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

All right, folks. The third and last of the Global Premium Airlines presenting here this morning. Thanks for everybody, reconvening and helping us keep it on schedule. It looks like you have a presentation with you. No 8-K filed, so that's a relief because it's been a day of sort of mixed guide so far, but very curious to hear the update from the American Airlines. So let me turn it over to Rob Isom. Thanks so much. Thanks for coming.

Jamie, thank you. Good to see you. Thanks, everybody, for making time for me this morning. You're right, Jamie, there was no filing. So let's see, forward-looking statements. Everybody is aware of that, quick read-through. Okay, so what I'd like to start with is just where American has been over the last year? And it really has been tough coming out of the pandemic certainly. But for American coming out has really been all about focus. And that has been really [indiscernible] airline that is reliable and then ultimately get back to profitability. And there's an imperative that we had to do both coming out of the pandemic. It fits with our long-term goals. And where we stand today, I'm going to talk to you about why I have confidence in what we're doing, the progress that we made and the outlook for the future as well. So as we take a look at 2023, it's all about reliability, profitability and then holding ourselves accountable to delivering on our goals. And in 2023, look, we intend to build the best network and have the best travel rewards program for our customers. Operating excellence, it means that we are going to plan the airline right, operate to the resources that we have to execute really well. And then inevitably, like we're having in New York today, there are going to be disruptions, and we've got to recover well from them. We have the opportunity to modernize our technology. So we brought on a new CIO that is going to help us in that regard. And it fits with customer experience. People want to be able to be in control of their travel itineraries. And then ultimately, in producing profits, we have to drive financial performance, and that means efficiency, improving margins and ultimately, deleveraging the American. So just first off, in terms of operational performance. I'm just really looking at American Airlines. But on the kind of things, the output metrics that we look at for our customers' completion factor, controllable completion factor, on-time performance, departing exactly on time and arriving on time. We've seen steady progress over the last year, and that's good news. We had to improve quite a bit. But on those things that we really put our mind to, it's translated into better performance. And then I'll tell you that there's no better correlation than between on-time performance or completion factor and things like recommend Net Promoter Scores. So we're really pleased with this. And as we take a look on a quarterly basis of outperformance, the thing that I'm most proud of is that when you really need to be on time, and you really need to complete flights, we've been exceptional and that's especially over the year-end holidays and really all holidays. We've really picked up the pace. We certainly had our bumps and bruises throughout the pandemic that we've learned from them. And as we take a look into the coming year, we've seen really solid performance in both January and February outside of the inevitable weather events, but we recovered quickly, and we're back on pace. So we're positioned well, not just for the coming year, but even immediate. Those of you that have spring break travel plans, fly American, we're going to get you there. So that work and the results are really all due to a tremendous amount of plan that has gone back over the course of a couple of years. And it's -- first off, making sure that you have the resources to run the airline that you want to from a planning perspective. Executing, make sure they have the tools that when inevitably something comes up or there's disruption that you can keep yourself on time as much as possible. And then when the big events happen, getting back on schedule, we've invested in technology, we brought on really -- we've hired more people than we ever have before in our history. And we've concentrated our assets in places like DFW and in Charlotte, which so happen to be the places that we make the most money. And we've gotten those to run better as well. So next, I'll translate -- I'll go from the reliability part of the presentation to profitability. A year ago, my predecessor, Doug Parker, was here. Jamie, with you. And he based his presentation on coming out of the pandemic and saying, hey, look, there is a historical relationship between GDP and industry that flows -- in revenue that flows into the industry that had been something that had been out of whack during the pandemic off by a considerable amount. And something that, for the most part, we saw as hopeful in 2022, but what I see right now as we exit 2022 and as we go into 2023, that relationship between industry revenues and GDP, it's returned to the norms that we had seen in the past. And that bodes well certainly in the short run. I know others in the industry have said the same thing. If you go back to 2019, the economy has grown on a nominal basis, maybe a little bit less than 25% over the last -- since 2019. Airline industry capacity has grown less than 5%. So we're still in a period where there's catch-up, and still in a period where I think that there's an opportunity to take advantage of the mismatch between supply and demand. And so we're in -- we continue to be in a decent pricing, in yield management environment right now. So as we take a look at what that demand translates into, it's been profitability. So for American, again, at the time that Doug was here last year, we were about to talk about first quarter results that produced a loss of $1.9 billion, a huge sum of money, big hole to climb out of. But fortunately, revenue production and managing the airline well, it produced results over the course of the year where we were able to not just rebound but actually able to produce a pretax profit for the year. So a really nice result. Small pretax profit, but still something that we're really proud of, $2.4 billion in pretax profits over the last 3 quarters that resulted in that full year profitability. So that leads me to this, which is everything that we've done to make the airline reliable translating into profitability, taking advantage of the economy and revenue flowing into the industry, we've done the right thing so far. And as I take a look into 2023, what we've seen in the first quarter so far, it just leads us to that there's continued strength in the first quarter. And as we take a look out into the rest of the year, we're reaffirming our guide on both the first quarter and for the year as a whole. So it's good news, it's which we had expected. But as well, I think it speaks to the demand environment that we continue to be in. So that profitability, though, it wasn't just through focus and returning to reliability in the last year. It was a lot of work that took place over the course of a number of years. So remember, prior to the pandemic, American had just about every flavor of aircraft that you could imagine. We greatly rationalized that down to having 2 types of narrowbodies, 2 types of widebodies. And that has created a lot of simplicity in the operation. So whether it's from a scheduling perspective, whether it's from an operational recovery perspective, having the right mechanics, the pilots trained for the right equipment. All of that becomes much, much more efficient as you get some commonality in terms of the fleet you're operating. At the same time, we've done a considerable amount of up-gauging as well, especially on our regional fleet. All of that has put us into a position where we are much more efficient than we had been in the past. Now we still have some recovery to do here. And that's what I think gives me a lot of confidence in terms of our unit cost production going forward. And that is that we still at American have a lot of underutilized assets. At American right now, we probably have 30 to 50 aircraft worth of mainline aircraft that are underutilized and probably still 150-plus of regional aircraft that are essentially on the ground. That's capacity that we have the resources, the gates and in some cases, even the people on board to be able to put back up in the air. But over time, I think that, that is going to be something that continues to drive efficiency for American. At the same time, over the last -- from the merger, all the way to the pandemic, American invested almost $30 billion of money into new aircraft. So we find ourselves in a position where we have the youngest fleet in the industry. And really, even for our oldest aircraft, those are aircraft that are probably going to stay in the fleet for some time, so we're really well positioned from a capital expenditure's perspective. We've done our fleet renewal. We're taking advantage of some of the efficiencies that we get from that lower fuel burn and whatnot. But we're in a position where I think that there's a lot of efficiency comes from the work that we've done, plus the fact that we've made these investments and we're in good shape as we take a look from a capital expenditure perspective. And that translates into these figures that I'm showing now, which says, "Hey, look, in 2023, we're estimating $2.3 billion of capital expenditures only about $1.7 billion of aircraft CapEx." Now that's not what we anticipate for the long run because of aircraft delivery delays that number is suppressed a little bit, but as you take a look out into 2024, and we get back to $3.5 billion of capital expenditures to about $2.7 billion of aircraft CapEx and getting into that $3 billion to $4 billion range of capital expenditures as we look out into the future, we're in a period of fairly stable capital expenditure spending and having a fleet that is in relatively good strength is relatively strong as well. So you put all that together, okay, you've got profitability -- reliability that drives profitability. That profitability and lower capital expenditures as we go forward, it puts us in a position where we're finally earning a lot of free cash flow for the first time, certainly since the merger. And this is a position that we have to get to because ultimately, one of the big concerns is that American is carrying too much debt. This free cash flow puts us in a position where we're going to make good on our commitment to reduce overall leverage. And so that leveraging reduction cycle continues. We made a commitment in 2021 to reduce total debt by approximately $15 billion by the end of 2025. We find ourselves looking at by the end of 2023 to be $10 billion to $11 billion down that path. Again, we -- in the third quarter 2021, we paid down the spare parts loan; second quarter 2022, the 2019 unsecured; and most recently, the LaGuardia and DCA term loan in the fourth quarter of 2022. So you're going to see us focused on making sure that leverage comes in -- is a top priority. And when we do have free cash flow, which we anticipate on a go-forward basis, this is where we're going to be spending our money. So that then leads us into a position where, on some important metrics like debt -- net debt to adjusted EBITDAR over time, we're going to find ourselves in a position where we have some of the best metrics that we've had even lower than we found ourselves at the time of the merger way back in 2017. Now we don't -- we haven't talked about specific targets out there, but getting to credit ratings of BB flat and I think that that's going to be able to put us in a position where we're going to be able to borrow at the rates that we want and still have the flexibility that, that would -- that, that type of rating would afford us. So we're in a good spot, I believe, on a go-forward basis. And this is all keyed off of really just producing free cash flow that is at the midpoint of our 2023 full year guide. So again, feel good about how that all shapes up. And so I sum all this up with -- we've got tremendous confidence. We're reaffirming our guide. We're running a reliable airline. We can always get better. We're going to continue to invest, invest in the right way. And fortunately, we have a great asset base to begin with. We're at a point where we're producing free cash flow. We're going to use that to pay down debt. And ultimately, put ourselves in a position where we've got a really exciting 2023 and 2024 and beyond. And I'd tell you that while that's a really promising picture; on top of that, we're finally at the point where we've merged the airline, gotten out of the pandemic and we can really take a look at optimizing performance of the airline. And on that front, I'm really excited about what that portends as well. So Jamie, with that, I will open it up to questions.

Well, first off, I'll start with an apology. I was watching the clock when I ran up before and I failed to introduce the industry's most newly minted CFO, Devon May, and Meghan Montana, Treasurer of American Airlines, who are up on stage for those that are listening. So in 2019, had somebody asked me to envision a scenario where ultra low-cost carriers would lose money at the summer peak, but American would be profitable. I would have considered that at the time to be a pretty provocative question. In fact, I'm not sure I would have even come up with a good answer because it -- yes, it would have sort of flown in the face of sort of generally accepted airline principles gap at that time, okay? But it's what happened. Does that speak more to discount airlines or more to American? And is it sustainable? What's your answer? And what do you think Vasu would say?

What do you think Vasu would say? Okay, that I'm not going to take on. Okay. Well Jamie, you teed it up as the American Airlines versus low-cost carriers. But I go back and I talk to you as well. Look, what's happening right now is I think what we've been working for, for a long time. It was hard to show it. And so look, I do think that there's -- it's worth taking a look at where American has come from, from an analysts' perspective into where we're going. Look, I know that even from kind of an EPS guide perspective, analysts today still greatly discount what we're going to do in 2023. And so what we did leading -- going through the merger, the massive fleet investment. There's a couple of things that I think were probably overlooked and Devon can chime in here as well. First is, we took on this fleet commonality project, harmonization projects, where we made sure that our 73s were all size the same, our 321s were all size the same. And that actually added quite a bit of capacity with not that much cost. We did the same thing on the regional side as well. We greatly reduced our 50 seaters. But then also in 2019, don't forget, okay, we were still operating under different labor contracts for some really important groups within American Airlines. So we couldn't put all the pieces together. So now here we go through the pandemic. We rationalize the fleet even further, which I think just bodes really well. We certainly take a look at our network and our partnership relationships. And we have drastically change where we fly, how we do it to make sure that we're flying where we make the most money. As we come out of this with an operating -- and we weren't operating that well from an on-time performance perspective or a completion factor perspective, you put all that together into what we're encountering right now in 2023 and it's not that surprising to me, okay? This is what we've been working for. Devon, do you want to add anything?

Okay. All right. Now the only thing I'd add, there was a lot of work done during the pandemic to have this result in 2022. And as Robert talked about, a lot of it was on the fleet, and some of that was just accelerating initiatives that we knew we would eventually get to. Like this was the expected fleet we would get to. We just used the pandemic to get there a couple of years earlier than what we did otherwise. And then we talked about it a lot. We did become more efficient during the pandemic. We talked around $1.2 billion of cost efficiencies. I think most of those efficiencies are stuck and we're seeing that in the P&L as well. So without commenting on what's happening with kind of other areas of the airline business, we do feel pretty good with all the work that was done in America.

Devon, you are the new sheriff in town overseeing the industry's most controversial balance sheet. We haven't had a chance yet on conference calls. It's not quite as intimate as this room of a couple of hundred people to sort of talk about what's going to change. What's different? Derek obviously had a great track record, right, kept the airline out of bankruptcy. I remind people about that a lot of times because they don't understand the old history with the U.S. Airways and so forth. But Obviously, there was a level of risk tolerance that a lot of people in this room simply weren't comfortable with on the equity side or on the credit side in terms of where the balance sheet was taken. That I know is in the repair process is underway, but how are things going to change under your stewardship relative to the prior regime?

Yes. Sure. Well, I'll start on the balance sheet side, and I think we've made it pretty clear in this presentation and with a lot of the commentary we've made, what our expectation is for the balance sheet in the coming years. So coming into the job, I feel fortunate of the timing to enter into it in 2023 despite economic uncertainty. It's a lot better coming into this job in '23 than it would have been in 2021 or 2020 or I guess even 2022. But as for the balance sheet, we talked about it, summer 2021, we said, "Hey, this is where our debt level is at today. As we focus on the balance sheet, we want to have $15 billion less debt by 2025, and with that, we think we can get the credit rating of BB flat." And that's going to be our focus for the next several years. And as we get to that point, I think we're all going to feel really comfortable with where American's balance sheet is at. And listen, we're, whatever, 2.5 years into this deleveraging process, and we're already seeing credit metrics that were better than what we had in 2019. But you can't fix the balance sheet overnight. This is going to be something that takes a couple of years. I feel we have a fantastic treasurer in Meghan, and she's focused on making sure we're making the right moves and refinancing when we should and paying down debt as scheduled and finding some early opportunities paid down debt as well. So I'd like to track we're on. I spent a lot of time with Derek and Robert and Doug before that as to where we're going to go with it. Speaking a little bit broader, I just think in terms of my view on the company, it's shaped by my 20-year history here. I've been, I guess, 10 years or 12 years on the finance side, another 7 or 8 on the commercial side, 4 or 5 on the operations side, if that all adds up. So I know the business well. I know this finance team really well. But all that being said, American does have a lot of new leaders in a lot of different areas of the company. So as I come into the job, we are taking a fresh look at everything we do and really this is impacting earnings more than balance sheet. But the goal is to make sure we are best-in-class in terms of process. We're finding technology solutions were available to become more efficient. And so we have been working with some outside advisers on that, that Robert and I have engaged. And I think there's a real opportunity to improve our efficiency and ultimately improve earnings in the coming years as well.

Look, we're the beneficiaries of a tremendous amount of investment that was made. So as I take a look going forward as well, there are certain things that have happened that I've been in the business quite a long time. You think back to 9/11 and you think to the financial crisis in 2008, 2009, okay, well, we just put us through something that I couldn't have ever drawn out or imagined in terms of the pandemic. And so we learn from that. And as we take a look forward, we're going to be mindful of [indiscernible] we can survive through any type of storm. And credit to Doug and to Derek that made sure that we had the liquidity and then helped arrange for the liquidity to make it through it. And we're going to have a strong bias to making sure that we have a balance sheet that's appropriate and then also have the resource to make it through whatever comes our way.

And Robert, just another one for me for you. There was an interesting contrast this morning where Delta talked about how their domestic margins are stronger than their international margins and that they're looking forward to the upside in International. United talked about how their international margins are already stronger than their domestic margins. So where does American fit into this debate about domestic versus international margins? Where is there more upside for you? How are the regions performing? Maybe just help us get our arms around that because your network peers are clearly in different spots.

Okay. Well, I'd tell you this, I think that there's upside on both internationally and domestic. And for American, right, international is hinged off of what we do out of our domestic hubs. So they're absolutely complementary. And international for us, it doesn't exist without a really robust, strong domestic. So from what I see, the kind of changes that we've made to our network to make sure that we're flying in our Sun Belt hubs, fortunately, we benefit from where population and commerce is happening. And that bodes well from an international perspective. And I'd tell you that we're probably less exposed to secondary cities, just that's the way our network -- international secondary cities, that's just the way our network is set up. We're more oriented to big business markets. We have the biggest footprint with our partner, BA, in London Heathrow, which is a good place to be right now. So that's very fortunate. We've got a strong Latin network that I think over time comes back, short-haul international, especially leisure is something that we're incredibly strong at and is doing very well. And then from an Asia perspective, we just don't have a lot of exposure. But right now, I'd tell you that that's probably a place that we don't need a lot of exposure. So I look to a lot of strength domestically, especially as we get to the high season here that's only going to make international stronger for us. And right now, we're really weighted toward the London Heathrow and our partners. We've got the best part -- I think we've got the best partner network in the world. And whether it's the international relationships we've set up, or throughout the pandemic, the West Coast International Alliance with Alaska and what we've done with the Northeast alliance with JetBlue, that makes us a stronger international carrier.

I did try the new lounges at JFK.

Did you?

I enjoyed them.

All right. What you told me if you didn't?

He didn't get it in the best lounge.

Well, Jamie that's reserved for you. Good. Yes.

That is true. I got into do the second one. Okay. Questions are in the room. Happy to ask another one.

Jamie, we've got one over here, too.

We do. Great.

So you guys have a pretty big debt wall in 2025 right? And that includes a bond with a very significant interest rate. Can you give us a sense of how you're going to approach that debt wall? I mean is the goal going to need to try to build cash towards tackling that high interest debt outstanding? Or do you anticipate like that debt being kind of a permanent part of the capital structure just refinance going forward? Just because I think in the past, like that, the underlying collateral had not been part of the capital structure, but it sounds as though those routes, slots and [ grids ] are going to be like a permanent part of the capital structure going forward.

Meghan?

Yes, I'm happy to take that. I think you hit on the right theme, which is what do we view as permanent versus non-permanent parts of the capital structure. And so our 2025 tower is larger than most of our other towers as a function of we took on a lot of debt during the pandemic to shore up our liquidity position I think we've been very proactive in demonstrating our focus on that tower earlier this year. We extended what I described a permanent part of the capital structure, our LatAm franchise. It was a $1.8 billion term loan that we termed out in the form of a bond and a term loan to 2028. So I think you'll continue to see us be very nimble about how we manage that tower. That reduced the size by about 20%. And as we look forward, one of the premises of our deleveraging program will not only be freeing up high-quality collateral and paying down debt, but it will also be smoothing our towers. And so when I look at 2023, we feel really good. We just have amortization this year similarly for next year as well. So all eyes are on opportunistic ways to manage 2025, and we'll be doing that very same analysis of what do we want to be part of the long-term capital structure and what are instruments that were very helpful during COVID, but probably better served as free borrowing capacity or unencumbered assets, as we pay those things down. How we get there is the combination of the cash flow generation that Robert spoke to and excess liquidity. Right now, we have a target out there from a liquidity perspective of $10 billion to $12 billion over time that will recalibrate in line with balance sheet progress. So we feel really confident on our ability to do that. You saw in the chart that Robert showed we're ahead of schedule, which is a great place to be. So we'll just continue to focus on reliability, profitability and the cash flow generation that we'll spill out.

Thanks, Meghan.

Delta and United have partnership and ownership in CLEAR, which has been a pretty program. I guess, how are you guys thinking about kind of identity management technology and as a differentiation for customers?

Well, that's an interesting question. Look, we work really closely with the TSA. Ultimately, all these programs are based on what the TSA says what we need for security for the country. So we're working on recognition technology with the TSA. I think that over time that, that is something that can actually be applied to a much broader audience and that's really where we need to go as opposed to charging extra for security, right, there absolutely is a way to take that same technology, deploy it through the TSA and do it in a different manner that's more secure. And we spend our -- the vast majority of our time there. Now down the road, with recognition technologies, there's application in so many other -- so many places. The concern is all about privacy and control of that information. And so we're making sure that we take a balanced approach and also, ultimately, what our customers want and will accept and what's appropriate for security and privacy.

[indiscernible] sort of recovery coming out of COVID. And it's a very interesting story. What signs -- just taking the other side though, what signs would you see or that could come up that would make you concerned over the second half of the year? One of your competitors had talked last night/this morning about this sort of shift in terms of where peak periods sort of are, but given that we've had the past 10 days has been pretty dramatic in terms of some banking and so forth, does the consumer retrench? I think we're all trying to figure that out. But is there something you would look to or a sign in a period of time over the next few months or you say, "Oh, I need to pay attention to that." I'd love to just get your thoughts generically on that.

We always -- we're always at making sure that we're doing right by the marketplace and the overall economy. But I'd take a step back and again, go back to some numbers that I shared which is just simply this that there's a tremendous demand for air travel. I don't think it's pent up. I think this is just us returning to the way customers want to use our product and the desires that they have. So as I said, the economy has grown by almost 25% on a nominal basis. Airlines are still less than 5% from where we were in 2019. And I think that, that suggests that there's still a lot of room to go before we get supply and demand imbalance and there could be a number of things that come up. But we've seen -- we've been through, from an airline perspective, the largest recession that we could have ever imagined. And we've seen other things happen throughout the world as well in the interim, even issues with banking most recently. But from a demand perspective, I can tell you that what I see coming to the summer, it looks really positive. Travel is coming back differently, okay? The day of the road warriors, I see some friends out here that used to take the Chicago to New York flight and go there back same day, that kind of traffic used to be almost 3% of American Airlines revenues. And now it's less than 1%. It used to be that you could forecast the peak of the peak days leading up to Thanksgiving and the New Year's holidays. But now those peaks are spread out. That's a good thing. It means that our assets are being utilized more. You used to be able to say that Mondays and Sunday nights are big travel days and Thursdays and Fridays returning back were huge travel days. People are spreading those weekly peaks out. There's a mix between business and leisure traffic. We know that there's some aspect of the strength that we see in leisure that's really -- has some tinge of business to it. So you've got all these dynamics going on. I think the hard thing for us to do is really to keep up with the changing travel patterns, making sure our revenue management systems are fine-tuned and as up to date as possible. And then all the while making sure that we're -- have an eye out for whatever may come our way. And on that point, I'll just say that American is in a terrific position from a liquidity perspective and also from an asset perspective, we're able to react to what may ever come our way, and we can modulate our growth and do that in a very efficient fashion if that were to come to be necessary.

Robert, I'll ask the last question. Well, it depends on how long your answer is. I can't lead the witness like that. Help us understand some of the changes that are taking place in sales. And I'm not referring to staffing gyrations. But it feels as if you are taking a different approach towards sales towards corporate, and it's not something that I fully understand.

Okay. Well -- and Jamie, you might be referring that we've made some organizational changes, and we've realigned our sales team, but what I would say is we've realigned it, and we've changed it and to some extent, made some reductions. We've also reinvested in other places as well. So where I take a step back and it's really that last question that was asked, which is, "Hey, well, demand is shifting, are you ready for it?" And on that front, look, we're going to be a more nimble company. So right now, we see so much more direct sale growth over the last year. And sure, some of that's pandemic-related. But also, it's due to how people are flying, and they want to interact with you, right? You can get a better experience today versus the past, you can get a better experience dealing directly with American because you can control more of your itinerary, more of your experience by booking direct. Our intent is to make sure that all those that distribute American's product, right, offer that same type of product level and also sense of control. The more we do that, the more that our partners become more effective, ultimately, the higher levels of revenue that we can achieve. So the moves that we've made are as much about reacting to the post-pandemic world as anything. For us, corporate travel is incredibly important. American depends on leisure all the way to corporate, the highest end of luxury, all the way down to those that really need the bargain of the day. An airline American size, we need it all. And so for us, we're dedicating our resources to those places that we can create the tightest relationship. So that's the story behind it, Jamie. Yes.

I'll sneak in one more just because you didn't run out the clock. We haven't really had a discussion this morning yet with any of your peers on loyalty. And given the industry shift, towards more leisure, more bleisure, whatever we want to call it, still corporate not fully recovered. What are the implications for loyalty? Because it's such an important financing tool, it's such an important part of the value of American. And for the industry, when we think about this shift towards more leisure, is there a higher propensity, lower propensity to sign up for a credit card to redeem points? And so how should we be thinking about going forward and how we think about the loyalty business?

So, Mark, I'd say it's also tied to Jamie's question. right? The closer to that relationship that you can have, the more that you can engage that customer, the more benefits that you can offer, and it's also getting the customer what they value and they may be willing to pay more for. So for us, I look at this -- if Vasu was here, he would talk to you about this being one of the great opportunities, right? The shift last year that we made in terms of earning points within our program that you can basically spend your way there through purchasing out American or through our cobrand and the other ways that we offer to earn mileage. It's great to talk to people now and they say, "Hey, I wish I could get from gold to a higher level." Well, it's easy. Go get a Citi advantage or platinum card, right? You can do that. And you know what, customers are recognizing that, and I think are embracing it, we've never seen enrollments higher okay? And we also see, from our cobrand cards, we've never seen spend on the cards as high as we've seen today. Key to all this, though, okay, is the most -- for us, is the most important aspect of what we do. First off, running a reliable airline, sustainable that people want to be a part of, but then it also has to be an airline that gets you where you want to go, okay? So throughout the pandemic, and I'll tie all this back. Throughout the pandemic, American has done a great job of making sure that we offer more O&Ds, certainly organically and then also with our partners than any other carrier or combination of carriers. And that is the real tie, then offering a great product, a reliable product, having a personalized relationship, that translates into the ability to actually earn a premium. So I appreciate the question, but it's something we're really excited about. And I think, again, it's one of the things that you're going to hear a lot more from us. When I do pull all this together, it's -- we've got a great story. Again, reaffirming guide today. As we look forward, we've got a solid 2023. But then beyond that, with Devon's help and some of the other new executives that we have on our team, we're looking to reengineer the company from a technology perspective, from an operations perspective, from a commercial and really a business model perspective. And that, I think, bodes well for the employees of American, certainly, all of our customers and ultimately, our shareholders.

I'm going to sneak in my last, last question. What's the plan B if you lose the NEA case or JetBlue trades away the NEA as part of its negotiating effort down the road? What's Plan B for American?

Jamie, we're really confident in the NEA. The NEA is producing value that I can't envision it being ruled against. So look, I spent quite a bit of time with our JetBlue partners. I know that they're committed to it. This is foundational to I think the way they look at the world. And everything that we have done has produced consumer benefit and all the concerns have never -- have not come -- we've been operating this now for a couple of years. So I'm not looking at a plan B.

See, this is why I like this better than earnings call because he can't cut you off. I can cut you off.

I know you can.

Thank you.

Thanks, Jamie.