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

Good afternoon, everyone. Thank you so much for staying with us today, final panel of the day, always an exciting time. I'm Catie O'Brien. I'm the lead equity analyst covering the U.S. airlines and the aircraft leasing companies. Today, I have the great pleasure of speaking with Devon May, Chief Financial Officer of American Airlines. Thanks so much for being with us, Devon.

Well, thank you for having me.

Of course. And I think you wanted to start with just a couple of minutes of prepared remarks, then we'll jump in.

Sure. That's great. I'd just start by saying we are really excited about 2026. We're ready to turn the calendar and head into our centennial year. We think the company is incredibly well set up. And just starting from a finance perspective, there's been a lot of great progress on the balance sheet. This has been a multiyear effort since we came out of COVID, but we had debt levels of $54 billion when it peaked out in COVID. We've reduced that. We hit our first target, which was to reduce it by $15 billion by the end of 2025. We achieved that in 2024. We've set another target now to get total debt below $35 billion by the end of 2027, and we're making really nice progress there. We continue to be a leader in terms of cost efficiency. It's an effort that we call reengineering the business, but we have a group set up that's effectively a transformation office to make sure we are investing in the right areas that are going to drive efficiency across our business. We've been industry leaders for several years now. We'll continue down that path as we go forward. When I think of our team members, we have the greatest team members in the business. I'm thankful for all the work they continue to do for our customers every single day. We're in a really great spot where we have contracts in place with all of our largest work groups. So in great shape there with a fantastic team. And maybe most importantly, with where we're at right now is just I look at our commercial team, which has worked so hard over the past several years. I think they've set us up incredibly well for 2026 and beyond. But just starting with sales and distribution, we had a lot of work this year to recover from the prior strategy. We're coming out of this year effectively having regained our fair share. But across the board on commercial, I think we're executing better. We have fantastic leaders. We're excited about the Citi agreement, which launches soon. We're excited about the customer initiatives that we keep rolling out each month. So a lot of reasons for us to be excited about 2026. I think there's a lot of upside for American as a premium global airline, and we're ready to turn the page to get there.

All right. That's an exciting intro and not to be a Debbie Downer and take us back to some dark times, but this year got off to a rough start, a lot of uncertainty around the economy and trade and 2025 results are going to look really different at American and at the rest of the industry than what we thought in January. Against that backdrop, is there anything underlying the bottom line results that you would highlight that actually went better than planned?

Listen, there's a lot that you didn't feel great about in 2025 at that macro perspective. But there's a lot we feel really good about. When I talked earlier about just our cost performance, we hit our cost guide, or we will hit our cost guide for 2025 that we started the year with. We continue to be a leader in that area. These commercial initiatives, we started the year saying we're going to go back and recover our share. We did that. And you start to see it in the results as well that while nobody is happy with unit revenues not being where they expect to be not being positive for the full year, if you look at our year-over-year unit revenue performance, year-to-date, we have outperformed the other premium global airlines. So we're proud of that progress. We continue to hit our capacity targets. It's exciting to take delivery of almost all of the airplanes we expect to take delivery of this year. So a lot of good things happening in 2025 that are going to set us up really well for '26 and beyond.

And maybe just on '26, this year didn't go as planned, but are those issues in the rearview mirror? Are we entering '26 in the place you thought we would be? Like is there any bleed over from 2025 issues in 2026?

I don't think there's much that's going to bleed over. And we talk really short term here. I don't think there's anything from the government shutdown that's going to bleed over into 2026. We're just excited to get to the year. Like we sat here a year ago, and we were talking about all of these things that were going to be setting the company up well for 2026 and beyond. And you go through this year, and you start to just check them off the list. Like we started the year being really excited about taking delivery of our new 787-9P, our high premium configured 789s. And here we are at the end of the year, we will have taken 11 of them by the time the year ends. We're excited to take delivery of the A321XLR, which is going to be an incredible airplane for us in transcon markets as well as into Europe. We've taken delivery of that airplane. By the end of next year, we're going to have 15 or 16 XLRs in the fleet. We started the year talking about recovery of sales and distribution. That's in the rearview mirror at this point. And one of the biggest things, at this point last year, we were talking about this new agreement with Citi. We spent the last year planning for it. Now we finally go and get to execute. So we're excited about all of those opportunities next year.

That's great. And maybe you brought up the government shutdown. We've had a mix of updates and non-updaters. You're in the non-update crew. Any thought -- can you just talk about what you saw in terms of booking impact around the shutdown and the FAA flight reduction order? And then where are we today? I know it's only been a couple of weeks, but like would love to just hear about the arc of the recovery.

Sure. At the time of our call, we had our call on October 23. And at the time of that call, we were talking about the impact of government travel being something less than $1 million a day during the shutdown. That's what we experienced really through the month of October. But when you started to see a customer impact, so these 3-hour TSA lines that you heard about, there were some stories about shortage air traffic controllers. You did see consumer sentiment start to change a bit and bookings started to slow. That the slowing of the bookings really peaked when we got the FAA mandated cancellations that happened there, somewhere around November 7. That's when we started to see bookings really slow. And it was an important booking window. You're taking bookings for the Thanksgiving break for early December, even through kind of that Christmas and New Year's break, and it slowed pretty materially for that period. It has since come back. Bookings are coming in as we would expect right now. But yes, bookings slowed for that period, it impacted November, impacted Thanksgiving in the first couple of weeks of December. These next couple of weeks are going to be important for us to understand exactly how this holiday period is going to shape up. I say all that, it's still temporary. One of the reasons we didn't update today, we want to see how the next couple of weeks ago. But for the most part, this is a temporary issue. We're excited about going into '26. All of our bookings for 2026 are exactly what we expected them to look like back in October. We're only booked at 25%, but our booked revenue that we have today is exactly what we have expected 6 weeks ago.

Okay. That's great. Maybe moving to cost performance, which I know has been a bit of a feather in your cap over recent years. My interpretation of your latest comments on the medium-term outlook is that mid-single-digit capacity growth would drive approximately low single-digit unit cost growth, which will drift higher or lower depending on maintenance timing or labor step-ups. Can you remind us of any headwinds or tailwinds we should be keeping in mind in 2026 against that longer-term framework?

Yes. I don't know if I gave that exact rule of thumb, but I don't think it's too far off either. It's going to be a little different for every airline. It's going to be different based on how you're growing, if you're growing through gauge or stage length, if you're going regional at a faster rate than mainline, you're probably going to have a little bit more cost pressure. So there's a number of different factors that impact that rule of thumb. But it's probably not too far off. For us next year, I'll just start on the labor line. Our salaries and benefits this year, we did see a pretty meaningful bump up from agreements that we reached back in 2024 and some of those prior. We're not going to have a meaningful step-up on salaries and benefits next year, but we will see some wage pressure, like pilots for us and pilots for a lot of carriers in the industry are getting a 4% wage increase. So it's growing faster than inflation. Our flight attendants just got a 3% increase. All of these different collective bargaining agreements will have out year increases, many of which outpace inflation. So there's going to be some cost pressure there, but not to the extent that other carriers would have if they're working through a new collective bargaining agreements. A line that impacts everybody is going to be just airport rent and landing fees. There' been a ton of projects done over the past 10 or 15 years that are really now coming to fruition. With that, though, comes an increase in rent and landing fees. It's going to be something that's outside of inflation that impacts everybody. To your point, when you asked the question on the maintenance side, it kind of moves around each year. There's some years you're just going to have more engine events, more airframe events, but it's not something that we see as a really big headwind as we're looking at our budget right now for 2026. There's probably going to be some cost pressure there, but it's not going to be something that is a really meaningful line item for us. All that said, I think we've been really good at this. It's a mindset for the company to run a really efficient business. It's -- I look at our leaders across the board, David Seymour, our Chief Operating Officer and his team do an incredible job. Robert and I get to sit down with them every couple of weeks just to talk through their different efficiency initiatives and what sort of investment they need to drive those efficiencies. And I think we manage our expense lines and just drive efficiencies better than anyone.

So on the theme of efficiency, on the last call, you noted that most of your work groups are more productive today than they were in 2019. Can you dig in on what's driving that? Is it work rule changes from latest contracts, technology, something else?

It's not work rule changes. In fact, if anything, we have work rule changes that have gone the other way, where it probably makes us a little bit less efficient. But when we think about all of our different work groups to drive efficiencies, it doesn't just happen. It requires investment in technology, it requires process changes or process improvements and that's where we have been focused with our reengineering the business efforts. I look at a big grid probably once a month that is like every step of an employee experience from the time you recruit to when they're onboarded for training to your manpower planning models to day of recovery. And we're trying to get to best-in-class on all of these. And a lot of it requires technology investment. Some of it requires process improvements. David as leader is doing an incredible job on that front. But if I go back 4 or 5 years, there's probably a lot of like reds and yellows on our stoplight chart on a lot of these different categories. And there's still yellows on the page, but there's a lot of greens as well. I think we're getting closer and closer to best-in-class. But it's been a huge effort for us. I think the company has done a great job investing in the right areas to drive efficiency across all of our work groups. And it's an opportunity that's going to continue for us. We were looking at a stat earlier today where our mainline capacity growth has been about 6% from '23 to '25. Our mainline headcount growth has been about 1% over that period. I don't know if we're able to continue at that same ratio, but I do expect we will grow capacity at a much greater rate than ASMs going forward.

And that should be a tailwind again in '26?

It should be a tailwind for us in '26, yes.

Okay. Great. moving to the fleet. You have one of the youngest fleets of your mainline peers and solid stream of deliveries through the end of the decade. But I'm coming off the GS aircraft leasing conference yesterday, and we talked a lot about lengthy backlogs that are stretching into the 2030s for narrowbodies and widebodies, even starting to be mid-2030s really after the conversation yesterday. Are you happy with the capabilities of the aircraft you currently have on order? Could there be something incremental that would make sense from what's currently available from the OEMs?

I'll just start. Our fleet is in incredible shape. There has been so much work done over the past 10 years to get the fleet to where it is today. We invested heavily through the teens. We're in this spot now with the order book where I think we have a great order book through the end of the decade and really well into the next decade. But our fleet requirements are about $3 billion to $3.5 billion of capital spend each year. And with that capital spend for the fleet, we can grow the airline by about 5% a year. Now for an airline our size, run rate CapEx is probably more like the $5 billion or $5 billion plus range. But because our fleet is so young, we don't have any retirements coming up. So the fleet is in a really nice position right now with only $3 billion or $3.5 billion of aircraft CapEx that sets us up really well for free cash flow production. But more specifically to your question, on the order book right now, we're really well set up through the end of the decade on the narrowbody side. On the widebody side, we have taken 10 or 11 787s so far. We have another 20 to take delivery of between now and the end of the decade. We have options for another 25 or 30 787s that would come in, in kind of the late 2020s, early 2030s if we chose to execute on those options. On the narrowbody side, we're in great shape. On the XLRs, we have the ability to change the -- or sorry, on the neos. We have the ability to change that to the XLR variant if we want to continue to grow the long-haul capable fleet. But right now, we're in great shape, nice narrowbody growth, long-haul capable. We have another 20 or so 787s, we have another 35 A321XLRs. So on both fronts, we're in a good spot. As to when we might go out with an order, like at some point, we're going to have to. We're going to want more widebody growth as we head into the next decade. You have to replace the 777-200s, which right now, we're doing a life extension and doing the interiors on that airplane, which will be higher premium, fantastic product, exactly the same product that we're rolling out on the 789Ps right now. It's not immediate, but at some point, we're going to have to put an order out for more widebodies.

And when would you have to press the button on the options? Is that like a rolling? Like how flexible is that for you?

I don't know how much of it's public. It's probably shorter duration options than you would see most companies have though.

Okay. Got it. Moving to commercial initiatives. So when I last got to go down and spend some time with the team in September, we talked a lot about product investments that are coming in the large expansion of your premium cabins. I think it's 20% total increase in premiums seats and a 50% increase in lie-flat between now and 2030. I guess maybe more of a philosophical one to start. Back when we started talking about premiumization pre-pandemic, the sell side scoffed. I was quite nervous about this. I guess -- and then now the more premium, the better, we're all super excited about that. 50%, why not 75%, just kidding. But I guess, what do you think has driven the success of the push into more premium for the industry?

Well, it's a handful of areas. Like one, there was a lot of efforts on premium, really not just for the last decade, but probably for a longer period than that. And if you look at what we've invested in, invested in our loyalty program and invested in our clubs and invested in this premium product pretty heavily, all leading up to this point, maybe we didn't monetize it as well as we could have though. And that was really the opportunity is how do you get a higher paid load factor? How are you able to monetize this product more effectively? And that's what we've been able to do over the past several years. But it has been a long trend. The 789s that we took delivery of this year, we designed that layout, I don't know, 5 years ago or something like that. So we're excited to be a premium global airline. We think that is where these demand trends will continue to go. We think we got in front of it with orders like the 789P with 321XLR with all of the work we've done in the clubs, and we expect it to continue.

Great. And I guess, I think also back in September, some of these investments in clubs and fleet that would fall into the non-aircraft bucket like [indiscernible]. I think you said you think that's going to be around $1 billion, $1.5 billion over the next couple of years. Is that right?

Yes, that's probably the range.

Okay. Got it. And then relatedly, from all of this premium seat config increase, what do you think the margin opportunity is for that? Like maybe -- I mean, I don't know if it's too short term to talk about, but like is that a major tailwind you're thinking about into 2026? Like how do we think about it over the next 5 years?

[ Measurment ] just in 2026 probably is a little bit too short term, but we think it's an opportunity for us in 2026 to continue to drive margin. We do a lot of work on just understanding the profitability of everything we do. So from every flight to every product offering we have. We look at profitability effectively on a per square foot basis. So when you're looking at the profit of -- of the lie-flat business product versus the premium economy versus the economy or the main cabin, we look at that on a per square foot basis to see what's the most profitable cabin we have. And inevitably, it's our premium cabins. And it's on every fleet and every entity. If we had more of it today, I think we'd be more profitable today. But overall, I think our configurations are close, maybe not quite optimized on every fleet. So there's some work to be done. That's why we're going ahead and reconfiguring the 777-300s and the 777-200s. We're doing some work on the narrow-body. So the A319s and A320s are being reconfigured to higher premium as well. That will be a profit driver for us. And so we spent a lot of time working on it. It will be something that becomes a tailwind for us here over the next handful of years.

That's great. And we already touched on the Citi agreement a little bit. We got -- was announced at this conference last year. So I guess, I think the contract was designed to be fairly ratable over the course of the contract. So no big step in year 1, followed by a plateau. So could you just maybe talk about how we're going to see that impact the P&L over the next couple of years? And really, how is the -- it seems like to me that the contract was designed more to drive card acquisition, engagement, like any help there?

Sure. Well, that works -- we are excited. A year ago, we were talking about it and talking about the launch of it, that was really happening in early 2026. And there's been some launches. There's been some new products that are out there. We're excited about all of that. We're really excited to get it going kind of full on here as we head into the new year, though. But when we were here a year ago, we were talking about this new agreement and how it would change remuneration, not just with Citi, but with all of our co-brand partners here, but how remuneration would grow from -- at that time, it was effectively year ended third quarter 2024 until the end of the decade. And what we said is that remuneration would grow from what we had published at about $5.5 billion of remuneration for the 4 quarters ended Q3 '24, it would grow at about 10% a year. And so we would achieve around $10 billion of remuneration by the end of the decade. So on that incremental $4.5 billion of remuneration, we said it would improve earnings by $1.5 billion. So we get out to the end of the decade, remuneration will be up $4.5 billion, earnings will be up $1.5 billion. We think that was more disclosure and more clarity than there's ever been on the loyalty business. We're excited about the opportunity to grow it. It's not going to come in at exactly 10% increase each year. It may not flow through the P&L exactly at $300 million of incremental EBIT a year, but it's going to be close to that. I do expect there's going to be some years where we get a little bit heavier bonuses and a little bit greater remuneration, some years maybe where it's a little bit less. Maybe P&L recognition comes in a little heavier, a little light some years. But for the most part, I would expect remuneration to grow 10% a year, EBIT to grow somewhere around $300 million a year. And by the time we get to the end of the decade, we're approaching $10 billion of remuneration and an incremental $1.5 billion of EBIT.

Okay. Great. Moving to the balance sheet. At the risk of always asking you what's next versus pausing, but [indiscernible] accomplished so far. What is your view long term on where airline leverage should be? One of your peers is now targeting 1x gross leverage. I believe you shared on your last call that getting to gross debt of less than $35 billion will put American about 3x net debt to EBITDAR. Where do you come outweighing potentially reduced earnings volatility versus balance sheet efficiency?

Well, one step at a time. We were pleased a year ago to say, you know what, we set this goal that we're going to reduce total debt by $15 billion. So to have it below $39 billion by the end of 2025. We achieved that in 2024. We're proud to have achieved that. We set another goal that we would be below $35 billion by the end of 2027. I fully expect we're going to go and hit that goal. We've made a lot of progress in this year alone. So 2027 feels like something that we should all be really confident in American hitting. The leverage question, though, we need to get earnings up to get net debt to EBITDA at that 3x. But when we get there, we think that will get our credit rating to about a BB credit rating. That would be a notch above where we were pre-pandemic. So we find ourselves in a pretty good spot. Where we go from there, let us get to that point first. But if we can get to 3x, get to a BB, hit the $35 billion target, we'll be in great shape at that point. And then we can decide exactly what capital deployment is going to look like. I would imagine it will mean further improvements to the balance sheet, but let us hit that $35 billion first.

All right. We'll be patient, fine. Maybe a follow-up on the last question. At what point on the balance sheet journey, does shareholder return start becoming part of the calculus? How much of a focus is returning cash to shareholders for you and the management team?

Well, right now, the focus is on the balance sheet. And we think that's -- we're doing right by the shareholders at the same time. We want to get to a BB credit rating. We want to get net debt inside of $30 billion and total debt inside of $35 billion. So we think that's the right thing for our shareholders today. We're excited to have that conversation about shareholder remuneration going forward. But right now, we're pretty focused on just improving the balance sheet.

Okay. Got it. And as we get closer to the end of '25, I want to talk about the indirect share journey that you have been on. We're on track to get back. I guess maybe 2 questions. First one, is the margin profile of the revenue that you're going to have recovered by year-end the same as it was before? And I guess, really the question is more, should we be thinking of this as an opportunity that maybe there was a little bit of sweetening the pot to get corporates back on side mid-contract. And so therefore, the revenue is back, but maybe the next leg, there's some sort of margin expansion on top of that.

Well, I would just say the margin profile is probably exactly the same as it was previously, give or take, maybe it's a little better in some areas and a little worse than others. But for the most part, it's very similar to what it was previously. Just stepping back, though, I am really proud of the progress that the team made this year. It was a huge effort that really started under Steve Johnson's leadership back in May or June of 2024. I think he did a fantastic job studying the ship, getting us going on this effort. And the team has done a really nice job so that as we head into 2026, we're not talking about regaining lost share. We're talking about gaining more incremental share. And I think that's the opportunity for us. Right now, I mean, we're somewhere around our historical fair share, but there's been a lot of years where we've been above that. And I think we have a real opportunity to get back above where we were just prior to the sales and distribution change. And that will be the work that the sales team and the customer team and our entire frontline team is going to be focused on.

And I guess maybe just a follow-up on that. What do you think drives that incremental share? Is it some of the product improvements you're talking about? Is it regaining share in Chicago? Like is it maybe your old fair share, you don't think it actually was fair share? Like what do you think drives the move from here's our historical share to like whatever the number you come up with higher should be?

It's going to be all of those things. It has to be a competitive network. And on that front, we're really excited about the growth that we completed here in 2025. We had a really nice growth in Philadelphia. It did exceptionally well. We grew in New York. We got some slots back in LaGuardia. We've upgauged. We've increased our stage length. All of that has done well for us. Obviously, we grew meaningfully in Chicago this year. All of these are things that when our sales team goes out and talks about what we're doing, they say, well, starting with the network. The network is better than ever. So we'll continue to start by focusing on the network. All the product enhancements, yes, we continue to do a good job rolling out new products, making sure that the products we are delivering are the products that our premium customers want. And when we're doing that, it just makes the job easier for our sales team. All of that only works if you're running a great operation, if your frontline team is doing a fantastic job delivering customer service. And on that front, I think our frontline team is doing a great job, and our operating team is also doing a really nice job for the airline.

That's great. And maybe just following on the growth in Chicago, Philadelphia. That's been a big focus this year. As we look into next year, is it about annualizing that growth? Is it continuing to densify those markets? I know we've also talked about Miami, Phoenix, like where do you see the growth opportunities for '26 in the network?

It's in a lot of those areas. We will continue to grow Chicago. We didn't quite get back to 500-plus departures this year. We will get back over 500 departures next year. Philadelphia is going to continue to see growth. There's opportunities just within our current infrastructure to continue to grow in Philly, and we have the aircraft assets to do it. In a place like Phoenix, we're probably -- I don't know, this year, we might get up to 280 or this winter up to 280 departures a day or something like that. But we think we have the opportunity to grow that hub to something over 300 departures a day. Miami has all sorts of opportunity for growth. And really look across the board, each of our hubs has some opportunity. It's just when is it going to happen? What's the timing of it? Like DFW is one of the fastest growing economies in the country right now. But right now, we don't have a whole lot of gate growth, but that's going to come online. We're really excited about Terminal F, which I want to say opens up in 2027. We have some new peers that are opening up in Terminal A and Terminal C. So you will see really nice growth in DFW. It's just going to be measured over the next handful of years. And you see that in Los Angeles as well. There's a lot of construction happening right now that's limited our capacity there. But once we get past our terminal construction, we have a real opportunity to grow back to our historical levels in Los Angeles. So for next year, it is going to be focused more on the hubs you mentioned, Chicago, Philadelphia, Miami and Phoenix. But longer term, I think there's opportunities in all of our hubs.

Is the gating factor right now airport constraints driven? Like are we -- I know OEMs -- it sounds like we're delivering below what we thought we would be in 2019, but maybe we're starting to get a little bit more flow through and a little bit more predictability. Like what's the gating factor to growth? I guess, if we go into next year and we have the opposite of this year, and it's an unexpected boom in demand, and we're all super excited about that. What's the opportunity to flex up if there is one?

Well, what we've been saying with our capacity is that we have an order book that allows us to grow at about 5% a year. So the fleets we have coming online, we can grow the airline by fact up to 5% a year, some years more than that. The other end of that though is we have a lot of fleet flexibility that if it's a softer demand environment, we can pull back on that growth either through changes in utilization by returning some of our leased airplanes, by either permanently or temporarily parking some of our old airplanes. So a lot of flexibility with the fleet in terms of how we want to grow. In terms of infrastructure, there are some hubs that are somewhat limited in terms of how much growth they can take on in the near term. And that helps us decide where we're going to be deploying assets. But generally, that is long planned. These are things that are known for years and years. There's some years where we might try to push that a little bit and impact the customers or the operations, so we'll pull back in certain hubs. But generally speaking, our hub infrastructure is going to allow for at least that 5% growth if that's where we choose to grow.

Okay. Got it. And maybe just on the opposite of my last question on the downside protection. It sounds like there's a lot of off-ramps on fleet through retirement, through lease returns. How reticent would you be and how to cut non-aircraft CapEx, some of these investments in product? And how much flexibility is there to do so? Like are the seats already being built and they're arriving and there's not really any way to [ back settle ] that?

I would say like that type of CapEx, that is like long-life CapEx. When we're deciding to go and reconfigure an airplane, we're reconfiguring it because we want to operate it for the next 8 or 10 years in that new configuration. So we would not tap the brakes on a big 777-300, big 777-200 reconfiguration project. There probably is some CapEx you could pull back on, but you would likely only pull back on it if you were reducing the size of the airline at the same time. We've shown in the past, we can be pretty nimble and pretty flexible with the amount of capacity we produce, and we'll continue to do that. But in the near term, there's not much when I look at that $1 billion or $1.5 billion of CapEx on non-aircraft that we would end up wanting to pull back materially on. But around the edges, yes, you can easily cut $100 million or a few hundred million from it.

Okay. Got it. We've got a couple of minutes left. So I always like to close with the same question as I usually wind up getting some good food for thought for the next couple of months here. Is there something that you're really excited about or something or 2 you're really excited about over the next 1, 2 years? And is there anything -- happy to just hear the punch list, but is there something that's in the back of your head that you really think we on the Street are missing from the punch list of what you're excited about?

Well, I'll probably just go back to where we started. Like there's not much that we have done that I'm not really excited about. And I think generally, it's appreciated by our customers and our team members and probably the Street, but there's maybe a handful that are underappreciated. But right now, we look out, I'm really excited about our centennial year and all that we have planned for it. I'm excited about having all of our team members or maybe not all of our team members, all of our major work groups with contracts in place. And it's just not something we have to worry about. We can just focus on execute on the business. We do have 3 smaller work groups that require contracts still. We're hard at work on those. But overall, I think our 105,000 employees are all pulling in the same direction and really ready to get at it here in 2026. We've talked about the fleet. I think it's appreciated and understood by our investors. The one thing I think gets lost a little bit is the hard product we have on this fleet. We don't talk about it enough, but if you look at our widebody fleet, read the blog, do your own research, the hard product on our widebodies, I think, is the best amongst the U.S. premium Global Airlines. It's the most consistent product there is out there. It's the best seat there is out there, the brand new 787-9 premium configuration. It's the best product out there. Others might have certain products that can compete, but it's not consistent. Ours is just this fantastic product that I don't think we talk about enough and probably don't quite get enough credit for. But we're excited to be expanding that next year as we take on more XLRs. We'll get kind of this run rate impact of these 10 787s we took this year, and we'll get 1 or 2 more next year before deliveries resume here again in 2027 and beyond. So the heart product is in great shape. I do think the balance sheet progress is appreciated by some. So thank you for bringing that up. But I think that, that is going to continue at a similar pace. And I have full confidence we're going to hit the goal there in 2027. On the customer side, I think we're doing just a lot of really great work to make sure that we are taking care of these premium customers and to make sure that we're getting a greater share of these premium customers. So all the things I started with that I'm excited about in 2026. I we'll be excited about for the rest of the decade probably. In the areas where we're underappreciated, I think we just need to talk about it more. I think there's a lot of great work that's been done over the last several years. We should be out there celebrating it more.

And maybe just to sneak in one last quick one. We talked about it earlier. I think it's well documented. Domestic was a bit of a laggard this year. You're one of the more domestic facing of the Big 3, not too different than Delta, but less than the United. Should we be thinking about -- like based on what trends you're seeing now in the domestic part of your network, should that be another tailwind we should be focused on for next year?

It is, and it's part of the network we're proud of. Like we are proud to have the best U.S. domestic network that there is. Like there's not a more important aviation market in the world. There's not an aviation market that has more consistent revenues and more consistent profitability. And while it's down this year, yes, there's absolutely a great setup for next year as we look out to 2026, I think supply is going to be in a better spot than it was this year. The uncertainty, the macro uncertainty that we dealt with this year that really impacted domestic mainline more than our premium products and probably more than international, that should be behind us as well. So for us, it should be a really nice tailwind as we head into next year.

All right. Great. I think that's a nice positive note to end off on. So Devon, thank you so much for joining us today.

Thank you. I appreciate it.