up for maintenance, we’ll be short some aircraft, and we’ll have to pare back some schedules. However, having said that, the cost gap between Ryanair and all of our competitors continues to widen materially in Europe. As previously guided, we expect to see a modest increase in our ex-fuel unit cost this year of about EUR2. This is due to the full year impact of annualized crew pay restoration, higher crew ratios, which is material this summer, where we’re suffering the challenge of really lamentable ATC provision across Europe. We know that some competitors have already been canceling flights through the peak travel months of July and August. We’re not canceling flights. We expect to complete our entire operation, but we need more standby crews to be able to make up the amount of ATC delays we’re suffering. The route charges and the impact of the Gamechanger delivery delays will also impact unit costs this year. Q2 bookings are strong. We expect to run through Q2 with load factors at 95%, 96%. The fare increase in Q2 will be much lower than it was in Q1. The average fare in Q1 was up just over 40%. We expect in Q2 that, it will be more modest because of a much tougher prior year Q2 pricing, we think low double-digits, something in the low teens, and again, that’s partly because peak summer travel snapped back very strongly in Q2 last year following the Ukraine invasion. We have noticed in the recent couple of weeks, a slight softening in the closed-in fares in late June and early July, nothing that I would be overly worried about at the moment, but I think there’s either a degree of customer resistance to the higher fares but we are filling our aircraft fares that are marginally higher than they were in Q2 last year. But the final H1 outcome, therefore, is highly dependent on these — the trends in close-in bookings for the remaining seats in August and September. As is usual this time of the year, we have no Q3 or Q4 visibility. We are cautious though that we enjoyed a bumper Christmas and New Year travel period last year. That was the first kind of full Christmas period for that wasn’t affected by COVID for three years. And we’re conscious that this winter, we are looking to grow. We’re operating at 125% of our pre-COVID capacity and I would allow for the fact that we may have to engage in some price stimulation as we move into October, November, but we’re not seeing that this summer, but we are expecting it later on this year. So I think we’re right to be cautious. We’ve had a very strong Q1. We think Q2 will be modestly ahead of where Q2 was last year. Therefore, we’ll have a strong H1, but I would be cautious into the second half of the year. Consumers are facing challenges out there across Europe, higher interest rates, highest — higher mortgage payments, consumer price inflation is high, you won’t have the benefit of the Asian and the American traffic in the second half of the year. And we are pushing 25% capacity growth in a market which this summer in Europe is operating at only 93% of pre-COVID capacity. We think that gets closer to a 100% of pre-COVID capacity into the second half of the year. So I think we’re right to be cautious. We are well crewed. We’re getting through the summer well. Load factors are high, but pricing might just be at that kind of inflection point where it begins to soften a little bit. I would welcome a softening in pricing. We’ve had a very strong recovery over the last two summers, but with Ryanair’s much lower cost base, I think you’re going to see us continue to take market share from competitors. We may need to do that this winter based on price. However, given the uncertainty we have over the H2 Boeing delivery that have been accentuated by the collapse the Yellowstone River bridge in Montana. Our significantly higher fuel bill this year, our fuel bill will be up EUR1 billion over last year. The continued volatility of unhedged oil prices, very limited H2 visibility and our expectation that the risk of tighter consumer spending in the second half of the year, we still remain cautiously optimistic that full year profit after tax will be modestly ahead of last year. It is, however, still too early to provide any meaningful FY’24 — guidance. And we don’t think that will change until we get to the H1 results in November. I would — two other — couple of other closing points. We look at the very strong growth profile we have here. We’re very excited by our entry into the Albanian market this winter. Albania is a market that is, I think, ripe for exploitation. It’s been hampered in recent years by only having one high fare carrier in the market and I think our arrival into Tirana in Albania, with very low, materially lower fares than the incumbent carrier will mean a pretty dramatic growth in that marketplace. We were pleased and delighted last week. Eddie Wilson, Jason McGuinness, our Director of Commercial and myself. We spent Wednesday, Thursday in Ukraine where we met with all the main airports Boryspil and Kyiv, Lviv, Odessa. We have — we’re, I think, inspired was the right word by the state of readiness of those airports. They really have — they’ve kept their people employed. The airports are ready to rock and roll the minute it is safe to do so. They’re hoping to reopen some air routes into the main airports in Lviv and Kyiv. Maybe by the end of this year, they’re looking at a kind of Israeli type Iron Dome solution over Lviv and Kyiv and if they could achieve that, we’d be hopeful that the European authorities would allow a limited flight resumption. I think it’s important for Ukraine and the people of Ukraine, I mean, we endured a 10-hour train journey from Poland into Ukraine in and out. The one thing that’s missing in Ukraine Kyiv is remarkably normal, but what they’re missing is air travel. And we — I think it’s incumbent on all of us in Europe to support Ukraine as best we can. And I think the best way we can support Ukraine is by leading the return to air travel. So we continue to work closely with the IASA, the FAA to encourage them to reopen at least even if it’s only on a limited basis, the return of fights into Kyiv and Lviv. Once the war ends, and we all hope it will be sooner rather than later, we will charge back into Ukraine. We’ve committed to basing up to 30 aircraft in Kyiv, Lviv and Odessa. Kherson, Kharkiv will be later because those airports have suffered significant damage, but we intend to return back in there within four to six weeks of being allowed to do so. We expect to be connecting Kyiv and Lviv with up to 25 or 30 European cities. Ukraine was a big and growing market for Ryanair prior to the invasion. And after they have successfully repulsed the Russians, we expect to be — Ryanair will be the number one airline in Ukraine. And in reasonably short order, we’ll be the number one airline in Albania as well. I think this underscores the strength of the growth that is still ahead of us — in front of us in Ryanair, not just in Western Europe, but in Central and Eastern Europe, where the more we push into those markets, the more we take market share from our high-fare competitors. One last thought, there is, I think, a slightly over optimistic. We are looking forward to we’re holding a Capital Markets Day on the first week of September. The purpose of that day is to take everybody through the MAX 10 aircraft order, a detailed drill down into the very exciting growth opportunities we have all over Europe for the next and in those countries close to Europe for the next decade. We will not be updating profitability. We will not be discussing dividends or anything else. We really want to have a drill down into just the growth, the MAX 10 and what it will do for our costs. We will be sometime before the middle end of August, issuing the Class 1 document together with the AGM notice for the MAX 10 order. And that will — so that will limit what we are any commentary we will have between it and the AGM when we hope shareholders will back our vision and support the order for the MAX 10 aircraft. So I just want to make sure that we have punctured any irrational expectation that the Capital Markets Day would be some dramatic reveal, it won’t, but there will be very exciting, I think, news and communications on our decade of growth which rolls out before us in a marketplace in Europe where capacity is constrained and where all of our incumbent competitors have seen are emerging out of COVID with materially higher unit costs than Ryanair is. I’m astonished, never cease to be amazed. I looked at the numbers last week. Our PE multiple currently is 11. The PE multiples of Wizz and easyJet who are — can either match our profitability, our growth, our unit costs are also 10 and 11. So either they’re materially overvalued or we’re materially undervalued, but I’m sure the market will work it out in due course. We look forward to seeing you all here at the Capital Markets Day in September. I think we have a very exciting story to tell on our new aircraft order on growth for the next decade, but that would be the height of it on that date. Neil, you want to take us through the MD&A or any point you want to raise on costs that I haven’t heard. Neil Sorahan: I’ll very briefly just run through within fairness, you covered off everything quite comprehensively. I think it’s clear that we will continue to have the unit cost advantage over everybody else, although there is a bit of price inflation coming through in the first quarter as we annualize the pay restoration and the pay increases that we’ve awarded our people. And as Michael said, we’ve invested very heavily in crewing ratios. This summer, we were operating up to about 5.8 set of crews per aircraft, up from 5.4 sets of crews last year. So you’re seeing that coming through, an increase in local ATC charges also coming through in the airport and handling line. So I think that, that’s apparent in the numbers this morning. The balance sheet’s in very good shape. We finished with EUR4.84 billion gross cash. And as Michael said, just under EUR1 billion in net cash, and that was after EUR1 billion in CapEx, including a $250 million signing fee on the MAX 10, which we signed back in May. So we’ve got another EUR1.8 billion to go for the balance of this year. Our balance sheets became fully unencumbered last Friday when we paid off our final Exim loan. So all of the 737, 800s now fully unencumbered, which I think is unique, and that’s reflected in the ratings that we got from Fitch and S&P up to BBB+. Hedging, again, as Michael said, very well hedged for the year, just under 85% hedging of which 75% is through swaps and the balance through options. So we’ve got about 25% of our fuel floating. And then as we look into next year, we’ve got about 40% of the first half of the year hedged out at approximately $75 a barrel and then some modest hedging into the second half of the year. Just some other bits and pieces, the Class 1 circular will be issued in the next couple of weeks. And this morning, we published our annual report for 2023 and our 2023 sustainability report on our website, which sets out our ambitious targets for the next decade there as well. And that’s pretty much it for me, Michael. Michael O’Leary: Okay. Thanks, Neil. We’ll open up to Q&A. Now I’m joined here, we’re in Dublin, where Eddie Wilson, the DAC CEO; Tracy Malloy ; Tom Fowler, Peter Larkin; Juliusz Komorek and Neil is obviously joining us from London where he’s doing the media. So we’re going to open it up to Q&A, and I’ll front-pass the questions around, so we get everybody involved in the call. Thank you. Q&A Session Follow Ryanair Holdings Plc (NASDAQ:RYAAY) Follow Ryanair Holdings Plc (NASDAQ:RYAAY) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question today from Savanthi Syth from Raymond James. Please go ahead. Your line is now open. Michael O’Leary: Savanthi, Hi. Savanthi Syth: Hey, good morning. If I might, on the fleet plan, it looks like there were some changes there, a little bit of MAX 10 shifting around. I was wondering if that was kind of based on what Boeing is telling you or you’re making some assumptions given what you’re seeing today? And then just for my second question, I was kind of curious with the investments in the operational resilience, does that get baked into the base and then we see kind of more of a normalized growth on top of that? Or how should we think about some of the investments that are being made there? And the impact on cost? Michael O’Leary: Yeah, I think — thank you. You broke up once or twice there, but if I picked it up, the only change in the fleet plan is just delayed deliveries from Boeing. We’ve had to continue to be reasonably adaptive there. At one stage, we thought we might only get 35 aircrafts for the peak summer this year. It’s now like and I think, credit to Boeing, they delivered all 51, but the last one will arrive on the 31st of July. So we are — that’s cost us about 300,000, 400,000 passengers through June, July. We’ve had to take about 200,000 passengers out of August and we are moving back. We’re going to be seven or eight aircraft short in September, October because we start all the maintenance on the fleet. But Other than that, there isn’t any — and then we are moving some of the deliveries into summer of 2024 are moving back from February, March, April, they’re moving into April, May, June. We are working closely with Spirit in Wichita and with Boeing to try to give us the most accurate figure we have on the fleet. Investment operational resilience. Savanthi Syth: It looks like Michael, your MAX 10 deliveries were a little bit delayed too like different than what you had in May. Michael O’Leary: No, no. There’s no change. Neil Sorahan: There were some slight changes just sadly from the final aspiration from the draft to the release you now not major between the first two. Michael O’Leary: Yes. The numbers are still the same per year. The investment operational resilience like again I’ll give you the good. There’s good news and bad news. The good news is that the airport handling generally across Europe has been materially better this year than it was last year. Most airports, most handling companies are reasonably well staffed this summer. And so we’re not seeing any significant changes or there’s significant improvement over last year. The bad news is that ATC is a shambles. They are short staffed, particularly at weekends. We have long complained about the 60 days of French ATC strikes. And the European Commission continues to sit on its hands doing nothing. I keep writing to Ursula von der Leyen. She keeps fabbing the correspondent after DG move, which is a misdescription in terms of DG no move. Nothing is being done for Europe. We are calling the minimum. We’re calling forest protection of overflights during French ATC strikes. That hasn’t been delivered. Most of the ATC providers, the German, the French are short staffed inexplicably and are incapable of providing the staffing that’s necessary. Remember, Europe this year is only operating at 93% of its pre-COVID capacity. And yet ATCs have less staffing than they had in 2019 and 2020. It is a mismanagement shambles but it’s exactly what you expect from anything run by European government and by the European Commission. But the continuing failure of the European Commission to take some action on this is inexplicable. I think it’s inevitable that we will have to maintain that, I think, improved operational resilience for the next year or two until we see Europe take some action on air traffic control. And we’re still — we would expect it to be as bad this time next year. I expect next summer Europe to be operating at about 100% of its pre-COVID short-haul capacity and ATC will still be giving us capacity restrictions at weekend, short staffing, excuses, piled upon excuses and nothing being done. So I think it is for additional — while we’ve doubled up the operations capacity in Dublin and in Warsaw. But the additional crewing, I think it will be with us here for the next summer or two. I don’t think it’s long term. I think ultimately, something will be done about European ATC and the mismanagement of ATC but I wouldn’t hold out any great hope that Ursula von der Leyen is going to do anything useful other than sit in her hands doing nothing. Eddie, you want to add to that? Edward Wilson: Yes. I mean I think the important thing is that what’s within our control we are significantly better in terms of solving those issues. So the two main call that Michael touched on there was the increased crewing ratios, which you’ve got to be ahead of the curve of like six, 12 months ago to bring those people through. We’re still training over 1,000 cadets a year, and we have significantly increased our cabin crew ratios. And quite rightly, like as ATC is hopefully solved over the next number of years, and we’re growing, we can get growing ratios. We can sort of lean into that. But more importantly, at the operations control center level, both here and in Bratislava, labs has been particularly important to us in designing systems that allow us in this environment where you’ve got, what would have been five, six years ago, meltdown days versus we’re able to manage that in real time in optimizing the allocation of crews. And that has been critical not just piling extra bodies in but the support and systems that we have here that are homegrown systems and are working very effectively this summer. I mean it just — it makes you — you’re able to get through without cancellations unlike many of our competitors. Michael O’Leary: Thanks, Eddie. Thanks, Savi. Next question please. Operator: Thank you. The next question comes from Muneeba Kayani from Bank of America. Michael O’Leary: Muneeba, Hi. Operator: Please go ahead. Your line is now open. Muneeba Kayani: Good morning, Michael and Neil. So just on your comments on the softening in closing fares, is there anything you would call out in terms of specific geographies? Would you say there’s a change in customer booking behavior maybe and kind of what portion of the second quarter — fiscal second quarter is booked currently? And then the second question just on uses of cash. And in the video, you talked about a potential cash return to shareholders. What are you thinking at this point within — across like dividend or buyback? And any metrics that we should think about in terms of a potential size in March this year fiscal year? Michael O’Leary: Okay. Thanks, Muneeba. Again, I would draw your attention, I think it’s important we say it. Partly this is, I think, is a function of the weak prior year comps in Q1 and the strong prior comps in Q2. As we went through April, May and June, the close-in fares, we were seeing continuously kind of booking up — your fares were significantly up ahead of budget expectations. As we move into Q2, close-in fares are closer to our budget expectations. There’s a kind of a leveling out. We’re still running marginally ahead of our budget expectations and low to mid-double-digit ahead of Q2 last year. But I think — what we’re trying to communicate here is in the last number of weeks, the close-in stuff has softened. In some cases, we’re now looking at very few seats left available to travel. We may have oversold Q2 a little bit ahead of schedule. But we’re not seeing the same kind of jump up in close-in bookings that we saw in Q1. But I think that’s more a factor in Q1. Our budget was kind of predicated on last year’s weak prior year comps versus Q2 it’s not. And again, I just — I don’t think that to be worried about here. But I do want to communicate we’ve had a very, very strong Q1. Q2 will not be very strong. It would be good, but not this good. And I don’t want any kind of irrational exuberance building up out there. No more than that. Uses of cash, we try to be as transparent as we can. The Board has set us kind of four in sequentially, the priorities in terms of cash and profitability. One, restored the pay cuts. We did that 24 months early in December of last year. We’re agreeing pay increases with the pilots, cabin crews, our ground handlers across Europe. We’ve done deals with almost all the cabin crews. Most of the pilot groups are now largely done, and we’re working our way through the ground handlers as well. It’s an ongoing process, but the Board is committed. I think the first use of funds was repay restoration and rewarding the people who stood loyally with.....»»

The FAA eased requirements for takeoff and landing spots, with one United route seeing 18% more seats despite one less daily flight thanks to larger planes. An airport passenger.Brandon Bell/Getty Images Last summer saw a spate of horror travel stories as the aviation sector rebounded from the pandemic. Major airlines have agreed with the FAA's request for fewer flights but larger planes this summer, per the NYT. That includes United, whose Newark-St Louis route will have one less daily flight but 18% more seats. Major airlines are hoping to avoid a repeat of last summer's travel chaos by scheduling fewer flights but with bigger planes.As the aviation sector rebounded from the pandemic in 2022, airports and airlines struggled to readjust to the increased demand. From lost wedding dresses to a 13-month-old booked on a separate flight to her parents, there were plenty of horror stories.So the industry has put changes in place to try to avoid anything similar happening again this year.In a statement, the Federal Aviation Administration told Insider it's "taking several steps to keep air travel this summer safe and smooth, even as we see strong domestic demand and a return of pre-pandemic international traffic."Several major airlines have agreed with its request to fly less often but with larger planes. That includes United Airlines, which told The New York Times it will have 30 fewer daily departures from New York's Newark compared to 2019. For instance, last summer, it had four round-trip flights to St Louis each day, but that's been cut to three this July.Yet that route will still have 18% more seats available because it's swapping out one of its smaller, regional planes for an Airbus A319, per the NYT.This is all happening thanks to new changes introduced by the FAA. From May 15 to September 15, the agency is easing a requirement that meant airlines could lose their takeoff and landing spots if they don't use them in time.That policy applies to the three New York City hubs and the Reagan National Airport in Washington, D.C."To help prevent disruption, the agency will give airlines flexibility on slot usage requirements," the FAA said. "In turn, the FAA expects airlines to take actions minimizing impacts on passengers, including operating larger aircraft to transport more passengers and making sure passengers are fully informed about any possible disruptions."United Airlines did not immediately respond to Insider's request for comment.Read the original article on Business Insider.....»»

European train operators Thalys and Eurostar have recently teamed up to create a sprawling high-speed train network and compete with air travel. The Thalys train runs at 186 miles per hour and now connects to the UK thanks to its recent merger with Eurostar.Thierry Monasse/Getty Images Thalys is a network of high-speed trains bolting across Western Europe at 186 miles per hour. The company recently merged with competitor Eurostar to better battle climate change and airlines. All of Thalys' seats come with necessities like power outlets, while first class also gets meals. Thalys is a 186-mile-per-hour high-speed rail network in Europe serving the countries of Belgium, Germany, France, and the Netherlands.A Thalys high-speed train in Paris.Taylor Rains/InsiderI rode on Japan's world-famous bullet train that reaches speeds of up to 186 miles per hour. It was an incredible way to travel.The vision started in the 1980s when Belgian politicians saw the need for quicker transport options between European nations.The Netherlands' Central Station in 1946.Sepia Times/Universal Images Group via Getty ImagesSource: Railway TechnologyAn international workgroup was created for the project, which officially launched in June 1996. The first Thalys-branded train ran on the Paris-Brussels-Amsterdam route.A Thalys train in Belgium.Thierry Monasse/Getty ImagesSource: Railway TechnologyEarly operations used conventional tracks as the high-speed lines were still being built. So, it wasn't until December 1997 that the first super-speedy tracks opened between Brussels and Paris — cutting the travel time from two hours to 90 minutes.A Deutsche Bahn AG train next to a Thalys train at Munich Central Station in April 1997.Frank Leonhardt/picture alliance via Getty ImagesSource: Railway TechnologyThe trains used were derived from TGV, meaning Train à Grande Vitesse — or high-speed train in English. They were made by the manufacturer Alstom and first ran in 1981 across France.Former French president Francois Mitterrand and his family at the TGV inauguration in 1981.Beucelle Armel/Sygma via Getty ImagesToday, the Thalys train remains one of the fastest on the continent. In fact, the Paris to Brussels corridor is so busy that airlines have adjusted their strategies to promote rail travel.Thalys has a train that directly connects Schiphol airport in Amsterdam to CDG airport in Paris.Thierry Monasse/Getty ImagesSource: Airline WeeklyAir France already has a Train + Air program, which was expanded in 2021 after France enacted a climate law that banned short flights.The law applied to local traffic (not connecting passengers) traveling between cities where a train service would take less than two and a half hours.Bodo Marks/picture alliance via Getty ImagesSource: Airline Weekly, Air FranceMeanwhile, Dutch flag carrier KLM bought up more Thalys tickets for passengers connecting from Amsterdam to Brussels this summer. It has also nixed one flight frequency on the route.KLM Cityhopper E190-E2.Wirestock Creators/ShutterstockSource: Airline WeeklyThese types of partnerships go back decades, like when SN Brussels Airlines established a similar Thalys service between Brussels Airport and Paris in 2003.An SN Brussels Airlines model plane in front of a Thalys train.Jacques Collet/Belga/AFP via Getty ImagesSource: Government of FlandersMany people find rail travel more convenient than flying as it typically doesn't require invasive security checks, boarding gates, or crowded airports.Security lanes at Schiphol Airport Amsterdam.Grace Dean/InsiderI rode on one of Europe's fastest high-speed trains in first class from Amsterdam to Paris for $160. It easily beat flying.This competition has not escaped the minds of government officials who see the low-emitting trains as a way to also combat climate change.TGV Duplex, Thalys, ETR 500, and Eurostar trains at the Eurailspeed 1998 exhibition in Berlin in October 1998.Schlemmer/ullstein bild via Getty ImagesSource: Aviation24.beAs a way to further reduce Europe's carbon footprint, Thalys merged with high-speed competitor Eurostar in 2022 to create one giant system under the Eurostar brand.The merger was first proposed in 2019 and named Project Green Speed. Pictured is a Thalys and a Eurostar train side-by-side with the new company logo.Kenzo Tribouillard/AFP via Getty ImagesSource: SNCF, Aviation24.be, ThalysThe combined company expects to handle 30 million customers per year by 2030.The combined Eurostar and Thalys route map as of 2022. Thalys and Eurostar are owned by French train company SNCF.Eurostar, ThalysSource: SNCF, EuronewsHowever, Arriën Kruyt of the sustainability non-profit organization European Passengers Federation warned the merger was a "monopoly" and could increase ticket prices.Kruyt spoke at RailTech Europe 2021, which is conference for the railway sector.Robin Van Lonkhuijsen/ANP/AFP via Getty Images)But, that likely won't keep people from rail travel. See what passengers can expect onboard Thalys' super-speedy train, which will be rebranded to Eurostar come October 2023.A rebranded Eurostar high-speed train that was previously Thalys.Jonas Roosens/Belga Mag/AFP via Getty ImagesSource: RailTechCurrently, there are two options when booking a Thalys train: premium — aka first class — and regular coach.First class seats on a Thalys train.Taylor Rains/InsiderFirst class is configured in a 2x1 layout, meaning a third of passengers will have a solo seat that offers added privacy.Taylor Rains/InsiderMeanwhile, the pairs — which face both forward and backward — are perfect for duos traveling together...Taylor Rains/Insider...while larger parties may opt for the quad-seating, which conveniently has a table in between the two sets of chairs.Europe's Thalys high-speed train at Amsterdam Central Station.Taylor Rains/InsiderEach reclining seat comes with power outlets, free WiFi, and a USB port…The power is attached to a box that doubled as a trash can.Taylor Rains/Insider…large tray tables and seatback straps…The seatback straps could fit charging cords.Taylor Rains/Insider…as well as a footrest, closable window shades, and a reading light.The footrest on the dual seats.Taylor Rains/InsiderThere is also plenty of overhead space for luggage…Each fare comes with two pieces of luggage.Taylor Rains/Insider…and a small table that folds down without taking up too much personal space.Taylor Rains/InsiderImagine an airline's domestic business class — though some may argue the train is nicer.A first class seat on a Delta Airbus A321, which comes with an inflight TV screen.Thomas Pallini/Business InsiderI flew first class on Delta from Orlando to New York and found it wasn't anywhere close to worth the extra costMeanwhile, the economy cars are configured in a 2x2 layout, meaning there will more people and potentially more noise.Quad-seating is also an option in economy.Robin Van Lonkhuijsen/ANP/AFP via Getty ImagesEach seat will still come with the same necessities as first class — minus the miniature tray table.Power outlets in the economy section.ThalysHowever, the premium seats are designed to be more comfortable and spacious to give the cars a leg up on coach.A Thalys train at Brussels station.Thierry Monasse/Getty ImagesMoreover, first class passengers get lounge access in certain cities across the network…Thalys passengers get one free drink but have to pay about $3 for another, according to signage inside the lounge.Taylor Rains/Insider…as well as two meals included in the fare, which has options like broccoli mousse, a waffle pastry, fish with veggies, or a rice dish — though the menu rotates.Examples of the food and drinks included in the Thalys first class ticket.Taylor Rains/InsiderEconomy passengers can still enjoy snacks and drinks from the "Thalys Welcome Bar" onboard, which also serves alcohol.Thalys' Welcome Bar.ThalysSource: ThalysRead the original article on Business Insider.....»»

United Airlines Holdings, Inc. (NASDAQ:UAL) Q1 2023 Earnings Call Transcript April 19, 2023 United Airlines Holdings, Inc. beats earnings expectations. Reported EPS is $-0.63, expectations were $-0.73. Operator Good morning and welcome to the United Airlines Holdings Earnings Conference Call for the First Quarter 2023. My name is Silas and I will be your conference […] United Airlines Holdings, Inc. (NASDAQ:UAL) Q1 2023 Earnings Call Transcript April 19, 2023 United Airlines Holdings, Inc. beats earnings expectations. Reported EPS is $-0.63, expectations were $-0.73. Operator Good morning and welcome to the United Airlines Holdings Earnings Conference Call for the First Quarter 2023. My name is Silas and I will be your conference facilitator today. Following the initial remarks from management, we will open the lines for questions. [Operator Instructions] This call is being recorded and is copyrighted. Please note that no portion of the call maybe recorded, transcribed or rebroadcast without the company’s permission. Your participation implies your consent to the recording of this call. If you do not agree with these terms, simply drop off the line.I will now turn the presentation over to your host for today’s call, Kristina Munoz, Director of Investor Relations. Please go ahead.Kristina Munoz Thank you, Silas. Good morning, everyone and welcome to United’s first quarter 2023 earnings conference call. Yesterday, we issued our earnings release and investor update, which is available on our website, ir.united.com. Information in yesterday’s release and the remarks made during this conference call may contain forward-looking statements, which represent the company’s current expectations or beliefs concerning future events and financial performance. All forward-looking statements are based upon information currently available to the company.A number of factors could cause actual results to differ materially from our current expectations. Please refer to our earnings release, Form 10-K and 10-Q and other reports filed with the SEC by United Airlines Holdings and United Airlines for a more thorough description of these factors. Unless otherwise noted, we will be discussing our financial metrics on a non-GAAP basis on this call. Please refer to the related definitions and reconciliations in our press release. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables at the end of our earnings release.Joining us on the call today to discuss our results and outlook are Chief Executive Officer, Scott Kirby; President, Brett Hart; Executive Vice President and Chief Commercial Officer, Andrew Nocella; and Executive Vice President and Chief Financial Officer, Gerry Laderman. In addition, we have other members of the executive team on the line available to assist with Q&A.And now I’d like to turn the call over to Scott.Scott Kirby Thanks, Kristina and good morning, everyone. I want to start by thanking the entire United team for delivering exceptional operation this quarter. Given our hub geography United almost all has the most flights impacted by weather, air traffic control delays of any U.S. airline. But despite this in Q1, we had the lowest mainline flight and seat cancellation rates of any airline in the country. That’s important, not just for the obvious customer and brand impact, but it’s also the key to hitting our planned capacity and CASM-ex target. I am going to leave the detailed quarterly results and guidance to Gerry and Andrew.But today, I will take a few minutes to talk about four emerging themes that have come to the foreground that I think are important to the United investment case. One, there appears to be a clear change in seasonality that is causing peak leisure demand months, March through October to be even stronger, while months that were historically reliant on business demand are weaker, that particularly impacts January, February, and the first half of November and December. We believe demand is just structurally different than it was pre-pandemic and we are still figuring out that new normal.Second, as we have expected all along, long-haul international is moving into the lead over domestic. Andrew will give more details, but this is a multi-year structural change based on aircraft retirements and pilot downgrades as essentially all long-haul U.S. airlines around the world except United. But my third theme is an appropriately cautionary point. Our guidance and everything we are discussing today is our base case scenario based on what we are seeing right now. And what we are seeing right now is still strong demand. At airlines, the macroeconomic weakness is being offset with a counter trend of consumer spending continuing to rebalance back to services. And by the way, we still remain below our historical GDP relationship arguably indicating more room to run in the revenue recovery. However, it seems clear that the macro risks are higher to-date than they were even a few months ago as demonstrated by the banking scare of Silicon Valley Bank. We saw an immediate drop in [closing] (ph) business demand that lasted for about 2 weeks, but now appears to have recovered.Our base case therefore remains a mild recession or soft landing which is consistent with what we are currently seeing in our bookings. But we agree that the tail risk is higher than normal. While we feel good about our 10 to 12 full year EPS, if the economy softens further we have prepared for it by a) having a lot of flexibility in the business line capacity if needed, b) improving our balance sheet to withstand the near-term issue with approximately $19 billion in liquidity and having reduced our total debt including pension by $4.6 billion over the past 12 months, and c) is actually my fourth theme which is controlling what we can and hitting our CASM-ex target in this new, different and more challenging operating environment. We can’t control what happens with the macro economy, but we can and are doing a great job of controlling our cost. We can’t run your airline like it’s 2019, it’s different and harder now.Cancellation rates are the leading indicator of forward capacity and therefore CASM-ex and United is leading the way on this front. Gerry will discuss some of the year-over-year tailwinds that will drive lower CASM-ex in the back half of this year, but we only need CASM-ex to be approximately 1 point better in the second half of the year to hit our full year target. We remain solidly on track.To wrap up, over the last 3 years, our industry has confronted a rapidly changing environment. United hasn’t been perfect, but we have got a lot more right than normal. In the big picture, we have got it right and took the steps in the last 3 years to thrive in exactly this environment. International is stronger, the operating environment is more challenging, which means reliability is harder, but also had a premium for producing bottom line results and we had confidence that our gauge growth and execution are keeping United uniquely on track for our near and long-term CASM-ex trajectory, that not to say that there aren’t real near-term risk, because we all know there are, but we feel really good about the strategic setup and tactical execution here at United.I want to again thank the entire United team for their hard work this quarter. We had a busy summer season ahead and I look forward to achieving even more operational and financial records.With that, I will turn it over to Brett.Brett Hart Thank you, Scott, and thank you to our United team for their hard work this quarter. As Scott mentioned, we continue to see the benefits of running a strong operation. In the first quarter, United led the industry with the lowest seat cancellation rate despite around 20% of our flights being impacted by weather, the most out of any of our competitors. This was the first time since 2012 that we led on this metric.Additionally, United was first or second in the quarter for on-time departures at nearly all of our hub locations, including those heavily impacted by winter weather like O’Hare and Denver. Our airline is built to run well and recover fast and we expect our operation to reflect that in the peak summer season. We continue to navigate the challenges in the current operating environment. Specifically, constrained industry infrastructure, United is working with the U.S. Department of Transportation and FAA regarding operational disruptions and air traffic staffing challenges. Photo by Toa heftiba on Unsplash The FAA’s decision to consider commercial air traffic with managing the growing number of space launches combined with the FAA’s recent move to give carriers more flexibility in how we all fly in and out of New York area airports shows that the FAA is listening to feedback and finding ways we can all work together.In March, we took steps to reduce our schedule in the New York region and DCA by around 30 daily departures over the summer period to provide the air space relief requested by the FAA. The scheduled reductions are largely regional jet focused and will be redeployed at our other hubs minimizing the capacity impact to the system. It is our hope that this will drive improved customer experience, while flying United in the New York area and throughout our network.We are excited to announce that we reached a tentative agreement with our nearly 30,000 employees represented by the International Association of Machinists. With volume on the agreement expected to be completed by May 1, we are very proud of the work that our team does daily to support our operation and create a positive travel experience for our customers.Regarding other labor agreements, a new contract with our technicians represented by the IBT was ratified in January and we are still in active negotiations with our flight attendants represented by the AFA and our pilots represented by ALPA. As a reminder, we reached an agreement with our Dispatchers represented by PAFCA last year. We look forward to sharing further updates in the future. I once again want to thank our team for being the best in the industry. We remain confident in our outlook as we leverage our industry leading operational performance and network advantages.And with that, I will hand it over to Andrew to discuss the revenue graph.Andrew Nocella Thanks, Brett. First quarter top line revenues of $11.4 billion finished consistent with our updated guidance of up 51% versus 2022. TRASM was up 22.5% year-over-year. While we were below our initial guidance, we expect that our TRASM performance in the first quarter will be top tier. As expected, other revenues in the quarter while strong are growing at a slower rate than passenger revenues, the opposite trend we saw last year and over the course of the pandemic. While cargo revenue declined 37% year-over-year, it remains 39% above the same period in 2019.MileagePlus other revenue had yet another strong quarter and was up 25% year-over-year, driven by our strategic partnership with Chase. United’s credit card continue to set records in Q1, including the highest first quarter ever per card spends, new accounts up over 30% year-over-year and account attrition near historic lows. We also welcome Richard Nunn to the United team as the new CEO of MileagePlus.As Scott indicated, we believe we are seeing different revenue seasonality for the United network post-pandemic and that change should impact our relative margin in Q1. New seasonality positively impacted March through October 2022, where new remote work schedule simulated business, particularly premium leisure. Ultimately, if these trends continue, we expect to be able to operate a more consistent level of capacity between March and October in future years.However, we believe the new seasonality negatively impacted Q1 in January or February, along with the first halves of November and December. With United’s relatively small presence in the Caribbean and Florida, where demand is usually strong in Q1 and over the winter months, the United network is more reliant on business traffic that is not fully recovered to pre-pandemic volumes in these periods. United’s global network and East West trends were simply better align to March through October post-pandemic where leisure and premium leisure business compensates for less traditional business traffic.As we head into Q2 2023, we are tracking ahead of 2022 in all the ways that we measure business traffic, a really good sign for revenue momentum. While it’s still early on, we do see corporate business for May and June tracking well ahead of their previous months at this time. The business traffic rebound we are seeing is strongest in global long-haul markets, where videoconference is not a substitute for an in-person meeting.The recent banking scare did initiate a slowdown in demand across multiple customer types in the quarter. Impacts on business demand for domestic flying was the most significant, impact on domestic leisure was smaller and impact over on overall international demand was actually minimal. In the weeks after the scare, we saw business demand relative to the same period of 2019 decline by 8 points after steady progress experience to the quarter to that point. This trend has since reversed back to pre-banking scare levels.In Q2, we expect total revenue to be up 14% to 16% versus the second quarter of 2022, with capacity, up approximately 18.5%. Our expectations for revenue in the second quarter continue to show strength with approximately 8% to 10% growth in domestic revenues and almost 30% for international. Second quarter bookings and revenues do look good versus the same point in 2022, with book deals up 13% and 31% above 2019 respectively. For 2023, we expect to expand international flying by approximately twice the rate of domestic leaning into the favorable supply demand balance that we expect. We will be focused on extending United’s leading position across the Atlantic and to Asia and the South Pacific. We believe this capacity deployment plan will set us up to meet our financial objectives given the stronger revenue outlook we are seeing for international flying and the rebound in Polaris cabin.We will also pass two critical milestones by this summer, with all United international wide-body jets having the latest generation Polaris seat and a premium plus cabin. While further return to corporate business will help profitability in all quarters, we are not assuming that will occur in our 2023 revenue outlook. United scheduled capacity this summer is up 39% in the Atlantic, but industry capacity, excluding United, is estimated to be down about 1%. United will operate an average of 207 daily flights across the Atlantic this summer. Across the Pacific, United plans to be up 14%, excluding China, with industry capacity down about 7% both versus 2019. Overall, international ASMs will be 46% of United’s capacity this summer versus 43% in 2019.Yesterday, we announced another set of capacity increases to the South Pacific ideally timed for the Southern summer later this year. These include the first-ever nonstop service from San Francisco to Christchurch, a new service from Los Angeles to Auckland in partnership with Air New Zealand and to Los Angeles to Brisbane, where we will connect to our new partner, Virgin Australia. Rebuilding connectivity back to our original 2019 standards in our Mid-Con hubs and Dallas will also be a long-term focus for our domestic volume. The loss of regional jets turned the pandemic without mainline jets to backfill them cause connectivity to suffer. Peak bank sizes at our high flow hubs are down 10% to 20% versus 2019.We were able to build connectivity and margins in 2018 and 2019 when we increase bank size connectivity and we expect to execute a similar strategy in 2023 and 2024. However, this time around, we will do it with the appropriately sized 737 jets instead of single-class regional jets. As requested by the FAA, we have reduced our planned flights from Newark City this summer, including to and from Newark. We believe this will be the first time in years that Newark will operate within the airport’s capacity abilities in most hours and consistent with the slot allocations. We are optimistic that between the new terminals and capacity consistent with the runway’s capabilities, the customer experience will improve dramatically and we appreciate the partnership with the FAA to make this happen.EMEA will gain up to 17 new mainline gates in Terminal A and Newark this summer versus 2022 which will improve Newark’s reliability and customer experience. Along with the new Newark gates, we will open a new United Club in Terminal A and in Terminal C later this year, adding 38,000 square feet and will be up 161% in club space relative to 2019.As impressive as that club space measurement is in Newark, our club members in Denver will experience an opening of 3 United clubs over the next year that include a total of 97,000 square feet, a 149% increase versus 2019. Construction of our new gates in Denver is also almost complete and will have 90 gates, up from 66 we had in 2019, which we expect will allow us to dramatically increase bank sizes and connectivity in 2024 and 2025.At United, we remain focused on our high ground, structural strengths focused on global long-haul, correcting connectivity issues in our Mid-Con hubs that surface during the pandemic and of course, gauge, increases that are consistent with our large hub markets. Our capacity plan for this year remains in place without adjustment as we operate with strong operational results.With that, I wanted to say thanks to the entire United team. And I will turn it over to Gerry.Gerry Laderman Thanks, Andrew and good morning to everyone. Let’s start with our first quarter results. Our pre-tax loss of $256 million was in line with expectations and at the better end of our updated guidance issued last month. We saw losses in January and February due to seasonal weakness, but March turned solidly profitable. Our first quarter fuel price of $3.33 came in at the lower end of our revised guidance range. This was still about $0.14 higher than our expectation at the start of the quarter due to a spike in jet fuel prices in late January and early February.Turning to non-fuel costs, our first quarter CASM-ex came in slightly better than our revised guidance range at down 0.1% versus the first quarter last year. Our operational performance in the first quarter was truly exceptional and our CASM-ex fee is largely due to the cost benefit of a reliable operation. On the balance sheet, we ended the quarter with approximately $19 billion in liquidity. We continue to leverage the flexibility provided by our cash with financing opportunities and paying down debt. We generated over $3 billion in operating cash flow in the first quarter, the highest for any quarter in United’s history and we produced free cash flow of over $1 billion. Over the last 12 months, our total debt, including pension liability, has declined by approximately $4.6 billion and we remain on track to meet our 2023 target of adjusted net debt to adjusted EBITDAR of less than 3x.Looking ahead, we expect second quarter CASM-ex to be flat to up 2%, with capacity up approximately 18.5% both versus the second quarter of last year. Strong cost performance underpins our confidence in the earnings trajectory of the business in the second quarter we expect adjusted diluted earnings per share of $3.50 to $4, with a fuel price of $2.80 to $3. As noted in our investor update, this fuel price is based on prices as of April 12.As others mentioned, our strong operational performance in the first quarter sets the tone for the remainder of the year and is key to our conviction in achieving our CASM-ex targets. For the full year, we continue to be on track to keep CASM-ex approximately flat versus 2022 with non-fuel unit costs in the second half of this year declining versus the second half of last year. To give context as to why we expect CASM-ex in the second half of this year to improve on a year-over-year basis versus the first half of this year, it’s helpful to consider the 2022 cost baseline.With COVID still significantly impacting the business in the first half of last year, we have certain unique headwinds in the first half of this year when comparing costs on a year-over-year basis. Here are two notable examples. Revenue in the first half of 2022 was much lower than the second half of 2022, which meant that distribution costs were also much lower in the first half of last year versus the second half. This drives the year-over-year comparisons for the first half of this year to be commensurately higher than the second half of this year. A similar phenomenon exists with maintenance expense. As Omicron abated and the recovery took hold, we ramped up our maintenance activity in the back half of ‘22 to more normalized levels. Again, the difference in year-over-year costs are much more muted in the second half of this year versus the first half.So simply put, the two items represent a 1 to 2 point CASM-ex headwind in the first half of this year, which won’t exist in the second half. These drivers, along with strategic cost management, gauge growth and running a reliable operation support our expectation that we will hit our flat CASM-ex target for the year. When combined with our revenue outlook, we remain confident in our trajectory towards $10 to $12 in adjusted diluted EPS for the full year whether we face a mild recession or soft landing.As we have left the starting gate for our United Next plan, I am encouraged by the progress we’ve made not only financially but in our operation and across the entire organization. While we continue to live in uncertain times, I know that we will successfully manage everything under our control as we continue on a path to reach our full year financial objectives.And with that, I will turn it over to Kristina for the Q&A.Kristina Munoz Thank you, Gerry. We will now take questions from the analyst community. Please limit yourself to one question and if needed, one follow-up question.Silas, please describe the procedure to ask a question. See also 16 Best Utility Stocks to Buy Now and 15 Biggest SaaS Companies in the World. Question-and-Answer Session Operator Thank you. [Operator Instructions] The first question comes from Catherine O’Brien from Goldman Sachs. Your line is unmuted. Please go ahead.Catherine O’Brien Good morning, everyone. Thanks for the time. So there has been a lot of investor concern recently around the domestic slowdown. So I think I’ll just get right to that. I know United is built to win in the international strength. But can you just help us think about what’s driving the domestic unit revenue performance to underperform international, at least based on first quarter versus ‘19. Is there a shift in leisure demand to international from domestic that might be exaggerated right now post pandemic? That international business is stronger, as you know prepared remarks, something else? And then I saw you had another record first quarter build in the air traffic liability. Would also be helpful just to talk through how much you have on the books, domestic versus international first quarter. Thanks so much.Scott Kirby Sure, Catherine. We’re getting this question about domestic strength a lot and we should really address it. The way when we go back thinking about it, how to describe the conditions of this Q2, we have to recall Q2 of last year, Q2 of 2022 was the best domestic TRASM quarter ever for United with TRASM up 25% versus Q2 of 2019, which, by the way, was a prior record holder. We simply sent a really hard comp for Q2 2023 and also last year at this time, international markets were not widely open to travelers, in my view, selected domestic trips out of caution, just creating unprecedented demand relative to the number of seats available to sell. This year’s conditions are different. International travel is more or less completely open, and we see customers clearly excited about taking a long-haul trip. Domestic capacity is also now comparable to 2019 levels.So here are the facts, domestic ASMs at United will be up about 10% in Q2 2023 year-over-year. And our TRASM outlook for domestic will be negative low single digits from what I’ve said today. Total domestic revenue should finish well above 2022, given our TRASM outlook on capacity growth of about 10%. We’re currently booked about 10% ahead in gross revenue at this point compared to last year, and we’re about 54% into the booking curve for the quarter. I just don’t see these facts as weak when revenue is on target to again break the record and TRASM is likely to be just a bit behind an amazingly strong 2022. In summary, when Q2 2023 is in the books, we will likely be our second biggest best domestic TRASM quarter ever with record total domestic revenues. The only thing negative, I think I can say is that as good as domestic looks, it’s just not matching global long-haul revenue outlook, which is very strong and where United has focused a majority of capacity.Catherine O’Brien On the ATL…Scott Kirby On the ATL, I think it’s seasonally moving in a normal way. I don’t know, Gerry wants to add anything else on the ATL question.Gerry Laderman Okay. Your question about international versus domestic, you’re actually the first person to ask us that question. So we will follow-up with you.Catherine O’Brien Okay, thank you.Operator The next question comes from Jamie Baker from JPMorgan. Your line is unmuted. Please go ahead.Jamie Baker Hey. Good morning, everybody. Just chuckling it Gerry’s response to Katie there, on the ATL, Gerry, the build obviously helped with free cash flow generation in the quarter, presumably, the ATL will incrementally moderate in the second half as it often does. Do you still think you can cover this year’s $9 billion in CapEx and generate positive free cash flow?Gerry Laderman Yes, Jamie, I think we can.Jamie Baker Okay. Fair enough. Second to Andrew, relative to the international component, you have got a lot of new route activity. Could you speak to sort of like same-store sales or same-store RASM or revenue, I guess, relative to those new routes? And how does the ramp to profitability in all of these new markets compare to that in the past? I mean, are new markets maturing much faster? Or does it take about the same amount of time as it ever did? I’m just trying to think about the read-through as some of these trends normalize next year.Andrew Nocella There is – for global long haul, there is virtually no [spool] (ph) up right now, Jamie. It gives us – the supply-demand equation is just not what it’s ever been in the past. While United supply across the Atlantic and Pacific is dramatically up and we’re happy it is dramatically up, obviously, industry supply is down. So what I would tell you is that the new routes come in very quickly with very strong profitability, which is why we keep adding them. That being said, in terms of same-store sales, I will say that London Heathrow is probably our weakest at this point because there is just – that there is a large amount of capacity in London Heathrow relative to the rest of the world, and we’ve grown there. And our connections within Europe in our key hubs are – have not fully recovered, just like they haven’t domestically. And so we actually do see some relative weakness in certain parts of the global network off of a strong base. But the new routes to your question are just coming in with home runs on day 1.Jamie Baker Thank you, gentlemen. Speedy answers. Take care. Operator The next question comes from Conor Cunningham from Melius Research. Your line is unmuted. Please go ahead.Conor Cunningham Hi, everyone. Thank you. Just the 2023 CASM-ex rate seems pretty encouraging. I know you mentioned maintenance and distribution as being a main driver from the first half to second half, but it still seems to me that you’re holding incremental cost. I mean, that may be the cost of doing business right now. But just curious if you could talk about what potentially rolls off next year as we start to think about CASM-ex there? Thank you.Gerry Laderman So I’m not sure I would call it rolling off. But keep in mind, next year, one of the benefits we’re really going to start seeing is that growth in mainline gauge, as the aircraft continue to come in. That process is really just starting this year. So next year, we get the full run rate of the larger gauge aircraft and take even more next year. So when you’re looking sort of where the tailwinds are next year, gauge is one. And the comps year-over-year are going to be better. Think of this year is really finally getting to the run rate of the post-COVID sort of full operation. So I think as an industry, we’re done with a lot of the surprises we all kind of saw coming out of COVID with some of the cost pressures. So I think from the cost side, the business has become more stable and a little more predictable.Conor Cunningham Okay. Okay. That’s helpful. And then just on the evolving booking curve and seasonality that you’ve been talking about. Just curious how going to combat those challenges going forward? I mean Delta has mentioned they are talking about looking at like overbooking and like tinkering with the inventory. Just curious what the strategy is at United, if there is one to combat those changes in the booking curve. Thank you.Scott Kirby Sure. Well, we think we clearly have the best RM system in the world, by the way. That’s what I’ll start off with. While there has been a small change in the number of tickets not flown in the quarter, due to the increased flexibility created when United eliminated change fees it’s our view that it’s not really material and it’s fully accounted for by our RM systems. And I’ll add on to that, our no-show rate is lower as well, and we will not be changing our overbooking levels at this point.Conor Cunningham Okay, thank you.Operator The next question comes from Savi Syth from Raymond James......»»

JSX's semi-private flying experience allows customers to bypass crowded airports, long security lines, and hectic boarding gates. Passengers deplaning JSX, which is a semi-private air carrier flying around the US.Taylor Rains/Insider US-based JSX is a semi-private air carrier, with fares typically starting at $249 one-way. The company uses 30-seater Embraer 135 and Embraer 145 aircraft equipped with Starlink WiFi. JSX's business model allows customers to avoid crowded airports and long security lines. Founded in 2016, JSX is a semi-private air carrier flying Embraer 135 and Embraer 145 aircraft.Flying JSX from Burbank to Phoenix.Taylor Rains/InsiderUnlike a typical passenger carrier like Delta Air Lines or Southwest Airlines, JSX operates as a public charter.A JSX aircraft inside a hangar near Hollywood Burbank Airport in California.Taylor Rains/InsiderThis means anyone can book a ride onboard one of its 30-seater jets, but it does not come with the regular treacheries of commercial flying.The author's view from seat 4A on a JSX flight from Burbank to Phoenix in April.Taylor Rains/InsiderI flew on a semi-private jet and enjoyed the hassle-free experience but I wouldn't do it againInstead of battling crowded airports and long TSA queues, JSX customers will fly out of a small terminal known as a fixed-based operator, or FBO.TSA Automated Screening Lanes at LAX.Brady MacDonald/InsiderI flew out of a general aviation airport to see how the rich travel. I didn't miss the hassle, lines, and frustration of commercial flying.FBOs offer services like fueling, parking, and maintenance to general aviation aircraft, like private jets and flight school training planes.JSX's FBO at Hollywood Burbank Airport in California, which had a two lounge areas with seating and complementary tea and coffee.Taylor Rains/InsiderIn most cases, FBOs will not have any security or boarding gates, and many even allow customers to drive right up to the aircraft.General aviation aircraft, like private jets, have different federal regulations compared to commercial airliners.Taylor Rains/InsiderI flew on a $50 million Bombardier Global 5000 private jet from Montreal to New Jersey and saw why those who can afford it are flocking to private aviationThese perks have turned many deep-pocket travelers to private aviation, which boomed during the pandemic.Flying on Volato's $5 million HondaJet.Taylor Rains/InsiderI flew on Honda's $5 million private jet that seats 4 — see inside Volato's HondaJetIt was further popularized after thousands of flights were canceled throughout 2021 and 2022 due to staffing shortages and system outages.Southwest Airlines passengers stand around dozens of bags during the carrier's December 2022 meltdown.Irfan Khan/Los Angeles Times via Getty ImagesFrustrated Southwest pilot and union rep says the airline's flight meltdown was caused by outdated scheduling softwareJSX CEO Alex Wilcox told Insider the company allows people to enjoy the luxuries of private flying without breaking the bank: "People don't want to take off their shoes or walk a mile to get on an airplane."Flying JSX from Burbank to Phoenix.Taylor Rains/InsiderHowever, the main difference between JSX and true private flying is that the latter is more personal, and the charters can fly on demand.True private flying can cost upwards of $20,000 per hour for large aircraft, like the Global 7500 (pictured).NetJetsJSX, by comparison, has a pre-determined flight schedule on set routes — meaning the customer has less flexibility.JSX flies seasonally to Cabo San Lucas, Mexico, during the winter.JSXMoreover, passengers will still experience a very minor security scan, though it is far less invasive compared to TSA screening.JSX passengers carried their personal item through a simple body scanner before boarding the aircraft in Burbank.Taylor Rains/InsiderDespite this, JSX can still be a good deal. A company spokesperson said fares typically start at $249 one-way but can lower depending on the route and season.Taylor Rains/InsiderSource: InsiderTake a look inside one of JSX's Embraer aircraft flying the routes.Taylor Rains/InsiderThe air carrier has configured its planes in a 1x2 layout — similar to what you'll see flying on small regional airlines like CommutAir.CommutAir, which operates as United Express, operates the Embraer 145 as a 50-seater plane.Taylor Rains/InsiderWhile there are no couches or televisions commonly seen on private jets like the Gulfstream G650ER, the seats resemble a typical domestic business class cabin.Taylor Rains/InsiderI toured a $65 million Gulfstream G650ER private jet like the ones owned by billionaires like Elon Musk and Jeff Bezos and saw how the ultra-rich travelPassengers can expect a generous 36 inches of pitch…Flying JSX from Burbank to Phoenix.Taylor Rains/Insider…a power outlet…Flying JSX from Burbank to Phoenix.Taylor Rains/Insider…a large seatback pocket…Flying JSX from Burbank to Phoenix.Taylor Rains/Insider…and a tray table with a wood-like design.Taylor Rains/InsiderThere is also one lavatory onboard with a sink and mirror.Flying JSX from Burbank to Phoenix.Taylor Rains/InsiderOne flight attendant is responsible for the entire cabin. JSX offers a complimentary drink — including alcohol — and a snack during each flight.The menu available on JSX flights.Taylor Rains/InsiderThe only thing missing from JSX's Embraer planes are overhead bins. Instead of allowing carry-ons, fares include at least two free checked bags…Depending on the JSX fare, customers will get either two or three checked bags included in their ticket.Taylor Rains/Insider…and only one personal item that must fit under the seat in front.The space under the set of dual seats (pictured) does not have a bar separating them, so there is plenty of space.Taylor Rains/InsiderAll luggage is collected at check-in and then delivered to customers within a few minutes of deplaning — much more convenient than waiting at bag claim.Agents unloading the checked bags in the FBO after landing.Taylor Rains/InsiderBut, one of the most unique features of JSX is its high-speed Starlink WiFi.Starlink was created by Elon Musk.Patrick Pleul / POOL / AFP/Yasuyoshi CHIBA / AFPThe carrier was the first operator to have the service, which will be complementary and available on all aircraft by May.SpaceX Starlink AviationSpaceXThe free WiFi will be the only entertainment option onboard as there is no inflight streaming service or seatback TV.Taylor Rains/InsiderFor those interested in experiencing JSX, West Coast routes are some of the cheapest, with Burbank, California, to Las Vegas costing as low as $149 one-way.Taylor Rains/InsiderHowever, the popular corridor between New York and Miami will cost between $599 and $929 one-way this summer, according to JSX's website.A view out of the window of a JSX plane.Taylor Rains/InsiderSource: JSXFares for competing semi-private carrier BLADEone can start at over $2,400 one-way on the same route, though JSX's planes are not as luxurious.A BLADEone Bombardier CRJ-200.BladeI flew on Blade's $2,750-per-seat jet from New York to Miami to see how the other half escape the winter blues — here's what it was likeRead the original article on Business Insider.....»»

The A380 plane has a unique product called the "COUCHii," which is a row of economy seats that converts into a bed. Third and final ANA A380.Airbus Japanese carrier All Nippon Airways is one of a handful of airlines still flying the mammoth Airbus A380. The carrier flies the superjumbo exclusively between Tokyo Narita Airport and Honolulu, Hawaii. ANA's A380 features a product called the "COUCHii," which is a row of economy seats that converts into a bed. The Airbus A380 is the world's largest passenger jet, capable of carrying up to 853 people in an all-economy configuration.No airline opted for this super high-density configuration, with most carrying around 450-550 people.Arnold Aaron/Shutterstock.comWhile the plane was once a marvel of engineering, its four-engine design has proven to be less efficient than newer twin-engine widebodies, like the Boeing 787 and the Airbus A350.Airbus A350-1000.Bryan Van Der Beek/AirbusI went inside an Airbus A350 owned by Italy's newest national airline flying from Europe to the US and I now can't wait to fly on itThese jets are more fuel efficient compared, meaning they are cheaper to operate. According to Forbes, an A380 can cost $26,000-$29,000 per hour, while the 787-9's estimated hourly cost is $11,000-$15,000.Boeing 787 Dreamliner.APSource: Forbes, Boeing just sold hundreds of Dreamliners — now it just needs to figure out how to consistently deliver themMoreover, many passengers favor nonstop routes instead of layovers. The dual-engine aircraft are better suited for this preferred point-to-point flying.United Airlines' Polar Plus cabin on its Boeing 787.Taylor Rains/InsiderMore airlines are choosing single-aisle jets for flights from North America to Europe — see the full evolution of jet-powered transatlantic flyingBut, the pandemic proved to be the nail in the coffin for the A380 as travel halted in 2020, and airlines like Air France, Malaysia Airlines, and Thai Airways have since ditched the jet.Thai AirwaysLufthansa announced its first post-pandemic Airbus A380 destination will be to the US. Here are the airlines that have resumed flying the plane since 2020.Air France described the retirement as a "simplification strategy" to transform its fleet with "more modern, high-performance aircraft with a significantly reduced environmental footprint."Belish/ShutterstockSource: The Points Guy, I flew on an Air France Airbus A380 2 years before the airline suddenly retired the world's largest passenger plane — here's what it was likeBut, there are a few airlines in the world that have held onto the A380, like Emirates...Emirates is the world's largest operator of the A380, using Dubai as its major international hub. Pictured is the last A380 to enter the fleet after Airbus stopped producing the jet.Airbus-Lutz BorckEmirates is bringing its redesigned Airbus A380 with premium economy seating and upgrades in every cabin to the US — see inside…Singapore Airlines…A view of a Singapore A380 being boarded via two lower jetbridges at Paris' CDG airport.ERIC PIERMONT/AFP via Getty ImagesI flew on Singapore's Airbus A380 for 12 hours in economy from Germany to Singapore. The seat was surprisingly amenity-heavy and made the long trek easy.…and Japan's All Nippon Airways. The carrier ordered three turtle-painted A380s specifically for flights between Tokyo Narita Airport and Honolulu, Hawaii.Third and final ANA A380.AirbusThe route — dubbed "Flying Honu" — launched in May 2019 but was suspended during the pandemic. However, flights have since resumed.The aircraft are named Lani (blue), Kai (emerald green), and Ka La (orange) and represent Hawaii's sea turtles. The colors represent the blue sky, crystal clear waters (emerald green), and orange sunset.ANASource: ANAANA Holdings CEO Koji Shibata told Insider the 520-seater A380-800 is a money-maker for the airline thanks to the high-demand market.Pascal Pavani/AFP via Getty ImagesHe explained passengers will pay a lot of money to fly on the A380 to and from Honolulu, so he'd "like to continue to deploy those airplanes for as long as possible."AirbusCurrently, ANA is flying two of its three A380s to Hawaii, and the company told Insider the route will match pre-pandemic levels by this summer. Take a look inside the cabin.The blue and emerald green planes are currently flying the route.ANASource: ANAANA's A380 is split into four classes: first, business, premium economy, and regular economy.ANAThe eight-seat first class section is the most luxurious onboard, featuring a fully-enclosed space with a sliding door…The first class section has a blue starry wall panel.ANASource: ANA…a lie-flat bed…ANASource: ANA…and a large flat screen TV. There is also a personal closet available for jackets.ANASource: ANABusiness class has 56 lie-flat loungers in a staggered configuration. This creates more privacy for passengers, especially since the seat lacks a door.ANASource: ANALike most other business class cabins, the seat comes with a flat screen TV, premium food, storage, and space to spread out.ANASource: ANABut, the product is not as nice as "The Room," which is the business class seat fit onto ANA's Boeing 777-300ER aircraft. These come with a privacy door and huge bed."The Room" on ANA's Boeing 777-300ER.Taylor Rains/InsiderI flew in business class on Japan's biggest airline for 14 hours and the seat felt more like a hotel roomShibata told Insider that there are currently no plans to add the upgraded "Room" seat to other long-haul aircraft, like its A380 or Boeing 787.ANA's Boeing 787 business class (pictured) is the staggered seats layout as well, but has a different fabric pattern.Taylor Rains/InsiderOnly about 12% of ANA's A380 aircraft are first or business class, meaning a majority of passengers will be seated in coach.ANATravelers who want some added comfort can opt for premium economy, which has a 2x3x2 layout and comes with a legrest…ANA…a 15.6" seatback TV…ANASource: ANA…as well as an adjustable headrest and a 90-degree swivel tray table "for easy aisle access."ANASource: ANAConfigured in a 3x4x3 layout, regular economy is the most basic cabin onboard the mammoth plane.ANABut, it still comes with a few unique luxuries not seen on other airlines, like a generous 34 inches of pitch…Competing carriers like United Airlines only offer 31-32 inches of pitch.ANASource: ANA…and a footrest.A few other international carriers like Aerolineas Argentineas offer a footrest in regular economy.ANASource: ANAAll four A380 cabins have power ports and lights available, while both coach classes have adjustable headrests.ANAANA's unique "COUCHii" seat is also available on its A380.ANASource: ANAThe product is a group of three or four seats that convert into a bed — perfect for families or couples.ANAThe seat resembles Air New Zealand's revolutionary Skycouch, which was introduced in 2011. Other carriers like Azul Brazilian Airlines and China Southern Airlines also have a similar product.Air New Zealand's Skycouch.Taylor Rains/InsiderI flew on the world's 4th longest flight in a 'Skycouch' — an economy seat that converts into a bed — and it was a lifesaver on the 16-hour journeyFor those eager to try out ANA's A380, current roundtrip fares range from 97,000 yen ($737) for regular economy to 300,000 yen for business ($2,278), according to the carrier.JIJI PRESS/Getty ImagesSource: ANARead the original article on Business Insider.....»»

Business class has its perks — and I do like having my own bed. I can see how the conveniences of flying private can be worth cost, but not always. In the past year, Insider's aviation reporter Taylor Rains has flown business class three times and on two large private jets.Taylor Rains/Insider There are lots of ways to travel by air, from cramped seats on budget carriers to private planes. As an aviation reporter, I've been able to experience some of the most high-dollar experiences. Here's how flying in business class compares to flying on a large private jet. As an aviation journalist, I spend a lot of time in the sky.The author sitting the cockpit of an airBaltic Airbus A220.Taylor Rains/InsiderOver the past year, I've experienced several luxury products, including long-haul business class on Singapore Airlines, Air New Zealand, and French boutique carrier La Compagnie…La Compagnie is the world's only all-business-class airline.Taylor Rains/InsiderI flew on the world's only all-business class airline and it felt more like flying on a private jet across the Atlantic…as well as the multi-room Bombardier Global 5000 and Global 7500 private jets, the latter being the world's biggest and longest-range purpose-built business plane.Both the Global 5000 and Global 7500 were operated by private charter company VistaJet.Taylor Rains/InsiderI flew on a $75 million Bombardier Global 7500 private jet from Miami to New Jersey and saw why the ultra-wealthy love the planeBecause I normally fly in economy class for personal travel, it's always a treat to experience these high-dollar options.The author's Air New Zealand business-class bed.Taylor Rains/InsiderI flew on the world's new 4th longest flight from New York to Auckland and Air New Zealand's business class made the over 17-hour journey easily bearableAnd, after several flights, I've found there are some cases in which flying business class is a better use of time and money than flying private…For reasons I'll explain later, Singapore Airlines' 18-hour trek from New York-JFK to Singapore on its A350 in business class is better than flying private.Sorbis/Shutterstock…but it's fair to say flying private adds a level of convenience and flexibility that airlines simply can't provide.Boarding VistaJet's Bombardier Global 5000 private jet.Taylor Rains/InsiderHere are the biggest differences I've found when traveling in business class vs. on a private jet.Flying on VistaJet's Bombardier Global 5000 private jet.Taylor Rains/InsiderI flew on a $50 million Bombardier Global 5000 private jet from Montreal to New Jersey and saw why those who can afford it are flocking to private aviationFirst and foremost, private jets operate under different federal regulations, many of which — like on going through security and smoking aboard a flight — are more relaxed than the ones for commercial aviation.A TSA agent at LAX.Brady MacDonald/InsiderSource: InvestopediaInstead of flying out of a crowded airport with snaking security lines, private flyers will board out of fixed-based operators, called FBOs.The Million Air FBO at Westchester Airport in New York.Taylor Rains/InsiderI flew on a $25 million Gulfstream G280 that private aviation company Volato will charter for $6,550 starting in 2024 — see insideThese are aircraft service providers for things like fuel and maintenance, and typically have a lounge area with free snacks and drinks available for travelers.The Million Air FBO coffee bar at Westchester Airport in New York was tip-based.Taylor Rains/InsiderThere are typically no security checks or long lines. So, on recent flights, I needed to arrive at the FBO only about 10 minutes before departure.Private jets on the ramp at Bridgeport Sikorsky Memorial Airport in Connecticut. This airport is only used for general aviation, like private charters.Taylor Rains/InsiderI flew out of a general aviation airport to see how the rich travel. I didn't miss the hassle, lines, and frustration of commercial flying.I either walked directly out to the jet from the small terminal or took a one-minute bus ride. And, I could park my car for free outside — though some people drive right up to the aircraft.We drove right up to the jet when flying on VistaJet's Bombardier Global 5000 from Montreal, Canada, to Teterboro, New Jersey.Taylor Rains/InsiderWhile many business-class tickets come with expedited security and passport control, the need to arrive at the airport early to check bags, traverse checkpoints, walk to the gate, and wait for boarding is still a hassle.Security took place at my boarding gate for my flight home to New York-JFK on Singapore's A350 business class.Taylor Rains/InsiderAnd, although I'm not a smoker, charter companies can allow passengers to smoke tobacco on board assuming it follows FAA regulations for things like ashtrays and signage.No-smoking signs are plastered all over airline aircraft, including the cabin and the lavatories.Taylor Rains/InsiderSource: Stratos Jet ChartersFor these reasons alone, I can see how the money — for those who have it —is easily worth the hassle-free experience — especially for celebrities who want to avoid the crowds.Inside a Gulfstream G550 private jet, like the one Elon Musk owns.Getty Images/JetcraftBut, the conveniences don't come cheap. While Insider paid a media rate for my private flights, the ultra-wealthy will shell out thousands.The interior of a NetJets' Global 7500.NetJetsFor example, a Global 7500 operated by charter company VistaJet ranges from around $12,000 to $20,000 per hour. So, an eight-hour leap from New York to London could cost $96,000 to $160,000 one-way.A VistaJet Bombardier Global 7500.VistaJetSource: Elite TravelerThe same route in mid-April for eight people — VistaJet's sleeping capacity — in Delta One suites is just over $93,000 roundtrip — or about $11,600 a ticket.Delta One suite on the 767-400ER. On a commercial airliner, you pay for each seat; on a private jet, you generally pay one price for the entire plane — however many people it holds.Delta Air LinesWhile splitting the Global 7500 among eight people brings the cost per person down, it is still substantially greater than booking roundtrip suites for about $11,600 a pop.The theater in VistaJet's Global 7500.Taylor Rains/InsiderThis is why I think the duration of the flight and the number of people onboard are the biggest factors in making private flying worth it.In the past year, Insider's aviation reporter Taylor Rains has flown business class three times and on two large private jets.Taylor Rains/InsiderOn one hand, I can argue the luxuries on board private jets far outmatch those in business class…Air New Zealand's business class on its Boeing 787, which was configured in a 1x1x1 layout. The beds had to be manually created by the flight attendants rather than using a button — an inconvenience for travelers, in my opinion.Taylor Rains/Insider…especially since the largest aircraft come with double beds, dining rooms, and theaters, creating a more spacious, comfortable atmosphere.Dining inside the Bombardier Global 7500.BombardierThere is even a cargo hold accessible to passengers on these private planes, many of which can fit oversized items. Airline passengers typically have to pay extra for excessive luggage — even business class.The cargo hold of a Bombardier Global 6000 private jet. VistaJet said it can accommodate excessive luggage based on the "available hold capacity and security regulations for each flight at the sole discretion of the pilot in command."Benjamin Zhang/InsiderSource: VistaJet, Check out the $62 million Bombardier private jet that's Canada's answer to GulfstreamMoreover, in addition to the aforementioned security and smoking rules, private travelers have more food flexibility because they aren't tied to an airline's predetermined menu…I was served food from the award-winning restaurant Nobu on my Global 7500 demo flight.Taylor Rains/Insider…and they can access routes that commercial carriers don't offer, like Elon Musk's 12-hour trek from Mykonos, Greece, to Austin, Texas, in July 2022 — a route that would take at least one stop and 30 hours on an airline.A Gulfstream G550, like the one owned by Elon Musk.aviation-images.com / Contributor/Universal Images Group EditorialThese personal, individualized amenities go beyond what can be offered in business class.VistaJet provides a yoga mat and other work out equipment onboard for its customers.Taylor Rains/InsiderNot to mention, passengers are not at the whim of sometimes unreliable airlines, which suffered chaotic meltdowns during and after the pandemic. These, of course, affected everyone regardless of ticket class.Southwest Airlines passengers stand around dozens of bags during the carrier's December 2022 meltdown.Irfan Khan/Los Angeles Times via Getty ImagesWheels down: The super rich struggle to book private jets as more people shell out $10,700 an hour to avoid airline chaosBut, on the other hand, some wealthy travelers could see the cost-savings of flying in business class on a transoceanic flight worth ditching a private jet...My lie-flat bed on La Compagnie, which was cocooned between the privacy divider and fuselage wall.Taylor Rains/Insider...especially since long-haul business typically has lie-flat seats. For example, Singapore Airlines has a large business class lounger on its Airbus A350 that comes with a roomy bed and a flat-screen TV.Onboard a Singapore Airlines Airbus A350-900ULR.Thomas Pallini/InsiderI flew the product on a recent 18-hour trek from Singapore to New York, and I felt cocooned inside the little area thanks to the seat's shell. It was my personal space, and I didn't have to share any amenities.Laying on the lie-flat bed with my legs stretched fully out.Taylor Rains/InsiderI flew on the world's longest flight in business class and thought the 18-hour trip from Singapore to New York was nearly flawlessThe food was pretty amazing too despite having a set menu.Taylor Rains/InsiderBy comparison, there are a few places to sleep on VistaJet's Global 7500, but not all are fully private. These include the double bed in the bedroom...Onboard VistaJet's Global 7500.Taylor Rains/Insider…as well as the double beds made from the theater couch and dining room seats. The two sets of four swivel chairs also create a pair of single beds.The bedroom and theater room can be closed off with sliding doors, but the dining room bed and the single beds are in the same cabin.Thomas Pallini/InsiderFor eight people to sleep comfortably, six would need to be couples, friends, or family members — it wouldn't be a great option for colleagues, which VistaJet US President Leona Qi acknowledged during a demo flight in November.The twin beds are similar to the ones seen on the Gulfstream G280 (pictured).Taylor Rains/InsiderMoreover, I don't really mind not having as much choice in terms of meals. But, I know a lot of customers have specific needs and wants, which is more easily catered to on a private jet.Flight attendants served us food on VistaJet's Bombardier Global 5000 private jet.Taylor Rains/InsiderAll things considered, if I had to choose between Singapore and a crowded Global 7500, I'd choose the former. I wouldn't have to share a bed or have to fight over the private jet's main television.I loved the handheld remote that controlled the 18-inch TV at my seat.Taylor Rains/InsiderNot to mention, there is no purpose-built private jet that can connect Singapore and New York nonstop, making Singapore's A350 business class a faster and more logical option.The Global 7500's range is just short of connecting New York and Singapore nonstop. The route is 9,537 miles — the Global 7500 can fly about 8,800 miles nonstop.BombardierSource: BombardierGranted, this is one of the few instances in which I think traveling in business class would be better than chartering a jet. And, it really only applies to ultra-long-haul flying.Singapore Airlines A350-900.KITTIKUN YOKSAP/ShutterstockHaving also flown on several small and mid-sized business aircraft — like the Gulfstream G280, the HondaJet Elite II, and the King Air 350i — I think the convenience of flying private easily beats any airline product on short- or medium-haul routes.The author with a Wheels Up King Air 350i.Taylor Rains/InsiderI flew on an $8 million private aircraft that costs $5,000 an hour to charter and seats 8 — see inside the King Air 350iAnd these aircraft are cheaper to fly on, but the cost is still much more than airlines.If money isn't a factor, then flying private always beats airlines. But, for the wealthy who are more cost-sensitive, lie-flat seats on business class are sometimes more logical.Taylor Rains/InsiderA group of four people on Volato's HondaJet Elite II would pay $6,000 per person roundtrip between New York and Miami — the first-class fare on Delta is about $1000 in April.Flying on Volato's $5 million HondaJet.Taylor Rains/InsiderI flew on Honda's $5 million private jet that seats 4 — see inside Volato's HondaJetBut, the cost isn't deterring demand, with some deep-pocket customers saying they will never go back to airlines — especially after the pandemic showed travelers the convenience of private aviation.Mark Wahlberg's Bombardier Global Express jet.HoneywellSource: CNBCAnd according to VistaJet, its number of flight hours increased by 41% year-over-year in 2022.Inside a VistaJet Global 7500.VistaJetSuper-rich keeping flying private despite surging fuel costs making charters even more expensive"If people need to fly, they will fly," VistaJet's Qi told Insider in October 2022. "No one likes to pay more money, but we live in a world where inflation is close to 10% and the most precious resource of our members is time."Courtesy of VistaJetRead the original article on Business Insider.....»»

Condor has been operating as a leisure airline for decades but is turning its focus on the corporate traveler with an improved business class cabin. Condor's new Airbus A330neo recently operated its first-ever transatlantic flight, journeying from Frankfurt, Germany, to New York-JFK airport on Monday.Condor German budget carrier Condor flew its new Airbus A330neo across the Atlantic for the first time on Monday. The historically leisure-focused airline is set on improving its premium products, like business class. I toured the jet at New York's John F. Kennedy International Airport and was thoroughly impressed. If you've never heard of German low-cost airline Condor, you might be surprised to hear it has been around since 1955 and was the first leisure carrier to fly the iconic Boeing 747.A Condor Boeing 747 photographed in 1976.Daniel Tanner/Airliners.netSource: CondorThe airline has been flying to the US for years, and, by summer 2023, will have a strong network of 17 routes across North America to places like Seattle, Toronto, and San Francisco.A Condor Boeing 767 at Frankfurt Airport in 2018.Lukas Wunderlich/Getty ImagesCurrently, Condor has narrowbody fleet of Boeing 757, Airbus A320, and Airbus A321 planes...A Condor Airbus A320 in newest livery.CondorSource: Condor...and a widebody fleet of Airbus A330-200, A330neo, and Boeing 767-300ER aircraft, though the company plans to have an all-A330neo long-haul fleet by 2024.A Condor Airbus A330 at Frankfurt Airport in 2018.Silas Stein/picture alliance via Getty ImagesSource: CondorWhile the carrier has historically sported an all-white fuselage with varying tail designs, the livery was changed in April 2022 to resemble beach towels.Condor's A330neo in newest livery.CondorSource: CondorThe eye-catching stripes — which come in blue, green, red, yellow, and beige — represent the carrier's leisure business model.Blue is for the sea, red is for passion, yellow is for sunshine, beige is the beach — or sand — and green is for islands.CondorBut, the company has started to focus more heavily on the corporate traveler, and is revamping its business class product to lure in more premium customers.A picture of Condor's Boeing 767 business class from Las Vegas to Frankfurt in 2019.Taylor Rains/Insier"We have to build awareness and we have to improve the product recognition that is in the market," Condor's director of sales for the Americas, Mikko Turtiainen, told media at an event at New York's John F. Kennedy International Airport on Monday.A picture of Condor's Boeing 767 business class from Las Vegas to Frankfurt in 2019.Taylor Rains/InsiderI toured the carrier's A330-900neo, which will be the airline's long-haul workhorse, to see what passengers can expect — take a look.First flight of new Airbus A330neo in beach livery.AirbusCondor's A330neo is new to the fleet, favored for its 20% better fuel efficiency and lower operating costs compared to older A330s.An Airbus A330 new in production.Screenshot/Airbus videoThe first of 18 aircraft was delivered to Condor on December 19, and flew for the first time from Frankfurt to Mauritius in East Africa on December 27. But, Monday's flight was the plane type's first trip across the Atlantic.Delivery of Condor's first A330neo in December 2022.AirbusSource: AviacionlineThe jet arrived around 2:30 p.m. at JFK's Terminal 7. The airline previously operated out of Terminal 1, but has since taken over the space left behind by British Airways, which moved to Terminal 8 in November.British Airways moved to Terminal 8 to have better connections with oneworld partner American Airlines.Taylor Rains/InsiderAmerican and British Airways are joining forces at New York's biggest airport to streamline their partnership — see inside the new Terminal 8The aircraft is split into two sections: business class…Condor's new business class on its Airbus A330neo.Taylor Rains/Insider…and economy. There are 216 economy and 64 premium economy seats — the latter offering more perks like extra legroom and a footrest.The footrest in Condor's A330neo premium economy seat.Taylor Rains/InsiderHowever, both sections feature 13.3-inch seat each screens, and the regular bells and whistles of coach, like a sturdy tray table and a seatback pocket…The inflight entertainment in Condor's Airbus A330neo premium economy section.Taylor Rains/Insider…as well as an adjustable headrest and power ports, including both USB and USB-C.Condor's Airbus A330neo premium economy section.Taylor Rains/InsiderTurtiainen said wifi packages will be available throughout the jet, which can be tailored to the traveler's needs, whether it be texting, emailing, or streaming.Condor's A330neo economy section.Natt McFee/Condor AirlinesI thought the economy products were nice. I think the 35 and 30 inches of pitch in premium and regular, respectively, would make the seven-hour trek to Germany bearable.The 30-inches in economy may be cramped for taller travelers, so I suggest upgrading to premium economy (pictured) if the budget allows.Taylor Rains/InsiderBut, the true luxury lies at the front of the jet in business class. The 30 Skylounge Core seats are made by French manufacturer Safran and are also seen on carriers like Taiwan-based Starlux.Starlux's Safran Skylounge Core Seat.SafranSource: SafranAccording to Condor, introductory fares start at $1199 one-way, which is a pretty good deal considering a roundtrip business flight on Lufthansa from New York to Frankfurt is $5,400 in June.A roundtrip flight on the same dates as the Lufthansa example are about $2,400 on Condor for business class. Pictured is Lufthansa's A350 business product.LufthansaSource: The Points GuyHaving flown on Condor's old business class back in 2019, I had high hopes for the new product — and I wasn't disappointed.My meal on Condor's Boeing 767 business class in 2019.Taylor Rains/InsiderThe cabin is laid out in a 1x2x1 configuration, so all passengers have direct-aisle access.Taylor Rains/InsiderMoreover, the seats have a partial shell for added privacy…Taylor Rains/Insider…and myriad other features, like table and storage space…Taylor rains/Insider…a universal power outlet and USB-A/C ports…Taylor Rains/Insider…full lie-flat capabilities at the touch of a button…Taylor Rains/Insider…plenty of legroom…Taylor Rains/Insider…a large tray table that drops from below the TV and stays out of the way when sleeping…Taylor Rains/Insider…linens, a coat hook, and a reading light…Taylor Rains/Insider…an adjustable headrest…Taylor Rains/Insider…and a 17.3-inch TV. There is a section with larger screens, but more on that later.Taylor Rains/InsiderAll seatback entertainment screens have a 4K display and Bluetooth connectivity.Business class has a remote to control the inflight entertainment.Taylor Rains/InsiderThe Bluetooth was a shocking perk for a leisure airline, especially since I've only seen the option on a handful of other carriers, like United Airlines.Thomas Pallini/InsiderCondor has special a front row section — four "Prime Seats."Taylor Rains/InsiderThese seats take business class one step further by adding the option for travel companions or colleagues to sit in the pod together.Condor representatives sitting in the window-side Prime Seat.Natt McFee/Condor AirlinesThis is achieved by designing the footrest to double as a seat — and it even comes with a seatbelt so travelers can safely sit and talk without turbulence forcing them back to their original lounger.The second seat with a seatbelt and pillow in the Prime Seats.Taylor Rains/InsiderMoreover, the tray flips down from the side rather than from under the TV, allowing passengers to enjoy a meal together as well.Sitting with the tray table flipped down between the two seats.Taylor Rains/InsiderAnd, unlike the normal seats there is a divider between the middle section seats for added privacy, though groups of four could take advantage of the quad-like setup.Taylor Rains/InsiderIn addition to the extra space, Condor's Prime Seats also feature a large 24-inch screen — seven inches bigger than regular business class.Taylor Rains/InsiderMeanwhile, the extra seat is larger than the regular business class footrest. This means when the lounger is in a lie-flat position, travelers have more leg space to spread out.The Prime Seats with lie-flat bed.CondorTo also aid with sleep, the Prime Seats come with added perks, including upgraded amenity kits, pajamas, and slippers.Taylor Rains/InsiderPassengers hoping to snag a Prime Seat will first need to purchase regular business class and pay for the upgrade on top, which starts at $215 one-way.Taylor Rains/InsiderSource: The Points GuyThese flying offices, which are typically located in the first row, are becoming more common as airlines continue to focus heavily on creating a robust business class product over first class.American Airlines recently announced the end to its international first class product, saying people simply "aren't buying it." The carrier has since unveiled it new Flagship Suite in business class (pictured).American AirlinesAmerican Airlines is ditching first class on long-haul flights because customers simply 'aren't buying it'Qatar Airways was amongst the first to create one with its QSuite quad-seating arrangement, which was unveiled in March 2017.A Qsuite Quad.Qatar AirwaysI toured the 'world's best' business class on Qatar's Boeing 777-200LR and I see why people fork out thousands of dollars to experience itSince then, a handful of carriers have implemented their own version, like JetBlue Airways' Mint Studio…JetBlue Airways Airbus A321neo's with new Mint business class.Thomas Pallini/InsiderI flew JetBlue's new London to New York route in Mint business class. It's a premium leisure traveler's dream but some kinks need to be ironed out.…and Virgin Atlantic's Retreat Suite.Virgin Atlantic AirwaysVirgin Atlantic just flew its first-ever A330-900neo on a brand new route from London to Florida — take a look inside the swanky jetRead the original article on Business Insider.....»»

Q4 2022 pre-tax margin exceeded 2019 and vaulted United to an industry-leading position The changes United made to increase staffing and resources and invest in technology and infrastructure created strong operations and allowed United to recover quickly after winter storm Elliott Remains confident in hitting its 2023 financial performance targets fueled by United Next progress CHICAGO, Jan. 17, 2023 /PRNewswire/ -- United Airlines (UAL) today reported fourth-quarter and full-year 2022 financial results. The company exceeded adjusted operating margin1 guidance in the fourth quarter reporting a 11.1% operating margin; 11.2% operating margin on an adjusted basis1. Additionally the company reported a 9.1% pre-tax margin on a GAAP basis and 9.0% on an adjusted basis1, achieving its 2023 target ahead of schedule. The company grew operating revenue by 14% and TRASM (total revenue per available seat mile) by 26%, both versus fourth quarter 2019. The company remains confident in the 2023 United Next adjusted pre-tax margin1 target of about 9%. United was able to recover quickly from significant irregular operations in December as a result of winter storm Elliott. During the key holiday travel days between December 21 and 26, nearly 36% of all United flights were exposed to severe weather. Despite that impact, 90% of United customers made it to their destination within 4 hours of their scheduled arrival time. The company credits significant investment in its people, resources, technology and infrastructure over the past few years with its ability to recover from significant weather events.  "Thank you to the United team that, last month, managed through one of the worst weather events in my career to deliver for so many of our customers and get them home for the holidays," said United Airlines CEO Scott Kirby. "Our dedicated team used our state-of-the-art tools to prepare for the bad weather, take care of our customers and quickly recover once the worst of the weather had passed. Over the last three years, United has made critical investments in tools, infrastructure and our people – all of which are essential investments in our future. That's why we've got a big head start, and we're now poised to accelerate in 2023 as our United Next strategy becomes a reality." Fourth-Quarter Financial Results Net income of $843 million, adjusted net income1 of $811 million. Capacity down 9% compared to fourth-quarter 2019. Total operating revenue of $12.4 billion, up 14% compared to fourth-quarter 2019. TRASM of up 26% compared to fourth-quarter 2019. CASM of up 21%, and CASM-ex1 of up 11%, compared to fourth-quarter 2019. Operating margin of 11.1%, adjusted operating margin1 of 11.2%, both up over 2 pts. compared to fourth-quarter 2019. Pre-tax margin of 9.1%, adjusted pre-tax margin1 of 9.0%, both up and around 1 pt. compared to fourth-quarter 2019. Average fuel price per gallon of $3.54. Full-Year Financial Results Net income of $737 million, adjusted net income1 of $831 million. Operating margin of 5.2%, adjusted operating margin1 of 5.5%. Pre-tax margin of 2.2%, adjusted pre-tax margin1 of 2.5%. Ending available liquidity2 of $18.2 billion. Key Highlights Announced the largest widebody order by a U.S. carrier in commercial aviation history: 100 Boeing 787 Dreamliners with options to purchase 100 more. Also added 100 additional Boeing 737 MAX aircraft by exercising 44 options and adding 56 new firm orders. This historic purchase is the next chapter in the ambitious United Next plan and will bolster the airline's leadership role in global travel for years to come. Officially opened the United Aviate Academy, the only major U.S. airline to own a flight training school, with a historic inaugural pilot class of 80% women or people of color. Launched Calibrate, an in-house apprenticeship program that will help grow and diversify its pipeline of Aircraft Maintenance Technicians. Launched a new, national advertising campaign – "Good Leads The Way" – that tells the story of United's leadership in areas like customer service, diversity and sustainability, and captures the optimism fueling the airline's large ambitions at a time of unprecedented demand in air travel. Announced and began the expansion of its Flight Training Center in Denver, already the largest facility of its kind in the world. Announced a historic commercial agreement with Emirates that will enhance each airline's network and give customers easier access to hundreds of destinations around the world. Also announced a new direct flight between Newark/New York and Dubai beginning in March 2023, subject to government approval. Appointed by Department of Homeland Security Secretary Alejandro Mayorkas, United Chief Executive Officer Scott Kirby served as the Co-Chair of the Homeland Security Advisory Council and also served on the Board of Directors of the Business Roundtable as the Chairman of the Education and Workforce Committee. Hosted the first Eco-Skies Alliance Summit, bringing together leaders, corporate customers, and senior U.S. government officials for important discussions on sustainable aviation fuel, best practices of how to reduce carbon emissions from flying and how to collaborate on future sustainability solutions. Operational Performance In the fourth quarter, on-time arrival performance (arrival within 14 minutes of schedule) was at 80%, the best quarterly performance of 2022. United finished first among network carriers for on-time departures and completion at its three largest hubs – Denver, O'Hare and Houston – for the fourth-quarter and full-year 2022. In 2022, over 650,000 passenger connections were saved with ConnectionSaver, resulting in United achieving the lowest misconnect rate ever for the fourth quarter and full year (excluding 2020/2021). In the fourth quarter, Inflight Service, Check-In and Club Satisfaction beat their record from last quarter and ended with their highest quarterly performance since the launch of the NPS (Net Promoter Score) survey in 2020.  Customer Experience In 2022, 80% of domestic departures were operated on a dual-cabin aircraft, up from 67% in 2019. Despite the severe operating conditions during winter storm Elliott, 43% of our customer surveys included a compliment for something a United employee did to help them. Debuted free "bag drop shortcut" – a simple way for customers at United's U.S. hubs to skip the line, check their bag in a minute or less on average, and get to their flight. Began offering eligible T-Mobile customers free in-flight Wi-Fi and streaming where available on select domestic and short-haul international flights. United, with Jaguar North America, launched the first gate-to-gate airport transfer service powered by an all-electric fleet in the U.S. at Chicago O'Hare International Airport. Announced the return of kids' meals on board on select United flights where complimentary meals are served. Announced the opening of United Club FlySM, a new club concept for a U.S. airline at Denver International Airport. Opened the new United ClubSM location at Newark Liberty International Airport, a 30,000-square-foot space offering travelers a modern design, enhanced amenities and culinary offerings. Debuted new custom amenity kits for United Polaris® from Away ahead of summer travel. Debuted new plant-based menu items from Impossible Foods as part of United's goal to add more vegan and vegetarian options to its culinary lineup amidst growing demand for plant-based meat. Network Announced the 2023 summer schedule that includes adding new service to three cities – Malaga, Spain; Stockholm, Sweden; and Dubai, United Arab Emirates – United will be the No. 1 airline to Europe, Africa, India and the Middle East next summer with service to 37 cities, more destinations than all other U.S. airlines combined. Launched a new alliance partnership with Virgin Australia, began year-round, nonstop service between San Francisco and Brisbane, Australia and became the largest carrier between the United States and Australia. Began year-round, nonstop service between Washington, D.C., and Cape Town, South Africa and expanded to year-round nonstop service between New York/Newark and Cape Town, South Africa. Expanded the airline's codeshare agreement with Star Alliance member Singapore Airlines, making it easier for customers to travel to more cities in the United States, Southeast Asia and other destinations in the Asia-Pacific region. Announced a joint business agreement with Air Canada for the Canada-U.S. transborder market, building on the companies' long-standing alliance, that will give more flight options and better flight schedules to customers traveling between the two countries. Environmental, Social and Governance (ESG) In the fourth quarter, over 7,700 volunteer hours were served by more than 1,000 employee volunteers. In the fourth quarter, nearly 13 million miles were donated to 40 participating nonprofit organizations during United's Giving Tuesday 2022 campaign by over 700 donors, including nearly 2 million miles matched by United. In the fourth quarter, more than 4 million miles and over $111,000 were raised for Hurricane Fiona and Hurricane Ian relief efforts. In 2022, through a combination of cargo-only flights and passenger flights, United transported over 1 billion pounds of cargo, including approximately 121 million pounds of medical shipments and approximately 10,500 pounds of military shipments. United Airlines Ventures announced a strategic investment in NEXT Renewable Fuels (NEXT), which is acquiring a permit for a flagship biofuel refinery in Port Westward, Oregon, with expected production beginning in 2026. Announced a $15 million investment in Eve Air Mobility and a conditional purchase agreement for 200 four-seat electric aircraft with options to purchase 200 more, expecting the first deliveries as early as 2026. Launched United for Business Blueprint™, a new platform that will allow corporate customers to fully customize their business travel program contracts with United. United Airlines Ventures and Oxy Low Carbon Ventures announced a collaboration with Cemvita Factory to commercialize the production of sustainable aviation fuel intended to be developed through a revolutionary new process using carbon dioxide and synthetic microbes. Announced a strategic equity investment in Natron Energy, a battery manufacturer whose sodium-ion batteries have the potential to help United electrify its airport ground equipment like pushback tractors and operations at the gate. U.S. President Joe Biden appointed United President Brett Hart to the Board of Advisors on Historically Black Colleges and Universities. Along with the PGA TOUR, announced that it will award 51 golf teams at Historically Black Colleges and Universities with more than half a million dollars in grants to fund travel for golf tournaments and recruiting efforts. Announced a new collaboration with OneTen, a coalition committed to upskill, hire and advance Black talent into family-sustaining careers over the next 10 years. United Airlines Ventures announced an investment in and commercial agreement with Dimensional Energy, another step forward to reaching United's pledge to become 100% green by achieving net-zero greenhouse gas emissions by 2050, without relying on the use of traditional carbon offsets. Became the first U.S. airline to sign an agreement with Neste to purchase sustainable aviation fuel overseas. Over 42 million miles and more than $400,000 donated to World Central Kitchen, Airlink, American Red Cross, and Americares in support of Ukraine relief efforts by United's customers, with an additional 5 million miles and $100,000 matched by United. Earned a top score of 100% on the 2022 Disability Equality Index for the seventh consecutive year and was recognized as a "Best Place to Work" for Disability Inclusion. Hosted more than 100 volunteer events for United's 2nd Annual September of Service with more than 1,600 United employees volunteering 6,500 hours. Became the first airline to donate flights in support of the White House's Operation Fly Formula and transported Kendamil formula free of charge from Heathrow Airport in London to its Washington Dulles hub. Earnings Call UAL will hold a conference call to discuss fourth-quarter and full-year 2022 financial results, as well as its financial and operational outlook for first quarter 2023 and beyond, on Wednesday, January 18, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months. Outlook This press release should be read in conjunction with the company's Investor Update issued in connection with this quarterly earnings announcement, which provides additional information on the company's business outlook (including certain financial and operational guidance) and is furnished with this press release with the U.S. Securities and Exchange Commission on a Current Report on Form 8-K. The Investor Update is also available at ir.united.com. Management will also discuss certain business outlook items during the quarterly earnings conference call. The company's business outlook is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release. Please see the section entitled "Cautionary Statement Regarding Forward-Looking Statements." About United United's shared purpose is "Connecting People. Uniting the World." From our U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C., United operates the most comprehensive global route network among North American carriers. United is bringing back our customers' favorite destinations and adding new ones on its way to becoming the world's best airline. For more about how to join the United team, please visit www.united.com/careers and more information about the company is at www.united.com. United Airlines Holdings, Inc., the parent company of United Airlines, Inc., is traded on the Nasdaq under the symbol "UAL". Website Information We routinely post important news and information regarding United on our corporate website, www.united.com, and our investor relations website, ir.united.com. We use our investor relations website as a primary channel for disclosing key information to our investors, including the timing of future investor conferences and earnings calls, press releases and other information about financial performance, reports filed or furnished with the U.S. Securities and Exchange Commission, information on corporate governance and details related to our annual meeting of shareholders. We may use our investor relations website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We may also use social media channels to communicate with our investors and the public about our company and other matters, and those communications could be deemed to be material information. The information contained on, or that may be accessed through, our website or social media channels are not incorporated by reference into, and are not a part of, this document. Cautionary Statement Regarding Forward-Looking Statements:  This press release and the related attachments and Investor Update (as well as the oral statements made with respect to information contained in this release and the attachments) contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to, among other things, the potential impacts of the COVID-19 pandemic and other macroeconomic factors and steps the company plans to take in response thereto and goals, plans and projections regarding the company's financial position, results of operations, market position, capacity, fleet, product development, ESG targets and business strategy. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the company's future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the company's control and could cause the company's future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements. Words such as "should," "could," "would," "will," "may," "expects," "plans," "intends," "anticipates," "indicates," "remains," "believes," "estimates," "projects," "forecast," "guidance," "outlook," "goals," "targets," "pledge," "confident," "optimistic," "dedicated," "positioned" and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements. Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the adverse impacts of the ongoing COVID-19 global pandemic on our business, operating results, financial condition and liquidity; execution risks associated with our strategic operating plan; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally (including inflationary pressures); reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constrains at our hubs or other airports; geopolitical conflict, terrorist attacks or security events; any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; increasing privacy and data security obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions on our operations; any failure to attract, train or retain skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change, including our climate goals; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel (including as a result of the Russia-Ukraine military conflict); the impacts of our significant amount of financial leverage from fixed obligations, the possibility we may seek material amounts of additional financial liquidity in the short-term, and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements; the impacts of the proposed phaseout of the London interbank offer rate; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality, weather events, infrastructure and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage and other risks and uncertainties set forth in Part I, Item 1A. Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission. The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties. In addition, certain forward-looking outlook provided in this release relies on assumptions about the duration and severity of the COVID-19 pandemic, the timing of the return to a more stable business environment, the volatility of aircraft fuel prices, customer behavior changes and return in demand for air travel, among other things (together, the "Recovery Process"). The COVID-19 pandemic and the measures taken in response may continue to impact many aspects of our business, operating results, financial condition and liquidity in a number of ways, including labor shortages (including reductions in available staffing and related impacts to the company's flight schedules and reputation), facility closures and related costs and disruptions to the company's and its business partners' operations, reduced travel demand and consumer spending, increased operating costs, supply chain disruptions, logistics constraints, volatility in the price of our securities, our ability to access capital markets and volatility in the global economy and financial markets generally. If the actual Recovery Process differs materially from our assumptions, the impact of the COVID-19 pandemic on our business could be worse than expected, and our actual results may be negatively impacted and may vary materially from our expectations and projections. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs and assumptions upon which we base our expectations may change. For instance, we regularly monitor future demand and booking trends and adjust capacity, as needed. As such, our actual flown capacity may differ materially from currently published flight schedules or current estimations. Non-GAAP Financial Information:  In discussing financial results and guidance, the company refers to financial measures that are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The non-GAAP financial measures are provided as supplemental information to the financial measures presented in this press release that are calculated and presented in accordance with GAAP and are presented because management believes that they supplement or enhance management's, analysts' and investors' overall understanding of the company's underlying financial performance and trends and facilitate comparisons among current, past and future periods. Non-GAAP financial measures such as adjusted operating margin (which excludes special charges (credits)), CASM-ex (which excludes the impact of fuel expense, profit sharing, special charges and third-party expenses), adjusted pre-tax margin (which is calculated as pre-tax margin excluding operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net) and adjusted net income typically have exclusions or adjustments that include one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded because the company believes they neither relate to the ordinary course of the company's business nor reflect the company's underlying business performance. Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Please refer to the tables accompanying this release for a description of the non-GAAP adjustments and reconciliations of the historical non-GAAP financial measures used to the most comparable GAAP financial measure and related disclosures. -tables attached-  UNITED AIRLINES HOLDINGS, INC STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)  Three Months Ended December 31, % Increase/ (Decrease) 2022 vs. 2019 Year Ended December 31, % Increase/ (Decrease) 2022 vs. 2019 (In millions, except per share data) 2022 2021 2019 2022 2021 2019 Operating revenue: Passenger revenue $  11,202 $    6,878 $    9,933 12.8 $ 40,032 $ 20,197 $ 39,625 1.0 Cargo 472 727 316 49.4 2,171 2,349 1,179 84.1 Other operating revenue 726 587 639 13.6 2,752 2,088 2,455 12.1 Total operating revenue 12,400 8,192 10,888 13.9 44,955 24,634 43,259 3.9 Operating expense: Aircraft fuel 3,317 1,962 2,249 47.5 13,113 5,755 8,953 46.5 Salaries and related costs 3,000 2,579 3,078 (2.5) 11,466 9,566 12,071 (5.0) Landing fees and other rent 657 681 650 1.1 2,576 2,416 2,543 1.3 Depreciation and amortization 624 619 606 3.0 2,456 2,485 2,288 7.3 Regional capacity purchase 571 601 725 (21.2) 2,299 2,147 2,849 (19.3) Aircraft maintenance materials and outside repairs 600 399 475 26.3 2,153 1,316 1,794 20.0 Distribution expenses 434 235 417 4.1 1,535 677 1,651 (7.0) Aircraft rent 59 63 67 (11.9) 252 228 288 (12.5) Special charges (credits) 16 56 130 NM 140 (3,367) 246 NM Other operating expenses 1,745 1,405 1,630 7.1 6,628 4,433 6,275 5.6 Total operating expense 11,023 8,600 10,027 9.9 42,618 25,656 38,958 9.4 Operating income (loss) 1,377 (408) 861 59.9 2,337 (1,022) 4,301 (45.7) Nonoperating income (expense): Interest expense (479) (429) (161) 197.5 (1,778) (1,657) (731) 143.2 Interest income 156 6 30 420.0 298 36 133 124.1 Interest capitalized 32 23 20 60.0 105 80 85 23.5 Unrealized gains (losses) on investments, net 32 (125) 81 (60.5) 20 (34) 153 (86.9) Miscellaneous, net 12 88 13 (7.7) 8 40 (27) NM Total nonoperating expense, net (247) (437) (17) NM (1,347) (1,535) (387) 248.1 Income (loss) before income taxes 1,130 (845) 844 33.9 990 (2,557) 3,914 (74.7) Income tax expense (benefit) 287 (199) 203 41.4 253 (593) 905 (72.0) Net income (loss) $      843 $     (646) $      641 31.5 $      737 $ (1,964) $   ...Full story available on Benzinga.com.....»»

Is it a surprise that we Millennials are scared of retirement? Not only did we survive the Great Recession and a once-in-a-lifetime pandemic, but we’re also buried under debt. Moreover, unlike previous generations, traditional pathways to wealth, such as homeownership, are increasingly out of reach. On top of that, we don’t have access to pensions […] Is it a surprise that we Millennials are scared of retirement? Not only did we survive the Great Recession and a once-in-a-lifetime pandemic, but we’re also buried under debt. Moreover, unlike previous generations, traditional pathways to wealth, such as homeownership, are increasingly out of reach. On top of that, we don’t have access to pensions or quality retirement plans from employers. And there’s a chance that Social Security won’t be there. Despite all of these challenges, we still want to retire by 50. Is that actually possible, though? It could be if you start prepping for retirement using these nine strategies. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. 1. Set a goal for saving for retirement. Saving for retirement can be simplified by following two simple rules. The first is to invest 10 to 15 percent of your income toward your retirement. Secondly, you should save enough to cover around 80 percent of your pre-retirement income. However, without a personal retirement savings goal, it isn’t easy to know if you’re on the right path to funding your ideal retirement. Think about your future when it comes to saving for retirement. For example, the average American life expectancy is about 79 years, according to the CDC’s National Center for Health Statistics. Therefore, if you plan to retire at 65, you should plan for your money to last for at least 15 years. In some cases, it takes even much longer, depending on your lifestyle, health, family history, and if you’re going to retire early. It’s always a good idea to estimate your annual living expenses. At the minimum, this should include taxes, housing, food, and health care. It is estimated that the average amount spent annually by “older households” (those headed by someone 65 or older) is $48,885. There are, of course, other factors to consider, such as where you live. For example, if you have a mortgage now, will you be able to pay it off by 65? Don’t forget to budget for extra costs, like travel, gifts, hobbies, and entertainment. Then, if you add up your annual expenses, you can plug that number into an online retirement calculator to see how much you’ll need to save each month. 2. Pick a retirement account that suits your needs. Millennials will not reach retirement age until well after 2034, when Social Security’s cash reserves are depleted. The chances of this happening are small, but it’s better to be prepared for the worst. In this case, they are saving for retirement without relying on Social Security. In the retirement account world, you have a lot of options. So, let’s explore some of the most popular options available. And remember that you can often invest for your future using more than one. 401(k) There’s a good chance your employer sponsors a 401(k) plan at work. If so, jump all over that. First, employees can contribute to a 401(k) directly from their paychecks before taxes. Then, until you begin taking distributions in retirement, the money grows tax-free. Unfortunately, the IRS’s contributions to 401(k)s are limited each year. ‌A 401(k) plan in 2022 will allow employees to contribute a maximum of $20,500. ‌In 2022, the catch-up contribution will increase by $6,000 for individuals over 50. The funds are intended for retirement, so you’ll be charged a 10-percent penalty if you withdraw them before 5912. The withdrawals will also be subject to regular income taxes. What is the best part of a 401(k)? There is something called an “employer match,” in which employers will also contribute to employee retirement accounts. For example, if you contribute 6% of your salary, your employer may match 50%. So if you contribute 6 percent, you will have 9 percent invested for retirement if you contribute 6 percent. It’s pretty much free money. 403(b) As of 2022, this employer-sponsored retirement plan allows contributions of up to $20,500 — and $22,500, most likely in 2023. For those over 50, the 401(k) employee contribution limit should be $30,000 in 2023. There is sometimes a match offered by the employer as well. You’ll also pay a 10-percent penalty if you withdraw your money before 59 ½, which is taxed at your ordinary income rate. Compared to a 401(k), this plan is for nonprofits and government employees. Traditional IRA Anyone with an income, including a spouse with an income, can open an Individual Retirement Account (IRA). Generally, contributions are made after taxes are deducted. But if you have an employer retirement account, you may be able to deduct contributions now, possibly reducing your tax bill. In 2023, after two years of remaining at $6,000, the IRA contribution limit and catch-up contributions will rise to $6,500 ($7,500 if 50+). After that, however, your retirement savings grow tax-free, and your income taxes are only due when you withdraw them. You have to pay a 10-percent penalty plus ordinary income taxes on withdrawals made before age 59 ½ — just as you would with 401(k) or 403(b) accounts. Some exceptions apply, such as payments for qualified college expenses or home purchases. Roth IRA As with a traditional IRA, you contribute after-tax cash, but you can withdraw the funds tax-free as they grow. Your contributions today cannot be deducted in any way. Because the gifts have already been taxed, you can withdraw them at any time without paying additional taxes. You will, however, be subject to ordinary income tax and a ten percent penalty if you withdraw your investment earnings before the age of 59 ½. To contribute to a Roth IRA as a single individual, your Modified Adjusted Gross Income (MAGI) must be below $140,000 for the tax year 2021 and under $144,000 for the tax year 2022. For couples filing jointly, the MAGI must be under $208,000 in 2021 and 214,000 in 2022. Combined contributions to all your IRAs are limited to: $6,000 if you’re under the age of 50 $7,000 if you’re age 50 or older By checking this IRS table, you can find out if you are eligible to contribute to a Roth IRA. SEP IRA or Solo 401(k) Self-employed people or small business owners can also benefit from a Simplified Employee Pension (SEP). As of 2023, SEP-IRA contributions will be limited to $66,000 per year, up from $61,000 in 2022. Employees deemed eligible to participate in your plan must also have SEP IRAs set up for them. Also, as you’re well aware by now, If you withdraw money before you turn 59 ½, you’ll pay regular income taxes and a 10-percent penalty. Business owners with no employees, such as freelancers and solopreneurs, can participate in a solo 401(k). In addition, it offers the same high contribution limit as SEP IRAs. Finally, depending on your tax situation, you may be able to choose between a traditional version (pre-tax contributions that are taxed on withdrawal) or a Roth version (post-tax contributions that can be withdrawn tax-free). The Roth solo 401(k) contribution can be withdrawn at any time without penalty, just like a Roth IRA. However, you will have to pay penalties and taxes if you withdraw investment earnings before you turn 59 ½. Brokerage account Brokerage accounts enable you to buy and sell stocks, bonds, and mutual funds through a brokerage firm. Due to their non-retirement-specific nature, these accounts do not offer any inherent tax advantages. Therefore, you are responsible for closely managing your tax liability. However, you can withdraw money when you want, and there are no contribution limits. There is no penalty associated with accessing the money before retirement. However, keep in mind that potential returns from the stock market may be lost to you. 3. Bring home the (extra) bacon. It might not be top of your mind. But you could definitely use some extra dough to pay off your student loans or afford early retirement. In my opinion, the fastest and easiest way to make extra money is through your current job. Examples include volunteering for overtime, asking for a raise, or utilizing your company’s referral program. After that, you could find ways to reduce your spending, such as canceling subscriptions you never use. Another idea would be opening a new bank account. Some financial institutions may give you a couple of hundred bucks for being a new customer. You could freelance, side hustle, or rent/sell items you already own. But, seriously. The sky’s the limit when it comes to picking up additional income. 4. Diversify everything you can. Saving for retirement does not have to be one-size-fits-all. For example, it’s possible to have both a work-sponsored 401(k) and an IRA. If you take this route, you’ll have a high-yield savings account and a taxable investment account. In addition, your future self will be better protected if you have more accounts. One of the best ways to protect your investments is to spread your money across multiple accounts and securities. In other words, don’t commit all your cash to one stock or asset. Instead, choose portfolios that diversify your money across various types of assets, such as stocks, bonds, and real estate, instead of high-cost index funds. 5. Be careful not to become a lifestyle creep. “Lifestyle creep — when an individual’s increased income leads to increased discretionary spending — is a real thing, especially for millennials,” said Steve Sexton, CEO of Sexton Advisory Group. “Higher rents, mortgages, living expenses, and lifestyle preferences can ultimately impact your larger financial goals, like saving for retirement.” You will need to stick to a budget if you want to stay on track with your retirement savings goals. And ideally, you should make every effort to live below your income. FYI, this doesn’t mean you have to go dumpster diving. In simple terms, living beneath your income means spending less each month than you earn. When you do, you’ll avoid debt and be able to contribute more to your retirement savings. “Hold yourself accountable by checking on your finances quarterly to ensure you’re on track,” Sexton said. 6. Snag the best deals. “By growing up in the .com era and the explosion of the internet, millennials know how to get deals and save on common products,” writes Matt Rowe in a previous Due article. Our first stop when shopping is often a clearance rack or tab on a website. Whenever we buy online, we do quick searches on Google to see if there are any discounts. The result is a ten percent or twenty-five percent savings here and there. As a result, we can save a lot of money over time. The honey app, for example, takes a few seconds to check and saves us money. “We also look for holiday deals or sign up for customer loyalty programs to get more discounts or free items,” he adds. Some will even go to thrift shops or second-hand stores for clothing and other fun items. “Regardless, millennials love to save, and millennials are savers because we know how to get deals on wants.” Although getting deals on wants is excellent, let’s consider saving on necessities. If possible, we utilize student discounts or online coupons at grocery stores. In addition, we purchase in bulk at places like Costco to save money. “We make lists of everything we need to avoid impulse buying unnecessary wants,” states Matt. Regarding renting and utilities, we look for ways to save, such as turning off the lights when we’re out or conserving water. Our fuel savings come from taking public transportation or walking and looking for free parking. “These are small habits, yet they are still fast-acting and long-lasting,” Matt says. “Millennials are savers because we know how to get deals and how to save along the way.” 7. Spend less on housing. Your house is probably the most significant expense and, therefore, the most effective savings opportunity. According to the Bureau of Labor Statistics, the average American’s housing budget consumes a third of their income. When it comes to buying a new home, what should you consider? When you have a large enough home, you should keep it. If not, then do not buy the biggest house you can afford. You can find out what you can afford using online calculators from Bankrate, NerdWallet, and Mortgage Loan. Using these tools, you can determine your mortgage affordability based on your income and other financial information. However, it is essential to remember that you do not need to borrow the maximum amount. If you want to maximize your savings, keep your housing expenses to 30% of your income or lower. To help you with your home-buying process, here are a few additional tips: First, work with a real estate agent. Despite signs of a cooling housing market, now is not the time to purchase without assistance. For first-time homebuyers, it’s essential to have someone who understands your concerns, needs, and problems. To get the best mortgage deal, shop around with several mortgage lenders. Loan terms and conditions aren’t just about interest rates but also about all-in costs. Stick to your budget. Again, a house beyond your means should not be a priority. Keep that budget going once you move, too. In a separate survey by Bankrate, millennial homebuyers expressed regret regarding unexpected maintenance fees. If some issues arise, you’ll want to be prepared. 8. Don’t be too aggressive with your portfolio. Imagine retiring at the age of 50. When you are in your late 40s, you should be more conservative with your portfolio than your peers who plan to work until retirement. ‌When your finances are particularly fragile, you want to avoid a series of bad markets when you’re at risk. This is called the “sequence of return risk.” Dr. Wade Pfau, professor of retirement income at the American College of Financial Services, believes this is why the first few years after retirement can be so rough. “I’ve estimated that if somebody is planning for a 30-year retirement, the market returns they experience in the first ten years can explain 80% of the retirement outcome,” he told Barron’s. “If you get a market downturn early on, and markets recover, later on, that doesn’t help all that much when you’re spending from that portfolio because you have less remaining to benefit from the subsequent market recovery.” How can this be solved? “There are four ways to manage the sequence-of-return risk,” Dr. Pfau adds. “One, spend conservatively. Two, spend flexibly.” If you don’t sell too many shares during a market downturn, you’ll be able to manage sequence-of-return risk. “A third option is to be strategic about volatility in your portfolio, even using the idea of a rising equity glide path,” he states. “The fourth option is using buffer assets like cash, a reverse mortgage, or whole life policy with cash value.” 9. Adjust your retirement plan as needed. Make sure you are on track to retire comfortably by setting and revising your retirement goals. Despite not having just graduated college like some folks, you still have time to plan your retirement. Consider how much money you will need to retire and how it will last you for the rest of your life. The correct retirement number can be found with the help of a retirement calculator. From there, take advantage of your resources now to figure out how to reach your goals. Let’s say that your current employer offers a match. Can you increase your contributions now, or should you search for a new job that offers one? Do you plan to downsize to save on expenses, or can you pay off your home before you retire? It’s okay if your plans change as you age since your life won’t look the same at 70. Keep in mind that it’s okay if things don’t go exactly as you planned. Make sure you have a backup (or two). You will thank yourself when you retire. FAQs What are the steps to retiring? Leaving the workplace may be as easy as completing HR paperwork. Replacing a paycheck, however, is more challenging. If you want to know how to go from a steady income at the workplace to a retirement income from savings, you should speak to a finance professional. You can also ask them for help determining how much to withdraw from retirement accounts and when to do so. When can I retire? In a nutshell, you’re free to retire whenever you like. There are, however, many limits to when people can leave the workforce in reality. A pension may only be available to some employees after working for the company for 20 or 30 years. To collect Social Security benefits, you must be at least 62 years old. Those receiving health insurance through an employer may wait until they turn 65 to retire since Medicare doesn’t begin until then. What is a reasonable monthly retirement income? The definition of a good retirement income will vary from person to person. To have a good retirement income, there are several factors to consider. Included in this are, at minimum, a planned retirement lifestyle, dependents, such as children or grandchildren, outstanding debts, and physical health. Most people consider 70% to 80% of their last income before retirement a good retirement income. Is there an ideal age for becoming debt-free? Individuals are often advised to be debt-free by 45 years of age. What makes this age so important? Your debts should be limited to good debt, such as a mortgage, by 45. At this point in your career, you should start saving for retirement because retirement is where you need to be. Should I retire early? You are the only one who can answer that question. However, financial advisors can run through scenarios to assist a worker in determining the right time to retire financially. By considering these scenarios, you can figure out whether retiring early might result in a shortfall of money in the future. Article by Deanna Ritchie, Due About the Author Deanna Ritchie is a financial editor at Due. She has a degree in English Literature. She has written 1000+ articles on getting out of debt and mastering your finances. She has edited over 40,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite......»»

A cabin cleaner at Logan airport said it can take 45 minutes to clean a plane, but airlines sometimes ask his team to finish the job in 10 minutes. A worker at Boston Logan International Airport.David L. Ryan/Getty Images Some airport workers told Insider they felt the pressure this summer amid the travel chaos. One trash-truck driver said she had to fill in as a cabin cleaner because of the staff shortage. A cleaner at Logan airport said airlines sometimes ask his team to clean a plane in 10 minutes. Airport staff working behind the scenes say the travel chaos this summer has put them under pressure to work harder and fill in for other jobs.After letting workers go during the COVID-19 pandemic, the airline industry has struggled to handle the strong travel demand with a depleted workforce. The situation has left passengers stranded, forced crews to time out, and led to many flight delays and cancellations.It's also taken a toll on airport workers across the US. Truck drivers, wheelchair helpers, and cleaners in airports have all said the disruption this summer has been the worst it's ever been.Lashonda Barber, a trash-trucker driver who works for ground services company Jetstream at Charlotte Douglas International Airport in North Carolina, told Insider that she takes heavy garbage bags off at least 30 aircraft — sometimes more — every day. Flight delays mean planes arrive at similar times, forcing employees like Barber to work back-to-back.Barber said she has to remove around nine trash bags from planes with the help of another employee in 10 to 15 minutes. Her team has halved in size this summer to three workers after two quit and one was promoted, she said.Due to staffing issues, Barber is occasionally asked to step in as a cabin cleaner after she's removed trash from the plane. She said the airline gives her on average just seven minutes to clean the seats and toilets, check compartments, and dispose of garbage."That's not enough time to actually clean what they want you to clean," she said, referring to the airlines.This summer has been the worst because there aren't enough staff to do the job, Barber said. On top of this, she believes being paid $18.50 an hour isn't sufficient. She joined the Airport Workers United union, which represents 35,000 airport workers at 22 US airports, to demand pay raises. A representative from the union confirmed to Insider the wages of the workers who were interviewed and said it was about what someone in that role would be paid.Frantz Genisca is a cabin cleaner at Boston Logan International Airport in Massachusetts who works for aviation services company Swissport and is paid $18 an hour — around $4 above the state's minimum wage of $14.25 an hour.He told Insider it can take at least 30 minutes to clean a plane, but airlines have asked his team to finish the job in 10 minutes, which wasn't enough time to clean the whole aircraft properly."The airplanes have been arriving with a lot of trash and are often very, very dirty," Genisca said.He added that he once left some trash on the plane because he didn't have enough time, but got into trouble for it.The labor shortage this summer has posed issues for his team. When the planes arrive at the same time, there's a lot more work to do and one person ends up doing a job that four people should be doing, he said.Staffing issues have also been evident at Dallas Fort-Worth Airport in Texas, according to Larry Allen, a wheelchair agent for a Delta Air Lines contractor. He told Insider many older airport workers retired during the pandemic.At 69 years old, he earns $10 an hour with tips by pushing people in wheelchairs around the airport — from the gate all the way to the plane. The minimum wage in Texas is $7.25 an hour. Allen said he makes around 10 trips in a working day.Allen said the hardest thing about the job is pushing 250- to 300-pound people up a steep hill. He hustles for the tips by putting on a smile and being nice, he said."Minimum that they give you is $5, and if you do a really excellent job, you might make more, you might get $20," Allen said. "It's still not enough."A Delta spokesperson told Insider the airline has a "strong track record" of offering compensation and benefits to staff. Delta requires its vendors to also provide "fair and competitive compensation and maintain a proper working environment".Jetstream and Swissport didn't immediately respond to Insider's request for comment.Read the original article on Business Insider.....»»

Air New Zealand is flying what's now the world's fourth-longest flight, journeying more than 17-and-a-half hours from New York to Auckland. Here's what I thought. Taylor Rains/Insider Air New Zealand has launched its highly-anticipated 17-and-a-half-hour flight from New York to Auckland. The Boeing 787-9 treks about 8,850 miles between the two nations, becoming the world's new fourth-longest flight. I flew in business class on the ultra-long-haul journey and the amenity-heavy cabin made the time easily fly by. It's official: What's now the world's fourth-longest flight has landed in Auckland, New Zealand.Taylor Rains/InsiderAir New Zealand will operate the 4th longest flight in the world when it launches the first-ever nonstop route between the US East Coast and the South Pacific nationOn Saturday, September 17, an Air New Zealand Boeing 787-9 Dreamliner flew nearly 18 hours from New York-JFK airport to Auckland. The total distance was 8,843 miles, according to FlightAware.Taylor Rains/InsiderSource: FlightAwareThe new nonstop beats out Singapore Airlines' 8,576-mile flight between Los Angeles and Singapore, which now drops to the world's fifth-longest flight.Singapore Airlines A350-900.KITTIKUN YOKSAP/ShutterstockThe 10 longest routes in the world flown by airlines, ranked by distanceTo get to Auckland, Air New Zealand — or ANZ — flew southbound across the US and Mexico before trekking across the Pacific Ocean. The inbound journey from New Zealand, which was the official route launch, took a similar path.ANZ route from NY to AucklandFlightAwareSource: FlightAwareWhile ANZ was the first to launch the route, rival Qantas has also announced nonstop service between Auckland and New York to start in June 2023 using Boeing 787 Dreamliners.Qantas Boeing 787-9.Toshi K/ShutterstockSource: QantasThe new service, which originates in Sydney before the stop in Auckland, makes the Australian flag carrier a direct competitor to ANZFirst Qantas Boeing 787-9.QantasSource: QantasDespite the competition, I have high expectations for the Auckland-based carrier.Air New Zealand 787.ShutterstockThe company has been investing heavily in improving its cabin product, like the new Skynest bunk beds that took the internet by storm in June…The Skynest at Hangar 22 in Auckland, New Zealand.Taylor Rains/InsiderAn airline plans to install bunk beds and couches in economy class to help to boost comfort on long-haul flights…and business premier luxe, which will have a privacy door and extra space to work or meet with another passenger.ANZ business premiere luxe mockup.Taylor Rains/InsiderThe new offerings, along with its unique Skycouch in economy, should make the carrier a favorable option for customers flying long-haul routes.Air New ZealandTo see what travelers can expect, I flew on ANZ's inaugural journey from New York to Auckland in business class. Here's what it was like.Taylor Rains/InsiderMy adventure started at New York-JFK airport at 6:30 p.m. — three-and-a-half hours ahead of my 9:55 p.m. flight.Taylor Rains/InsiderANZ will fly out of Terminal 1 along with most other long-haul international airlines. The carrier's check-in counter is at the far right end of the facility.Taylor Rains/InsiderBecause I was flying in business, I skipped the long economy line and checked in at the premium counter.Taylor Rains/InsiderI was flying to New Zealand on a US passport, so I needed to present a traveler form and the NZeTA at the counter. The NZeTA is an NZD $52 ($31 USD) visa to be paid online or via the mobile app in advance.Taylor Rains/InsiderSource: New Zealand GovernmentAfter check-in, I faced a treacherous security line, which snaked through a chunk of the departures hall. There was no TSA Pre-Check available for ANZ, but my premium ticket let me skip the queue.Taylor Rains/InsiderWe flew out of Gate 2.Taylor Rains/InsiderThe boarding process was quick for business class, and I was onboard and settled in my seat in less than five minutes.Taylor Rains/InsiderUnfortunately, we were delayed about two hours because of air-traffic control issues. We also had to detour around a large typhoon in Mexico, eating into travel time, but we still landed at 8:30 a.m. local time, which was only 50 minutes late.Taylor Rains/InsiderANZ's Boeing 787 is split into three classes, including 27 business premiere flat bed seats in a 1x1x1 layout with all seats facing the aisle…Taylor Rains/InsiderSource: SeatGuru…33 premium economy recliners in a 2x3x2 configuration…TAylorSource: SeatGuru…and 215 regular economy seats in a 3x3x3 layout. Of the 275 total seats available, 65 were blocked off on my flight.Taylor Rains/Source: SeatGuruAccording to a company spokesperson, the time of year impacts how many passengers the plane can take, with northern winter accommodating fewer than in northern summer. However, that will change once ANZ gets its new ultra-long-range Boeing 787-9s in 2024.Inaugural flight from Auckland to NY.Air New ZealandFor this flight, I was seated in 8K, which is a window seat.Taylor Rains/InsiderThe seat's orientation meant I had to crane my neck to see out the window, which was a little disappointing. However, the comfort made up for the view.Taylor Rains/InsiderWaiting for me at my seat was a large amenities kit, which was specially made for the inaugural flight. It featured things like hand cream and a bird-inspired eye mask.Taylor Rains/InsiderI was also given soft pajamas to lounge in. However, these were just a treat for the inaugural flight, though a spokesperson told Insider they are working on a set of PJs to hopefully offer in the future.Taylor Rains/InsiderThe seat itself was extremely spacious and comfortable with plenty of legroom and padding.Taylor Rains/InsiderI was particularly happy with the stationary ottoman that I could rest my legs on while we waited for takeoff. This seat is also good for talking with friends and family or having work discussions.Taylor Rains/InsiderOther amenities included at the premium lounger included storage space, which housed a power outlet…Taylor Rains/Insider…a retractable shelf…We were served champagne during boarding.Taylor Rains/Insider…a reading light…Taylor Rains/Insider…an adjustable window…Taylor Rains/Insider…buttons to adjust the seat's recline…Taylor Rains/Insider…wired headphones…Taylor Rains/Insider…large overhead bins…Taylor Rains/Insider…and a TV loaded with movies, TV shows, music, and games.Taylor Rains/InsiderThe TV folds out of the seat wall to face directly in front of each passenger.Taylor Rains/InsiderWhen in use, the TV leaves a small ledge available that I found it to be a perfect placeholder for things like my wine and AirPods.Taylor Rains/InsiderThere is also a remote that can be used to control the TV, which was handy because I could not reach the touchscreen when I was laying down.Taylor Rains/InsiderBefore departure, the flight attendants came through the cabin asking for our drink and food orders. There was a menu at each seat, which had things like lamb, pasta, spiced pumpkin, tomato, and lentil soup.Taylor Rains/InsiderThe multi-course meal was served about an hour into the flight. The tray table was located in the side of the seat and retracted by pressing a button. It was huge and perfect for working or eating.Taylor Rains/InsiderFirst, I was treated to a New Zealand beer and caviar...Taylor Rains/Insider...and seared tuna.Taylor Rains/InsiderNext was bread, which came with olive oil and butter. I tried all three options, including a beetroot and onion roll, black olive bread, and garlic flatbread. Each was delicious.Taylor Rains/InsiderAfter the appetizers, I was served lamb with potatoes and green vegetables on the side…Taylor Rains/Insider…and a cannoli for dessert. The dish also came with a glazed sweet and fruit.Taylor Rains/InsiderI am someone who actually likes airline food, for the most part, so I was very excited to try ANZ's meals, and I was blown away. The food was extremely tasty and the flavors were strong and diverse.Taylor Rains/InsiderMy favorite was definitely the lamb, which is something I wouldn't normally order at a regular restaurant as they are typically pricey, so it was a treat.Taylor Rains/InsiderWhile I ate, I watched the new Bob's Burger movie — which was actually pretty good — before getting ready to sleep.Taylor Rains/InsiderSome business classes I've flown in have a button that flattens the seat with the passenger already seated, like Delta One or United Polaris.EQRoy/ShutterstockBut, ANZ's lounger folds over into a bed, which is accompanied by a mattress pad, a blanket, and two pillows.Taylor Rains/InsiderI had to get out of my seat and ask a flight attendant to set it up.Taylor Rains/InsiderThough there is a button on side of the seat making it possible for passengers to convert the bed themselves, I just found it easier to ask for help. However, I'll admit was a little inconvenient.Taylor Rains/InsiderI realized quickly that it would be a whole process to put the bed back into lounger form when I wanted to work, so I ended up just sitting on the bed and leaning against the fuselage when I woke up.Taylor Rains/InsiderFortunately, ANZ is creating a new business premiere product that will eliminate the folding mechanism and allow passengers to lay flat without getting up.ANZ business premiere 2.0 mockup at Hangar 22.Taylor Rains/InsiderWhile passengers wait on the new product, the current seat is still impressively comfortable. When converted into bed form, it connects to the ottoman, offering plenty of room to even taller passengers.Taylor Rains/InsiderI slept for eight hours easily. I was worried at first because I sleep on my side or my stomach, and many business class seats can be like coffins that force me to sleep on my back.Taylor Rains/InsiderHowever, ANZ's single bed was the perfect width that let me sleep how I wanted. Moreover, I'm someone who regularly sleeps with two pillows, so having two was a nice surprise.Taylor Rains/InsiderBefore bed, ANZ offers passengers a "bliss sleep ritual" that helps them wind down. The kit comes with sleepy tea, sleep balm, and a light snack.Taylor Rains/InsiderBetween sleeping and working, I explored other areas of the jet, including the lavatory. While not very spacious, I liked the creative cloud pattern on the wall. There was also a baby changing table available.Taylor Rains/InsiderWhat I really loved about the business class service was the option to order food and drinks directly from my seat instead of calling a flight attendant and ordering verbally.Taylor Rains/InsiderThe menu is available on the TV screen, featuring things like soda, chips, chocolate, coffee, tea, water, and alcohol.Taylor Rains/InsiderWith about six hours left of the flight, I ordered a coffee, protein bar, and glass of water, which held me over until breakfast. The three easily fit on the small shelf next to me.Taylor Rains/InsiderAbout two hours before landing, we gave our breakfast orders. The menu had options like fruit, cereal, and poached eggs.Taylor Rains/InsiderLike dinner, we were given bread as an appetizer, though there were also pastries available. I opted for regular toast with butter and jam.Taylor Rains/InsiderFor breakfast, I chose creamy balsamic mushrooms with potato roost, grilled tomatoes, and bacon. Once again, the food was delicious and paired perfectly with a cup of coffee.Taylor Rains/InsiderI actually ended up having "breakfast in bed" because I left the seat in lay-flat mode. I wasn't sure if I'd have some time to sleep again after eating, so I didn't want to convert the bed into a seat and then back again.Taylor Rains/InsiderOverall, I was surprised about how quickly 17 hours passed. I slept for eight hours of the journey, which was made easy by the bed's cushioned mattress pad and two pillows.Taylor Rains/InsiderCaptain David Wilson and flight attendants Mark Bazar and Mike Webster told Insider they get a lot of time before the flight to rest up, and suggest passengers drink a lot of water before the flight to help with jetlag.Taylor Rains/InsiderWhen not sleeping, I was working — made possible by the airline's free inflight WiFi — or watching movies. While the TV was smaller than some rival business class cabins, I liked how mobile it was in the seat.Working from the road.Taylor Rains/InsiderI could sit in different positions on the bed and move the screen in front of me regardless of which way I was facing. It gave me more flexibility to move around to get comfortable while still watching a movie.Taylor Rains/InsiderNot to mention, the food was amazing. I felt full the entire route, and the flight attendants provided excellent service. The convenience of ordering meals straight to my seat was the cherry on top.My order on the seatback screen.Taylor Rains/InsiderMy only caveats are the angle of the seat and the lay-flat conversion. I wish the seats were more forward-facing so I could look out the window and I think the bed is a pain to convert.Taylor Rains/InsiderFortunately, the airline is working out the kinks, as shown by its business premiere 2.0 and all-new business premiere luxe mockups at ANZ's innovations center in Auckland — Hangar 22.Business premiere 2.0 mockup.Taylor Rains/InsiderDespite the length and seat flaws, I would recommend ANZ's business class on the ultra-long-haul journey. My return flight is in economy class, though I'm luckily booked in a Skycouch.Taylor Rains/InsidHopefully, the unique Skycouch will make it easy to get the much-needed sleep on the 16-and-a-half-hour journey home.Working onboard.Taylor Rains/InisderRead the original article on Business Insider.....»»

Americans are struggling to receive refunds following flight delays and cancellations. A German state is proposing a "pay as you fly" solution. James D. Morgan/Getty Images Americans are struggling to receive refunds following flight delays and cancellations amid a summer of travel chaos. The Department of Transportation is working to improve the refund experience. One German state is proposing a "pay as you fly" model that would make refunds less necessary. While the US is working to make it easier for customers to receive flight refunds, Germany is trying to eliminate the need for refunds altogether. In August, the German state of Lower Saxony called for the abolishment of advance payment for flight bookings — and the implementation of a "pay as you fly" model in which customers' payments aren't processed until they check in at the airport. When a passenger's flight is canceled, there's no need for a refund if they haven't paid for it yet. "It makes intuitive sense," Scott Keyes, founder of Scott's Cheap Flights, told Insider. "You don't pay for your hotel until you check out. Ditto with your car rental. There's certainly some elegance in having the same setup with the other major part of travel—flights."Under the current model, some have argued customers are effectively making airlines "interest-free loans" — loans many have had a difficult time collecting on. Over Labor Day weekend, thousands of Americans faced flight delays or cancellations, and since Memorial Day, there have been over 50,000 cancellations and over 500,000 delays. Many fliers have sought reimbursement and had a hard time receiving it — the Department of Transportation received over 1,400 complaints in June related to refunds. While the DOT is pushing airlines to make the refund experience more palatable, Germany's proposal could provide an alternative moving forward.Keyes says the "pay as you fly" model has a lot of appeal but that he has one main concern. "Airlines would have to grapple with far more canceled reservations than exist today," he said. "And they would almost certainly respond by raising fares en masse. How much and how quickly is hard to determine, and that's why I'd be glad to see this tested out in foreign markets."He adds, however, that airlines have "long resisted change to their business model, only to find that it worked out fine when they do." Pre-pandemic, most US airlines charged significant fees when customers changed or canceled their flights. But while many of these fees were dropped in 2020 to entice customers, airlines have still managed to generate "major profits" this year."The sky didn't fall," said Keyes. "And that's why I'm not entirely convinced a 'pay as you fly' method would necessarily result in more expensive flights."The US Department of Transportation is pushing for other reformsWhile a "pay as you fly" system may not come to the US anytime soon, the Department of Transportation has taken some steps to combat the refund crisis. Last November, the Department of Transportation agreed to a $4.5 million settlement with Air Canada following "extreme delays" in refunds for thousands of US customers. In July, US Transportation Secretary Pete Buttigieg said the department had completed 10 investigations into delayed or withheld flight refunds, adding that an additional 10 investigations were still ongoing. In August, the Department of Transportation announced a proposed rule that would aim to strengthen protections for US fliers seeking refunds. If enacted, customers would become eligible for a refund when they experience changes to their departure or arrival time by three hours or more, changes to their departure or arrival airport, or changes to their number of connections. "This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines," Secretary Buttigieg said in a department release. While the rule is just a proposal and has not been signed into law, travel industry analyst Henry Harteveldt, told Select that the proposal has a "decent chance" of getting enacted, though it could see modifications. On September 1st, the DOT launched a customer service dashboard to help fliers decipher what services and amenities they are entitled to when they experience delays and cancellations. Per the Department's release, none of the 10 largest US airlines have historically guaranteed meal vouchers or hotels to passengers experiencing cancellation or delays. Today, however — following a department push to improve these accommodations — nearly all major airlines have made these guarantees. Moving forward, Keyes expects airlines to begin offering more vouchers to incentivize people on crowded flights to switch to less crowded ones. "Right now, airplanes are more full than they were pre-pandemic, and airlines are increasingly trying to entice people to switch to less crowded flights days before the trip will actually begin," he said, citing a $55 voucher he was offered in recent weeks to modify his trip.  Read the original article on Business Insider.....»»