Frontier Group Holdings, Inc. (ULCC) Earnings Call Transcript & Summary

And I will leave that up to Barry Biffle, who's the CEO of Frontier Airlines. And just wanted to thank you again. A little bit different conversation that we're probably going to have today than we did when you presented this time last year, March of 2022, things -- the future was looking a little bit different. The trajectory has shifted. I would argue potentially for the better, but we'll see how things play out. Let me turn the podium over to you. And then yes, we'll keep you busy with a robust Q&A. Barry, it's good to see you.

Thanks, Jamie, and good afternoon, everybody. Sorry, I'm bringing up the end of the conference, but hopefully, you've gotten some coffee and the brightness actually helps for sure. But we'll get going here. I've got a couple of slides that walk everybody through kind of the highlights of Frontier and what's going on right now with the company this year. So if I can get it to work. Okay. Here we go. So here's all these sales prevention things that we have to show you on the disclaimers and more. I'm sure you can all read that. We'll have something on our website, so if you really need to read it. But let's talk about our cost advantage. So when you go back to pre-pandemic, we actually had a $0.05 cost advantage, which actually comes out to roughly $61 per passenger on a stage-adjusted basis. So that was the advantage that we had on each way. So $122 round trip. And a lot of discussion about costs and inflation and all those kinds of things and we just want to make sure that everybody understands that in our case, especially including interest and debt, the cost advantage is widening. So it went from $0.05 to $0.057 in 2022. We still have got room in the tank to further lower our cost but that $0.057 translates now to $71 per passenger, $142 a round trip. This is the cost advantage that we actually experience. And so when you think about the growth, and we'll talk about 321neo in just a moment, we would expect this to further widen, including pilot costs and other inflation and all those things, we expect to maintain over $70 a passenger. Obviously, this includes today's fuel price, but this would change slightly, but the cost advantage is there. So we also think there's a favorable revenue setup. When you think about our ancillary, we're #1 in the world. We generated $82 a passenger each way in the fourth quarter, and we've actually put out that we'll do $85 by the end of this year in the fourth quarter. In addition to that, we've got the strongest bookings you're here in kind of a common theme. We've never had bookings like this since the pandemic started. We've got great bookings for spring break, the summer seasons. But when we look specifically this summer, we have volume and revenue per passenger that's above 2019 levels. And again, it's just kind of the best bookings that we've seen on a go-forward basis since the pandemic started. We've also got a new revenue management system. We implemented ARM late last year starting to show dividends in the form of load factor, a little bit of a transition as you always do with these. But we're pretty confident that we get back to the 86% load factor that we were getting in a pre-pandemic basis as well. But in addition to that, so above just getting back to 86% on a natural state, with our revenue management system. We also launched the GoWild! program back in November. Now we started sales in November, but it starts May 1. And we talked about this a little bit, but I wanted to make sure that everybody really understands it. What we're doing is if we look at the 12 months that starts in May and you go forward a year, that's 6 million projected empty seats if we maintain 86% load factor. So what this program does, it leaves -- it allows people for a low annual price or a summer price. We have a summer season product as well. You have unlimited travel and if the seat is available the day before. So you can just start calculating for yourselves, how many of those 6 million seats that we can sell. So there will be the annual subscription revenue that we generate, but also what we believe to be largely 100% incremental revenue from all the non-ticket that they'll buy once onboard the aircraft. So pick your number, do we fell 10%, 20%, 30% of those seats. The opportunity is pretty big. So in addition to the revenue setup we've got, we've also got constrained capacity in the industry. I think everybody has seen this. Jamie and I have talked about this for a lot over the last 1.5 years. But the reality is with the supply constraints that you're seeing, especially on the manufacturer side, it looks like things are starting to kind of alleviate on the pilots, but the hardware issues are real. It's going to take a while to get caught buck up. If you want to order an Airbus today, you're looking at 2030. And I would argue to get any meaningful numbers for single aisle, you get well into the next decade. So having said that the supply is going to actually be constrained, we're in a unique position that we've actually got an order book over 200 aircraft. Of those, 70% of the 321neo with 240 seats. And so as you can see, in this constrained world, we've got 195 seats last year per aircraft, growing to 223 with the current order book by the end of the decade. So we're going to continue to drive more and more efficiencies. This is why we're confident in our ability to maintain over $70 a passenger in that cost advantage widening. You put that together, so the cost advantage plus what we've got the trajectory and the revenue, and we believe that we can reach the double-digit margins by the second half of this year. This is very similar to what we've talked about in $3 million a plane, but just to translate it for everybody, we are targeting double-digit margin in the second half. And this comes from the confidence that we've seen in the revenue environment as well as the cost trajectory. We talked a lot about modularity and reliability. I'll point to most recently, somebody was asking me about this earlier today, but a really big storm hit Central Florida. We have a large operation in Orlando. And Sunday and Monday, it hit us pretty hard. But you know what today, we're back to 99%. And that's because of the modularity, so we can have a tough weather event, but we can bounce back the next day because of the modularity and the out and back nature of all of our flying. So we've also got a robust recruiting and training program for our pilots, and we sit in a unique situation today where we have 150 to 200 extra pilots. We're actually starting to see that in just about every area that we are somewhat overstaffed. We're actually even -- we're going to cancel the next few classes for our flight attendants as an example, and we've slowed down our pilot hiring. You probably -- I know SkyWest announced this, you're finally seeing the light at the end of the tunnel with the pilot shortage, the hiring, I guess, if the big guys has slowed down. And what we've done, too, we actually implemented a sign-on bonus that has to be paid back if they leave in the first 3 years, and that's actually having the benefit of slowing attrition as well. So then that kind of helps create the surplus in pilots that we have. But as I mentioned a while ago, even in a constrained world, we've got the 321neo. So we think we've got the right trajectory to deliver the double-digit margins and we've got the growth that we can exploit it. We think we're better positioned than anybody else in the space. So with that, Jamie, do you want to -- want to talk?

So what's the path to higher margins next year constituted with? Because I think all of the efforts that you're committing towards the pilot shortage, whatever you want to describe it, the out and back flying. Everything you opined on during Investor Day, I think is very sensible, but there is the cold economic reality of higher pilot economics next year once your contract becomes amendable. You don't have the loyalty kicker that some airlines do. You don't have the exposure to premium, the exposure long-haul international, which is, I would argue, sort of the global bright spot from a RASM yield perspective. So what are the building blocks that drive Frontier margins higher in '24 over '23?

Yes. So I think they're the same things we talk about. Look, we're just a different business. We don't have a global alliance that drives credit card sales, but we've got our Discount Den subscription product, which gives people access to the lowest fares. Exclusively for subscribers. We do have our own credit card program, maybe not as productive as some of the big guys. But I think we're going to more than make up for that with our newest subscription product, the GoWild! product. Well, actually, I think all of those together will generate more money than you've seen from frequent flyer programs. And that's one of the reasons why we have the confidence in going from $82 to $85. That's all driven by new products. We also are launching a travel site. We talked about that at our Investor Day, and that's several dollars of passenger. And that's not even in the $85. So there's more to come. But from a cost perspective, like I said a while ago, we believe with the 321neo that we will maintain over $70 a passenger, and that's including new pilot economics. So I think you're going to see the margins continue to expand. Our cost trajectory is on, and we have no reason to see why that's going to change for the second half of this year. And so -- and we start to see that blended in over the next quarter. So we -- I think we're pretty solidly there. And I think on a margin basis, I think if you look credit shell neutral, I think we would stack up very well against most of the other competitors in the United States.

Yes. Forgive me if I missed this, I stepped out at the very beginning of your presentation. But did you provide an update, even high level as to how the first quarter is developing?

Yes. So we were actually a little later, I guess, in our reporting and when we gave our guidance. So we just gave our guidance just a few weeks ago. I think we were in a unique situation in that we actually reflected the actual fuel price and more reality of fuel and the current demand. So we didn't need to take it down or update today.

Okay. And so back to my earlier question on margins, does your internal model have you generating a margin premium to the industry next year, which historically airlines of your operating model did? Do you think you re-overtake the big 3?

Absolutely.

Okay.

Like we will be top 3.

Based on?

Based on the credit shells burning off and the fact that our trajectory is to improve and they will have to raise fares just to stand still.

Right. Okay. Fair enough. Anybody in the audience? I can keep going.

I won't go there. I'll go after me then. I was going to ask you about your business model, how concerned you are about the U.S. government kind of cracking down on this ancillary business model? And what you would do if you are forced to change?

Well, I think we are one of the few airlines that actually was applauded by the DOT recently for family seating. We've been doing it for -- gosh, over 6 months, I guess. So -- and we had a different program even before. So we've had that. As far as refunds for canceled flights, I mean, that's been regulatory out there for a while. I think there's maybe some confusion there. If anything, I would actually point to the government in the main part of their case to fight the JetBlue-Spirit merger is actually talking about how unique and important the ULCC business model is. So not to use their words against them, but if it's so important, I think that would be a challenge for them to want to harm it. I mean we enable millions of people to travel that couldn't afford to otherwise without our service.

So what are your latest thoughts on just the overall merger landscape? You were pretty vocal earlier or middle of last year as JetBlue gained momentum in their effort. And I guess part of that was because you had been involved up to that point, you did make use of our comment that we really do envision Frontier potentially inheriting the keys to the low-cost carrier kingdom. I don't remember exactly what I said, but it had a lot of case in it. Is that still your view? And have you seen anything on the regulatory front that has altered how you think you are going to earn for the next several years?

Look, I think there's a lot of posturing. I mean we saw the DOJ weighed in, I guess, officially finally. I think that was 100% expected. They've telegraphed that they oppose it in some way or another. We also have the NEA, which is, I guess, imminent at any moment. I think once that comes out, I think the general wisdom is that JetBlue and American are going to win. Once you have that, I think JetBlue has got something to trade. So I think, look, it's -- they have been pulling out all the stops to get this done, and I have every belief that they actually get it done. I think that's how we should expect it to roll out.

Would you be an interested buyers/participant in any divestitures that might come down the pike as they try to solve for the sort of regulatory conundrum that they're in?

We'll talk about that when it comes up. But nothing to discuss today. But look, I think it's an interesting situation, right? This is good for consumers in a way because it does make JetBlue a more competitive with the big 4, and I think consumers and the government are looking for that in the end, while they say they may fight it on its surface, maybe there's a divestiture path or something that gets them somewhere that they want to be. At the same time, it's great for us. right? They've already admitted they're going to raise the prices on all the existing Spirit capacity. There's a lot of capacity that they have deployed and stimulated markets. And I think Frontier along with a few other carriers, there's a couple of them sitting right there, probably have the cost structure that can replace that capacity pretty quick. I mean not next month. But within a few years, I think that you can get it replaced. And so look, I think there's a time value component. But I think in the end, the consumers still win and Frontier wins.

Barry, I've been asking everyone about their order book. So for you with Airbus, just any update on since their last guidance to you on the airplanes you're trying to get this year? And question as to whether or not you and your finance team are thinking about things differently, still sort of utilizing the sale-leaseback channel primarily? Or any thoughts on how that might evolve going forward?

Yes. So a couple of questions there. So look, we haven't -- we just got an update from Airbus recently. So -- and it was a pretty big update, right? So -- and we discussed that at our recent earnings call. So hopefully, they don't have a new update in the last few weeks. But look, it's in the 2- to 5-month range. So basically, everything moves forward. They didn't cancel our orders, right? Everything just moved to the right quarter, roughly. So it did cause us a lot of pain, close in. It's pretty significant to Q1, most impact, just simply because we actually had to cancel 5 lines of flying. We already were over-hired for pilots and flight attendants and then all of a sudden, just imagine, if I've got 15 pilots per plane. Now all of a sudden, I've got 75. So almost half of our surplus of pilots right now was just handed to us in the last 2 months. So that's very expensive. We're disappointed in our results for Q1. I mean it was a pretty big economic hit, and it's tough on our customers, too. We had to cancel a lot of flights during principally the spring break season so. But I think now that we flow through the year, basically, we should be by August-ish kind of blind back up, we think, with our hiring and our overstaffing situation but definitely July, August, somewhere in there. On the financing, look, I mean, Jimmy Dempsey is probably one of the smartest people in the world with this stuff, and we constantly compare debt finance to sale-leaseback and we choose the best economic answer and it continues to be sale-leaseback. If that ever changes, we'll look at it again.

So just how -- and I realize it was recent and so forth, but just all indications are just further delays are possible and so forth. Do you feel you have enough visibility and confidence into what there's -- that July, August time frame to catch up and so forth. Do you really...

Yes. Yes. So let me be clear on the July, August. That is for us to work through our oversupply of flight attendants, pilots, gate agents, I mean, we've just got too much staff because we were several months ahead of them, and then we're going to bleed that off. For example, I'm not going to stop hiring pilots. We're just going to just cut -- we're going to cut down the class sizes because it's really hard to shut down the growth machine, right? You don't want those trainers and the SIMs and all that, you want to keep it going. But we're going to cut it down and then that should enable us to catch up by the middle part of the year. But yes, on further delays. Look, I think that they're not done. I mean they've got a pretty big backlog that keeps getting bigger. I wouldn't be surprised if they have some additional delays, but I don't think you're going to see anything of the magnitude that we saw recently.

Got you. So how does it work with the Indigo order book? If you wanted more aircraft, if there was more opportunity made available to you down the road. Is it up to Indigo to well, that's part of it, but who instigates that conversation? Does Indigo reach out to you and say, look, we think you would generate better returns than Wizz or do you compete against?

Yes, I think there's a lot of confusion with this. We go out to RFP and we negotiate together for a large number of things, everything from airplanes to engines, to seats on aircraft, to technology purchases, all these things. But we don't have an Indigo deal. There's no Indigo contract. We have our own, so we go through the RFP process, but once you get to the end of that, we have a contract with Airbus, Wizz has a contract with Airbus, [ Lars ] has one and so on, right? Within that, I think there's been some publicity around the fact that we can swap a percentage amongst us. And I think the truth is, is that you can do this with -- especially in their current situation, my impression is just about anyone can do this, whether you're in the Indigo family or not, I think they would work with you. The problem you have is that there's a shortage of airplanes. And I think we got kind of slammed and, oh, their planes are late. There's very few airlines that wouldn't be envious very much of our situation. I mean ask some that don't have an order. If they would love to have them all 3 months late, but have our order book. It's pretty -- it's a huge asset to the company. And so -- and I think everybody else in the Indigo family feels the same way. I mean I think there may be a situation where I'm making this up. If somebody season is opposite of ours, possibly, there might be something on the margin, but I don't see that as a huge opportunity because everybody wants their plans. There's a shortage.

Given the order book, and I wasn't intended to ask this question, but do you consider yourself an acquisition candidate on that basis?

I guess everybody is an acquisition candidate, I guess.

It's fair enough.

At some level.

Yes. Because, I mean, I think that is forcing yet -- I mean, that's part of what lies at the root of JetBlue's interest. I think if there were not OEM challenges, if there were not pilot challenges and in fairness, had Spirit not been in play. I don't think there would be a [indiscernible]...

Look, I was at an airline that we bought another airline and their order book was a big deal. But in the '90s, when you couldn't get a regional jet, in the next 5 years, those of you who familiar American Eagle purchased business Express, got slots at LaGuardia and got an order book, right? And it was -- and we were really, really happy right, at the time. So I mean, yes, this is not some novel idea.

Is culture important internally? And I ask only because Delta made a big point about that today, United did, we had Jamie Dimon speak, and he's a big culture believer. But it's not a topic that I've heard you sort of bring up in the past as it relates to your role as CEO of the entity. Does it play a role? Or are you still be small enough and kind of scrappy enough that it's just not the biggest priority?

We definitely have it. We definitely have a culture. I mean if you see the animals on the tail, we're actually spending. We spend -- I mean, it's part of our brand, but it flows through to our culture. I mean we're in the Western Frontier and it's a big part about it. The animals attract kind of a family, a leisure family customer. And our flight attendants are actually not only our largest workforce, but they spend the most time with the customer. And so there's a lot of that kind of feel around the company. And so we have kind of a culture of helping families, and we're spending a lot of time this month. I wasn't -- you weren't planning on asking this question, but I wouldn't plan on talking about this either. But this month, we're calling it March Madness internally. But we -- in full disclosure, we ripped off this idea from Disney. But you know the little 3-fingered Mickey, right, that they wave when you're getting off a ride and so forth. Well, we actually have bought like thousands of bare hands. And so all of our flight attendants, all of our gate agents and everyone is going to start using these very shortly, waving at the kids, when they get on and off the airplane. And so we're doing all of these things and it's bringing this up as a way to kind of bring the animals to life, but it's also how fun it is to work at Frontier and serve our customers, especially as we get around the spring break season. So -- but yes, that's just an example. But yes, it's a big deal. It's a big part of us. And I think it's one of the things that differentiates us in the low-cost space.

So it's probably good that Cocaine Bear has gotten such bad reviews because you don't want to be frightening the kids. Sorry. So I'm really tired. In terms of the premium market, I mean, when Ted was up here, when Spirit was up here earlier today, they did speak of the big front seat, which isn't a true premium bells and whistles product, but it's something better than the rest of the configuration...

I don't class a service, it's actually a seat.

Yes. Yes, exactly. And they said the same thing. Have you gotten far enough down the negotiating path that you had made a decision? Had you carried out your merger with Spirit as to whether that was a product that you were going to adopt? And does it make sense for your clientele? And you were at Spirit. So you must know all the numbers. So.

Okay, with full disclosure, Yes, I came up with a big front seat. And the genesis was actually -- we were converting the airline from basically a legacy-type product. I mean Spirit Airlines had what they called a business class. And we literally were so broke that we didn't have the $3 million that it would take to actually get rid of them. And so I remember Bill and Indigo had just bought the company. And I went to him with this crazy idea of "hey, we'll get rid of the class of service. We'll get rid of [ boos ], we'll get rid of all that. But what do you think about this big front seat?" And it was like, well, we can't afford anyway, let's try it out. And it was a huge success for us. And so when I came to Frontier, a few months before I got here, we had made the decision to actually go with a potentially different strategy with the stretch strategy. And so we actually have a lot more seats. So there's not as much scarcity. And it literally took us probably 4, 5 years to actually finally optimize because, I mean, it was hard to sell a lot more leg room. When you've got 4, 8 or 10 of something, it's a lot easier to sell a finite amount -- much easier. And so it would have left us with a tough situation because we finally optimized it, and I think we would have to look at the numbers, but we did not get that far down the path to just for them to share their numbers on that and us to share ours because I'm really curious, I'm still curious, which one is the better use of the real estate. But we'll see. But we're not in the premium business. I mean we -- I mean we are, I think, more unabashedly leisure, and we don't make any qualms about it. I mean that's like the GoWild! product. I mean you're not going to see people match that because if you sell any walk up, you're not going to want that. I mean we're not a walk-up business.

So to bring that up, what has been the uptake on the past on the GoWild!?

We're really excited about it. It's been big. And in fact, what we've said publicly is over half the customers are actually new to Frontier. We have no history with them. So it's bringing us a whole new clientele that's really interested in the product. But we're seeing all types of segments. We're seeing -- as you would expect, we're seeing the retired segment that has a lot of flexibility. We're seeing the work from home, 20 and 30 somethings without kids, which is kind of what the genesis of why we came up with the idea during COVID anyway. So -- but it works for a lot of people.

If your route planning department came to you with 2 ideas, 2 new nonstop markets. And on paper, they looked identical. So let's call it the same stage length, the same estimated number of [ figures ], same fuel price at the other end of the nonstop. But the only differentiating factor was that one market would put you up against Southwest, one would put you up against Delta. Would that influence which route you took?

No.

How could it not? If that's the only -- yes, I mean -- so they are equal competitors to you in terms of how they behave to your market.

Those airlines are in different businesses than us.

Fair enough. Okay. I mean I think that Southwest's problem that they still consider themselves to have a foot in your business, which personally I think is undeserving given their cost structure.

But I fly everybody -- I mean, if I go to their terminal, there'll be a lot more sports coats than you'll ever see on us.

Fair enough.

I mean you don't fly 20 times a day between Dallas and Houston for leisure customers. I mean it's an interesting story, but it's just not based on fact.

Any other from the queue?

Thanks. I'm just curious how you think about airport costs given that's a much higher percentage of your cost structure than a legacy carrier, and we're seeing a lot of airport CapEx plans. Just curious how you think about that. Obviously, Allegiant, they do the secondary airport thing. Just curious for your thoughts.

Well, I think Allegiant and ourselves are probably some of the most aggressive. There's a few new ones, but we're pretty aggressive on airports. I mean, yes, they choose a lot of cheaper airports. We've pretty much handed the death penalty to some airports. We pulled out a lot of places recently. If you can't control your costs, you don't make a good partner for us. And look, we're so small that we can grow for years and years and years without incurring big airport, expensive airport costs. The other thing that's going on, too, is they're still holding on a lot of COVID money. We'll see what happens. I think now that they've -- it's very clear they're getting their passenger volumes back, I think we should see some of those benefits. But some of them have built some pretty expensive CapEx projects. And maybe didn't even add new capacity. So their cost per employment has gone up considerably. And we've just decided not to support it. We got 6 minutes. No other questions?

Well, what part of the Frontier story is not getting out? [ You have 6 million things ]?

What part of the Frontier story is not getting out? So I think that. Seriously, I mean, I know I'm the analyst and I've always kind of scoffed when my competitors have asked on [indiscernible], why do you think your stock's done that? But I mean, you're trading at a low -- very, very low multiple, which implies that the market doesn't believe the estimates. What are we all missing? Why is this not the greatest airline investment out there right now?

I don't have the ability to connect the dots. But I think if you look at our fourth quarter, our most recent, you have seen the trajectory go from third quarter last year. I mean let's back up. So we took -- we continue to take airplanes during COVID, and we didn't fly them. And so we had a whole bunch of airplanes sitting around with a whole bunch of rent expense. And in many cases, we kept hiring the employees too, to have them available. So we carried a lot of expenses, and we didn't plan. And so that's where our costs were elevated. And so we were like 7.2, I think, in second quarter last year, we guided to 6.7, then move down to 6.4 in the fourth quarter. So you can see what we've been saying from a cost trajectory has been coming through. I think we're the only airline last year that gave capacity guidance at the beginning of the year and actually hit it. I think you can check that math. Excluding Omicron and the Delta variant, we don't miss guides that we've given. So I'm not sure why people don't trust us. But look, I think the ancillary same thing. We've continued to -- we went from $53 to $57 to $65, $72 hit $82 in the fourth quarter, and we're telling you we're going to get to $85. I don't think another $3 is much of a stretch when I've already added over $20 in the last 1.5 years. So look, you've got the trajectory there. You've got the cost trajectory, if you -- I think the margins, like I said a while ago, I think if you subtract the credit shells from a lot of folks, I think you'll find that our margins are actually very respectable. We've closed that gap. I just think that it just takes time. There's a lot of other noise out there. I think that I continue to hear a lot of crazy ideas. We're out of pilots. Actually, no, we're going to have 150 to 200 extra pilots right now. There's problems with our operations. I'm like, okay, did you see the thunderstorm that sat over Orlando and the ATC things that happened 2 days ago, okay. So we hear a lot of these things. But at the end of the day, we just keep delivering. And so I look forward to doing that again this year.

For next year and not expecting you to negotiate in public, but to be conservative, $0.002 of ex fuel CASM for a higher pilot contract?

We're not negotiating in public.

[ Jon's ] got a question over here.

President Biden calls you up and says, I'm going to ask for your opinion on where the FAA should make the most changes to give the biggest bang for the buck for the airline industry. What would you tell them?

I would revamp air traffic control. It is a known issue that we could save 10 to 20 minutes on every flight. If we care about being green in this country, we made a lot of big deals about it. One of the biggest things you could do to not only save fuel and CO2 but save the airlines a lot of money and a lot of frustration for consumers is actually start clearing people direct, change up the air space.

So just -- want to just go back and sorry to kind of ask this question again or just go back to this one, but you were trying to figure out like you said you've got extra pilots and you don't really need as many. How much of that is driven by the delivery -- the plane deliveries being stretched out versus your having a robust pipeline or the attrition is down because you're saying you're going to have to pay back the bonuses just trying to understand...

So a little bit of everything. So I'll break it down here. We're somewhere between 150 to 200, too many right now. Of that 75, so there's 5 aircraft that are delayed right now. So right now versus what we had planned over the next 60 days. There's roughly 15 pilots per planes, that's 75. So roughly half of it is from those delays. We've also seen -- yes, we're seeing better attrition numbers now that we've done in our bonus program that has a 3-year cliff vest. And then also, yes, the robustness of the hiring has been pretty good. And so -- we just -- I think we're really nervous because we saw these new pilot deals coming in. And so -- and every time I come to an investor, it was -- it's been this Boogeyman story for the last 1.5 years. I mean he's laughing too from another carrier, I'm sure they say, too. We're not canceling flights for crew. We're not short of pilots. But we kept getting asked it, and so we got nervous ourselves. So we've been carrying an excess. But the truth is, we see that if you listen to them, not to make my pitch, but if you look at why our pilots coming to us. One, if you look at a W-2 and you look at our upgrade, our last class was with the company for 3 years. So there are stories of people upgrading to a captain in 2 years, but ask them what their average is. So one of the big 3 in particular, is 6.8 years. I just heard it last week from one of their VPs in finance. So they're actually running about 7 years. So when you compare that on their pay scales and ours, you will make more money even with them having higher pay rates on each side because you jump to the captain side, 4 years sooner, your W-2 over the first 10 years, you make more money with us. That's number one. Number two, our pilots get over 6 hours per day, meaning that the average bid is 12 days. They get an average of 18 days off. Go ask pilots at these other carriers that are sitting in reserve. They're going to be pumping 16 to 18 days, maybe even 20 and they're going to be sitting on reserve for a long time. Go ask a regional pilot, how much they get. They're pushing high teens. So you're getting better, good -- same or better cash, you're getting more days off and we have a better portfolio of bases than most carriers in the United States. We've got bases, not just in Florida, I've got Miami, Tampa, Orlando, Atlanta, Philadelphia. We've got a new base opening in Dallas, which has driven huge Texans that want [ incumbents ]. Ask. Ask. Ask. That's a question to ask American or Southwest. What is the seniority of a pilot that is actually based in Dallas? I mean you're going to get that a decade or more before with us. And then we've got Denver, we've got Las Vegas, and we've got Phoenix. So we've got lots of great places for them to live. And then the last thing is because of the growth, not only are they upgrading the captain sooner, you're going to have holidays and weekends off decades before anybody else. So we've got a really good package. And even with these higher rates, we're still seeing a lot of folks come in. And I think the other thing, I think actually one of the best things in this regard I've seen is kind of if you look at SkyWest, it's finally starting and they're kind of the canary in the coal mine. If they're actually now just getting stable, I think you're seeing the shortage starting to subside.

Last question real quick.

Just wanted to follow up on the stock valuation. Do you have any plans? Or are there any ideas of how to increase the liquidity of your stock? So I think that's the reason for the disconnect and the valuation. Whatever -- through whatever means, IPO or stock or whatever...

Well, we IPO-ed at $19, and we're far below that. And you can look at the history of our sponsor with other deals that are in with, I think, 18 years. They've been in Volaris 12 years and unaware -- somebody could find this of any of the companies that they've taken public that they sold below the IPO price. So -- but you'll have to ask them.

With that. Thanks, Barry.