Alaska Air Group, Inc. ($ALK)

All right. Awesome. Good morning, everybody. SP577648416 Continuing with airlines here at day 2 of TD Cowen's tenth Annual Future of the consumer. We're delighted to be joined today by Shane Tackett, Chief Financial Officer for Alaska Air Group. Shane, thanks so much for being here with us. Before we get into the conversation, any opening remarks you'd like to make?

Oh my gosh, just excited to be here with you guys this year and looking forward to like an is Q&A session this morning, and I can't wait to talk about the company, how we're doing now and how excited we are about the future as well.

Awesome. Let's get into it. Maybe before we dive into some of the long-term stuff, just get some of the near-term questions out of the way. Investors are obviously very focused on how travel demand is holding up in the face of higher fuel you guys gave an encouraging 2Q unit revenue outlook underpinned by strong domestic yields, accelerating corporate travel and your growing international franchise and robust loyalty engagement, How's the quarter had been tracking since April?

Yes, pretty much in line. So all of those things that you just mentioned are -- we're continuing to see good trends on each 1 of those. We -- I think, Tom, we had this transitory issue with Hawaii, the state of Hawaii. They had storms that were probably the worst they've had in 30 years some flooding and that had a significant impact on spring break travel and sort of early -- late Q1, early Q2 that did make its way into April and a little bit of May. But we look closely at how we're doing versus everybody else. And -- if you take Hawaii out of the mix, and it is starting to recover, we look to be sort of on trend or even in some cases, better than the rest what we're seeing in the industry. We've seen advances for corporate travel to be very, very strong. I think the 90 days are plus 25 year-over-year. And I'll probably get into more of what we're seeing on the loyalty side and the international launch side of the business. I also had a question that you asked that I can give some of that detail into as well. But those trends you mentioned are all in place still, and the summer is going to be a strong summer.

That's great to hear. Is corporate broad-based? Or are you seeing in particular industries, the tech or aerospace or?

Yes. It's relatively broad-based. There's always some hiring and some layoff activity in the tech industry up and down the West Coast that continues. But we've seen good return to travel from tech from Boeing, from other large Seattle-based companies really across all of the businesses that we cover.

It's awesome. So unit costs we have been a little more elevated in the first half of the year, but a lot of transitory factors. I think it's about 3 to 4 points of headwind in the second quarter. Are you still feeling pretty good about CASM ex decelerating into the back half of the year?

Yes, for sure. I think our cost profile, and we spent some time on the call talking about this, it's very much in line with what we anticipated. I think we don't give the same level of detail as we used to -- guidance. And so I think some of the folks who model us had a slightly a different number in there. But our costs are performing as we expected them to. We had some things in the first half of the year like needing to ramp up our crew complements for all the international flying, we were launching out of Seattle this summer, which is now launched. That is -- these are costs that will now be in the basin with us the whole time, but we'll have the benefit of the flying as well. We have we're crossing over in the second quarter the sale of a bunch of airplanes last year, which gave us onetime gains into the P&L. So there are things that are not core or structural that are giving us a year-over-year sort of percentage challenge, but the core cost structure of the company, I believe, remains 12% to 13% better than those of the legacy carriers. That's, give or take, our target. So we'll close the RASM gap to them, but we'll maintain a really strong cost advantage structurally over time against the legacy folks. And I think that's the way the business is performing, and we expect a nice exit rate through the year, which we saw last year. And I think folks were skeptical last year, but we delivered what we had said we were going to deliver last year and we'll see that again this year.

That's great to hear. Fuel has obviously been a roller coaster this year. And any comments on just a few on some of your key benchmarks quarter-to-date? And then maybe just remind us on some of your longer-term initiatives on building more infrastructure and storage solutions out West.

Sure. Did you want to use the rest of the 30 minutes on this topic? Or do you want like the 3-minute version of this. Yes, it's been really volatile, obviously, not only on the price side, but just the supply side, making sure that we didn't feel like there would be any shortages. And it's, I think, as stable as it has been since mid-February, early March as we sit here today. I think spot prices, which we're not seeing in the P&L yet, there's a lag, but I think spot prices are sub 380 as we sit here today and coming off the highs of $5 and then they were pretty sticky at $4.50, $4.60, $4.70 through the latter half of the second quarter and the first half of the -- sorry, latter half of the first quarter, first half of the second quarter. So that's good. We're seeing that the pricing start to abate. That's really not on the crude side. Crude is still relatively elevated. As you guys know, I think it's up a bit this week, but that's -- the refining margins have come way back down like what we would consider more normalized. We were seeing $3 refining margins in Singapore. We were seeing almost that pricing in Gulf Coast and West Coast. I think the last thing I saw Singapore is $0.90 and Gulf Coast is right around there, and West Coast is a little bit higher than that. But I think all in $3.80, $3.5 today, I think the quarter we had guided to $4.50. We need to see the current pricing stay like where it's at or get better to be able to hit the $4.50. -- mathematically, there's a chance, but we're certainly in the books in April and May over that number today just because it's taken a little longer for the price to abate. But I think that is feeling stable and trending in the right direction subject to whatever happens geopolitically, right? For what it's worth, and you're probably going to ask me and we can talk more. I think the tickets we're selling today are probably covering spot price of fuel in their entirety, as we sit here today. In terms of supply longer term, I'll be super brief. I think -- and we're always -- we wish this weren't the case over time, but it remains likely to be the lowest cost source of Jet A for us is shipping it in from Singapore to the West Coast. We certainly supply Hawaii from Singapore, and they have done that for a long time. And they've enjoyed a $0.25 to $0.30 pricing advantage for doing that. And so as long as that holds, we'll look to do more of that type of supply. We would love it if the price of our oil that's produced in the U.S. was below that of which is produced in Singapore and in Asia. And I think the big hope that we have over time is to be able to supply the Seattle station differently than we do today. But this stuff takes years to get in place. But I think there's a growing consortium of folks, who are interested in working with us on getting more supply into Seattle.

Well, that's great. Things to come. So you guys have completed most of the integration milestones related to the Hawaiian acquisition. I know it's probably hard to quantify, but how should investors think about the benefit just from management strategic focus becoming fully back on the day-to-day business?

Yes. It is probably -- I mean, I don't think Ryan puts any of this in a spreadsheet, but I can tell you the -- having done this twice now, what we believe we're really good at is running an airline. I think we understand how to create optimal outcomes from an operational perspective, balance that with the cost side of the business. And I think we've been pretty responsive to the desires and tastes of our guests over time. And that's really what we want to be working on. We knew we were undertaking a lot of additional work with the integration. We kind of knew those playbooks we've gotten through single operating certificate, single loyalty, single selling and now PSS. That's the big one. That's the 1 that gets all of the friction out of the way from consumers and so -- and we talk about this internally, we're moving from peak friction to peak execution. And give us a quarter or 2, we'll get back into full execution mode. We expect to optimize the business further to lean out the cost structure further to go get the value from the investments we made on the premium side of the business and to really enjoy the combined company, the 2 brands and the success, I think that lies ahead for the companies.

I think that's a good segue into maybe more strategic long-term questions. Airline industry is bentoriously difficult to survive in. But Alaska recently celebrated its 94th birthday congratulations. Scale relevance loyalty played a big part in your success over almost a century you talk about how the Hawaiian acquisition enables you to deepen scale, widen your relevance and drive accretive growth and loyalty?

Yes, for sure. I appreciate the question, too, because it's more like longer-term focused and sort of strategic over a number of years. One thing I won't belabor this, I am going to get the stat wrong, but our prior CEO, Brad Tilden, often talked about when he started, I think, we were the 27th largest airline in the country, and we're the fifth -- now -- and at the time, I don't think we had actually leapfrogged anybody. They just went away. And so that was kind of the history of the industry, sort of heads down, run a good business, understand what drives the economics and consumer choice and just sort of focus on that. I think the industry, as it's situated today is as competitive as ever, but also is in a phase of being able to invest in its product in a way that wasn't the case when I started in the industry in the 2000s, when product was being taken off planes. And that's what's been so exciting about the last several years for many of us in the industry. We get to go reinvest in experiences for our guests across all of our customer segments in every seat in the aircraft. The Hawaiian acquisition and the bringing into the family, the Hawaiian brand, it just made to us all the sense in the world. We needed more scale I think scale is going to be an important feature of successful airlines over the next 10, 15, 20 years. It was in a geography that we had more than 10 years of experience serving we understood our guest desires to vacation in Hawaii. And that had been a strong source of durable profitability for the company for a long time. That was impaired a bit when some others chose to come into the market, and it gave us a chance to go and become the carrier of choice not only into Hawaii off the West Coast, which we are, but also amongst resident Hawaiians in all of their flying. There's quite a bit of flying they do anywhere they go. They have to get off the island, whether it's between islands or certainly back here to the Continental 48 -- and we're starting to see that. We're starting to see the loyalty accrue back over to the Hawaiian Airlines brand and the Alaska Air Group network. And just -- I mean, this is pretty simple airline economics, like if you were flying off the islands, before the acquisition, you were terminating at whatever place you landed, you had no chance to continue on and we can now connect folks. And so people who are vacationing to Hawaii and Hawaii and out of California, we're flying somebody else for all of the rest of their trips. And there's a huge opportunity for us to go get all of that flying into our network given not only our network in the Lower 48, but the American Airlines partnership that we have, which is really a strong partnership with great connectivity around the -- and so those 2 things, entry like into the WCI with American, the acquisition of Hawaii and the connecting of these 2 networks. It's a premium market, it's a premium-oriented market. It fit everything that we felt you'd need to be able to say that you were able to go incredibly do to have a viable business model in the future of the industry, which is scale, is premium orientation that generates the ability to get people off of other airlines and on to you for flights they're already taking. And that is -- was the thesis of the acquisition? And honestly, I'm time to go through all the math, it's proven as we look at sort of the post audit on all of this stuff. It's working really well.

Yes. So at yesterday, there was a lot of various initiatives I outlined. I think the team targets about $400 million in incremental profits on the network side, about $175 million of those from acquisition synergies. Would you just maybe dig into the network side, where all the deal creates a little bit, whether it's opening up long haul out of Seattle, Portland becoming more of a connecting hub, enabling some growth in San Diego and then just adding the premium market in Hawaii. I would imagine it's a big redemption market for some of the West Coast travelers?

For sure. Well, you sort of named them, Tom, but I'll repeat kind of what you said. Let's start with Portland. Portland is an amazing market for us. I think we've been the largest carrier there for the entire time I've been at the company. We want to grow Portland further. We're going to go Petland further. We just opened this week, a brand-new lounge down there. It's amazing. They did a big overhaul of the lobby experience and the gate experience of Portland is 1 of the nicer airports you could possibly go through. It's also really good for connecting traffic just operationally. It's less constrained than Seattle. So I think our Portland connections are doubled today versus last year, which is probably faster than we had anticipated. And that just says we need to put more nonstop flights and then bring more connecting traffic through -- the big unlock with that, it's a better customer experience if you're coming out of Boise say, it doesn't matter if you go to Seattle or Portland. It's a great airport, really quick connection. But that allows us to open up space in Seattle, which is more constrained to take connections for international flying, which we've been really amazed at the amount of connectivity that we've drawn through the middle of the country through Seattle to Asia for instance and then to recapture local customers who are probably spilling to competitors today. And I think we've talked about that being -- the growing thesis is that's what we need to do. We need to upgauge Seattle, get more of the local folks back every time we do go supply the market with more seats, we see people come back to us that we are probably spilling to others. And we got to keep those connections open to fill the wide-body aircraft. So that network sort of thesis is working really, really well. San Diego, I think we saw an opportunity to go into a market that looks like a market that would really appreciate what we have to offer, bring the way that the Northwest does. And it just -- the demographics, they just feel a lot like the type of guests that are naturally attracted to us. It's been really fun to watch. I mean we've put more capacity in there more quickly than I think we've put anywhere in the recent history of the company, and it's doing quite well. I mean it's going to take time to mature, but if you just ran the math of this much capacity versus what it should do to unit revenues, you would have thought it would have done appreciably worse, and it's actually holding its own. So I think the products, the brands, what we're bringing to the market, the loyalty program is the fastest market -- growth market for loyalty and credit card sign-ups that we have in the network today, and we're excited about what we can do with it in the future. And I think the only other thing I'll say, where you really want to see the benefit of network effects as loyalty and loyalty cash remuneration even before the new bank deal -- and certainly, volume growth in both just membership and credit cards are 12%, 14%, 15% year-over-year and I think we're going to continue to look to have double-digit growth rates as we go forward. There's a lot of remaining opportunity in the new loyalty platform, which we've named at most.

Would you remind us where you see Seattle going in terms of being a global hub by the end of the decade and just your 787 order earlier in the year?

Yes, yes. And we -- I think very early on, put a bold vision out there, 12 cities served by 2030. We have line of sight to 17, 787 aircraft by 2035, a great order book with Boeing. Hopefully, all of those aircraft are Seattle originating, there could be uses for those aircraft out of Hanauluas well. But yes, 12 cities -- it's going to be the place that people want to go. If you look at our initial composition of traffic, it's pretty remarkable, Tom, like London, I think, is 70% loyalty members out of the gate. And Rome is 65% or 70% loyalty members out of the gate. [ Rekaicis ] 55% or 60%. Asia is 30% or 40% I actually think those numbers are like interesting. On the 1 hand, it tells us we're taking -- we're making the right choices, like this is where people wanted to go, and they were going to go on somebody else because we didn't have a way of serving them. But it also says there's a huge opportunity to go get new customers into the fold, like I actually would like to see those numbers a little bit lower because I want new people who don't know us coming in, and they are. It's just so many of our members want to take these flights right now. So I think it's been encouraging the Asia stuff I mentioned before, the connectivity we're seeing out of the middle of the country through Seattle. I mean, we've long talked about it, it's the least securitous route into Asia, over Seattle. So we have an opportunity to continue to attract folks into the loyalty program and really earn their loyalty over a long period of time. And I think we're in the midst of rolling out StarLink on every 1 of our flights that will be free, but you will have to become a member of Atmos to get it for free. So that will be a nice new hook to get on the loyalty journey with folks that aren't with us today.

It's a nice [ cartons ]. Looking forward. I still haven't been on our Sterling life, but looking forward to it.

You've never taken one.

Not on Sterling to go...

Find a plane with it and do it. You love it. Yes. Put on the docket.

Yes. So loyalty was another big, big component of Investor Day, and you raised the bar in your targets recently with the new credit card agreement. I believe it's an incremental $1 billion in remuneration by the end of the decade. Could you just walk us through some of the drivers of upside in loyalty, whether it's a single program, with Hawaiian, the improved scale, the new economics on the agreement that you just announced things like a premium credit card or things like that?

Yes. Yes, I think there's really significant upside. In fact, we're going to have an Investor Day in September. I think we're -- I think we announced that or something. And this should be 1 of the clear focus areas that we take you through. If you recall, when we announced the synergies with respect to the acquisition, we sort of backdated a lot of loyalty. Loyalty actually wasn't that large. There were some like initial benefits of bringing the 2 programs together, but now that we have the single loyalty platform. We've got the premium credit card out in the market. We've got the new bank deal in hand. Now we can really start going in growing the platform at the rates and with the value that we think are available to us. We are seeing and we would love to see more the credit card move towards top of wallet in some of the key markets that are new to our network in terms of the depth that we have there, like San Diego, certainly in the state of Hawaii. I believe 70% of the adults are now members of our program and many of them have the credit card. The credit card, I think it represents 6% of the local GDP down in Hawaii. I think there's an opportunity to continue to grow how much folks are using our credit card. I believe -- I mean, we're convicted about this. We routinely receive recognition for being the best loyalty program, the most value back to consumers and guests across the industry, and I think that's happened multiple years in a row. And this -- the Atmos program was recognized the same way when we launched it. And so we'll continue to invest in things that are good for guests and then watch the value sort of accrue over a period of time with respect to loyalty. But we expect further penetration just in terms of growth of loyalty folks. We know those folks are more, more likely to fly with us and give us all of their flying or most of their flying. And then obviously, the credit card is a huge sort of exponential growth driver in terms of the economics that come from the loyalty program -- and the new deal with the bank, I think, for the first time, really puts new incentives in for us to jointly grow the program together and Bank of America has been a phenomenal partner. One of their strategic imperatives that they announced at their Investor Day as loan balance growth, which is going to require them to be working with us to grow our part of that pie as well since we are their #1 co-brand partner by a wide, wide margin. So there's a lot of incentives that are now completely aligned between the 2 companies to go and drive this. The last thing I'll say, there's other areas like we would love, ultimately for the proprietary cards that our bank partner provides to be able to convert to points and redeem. And I think those types of things are all opportunities for us under the new contract.

That's really exciting. That's a fascinating stat on being 6% of Hawaiian I think it's like $125 million economy -- now how do you think about designing the program to widen appeal beyond some of your core struggles in the Pacific Northwest, especially given some of the geographic advantages that a has as a connecting market.

Yes. I love this topic. We have 12 minutes. I'll spend like 30 seconds or a minute on this 1 just because we need a little time to really build this out. But what your question kind of speaks to is, we have an underlying belief that if we build the utmost platform the right way, we can attract other partners from non-air parts of the travel ribbon that would be very compelling to a broadened customer base that doesn't have to geographically reside in our core markets. And I mean, it's not completely unchartered territory. Maybe it is a little bit for airlines, but we've specifically designed this in a way to give ourselves the flexibility to go partner with, say, a cruise line to give folks better -- more redemption opportunities and broaden the appeal of just joining the program as well. And we've -- like we've toyed with ideas, smaller partner airlines could utmost be the currency for their loyalty program as well. These are all like sort of ideas on the whiteboard that we have had to execute on or really go and look at it too closely, but it's now what we're starting to think about since we're past sort of PSS and able to go focus on the future more. But I think -- we won't talk a lot about this until we feel like it has real value coming into the P&L, but we're certainly going to go explore those opportunities, and we're relatively optimistic that there are going to be value drivers that do with those types of partnerships.

Yes. No, for sure, it seems like a lot of white space there for you guys. I think loyalty dovetails really well with the secular strength the industry is seeing in premium demand coming out of the pandemic. I think I have this -- correct me if I'm wrong, but you premium revenue from 27% prior to COVID, 33% before the Hawaiian deal. Now I think it's around 36%. Maybe just walk the audience through your longer-term premium strategy and how maybe things like your stage length and just your geographic core strongholds really help you lead into that?

Yes. You help me by giving all the stats. I don't have to remember them. But this is -- and look, I think it's broader than airlines. Airlines it gets talked about a lot, but I think the sort of the consumer move towards premium experience is beyond just the airline experience alone. So we're following, I think, a very broad and durable and we believe long-term trend of consumers wanting better experiences. And I think we've -- we've started this journey with premium economy. We've always had first class. It's always been part of our product set. It was mostly an upgrade product and then we put premium economy in, which we call premium class 10 or 11 years ago, something like that. I may have that slightly wrong. But we were more focused on just delivering a really consistent experience across the entire aircraft, and we weren't investing more of the experience into those cabins. And I think that's what we have started to do, and we've started to see it really provide strong returns for us. I think all of the revenue growth on a year-over-2 basis, year-over-3 basis has really come out of the premium end of the airplane. That's where most of the new demand is coming. So existing demand plus a lot of new demand is to be in premium economy or first class or lie-flats on international products. And so we've improved food and beverage. We've improved the soft product -- we've expanded first class on our 800 fleet. We've expanded premium economy on our 900 fleet. We have begun to sell our exit Rose as a premium economy seat product. And then we will remodel the A330s and the 787s in the next few years to get a traditional international premium economy section. -- into those and the A330s need more modern suites as well. I think 33%, 34%, 35% of the seats for us will be first class or premium economy or life flat. That seems to be what we believe the sweet spot for us will be, I know some are slightly over that. Some are a little bit under, but I think that's kind of the target that we're headed towards. And I think much like some of the stronger airlines you're seeing right now the share of revenue that's outside of Main Cabin, I think we're over 50%, and we'll be moving towards 60% over the next couple of years. So I think that's going to be the largest sort of underlying margin driver, margin expansion that we can unlock and we're well underway executing initiatives to do that. Yes. And then the last thing is just -- we've done a ton of work on the airport experience as well. Seattle is now starting to pull construction wells down. It's a beautiful sort of remodeled lobby that we have. We have a suite check-in area that is as good as any you can find in the industry that's private for folks who are flying international life flat or who are titanium on us. we've got a new lounge that's going to open next summer. That's going to be world-class as well. And yes, I think this end of the market is 1 that we're going to pay a lot of attention to, but not forget about the entirety of our customer set and making sure that there's a good experience for everybody.

How do you think about that from just a capital allocation standpoint, balancing? It's obviously with the fleet cap intensive, but just also the importance of the non-aircraft side, whether it's in the lounges or technology or cabin retrofits?

Yes, it's a good question. Look, I think the lounge experience is as important as -- I mean the flight experience on the long-haul international flight is really important -- but I think what we tend to see is folks who are going on those flights start their trip in the lounge. -- there are a couple of hours early relaxed sort of get in the mindset of going away to Europe or whatever. And I think that they are becoming more choiceful about what types of lands and environment they want to be in. And I think we are clear eyed about that, and that's why we've been going through a series of remodels of our lounges, where we've completely overhauled our food and beverage offering in the lounges. We brought in outside partners who do this really well, who we've just started in ancreage, and we're going to bring them through the rest of our lounges. It's just -- I think that cannot any longer just be a space that's away from the hold rooms, where people just go and sit in sort of a generic environment, they really want it to feel nice and comfortable in premium. And so that's the type of experience that we're going to give them. And then I think like Tom, as you know, like, it's more important for us to be able to deliver on the premium experiences in the airport and have a good experience for all of our guests. It's certainly a premium economy and first class domestically if we're going to capture the folks who are buying lie-flat tickets to Europe. And once you buy a lift ticket to Europe, you're likely to give all the rest of your flying to that same airline just because of the loyalty effects of -- for status and for accruals, it's so large on those tickets. So it all fits together as my point. We had to do all of this end-to-end in order to make international work as well as we needed to work.

Yes. And then I think you mentioned the retrofits on the A330s at some point. You guys have been, I believe, also on the 737 fleet. Can you remind us how that's going and the benefit...

737 is done. I think there's -- I'm not allowed to say completely done. There's a few aircraft that are going to go after the summer, but we're 99% done again, expanded first class by 4 seats to 16 on the 800s and expanded premium economy by Run row on the 900s to 30 seats now, and then we added selling the [ EXARoSe's ] premium economy that's all complete. And then the 330, 787s, those would be like a 2028.

Okay. Okay. There's been a lot of noise outside of your control the last -- this year or last year that has impacted the results, and you've been going through the integration process. But it just seems like there's a lot of leverage in the model that can be unleashed if some of the events -- some of the macro in the fuel stuff normalizes, and then you start to harvest the benefits from the acquisition. Would you -- just maybe if you can walk us through how investors think about that over the long term?

Yes. One thing I would share is the -- when you get these types of unexpected but very material shocks to your business, you sit down and you look at all of the strategies that you've that you've adopted and invested in and had been convicted on and just make sure that those are the right strategies. I mean it's incumbent on us to do that, and we got a chance to do that leading up to a Board meeting we had here in May. And I'll tell you, we came out more convicted perhaps than we were even 6 months ago that all of the things you would say you need to be doing to build a long-term, durable, strong financial model at an airline are the things that we're doing. And we couldn't be happier with the timing of the Hawaii acquisition, the results that we're seeing, notwithstanding this kind of like 30-year storm pattern that they got. All of the loyalty and network effect that we've already talked about. And then while we're in the middle of delivering on it, I think we got going on this need to go put more premium into the market. A few years ago. And so we'll get through that quicker than others who are now trying to play catch up, we'll be through it. And so with PSS behind us, if we can get the world to settle down a little bit, and we get to go focus on really optimizing this airline and really running at peak execution. The underlying earnings power is there. I think all the right strategies have been deployed, and I think execution is now getting closer to the end than the beginning. And so we're excited about a period of stability. And look, and others have said it, it's like any of us who've been in this industry a long time, time, there's a -- I think what we're seeing is durable demand as long as the economy holds. People want to go travel and they want good experiences when they travel. That's been super clear since sort of the revenge travel out of COVID, and it hasn't abated. There's no reason to think it will naturally abate without -- with a strong economy behind us. And so I think there's a really good chance that input costs normalize, and we have a really strong revenue environment, and there's a very, very healthy business there if that sort of is what prevails in the next quarters or so.

Absolutely. We're almost up on time here. Shane, I really appreciate you being here with us. Any closing remarks you'd like to make in less than the closing seconds?

Yes. I think, Tom, I just -- I appreciate the question set. I do think it's easy and normal for us to get very hyper-focused on the news of the day, and there's always so much news of the day. And I think you'll see us continue to talk about the investments we're making in the future and the future is not 10 years away. It's within line of sight. It's going to be here relatively soon. Everything we laid out at our Investor Day, Alaska Accelerate, those are the right strategies. And you're going to hear us increasingly be convicted about we are doing the right things. We're executing those things well, and they are going to show up in financial results sooner rather than later.

Thanks to Shane Tackett, CFO of Alaska Group.

Thanks very much for having us.