American Airlines Group Inc. (AAL) Earnings Call Transcript & Summary

I have American Airlines' Vasu Raja, Chief Commercial Officer. Thank you for being here.

Hey, thanks for having me. I'm glad to be able to close out your conference.

We appreciate it. So I'll pass it to you for some -- any opening comments, and then we've got a lot of things to talk about and we'll go from there.

Sure. I won't make a lot other than saying this very simply that we are really encouraged by the continuing recovery that we're seeing. Demand for the airline product has indeed never been higher and it continues to grow out there. We're encouraged by those signs. For us at American Airlines, we're focused on doing 2 things really well, which is returning to profitability and running a great operation. And those 2 things are indeed as related as they could possibly be. It certainly our every waking thought. And we're excited about what lies ahead, not just in the second quarter, but even beyond that. We think this is going to be a really unique time as the airline recovers from the pandemic, and we see it every single day on what our customers are telling us. So I'm happy to be here and take any questions you guys might have.

Fantastic. So I'll start. If anyone has questions, raise your hand, we'll get you involved. So no official updates from you guys today. But you've seen what United said last week. You've seen what some of the others said today. Is there anything that we've seen from anyone that we shouldn't apply the sort of the same logic to American and how second quarter is trending from a revenue standpoint, TRASM standpoint?

Sure. Well, I'll say this. We have not issued new guidance and let me not do so here and now. But I will tell you this, we are definitely very encouraged by all the trends that we've seen. And us not issuing guidance is only that we want to see how -- more of how the world comes in. Most namely, how this weekend comes in. This weekend, of course, is a Memorial Day weekend, which is really in the line of airline work, probably the first true indication of what the summer might look like. And for us, that's a function of 2 things. It's not just how demand takes shape, but how well airlines can deliver the product that we've all sold. What we've seen and what we continue to see is that even though airline schedules are closed, people continue to go and reduce capacity, which, though that may sound very marginal, it's now happening at such a level where real dollars can swing around. So we are encouraged by what we see. We are certainly very optimistic about what's happening with near-term demand this summer, but we're not yet ready to go and prognosticate how the quarter may come in yet.

Okay. And so let's talk about the sort of 3 different buckets. We've got leisure, corporate, international and maybe you want to break international further into buckets. But where are we -- where were we first quarter on recovery for both, where are we second quarter, and where can we go from here?

Yes. Look, I'll say 2 things. I'll say, first and foremost, there is very much -- maybe 3 things. There's a very big difference between short haul and long haul. And we call it short haul because for American Airlines, we're so big in the places like Mexico, South America and the Caribbean, that really, we think of that and our domestic enterprise in a lot of the same way. And that -- in aggregate demand and that is completely recovered, and it continues to grow at a pretty significant rate. As we like to think of it, airline demand, and by demand, I very specifically mean traffic, is very often a function of just GDP output. And so looked at like that, we estimate unconstrained demand maybe 115% to 120% of 2019 levels, but the capacity that's just out there and published schedules is probably 90% of 2019 levels. So we are encouraged both that demand is high and that indeed what that's turning into is that consumers really value the product we're offering, it's turning into really strong yields. The long-haul business is really quite different because there's still a patchwork of regulatory requirements. And those requirements whether real or perceived amongst customers, do indeed blunt travel. And when countries we find are really like removing things like pre-departure testing, things like that, then there is a big rebound that's there. But across long haul, things vary quite a lot. Our South American markets and transatlantic are picking up quite strongly. Transpacific much less so. And that's largely a function of that patchwork of restrictions that are in place.

So where would you say -- you mentioned South America, you mentioned transatlantic. Where would you say they are in their recovery? What percent recovered at this point?

Well, look, it's important with these things to separate out where traffic is and where revenue...

I think traffic may be more important. Yes.

Yes. And for that, as we look into South America and even long transatlantic, it's anywhere from 65% to 80% recovered on a traffic basis. But the revenues we're seeing can fluctuate very, very wildly. And indeed, we're seeing a steady increase in business style bookings in those markets, which are so important for us because so much of the long-haul system really depends on the solid bookings.

And then how would you think about domestic corporate recovery on a -- again, on a traffic basis?

Yes. Look -- and I think this is one of these things where the pandemic has -- look, as we see it at large, and this relates to my comments on our last quarterly call, aggregate demand is stronger than it's ever been. And there's a thing which we used to call business style demand, leisure style demand. And whenever we use those words at American, what we mean by business is people who book on a certain kind of itinerary. And it used to be in our system, that was a very binary distinction. We could tell somebody, people indicated that they flew on business or they flew on leisure. What's -- what we are seeing, first of all, is indeed true like business style bookings, that revenue is largely recovered at this point in time. Leisure bookings -- leisure revenues are more than 100% of 2019. But what's really interesting to us are the amount of blended trips that we see. We are seeing as much as 35% to 50% of the itineraries that are coming through are actually blended, where it may be you who is flying as part of -- you're flying as a single person in an itinerary, you're not checking a bag, you're leaving on a Tuesday, you're returning on a Saturday, we would normally say that somebody is probably a business customer only you're going to Hawaii or Florida, and we have a lot of those indications. Somebody is indeed going to Hawaii, but they're staying for 2 weeks and they say that they're going to work there. We have a lot of things where Sunday has become not just a really big leisure day, which it's always been, it's a big day for business travel. Thursday was always a big day for business travel. It's one of our biggest days for leisure travel. So the nature of demand is starting to blend and we see that actually as a really encouraging sign because those customers are more likely to take blended trips or more willing to go join our loyalty program and buy in the higher value products and services than either the binary distinctions of business or leisure [indiscernible].

Okay. That makes sense. So you said we have 2 really important goals right now: return to profitability, get the operation running right. Where are we -- let's start operationally. Where are we today in that sort of goal? And are we at the place now where we feel like schedules are good? We don't need to be making further changes, cuts. So let's start there.

Yes. Look, we -- you're right, and you nailed exactly the right thing. A long time ago -- look, one of the great things through the pandemic was that I should use that maybe a bit tongue in cheek, one of the things we learned in the pandemic is that we could go and adjust schedules really close in and still run the airline. And it worked because demand was kind of falling and it made sense to do. We kind of all took an oath in the company back in January that we wanted to produce schedules far from departure, like have them loaded and ready to sell at about 110 to 120 days, which was pretty -- much more common in 2019 than during the pandemic. But the reasons for it that we found is that in an improving demand environment, the more scheduled certainty you get, you get 2 things. The obvious one is we go and create a much better decision for things like our yield management systems and like anything that we're out there selling because we know that we're offering the customers a product that we'll have on the shelf. What became very evident to us when we built the airline back last year was that when we can load schedules early, it also makes it easier for our own team to deliver them well. So it's probably no -- it's no accident that the improving operational performance of American Airlines relative to the industry is in some way tied to the fact that a big chunk of our operations team and our schedule planning teams are really focused around how we actually go and create schedule, certainly far from advance. So some time back, we actually took the 787s -- or there was still an open question about when they were to be delivered. We made what seemed like a drastic cut at the time. We took them entirely out of the schedule for the summer. And that was really so that we didn't sell something that we couldn't deliver and that our team could be positioned to actually deliver the things that we've sold. So we've been encouraged by that. And even now when you go out and look kind of week-to-week in the scheduled transmissions, I won't say that there's never anything for America. And there's always going to be a something that's out there. That's the nature of our business. But we spend a lot of time tracking to what degree are we cutting schedules relative to the industry. And you'll notice when you look at it that we're cutting much less on a week-to-week basis for schedules inside of 100 days and what most of the business are doing right now.

So from, let's call it, June through September, right? That's your 120-day window at this point right now. We should -- not saying there's not going to be any changes, but do you feel like if we're doing our job right, that's going to stay pretty static. We've got it loaded now. We want to keep it pretty much where we are at this point.

Correct. Absolutely, right. And There will always be a thing. There will be a weather event, things like that. But that's right. We endeavor to publish out there. And if you go back and look, I mean, pretty much throughout the summer, about 100 days before the schedule has been loaded. By the way, is this your water?

I -- does not look like that one has been open.

Cool because that would have been super awkward.

Well, you can tell it, if you heard that noise, then you're good to go.

Thank you.

And then the other goal is returning to profitability?

Indeed.

You've talked about 3% to 5% pretax margin for the quarter. It sounds like revenue is doing really well. Fuel's up. How are we feeling about 3% to 5%? Anything...

Yes. Well, look, like I mentioned earlier, we don't intend to issue any new guidance here. And we feel very good about the last guide. We feel increasingly encouraged by all the trends that are out there right now, do very largely to, first, how well demand is coming in, but then also that for us, a major thing, like in this environment, where unconstrained demand is so high and capacity is so restricted and keeps changing in the industry. How well we deliver operationally has probably been -- it's really never been a bigger predictor of our financial success. So for us, we really want to see how Memorial Day comes in, things like that. But I'm suffice to say, we are really encouraged by what we've seen so far. And as the weeks tick along here, we'll go and issue updated guidance. But so far, it's very encouraging.

Are the pieces there, to have better margins in the second half of the year if the environment that we're in today continues?

Well, look, if we learned anything over the last 20 months, Scott, the pieces are there for anything to happen in the back half of the year. That is absolutely the case. And -- no, I say that jokingly. I mean there is something to it, which is that there's still a lot of unknowns that are out there right now. And if we learned anything in the last 20 months, you can prognosticate all you want, but still in the nature of travel demand, 6 months to 12 months is a really long time. And nobody has that crystal ball. But what we are encouraged by are the things that we can control, right? We know that we can go and do the basics right, produce a schedule, far from departure, and like ensure that we have resources in the right places to go be able to run it. And with that in place, like we are -- as we think about that period in time, and you can start seeing it in our August, September schedule, you'll see an airline, which is 65% of its flying is flying in markets that are short haul, Sunbelt kinds of markets that we have a unique competitive advantage in, create unique value for our customers. So we know that as long as we have that in place that the domestic and short-haul system is preserved and vibrant that's the basis from which we can build a lot of things off. And that -- we've learned that through the pandemic, no matter what might happen with demand, that's the thing we can control.

JetBlue said earlier, they're cautious on the fall, not for any reason other than just macro or anything, right? Is there anything that you're seeing at this point that would lead you cautious about the fall? Or you just don't know yet.

Well, no. I mean I think anybody who's probably done an airline planning function in the last 20 months is probably pretty cautious about every fall that may be out there. But again, it comes back to like what can we control? And for us, we realize time and time again in the pandemic that when we build an airline, which plays to our core strength, which is that up and down the Western hemisphere, the best solution, if you're in small cities and hard-to-get-to places, American Airlines is the best thing that's going. We're very often the largest operator, we can take you to the most places. And so preserving that, our core competency is how we make a living, no matter what might happen with demand. And the more and more of that we do, the better things are. If indeed, this whole function of as much as 30%, 40% of our revenue coming out of blended trips hold, we see that as a great opportunity for us, which -- that's going to open its way into things that maybe we wouldn't have conceived prior to the pandemic. So what it starts with is building the very best network, delivering it reliably. And once you do that well enough, long enough, you can make it through a lot of uncertainties regardless of how cautious or cautiously optimistic or whatever else you might be about it.

We're very clearly in a capacity-constrained environment.

Indeed.

How long does that last?

That's a great question. I think there's probably a lot of other people that you can go and ask that to, too. Look, what I will say is this because -- by no means do I either care nor could I pontificate on what the industry might do. But what I will say for us at American is, this is -- as we emerge from this thing, it's a real opportunity for us because we are -- like where the airline fundamentally goes and puts capacity is like the most influential variable throughout the course of the airline, not just what it is, how much money it can make, but how well it can go and deliver it, right? And we've seen it time and time again. When we go and try to put -- years ago, we tried to put a bunch of wide-body flights into Los Angeles at a time when we couldn't do it. It was terrible for us financially. It was difficult for us operationally. And we strayed too far from who we were. So the thing that we can go and control always is who is the thing that we are. And for us, first and foremost, is offering the most comprehensive network in what we call the Western Hemisphere. And doing that well enough is the basis to do a lot of things because look, a world where we have 950, 1,000 flights in DFW, no matter what might happen with demand, that's an airline that can go and handle that certainly better than what its competitive set can go and do. So we're very focused on deploying our capacity where it makes the most sense, in places such as the West Coast, the Northeast, places where it's really hard for us to build the kind of consumer proposition that we have in Dallas–Fort Worth or the Southeast of the United States, where there, we have partnerships to make work and making those work is how we go and manage it, not going and adding flights to markets to lose a ton of money.

So I want to ask from this perspective, right? We're in an environment where we've got very high fuel prices, right? We're seeing really, really good pricing momentum. And we're really focused on our operation. And if we add a lot of capacity, right, then it gets maybe it's tougher to run that really good operation, right? So everything to me says like we should -- this is -- we have all the incentive to stay very disciplined on capacity. What am I missing, right, from that sort of equation?

Yes -- look, I don't know that you necessarily are. I will just say it like this, that for us, the airlines can be as simple or as complicated as you want them to be. And ours, I guess, operates with this real kind of brutal simplicity, which is -- when we go deploy capacity into places like DFW and Charlotte and create a bunch of O&Ds that no one else in the business can, we're creating new products for customers. When you create new value for customers, they pay you for it. And unsurprisingly, we've seen it as we've concentrated more on the airline in the places where we have outsized value, we produced outsized RASMs relative to the industry. So for us, it's words like capacity, discipline, like it means a lot depending -- it means different things depending on who you're talking to. For us, it's a super simple thing. Fly in places where we have like a credible chance to win, where winning means making money and delivering well for the customer and those places where we can't find a creative solution so that we can and we can produce real growth for the airline for our teams, those places.

So do you think it's realistic that as your -- as capacity grows, your percent of competitive capacity goes down because the capacity growth is coming in areas that there's less competitive capacity?

That's probably maybe taking me too far into a level of speculation. I'm not sure I can help you that much on. But I would say -- I would keep it as simple as this. We generate value and we make unique O&Ds. We can make unique O&Ds when we fly it, we can make unique O&Ds when we partner with JetBlue or IAG or other people to go and fly it. The true north is make as many of those O&Ds as possible because the more that we do, the more we create real consumer value. We've got to figure out how we go about monetizing it and delivering it well, but so be it. But the expense of going and making those O&Ds like the capital deployed comes into how much of it we do on our own. And what we find is that we produce the best returns when we go do it in a market like Charlotte, more so than trying to go and start a hub and some far-flung corner of the system where we don't really have a right to go and play.

And so as you think about back half of the year, what's your current thinking on capacity? And then we've been asking everybody just sort of initial thoughts on '23 capacity growth.

Yes. Look, we're in the early stages of planning for 2023. I'll start with that question first. So we don't have a great answer for you yet. But like Derek has mentioned a number of times, including on the last call, like for us, a major, major key at this point in time is just getting all of our assets working, getting to a level where we're utilizing the airline because that enables us to really go and scale the cost base of these big facilities that we've got, fleet and airport facility. As far as capacity growth for the rest of the year, that is one thing we're -- I mean we're still -- we guided to something which was down 6% to 8%, and that is still what we anticipate through the course of the year. And of course, when I say that, like, things may yet change. If Asia continues to come back in a sluggish way, we have ample levers to go and manage things.

You mentioned just earlier about testing requirements, any visibility inside at all into when eliminating testing requirement back to the U.S.?

No, your guess is probably as good as ours on that one.

Okay. And then with the goal of what you just said of basically like restoring the network, what would that -- if we were to get there by the end of next year, what would that sort of -- what would that imply for '23 capacity growth?

Look, that's a great question because -- not to be too cute about it, Scott, but the question is, what does it mean that when we go and restore the network, right? Because when -- if you were to have our network planning team in here and they said, restore the network, great, we can't upgauge Dallas–Fort Worth and Charlotte fast enough and soon enough. Well, when you do that and just the geometry of the airport, that changes where gates are, how they're constructed, things like that. So what I would say is restoring the network is truly getting all of our airplanes to a proper level of utilization, doing it on much bigger gauge equipment -- look through the pandemic, we've done a lot to simplify the fleet. And frankly, like the stuff that we're flying right now in published schedules, there's a material change to gauge versus what there was in 2019. So look, as we get into 2023 restoring means that this kind of network mix that you see in the airline where we are heavy around our domestic and short-haul footprint in the Western Hemisphere. That's a mix, which probably roughly stays, but one where we're getting a lot more utilization out of the airplane fleet that we've got.

Okay. And then on the cost side, CASMx, you guys have said 9% year over 3-year, second quarter. How are you thinking about the cadence of that into the back half of this year?

Yes, look, and that actually picks right up where I left the last question. It's really a function of how we go and ramp utilization then, right? And by that, I don't mean that we're not setting a true north, which is ramp utilization at all possible costs. We said the true north is drive P&L at all possible costs in a way that we can actually go and deliver the thing that we're selling to people. And so we'll see how that comes in through the back half of the year because so much of it will be a function of how demand transitions from the summer into the fall. And then -- and frankly, even more how markets go on and reopen, right? Right now, we don't have -- we're short, the better part of 13 787s, and we effectively don't -- we're not really flying transpacific network right now. So that alone is an open question, which though it sounds pretty small, let's call transpacific 5% to 7% of the airline's capacity in a 2019 steady state. 15 wide-body is a whole lot of metal. So that can -- how those things get delivered and how demand reopens can influence the shape of our capacity.

When do we think we get those 787s?

That, too, is a great question. But it is -- it sounds like -- we're talking a lot with the Boeing team, and they are legitimately working hard on this. And we're encouraged by what we're hearing from Boeing about when the airplanes deliver, but clearly, we don't yet have them and unsurprisingly, we're keen to get them.

I'll try for a bad question. So what happens if...

Well then you may get a bad answer, Scott.

If we get -- if JetBlue, Spirit, Frontier, how -- what's your -- how does this impact your thinking at all?

Look, we take -- in competition, we take all comers.

Okay. I'll try differently, how about Northeast Alliance. So how is that performing right now relative to your expectations? What's the dream -- the dream case for what this means for American in terms of the upside? And what's your degree of confidence in sort of keeping the NEA?

Yes. Look, I'll tell you, we're really encouraged by the trends that we're seeing. First, I've mentioned this in a few different things even with some of the investors in this room and on the quarterly calls. But for the first time in 20 years of staring at it, our -- like when we look at the consumer and so much of what we've done in the NEA is like, look, we spent years trying to build in New York that worked on the P&L, but it never worked for the customer, right? Because like American Airlines can't be a credible thing in New York. If -- we can take you to London, but we can't credibly fly you to Seattle or Toronto or Houston or Atlanta or any of these places, right? We need to be in New York. And so there's no good way to go about doing that. So we had to think about it differently. And our approach to it was like, look, how do we create a real consumer proposition in New York. And so a lot of what we've done until now is we have front-loaded a lot of capacity before the demand was there in order to go and work out things like how well we can go drive connection, how well we can sell the connection because it's way easier to do that when demand is small than when demand is big. But with that lens, look, we've grown back -- we've grown into New York faster than what our competitors have done. And we're seeing a consumer benefit. Like advantage enrollments, our loyalty program enrollments in New York and Boston pace the system. We're seeing more spend from those customers. Increasingly, what those customers are looking for is they want to be able to get their -- they want to be an advantaged customer but get their upgrade when they fly mint. So we're encouraged by what we're seeing. But best of all, with sort of every month that we've gone through this year, the rate of unit revenue improvement in New York has grown sequentially, and we're encouraged, like we're starting to see signs where it's growing sequentially and even sometimes at a greater rate than the rest of the system, which in our domestic system is no small shakes. And certainly in a long time of looking at it, I've never seen New York unit revenue performance outpace the system. So we're encouraged by that. And the last thing, which maybe doesn't always stand a reason with this, too, is what the NEA has enabled us to do is we've gotten a lot more focused on where American Airlines deploys its capacity. So we are deploying a lot more in the markets where we have a credible proposition for the consumer in the market. So you see us in markets like Austin to Kennedy. Well, in Austin, we're the largest carrier in Austin. We have a huge frequent flyer base. But we never really could get you into New York with any level of frequency. So it's enabling us to, my earlier point, to go focus on the things where we can go benefit. We're seeing that play out in unit revenue performance. We're seeing our consumers really like that. And we're starting to upgauge in more and more flights. We're taking the 50-seater. We took the 50-seater out in New York before we took the 50-seat out to Charlotte, which is a really meaningful thing and the kind of laws of gravity how airlines work.

And so how much of what you ultimately want to accomplish with the NEA in terms of the network, the schedules, how much of that are we seeing right now? Or -- and how much is still to come?

We -- you see an element of it, but I would say there's still a lot yet to come in 2 ways, right? One is that though we are really encouraged how demand is returning into the Northeast. We're also struck by the nature of demand, like even that thing which is really true business demand has changed a lot. It used to be that -- let's call it, low single-digit percentages of our traffic would fly on day trips in short-haul markets, right? That number has diminished greatly -- like people instead of going between New York and Chicago on a day trip are much more willing to take a Zoom call. That said, there's a lot of people who are going to mid-continental markets like Austin or Oklahoma City or things like that. So the nature of demand is changing and what that -- even though the total is there. And so that may impact how we go in flexed sched capacity around the system. And then the other thing, too, which we haven't yet seen and may -- and could yet impact plans is we haven't had enough demand come into the international system. But as we look out into the summer, we are really positively encouraged as we're bringing on flights like Doha, Delhi, things like that, with how those flights are selling. I mean prior to the NEA, the idea that we could have made a flight like -- even launch a flight like Kennedy-Doha, Kennedy-Delhi was pretty unthinkable.

Why couldn't you do that? What does the NEA allow you to do that for?

Well, what we've seen is it's 2 things, right? One, now we can create a real connecting proposition in JFK, right? And we've spent a lot of time. Indeed, the -- we have a bus that goes between JetBlue's terminal and ours. And if you haven't taken, I encourage you to do so, I've done it a few times. It is indeed the fastest like connection -- terminal-to-terminal connection that's there. And for those unfamiliar with New York, effectively every long-haul connection is a terminal-to-terminal connection. So having that connecting power is a thing that we've never had in New York City. And then the other thing which has been unique for us is just the power of jetblue.com. That is JetBlue's primary sales source. And in so much that that's the case there. They haven't like -- we probably underestimated the degree to which -- there's a consumer out there that will simply go to that site. And a big chunk, I mean, let's call it, 3% to 4% of the onboard to our Tel Aviv flight are people who are just going to jetblue.com. Those are people who never -- like we've never seen any of those humans on American Airlines before. And that's a really meaningful thing because in the long-haul airline game, something as small as that is the difference between a route success or not.

So is the connecting power of the NEA a bigger deal for international than domestic?

It remains to be seen. Look, we theorize that it will be, just because for so much of domestic we can drive connection over Chicago, Philly, DFW or Charlotte. And for so much of international, especially out of New York, it doesn't exist anywhere else in our system, I don't think Delhi or Doha. So we do think that it's -- the marginal contribution of connectivity will be bigger for international and for domestic.

I don't want to ask it, that would imply because that hasn't recovered yet fully, then there's more upside of the NEA to come.

That's exactly right. That's exactly right.

We had a labor panel earlier and everyone that we need to get a deal done soon. We needed to get a deal there before the end of the year. Are we confident we can get there.

Well, it's funny. You just got Dennis Tajer's attention. Dennis Tajer is with the Allied Pilots Association, the folks that represent our team at American, is here, and you got his attention the moment you asked that. So look, we -- similarly, we are encouraged by that. We very much want to work to see if we can.

Okay. And then maybe I'll just wrap up just a balance sheet question. So time line, you want, I think, $15 billion of debt reduction, what's the time line to get there? And how we -- $15 billion of liquidity, when do we sort of get that to a more normalized level and...

Yes. Look, no change to what we've said to date on any of that. But again, in this business, the most important thing is there's a lot of things that you can guess at, important thing is what you can control. And that's like put the flights in a place where you can go make the most money and deliver it reliably and then the better and faster you do it, the better and faster you go and pay down your debt. And at the risk of oversimplifying it, in some ways, it sort of is that simple.

What else do you want to highlight for us just to make sure that we understand?

Well, look, I think you're very thorough in your questions, Scott. I'm happy to take any others that the people here or whatever, by a phone, might have. But look, I would just say this that with every crisis that hits the airline industry, there's a lot of uncertainty coming out of it, but it's also a lot of opportunity to go and think about the business differently, and in a way that can really drive value for our consumers and our owners. And that's definitely -- this is an opportunity which we don't intend to waste and that's why we're so focused, like I said, on being profitable as soon as possible. And delivering our schedule well. So thanks to everybody, and I'm happy to take questions.

One quick one. Two years ago, you did an interview with Holly Hegeman talking about zigging when the industry was zagging. It's been a long 2 years since then, but love to ask if there's any thoughts on what you've successfully done over these 2 years in zigging or what you can still do relative to what you're seeing from maybe some of your peers?

Yes. Well, look, let me not go too far into it because in this line of business, where everyone is so competitively obsessed, if you start describing how much you're zigging everybody starts zigging the same dang way. But I'll say this, that for us, probably the -- one of the more meaningful things that we did -- early, we built back capacity, and there was a lot of speculation around it. I think for many of us, maybe all of us at America and what we'd say is doing that -- there was a benefit from being able to go and just simply get the airline back to utilization. There is another benefit that we're seeing right now, which is that we -- I think in the airline business, it's easy to underestimate the growing back pains. But when you look at what some of us are doing as airlines, like in month-to-month schedules, the rate of growth for some of these big networks is greater than the entirety of a whole carrier based in Japan or the entirety of Japan capacity, right? It's a material amount of capacity that's coming back under some uniquely different like human resource issues, it's hard to simply hire. By doing it early, one of the very simple things we realized is we have to get really good at building back. And having certainty in how we're planning the airline is a meaningful thing and that's going to last a long time for us. And that line of thinking, though, it doesn't sound particularly -- it doesn't sound all that revolutionary. Sometimes the biggest lessons are the ones that are the simplest ones like when we go and put a lot of capacity into places like DFW and Charlotte, it isn't just that it goes and drives more P&L. We can -- now we can run DFW on an out-and-back schedule pattern. Like our ops team has now built a schedule where -- between our ops group and network planning, we have our crews match where the aircraft are going. And that also sounds small. But again, it's that we could be in a world in the old days of DFW, where an airplane is off and then the crew on it gets off and they could -- it could have a multiplicative effect through the system. So again, sometimes when you realize -- by doing those things early, it's enabled us to figure out how we run this airline well because there's certain things that apply to us, which don't apply to -- the expanse of DFW is a thing that nobody else has. And so getting good at that and being able to get good at that in the early days was important. The same is true for our partnerships. Being able to front load a lot of capacity growth into the New York City market has enabled us to realize like there are some markets that work better or worse than others. And like American Airlines going and flying heavily from the Midwest and New York and building an airline around that. Like that's a thing that we can go do and go and produce unit revenues that are a lot more like the way that airplane would go if it was flying from Chicago to Dallas.

Awesome. We're going to wrap there. Thank you so much. This is great. Appreciate it.

Absolutely. Thank you, guys. Thanks, Scott. I appreciate it.

Thank you very much.

Absolutely.