JetBlue Airways Corporation (JBLU) Earnings Call Transcript & Summary

All righty. Good afternoon, everybody, and welcome back. This is my first fireside chat of the day. I like the fireside format because you get to introduce me, right? No?

Whatever you decide.

So I'm here with Robin Hayes, CEO of JetBlue. And thank you for being here as always.

Great tradition. I probably have the least far of everyone to come.

That is true. That is true. All right. So let's start off. 8-K filed this morning. Why don't you just give us a quick update? How did the quarter develop? I know on a net basis, you're arriving where you expected to, but I know some of the moving pieces contributed to that.

Yes. Yes. No, thanks, Jamie, and good afternoon, everyone, in the room, and hello to everyone on the webcast. We are being webcast. Aren't we?

I believe so.

Yes. Great.

You're done.

Always, yes. Yes. But no, I mean, I think a good update this morning on revenue. We raised the -- and slightly tightened the midpoint of our guide. Really, I think you've heard from others as we went through the quarter, we -- once we got to that sort of President's Day, we can -- we've seen good strength since then. We've also been running a good operation. I mean we've definitely benefited from less snow in the Northeast, and that's definitely been very helpful from a completion factor perspective. And then also on the cost side, really, I think, pleased with our sort of cost management in the quarter and also benefiting from a higher completion factor linked to the operational benefits. Now I've said that we're probably going to get snow and ice for the next 2 weeks, but so far, so good. Then offsetting that, obviously, we saw a meaningful increase in the fuel price for the quarter.

How -- one of the recurring themes today from other airlines in recent quarters has just been the changes in how people are flying. Now traditionally, you didn't -- and I think a lot of that change is sort of skewed towards differentiated behavior from corporate travelers. You are never quite as large in that area as others. What are you seeing differently with your demographic in how that demographic is behaving from a purchase and yield standpoint?

Yes. No, a great question. I mean, certainly, we have seen the same. Just touching briefly on the corporate travel comment, I mean we have seen the same recovery as others. But clearly, it's a smaller part of our mix. In terms of the rest of the portfolio, I mean I would say where we're seeing strength in terms of leisure across all segments, so from price-sensitive to premium leisure and also VFR traffic, visiting friends and family. All of those are in our sweet spot. And those have been markets that have been performing really well, particularly Florida, particularly international into the Caribbean as well.

Okay. So let's talk about some merger stuff.

What merger?

Is there a third iteration that I have to brace for? But before we get to that, do you have any educated guess or practical information as to what is taking so long with the case for the Northeast Alliance? Our view has long been that this would be wrapped up well, early January, and that's obviously not happened. What's taken so long?

Yes. No, honestly, I don't know. I mean the trial was slightly late September. So we're waiting to hear. It doesn't really change anything in that we are operating the NEA today. And in fact, I was reminded the other day that this summer, we'll be entering into the fourth year since we signed the agreement. So it was sort of took the best part of the year to actually implement, but then we'll be entering year 4. So again, I think the benefits are there for everyone to see. JetBlue has never been bigger in New York. We've grown Boston because of the NEA, and we would like to be able to continue to do that.

So I was at the ISTAT conference next week -- or last week, excuse me. And I was sitting next to one of my competitors, who I know is listening. And when the news on DOJ broke and he or she and I, the name might rhyme with Rike Binenberg. No, sorry. Sorry, Mike. But anyway, we did remark to each other, who is surprised by this outcome? Of course, this was a step along the way. But I do think everybody was caught off guard. I could certainly speak for myself in this case as to the DOT weighing in. And perhaps my perception of DOT is flawed in a longer-term manner. I mean I wouldn't describe them as a rubber stamp regulatory body, but it didn't occur to me that this might be an issue. At a bare minimum, I think it speaks towards the administration is just sort of broader hostility towards M&A. But what do you make of it? There's really no -- this is one industry event that meaningfully predates my professional existence as it relates to airlines.

Yes. No. Thanks, Jamie. And I think even I can guess you were talking about Michael Linenberg. So hello to Mike, if he's listening. Anyway, so no, I mean, look, it is unprecedented. It's not something we've seen before. For the most part, it's been settled now for a number of decades that DOJ would take the lead on this. And by the way, I still feel with a lot of conviction that the biggest part of what we've got to get done is to win the case, and that's what we're focused on. On the DOT piece, we haven't actually seen what it is yet. We've seen the press release. I've seen some TV snippets. We haven't had any discussion on it. We haven't seen anything. And I think I'll probably have more to say on it later, but I want to see what it is. I mean at the end of the day, the DOJ has one view. We have a different view. A judge will now get to decide. We think that this deal is tremendously pro-consumer. If you look into the DOT's own docket, there are thousands of letters and submissions of support, a very few against. There's a lot of other people supporting that haven't necessarily commented yet. So I personally think that we go to trial, we win the case. I think it's going to be very difficult at that point for us not to better close the transaction. But anyway, let's see what DOT come out with, and then we'll be able to take it from there.

Well, in recognizing that there is ambiguity around DOT's current position, in an event where moving to a single operating certificate is delayed for some period of time, what does that disallow you from accomplishing? Because that's not entirely clear to me, and there seem to be several examples around the world of airlines that routinely operate with multiple operating certificates. And yet it's a single brand, single website, single [indiscernible] program. And maybe there are certain dissynergies behind the scenes. What does it preclude you from getting done?

Yes. I mean more common in the rest of the world than the U.S. And I'm sure a lot of that also links to some of the collective bargaining agreements around sort of some of the mass merged language around seniority. Look, I think, again, there could be lots of hypotheticals around if you can't merge that as quickly as you like, are you running 2 airlines longer? What does that look like? I think we have to wait and see what the DOT actually comes out when we can decide how we want to take that forward. At the end of the day, though, assuming we win the court case, we have a lot of conviction that we will because we think we have great facts that show how pro-consumer this deal is, then it's in everyone's interest to close and get it behind it. It's in labor's interest because the unions and our crew members want to get on and get a new contract because that will mean better terms, conditions to everybody. Communities want to have certainty over service and things like that. Everyone wants certainty. And so I think at that point, the case is, one, I think there will be a strong tide of how do we kind of now just get this closed as quickly as we can. But look, let's wait and see what the DOT come up with. I'm sure there's significant amount of due process behind what they are saying, and we'll work through that. But again, as I said earlier, our #1 priority right now is to prepare for trial, litigate our arguments and win the case.

But just to be clear, and I ask this question because it's one I'm fielding currently, if you prevail with justice in one way, shape, form or another, are you prepared to close the deal while the DOT issue is still percolating?

Well, let's see what -- again, I think it's going to depend what the DOT issue is, right? There's the operating artifice, there's the unfair -- the unfair and deceptive practices piece has me confused because what I've been hearing a lot from DOT the last few years is we should have more legroom, we should have less [sensitivity] fees. JetBlue is the poster child for that. I think there's no airline in the world, in my opinion, that offers the economy or coach traveler a better experience. And so again, let's see what the DOT say. We will then engage and decide how we want to take it forward.

Let's shift gears to the international market, which is still -- the long-haul international market, Europe. That's the word I was looking for. Although Great Britain isn't part of Europe, so -- I still can't find the right term. We left, Jamie. We left the pond. So I have not heard nor from your competitors nor have I seen any evidence, but maybe I'm looking in the wrong places, that your entry is proving to be disruptive. And I do believe that disruptive is the term that you have often used to describe the JetBlue effect. Do you think you are being disruptive in that market? Is it performing up to expectations? And what is your lost tolerance -- or lost duration tolerance in that market and other markets before you decide, let's cut and run, it's just not worth it? Because I am presuming that those are still money-losing markets because they're in their relative infancy, but correct me if I'm mistaken.

Yes, no In terms of the comment on disruption, I definitely believe from a fair perspective, we've been disruptive. I mean if I look at the world cup fares to London and before entry and after entry, I mean, they were down 50% in some cases. Now I think where we maybe have had -- maybe where we have less impact is with the delays of the aircraft, and we just took delivery of our sixth long-range airplane. We haven't been able to have the same reach that we originally planned. So our ramp-up has been slow. But look, I mean, we are about to start here in a couple of weeks, our third daily flight to Heathrow. Who would have thought that we would end up with 3 peak slots at Heathrow. So I think it's been a tremendous opportunity for us. We're expecting -- yes, for sure, the routes have been in ramp up, but we're expecting incredibly strong summer over the transatlantic. And I think we should see these markets come into profitability here as we get into the summer.

And forgive me for not knowing the answer, but the peak slots that you've locked down, these are permanently yours?

They're either permanent or on long-term leases.

Okay. Yes. All right. So that wouldn't be disruptive?

Yes. Yes, we're not about to lose one of these slots in the next few years. And again, the team have been incredibly creative how they've made that happen. Because obviously, being a low-cost carrier, we weren't in the position to sort of pay money for 4 slots.

Got it. So let's talk about the post-COVID environment. Because something that I admitted earlier today is that I occasionally go back and read my older research, more just to kind of get a kick out of it. And it's very difficult for me to read what I had written in 2020 because it was basically all wrong. Things just did not play out the way that we thought it might at the industry level. A consensus long for a good period of time was that discounters were just going to inherit the earth and Southwest was going to emerge structurally stronger and what have you. And that's not what happened. The best margins these days are the biggest carriers, not the smallest carriers. But as a bit of a tweener, for lack of a better term, I always had trouble framing JetBlue in one of those camps or the other. So the question, are you structurally in a better place today as a result of the industry -- well, your own efforts, but also the industry turmoil that accompanied the downturn?

Yes. I mean, I think -- by the way, what did you say...

Better worse or the same?

What did you say in 2020 that was so wrong? I can't remember now.

Oh, well, first, I said the corporate would come back before leisure. Well, we missed -- in my defense, we didn't understand the duration of the downturn. And my thinking was you can easily tell a spouse -- I'm not comfortable taking this family of vacation. It's tougher to tell your boss that you're going to stand down and not going to go on your sales call. Once we understood the magnitude of the downturn, I did lose quite a bit of Taco Bell currency with Bill Franke on this topic. But...

So back to your question, I would say that we feel confident that we can emerge better from the sort of disruption. Now I would say that. So what are the proof points? I mean, first of all, I think we've continued to progress a lot of our cost initiatives, particularly on the fleet side. Now it's frustrating that some of those changes are delayed -- with the delay. Now we're still flying around more E190s than we had intended. So some of those benefits are slow. But no, we're seeing that. I mean we'll end this year with 18 of the 60 190s retired. Again, we wish 220s were arriving at faster rate. So I think from a cost side, continue to be really pleased with the progress we're making there. And then on the revenue side, I mean, some really unique JetBlue tailwinds that I think are things that we had started pre-COVID and then really accelerated. So I think we've talked about the NEA, but one of the other benefits of the NEA is really helping transform our loyalty program. If you look at the -- because as we said before, we have a structural disadvantage. I mean no one is surprised by that versus the legacy airlines. But we are closing that gap. And the program is growing very quickly. The co-brand program is growing very quickly on the JetBlue Travel Products. I mean we have a business there that was $15 million of EBIT in 2019, and it's got a run rate of about $100 million now. And again, a really with very little capacity increase to support that. So I think very pleased with those changes. And I think if you think about where the industry is coming out of COVID, which is leisure strong across all segments; business, we say 80% recovered. It's really 60% recovered, isn't it? Because you can't forget the 20% of GDP growth that goes between 2019 and 2020.

Often.

Yes. Yes. So like it's great that you say it's 100% recovered, but that's like saying business travel is -- would have been flat, and it wouldn't have been. So again, we're going to continue to see that. But I think business travel has changed. And what we see is the type of business travel -- I don't know if folks in the room would agree, is those day trips where you used to get up at 6 a.m., you're back at 8 p.m., you go from one meeting. You're just not going to do that anymore. You're going to jump on -- you're going to make yourself a nice cup of tea and a biscuit, have a nice luxury morning, taking a few calls, do the 1-hour Zoom call and then be done. And we're seeing that trend. And I think that's here for good. And we're having to repivot some of our network choices around that, too. We came in with 15 Boston LaGuardias as we thought that was a great idea. It turns out it wasn't. And that's now going to be 9 or 10 as we get later into the year.

Well -- and how does that relate back to the Mint product? I mean, if the nature of corporate travel is forever changed as I think most generally expect it to be, does that make you rethink configuration efforts, pricing efforts? Where does that lead Mint? Because obviously, Mint predate -- that was intended to be your foray into meaningful corporate medium to longer haul?

Yes. I mean, really, what's always fueled Mint for the most part is the sort of premium leisure segment. We definitely have -- do have corporate travel in there. But we don't have any concern about replacing that with business travel, with the premium leisure travel. Since Tres and Jamie, you're an half geek, when we're having the debate about the configurations of the Mint airplanes, the domestic ones, we ended up with 16 because of the door 2 of the 321. There was quite a few of us who said that can't we just put a seat there. I'll go past the door and carry on, and it was a bit hard to do. So if anything, we kind of undersized the cabin a little bit. And so -- plus again, the delays in airplanes. I mean we should have more Mint airplanes than we do. So no, actually, premium leisure and Mint continues to be one of the better performing parts of our portfolio.

Getting back, just to follow up to what you were saying about JetBlue's positioning as you emerge from COVID, did you -- and I think this is a fair question to ask because the ink has now dried. But did you ever envision pilot economics, pilot wages going to the level that they have now gone? I mean, was that part of your thinking during the downturn?

No. I mean, I think I remember being in 2020, and the biggest concern for pilots were are we going to have a job because there was -- like we were all sitting there saying when is this coming back. And to see the turnaround, it's been remarkable. But I think the great thing about this is that it's created a lot of interest in the pilot career. And again, it's tempting people into the profession. For 15, 16 years, it was hard sometimes for pilots to recommend being a pilot to sort of an aspiring middle-schooler, unless you loved aviation because it was really hard and it was not well paid. And I think that, that has been terrific. And I'm very proud of our team's efforts. There's been a lot of talk about the pilot shortages. In 2016, we started a program to bring and train our own pilots. We now have, I think, about 800, 900 pilots who are out on the line or in training who have come through one of these programs, including one, by the way, where if you join JetBlue and work for JetBlue for a period of time, we will train you or your family members to become pilots. And so it's really part of our sort of embracing our culture and giving people within the company access to opportunities that they haven't always had. So -- and by the way, as these pilots come into the line, the attrition is so much lower than pilots that we're hiring from outside. So look, the cost increases clearly create challenges because it's a significant part. But I think the -- what we will all see over the next several years is just this big influx again of people coming into the profession. And I think that's terrific. Because when I grew up, aviation was one of the coolest things you can do, and I think we want to do that again.

So the consensus on the pilot shortage, and there are various ways to describe or define the shortage, but consensus seems to be around it's sort of a 3- to 5-year phenomenon before it's solved for. Over or under on that?

No, I agree. I mean, I think it's not a switch that sometimes it's -- it will continue to get worse for a little bit, and then it will start to get better. We all have different views as to how quickly you get to that point. I do think some of the aircraft constraints and some of the training constraints has limited some of the sort of pilot hiring that could happen. So my view is it's going to peak probably early next year and then start to ease. And I'd say we've -- as I said earlier, we've taken certainly some of this into our own hands with these programs. I mean the pilots that we kind of started in 2016, 2017, they've now been flying the line for 2, 3 years. And we've got hundreds of pilots coming out every year from some of these programs. And I think it's great. You can get a high school, you can join JetBlue, you can work at the airport. And then 3 years later, we'll train you and your sister or your mom or dad to be a pilot. I mean it's just -- it creates a fantastic cultural opportunity within our company.

Last question on the pilots, and I wasn't going to ask this, but I was a little bit surprised, and we discussed this earlier today. Part of Spirit's updated guide for the first quarter was that they underestimated some of the incremental pilot expense, which surprised me a little bit because I just thought you take a new contract, you drop it into a spreadsheet. I was surprised they missed, and they spoke to that. Is there any risk of that? Are you finding that the economic impact of the now ratified deal is driving anything different in terms of the costs that you would assume?

No.

Okay. Fair enough. Straightforward. Back to the merger for a moment, what gives you -- so when I think about airlines that have deep benches with significant consolidation experience, I just don't think of JetBlue, but I don't know everybody -- actually, I would probably put Southwest in front because they have a very storied career with consolidation over their history and yet even they struggled with the Air Train integration, and they were supposed to be pretty adept going in. Integration always seems to be harder than what people planned for. Do you really have the right -- I mean, what gives you the confidence? Are you looking for examples outside of your franchise for best practices? Because you have not -- you've grown something from scratch, but you have not mated, for lack of a better term.

Yes. We're waiting to mate.

Waiting to mate.

No. I mean, it's a great question and 2 things. As we came to this year, as a team, we said, we've got 2 main priorities. In addition to we want to run a safe operation -- and by the way, we can never take that for granted as we've seen over recent weeks and months. So you have to be very focused. And we want to execute really well in 2023 on that organic plan, and we want to prepare for the merger with Spirit. And so what we did in our company is we've really separated out the responsibility of those things. So we have a team that's entirely focused on running 2023, and then we have a team that is focused on integration. And that team consists of some JetBlue folks, people that we've hired that have been through this. We have hired consultants, and some of those external consultants who -- some of which have worked on hundreds of integrations and some with aviation experience. And we've also have access to, and I won't name them, but people that you would know who have been through this, other U.S. mergers, in the last 5 to 10 years. And the challenge I've given our team is I want -- I think it's right for us to aim high and say, we want the most seamless integration in airline history. Now if there's any good news about some of the regulatory time lines. And now we've got to go to court and make the argument there is it's just giving us more time to get ready for all of these changes. And we've also made some decisions early. I mean we've been very clear, it's going to be the JetBlue brand. We have a single fleet type. We're going to retrofit the fleet. We're not sort of saying, well, this -- remember when we went through the -- obviously, we were unsuccessful versus Alaska Airlines. But that brand question with Virgin was out for a while. So we kind of took that off the table. We've already started conversations with some of the unions and some of our own values committees about processes around that, too. So look, it's not a perfect process. It's extremely difficult. But I think we set it up well so that our team is not distracted from what we ought to do in 2023. And we're making sure that we've resourced the integration management office with people who've got experience with this. And by the way, I would say -- JetBlue, I would say, I mean, I think Southwest is a terrific airline to have a lot of people who have been there for a long time. Actually, JetBlue tends to hire more from different airlines. So we probably have more of that experience than you think. We have executives with us, they've worked for American, some have worked at United, some of which have worked at Delta. And I think we've hired some really good people in the last couple of years.

I mean you have to admit as mergers go, Delta and Northwest did the same thing for a living. Yours is an assimilation of a differentiated model into your own unique model. And what I can't decide is whether that makes it easier or more difficult to merge.

Yes. Look, I think they've all got their own challenges. And I mean we don't have the fleet challenges that perhaps the Delta and Northwest would have and Spirit -- By the way, terrific partners in this, when I talk about integration management office. It's with the Spirit team members and their leaders too, things we can talk about, things we can't. We make sure the lawyers guide us very clearly on all of that. But no, I think that as we work through it, we're just going to stay very focused on that. And I think that the fleet commonality is, I think, a big piece of what made us interested in this deal because we just -- we know how to retrofit airplanes. We've just been through that. We know how to hire people. I mean we just hired 7,000 people last year. And so we'll -- then there's all the other blocking and tackling that you have to do.

Back to the stand-alone franchise, you reiterated your full year guide today, somewhere between $0.70 and $1 profit. Maybe it's a question for your finance team or for Joe because I doubt you spend any time at all looking at...

Try me. Try me. Let's see.

At sell-side models. But the street is not at the level of prosperity that you are guiding towards. What do you think is the biggest differentiating factor there?

Well, I mean, if I think about the sort of 3 big variables, I think on costs, I think off to a strong start on ex-fuel CASM. And under Ursula's leadership, we're very focused on that this year. I think we had a good track record coming into COVID. And I think in the last couple of quarters, we started to pick up where we left off. On revenue, I mean, again, pleased with Q1. I mean let me put out this: for us to hit our annual revenue guide, which we did not touch today, RASM has to be flat or slightly down for the rest of the year. And I think our TRASM for the first quarter was like 23%, 24% roughly where we are. So I think that's...

That is the easiest comp of the year though.

Yes. No, that's true but...

Comping a COVID quarter but...

True. But to go then flat to down for the rest of the year Yes. I mean, I think that's a believable goal. And then I think fuel is the unknown. And as you saw today, we started to step in a hedge -- tiptoe into hedging a little bit just to kind of try to protect that plan from rising fuel, right?

Looks like my colleague, Mark Streeter, in the front row, may have a question. Let's see if you're going to ask the question without using the word sheet or balance.

I will. I'm more than a one-trick pony, Jamie. Robin, you first announced the bid for Spirit in April. You reached an agreement in July. And here we are 9 months later. And I think about what's changed since then. The revenue environment is a lot stronger, but there's been an awful lot of inflation. I know you put bridge debt in place. But when you think about permanent financing, obviously, there's give and takes. However, whichever way you and your management team view the accretion or value creation or whatever the metric is of the deal for Spirit, is it higher or lower now than when it was when you signed the paperwork?

Yes. Actually, it's a good question. I forgot when you asked me earlier, one of the other roles that we've created during this integration process is head of -- someone who's solely focused on value creation for the IMO for the merger because things change all the time. Financing costs go up, revenue assumptions change, pilot deals come and go. And we need to make sure that we are fully on top of all of those changes because I fully appreciate the history of these mergers is -- tends to be they get there in the end, but they tend to disappoint for the first 2 or 3 years. And so we're very focused on delivering the commitments that we've made. So we're very focused on that. Clearly, there's been some changes in some of those lines. I mean we were pretty conservative with some of those value-creation numbers that we shared because we didn't obviously want to put everything out there because we always knew there would be some things that perhaps didn't come in as we expected. And I think we -- on the higher interest rates, we still have -- we have time. I mean this transaction is still not going to close here probably for the next few months. And then we have a lot of flexibility with the takeout financing. And again, significant margin and flexibility to make sure we can still deliver the benefits even if we're in a higher interest rate environment.

So you didn't answer my question, so I'm going to redirect and just say that number, when you signed the paperwork at the end of July last year, if we were to just put a halt on it today and look at where you...

We haven't changed it.

You still think your accretion analysis, your number is flat? It's not better, worse? It's the same?

About the -- it's -- right now, we're assuming it's approximately the same to what we said when we announced the deal.

Any questions from the floor? It's been a shy audience today.

I have one more.

There's one over there.

Terrific. We'll go to that first.

Let's see, I was just looking to ask you about your fuel assumptions. Crack spreads, some of the issues in New York, where you see that going towards the end of the year?

Yes. I mean we don't -- Urs, please correct me. I don't think we see any relief in the New York Harbor issue anytime soon, unfortunately. As I mentioned, we've stepped into hedging, particularly over the sort of the prompt quarter to try to derisk at least the -- part of that pricing construct. I wish I had a better answer. I mean it's frustrating for us, believe me, when our fuel guy is always higher than everybody else's. Another plug for the merger because we'll have a more national geography, and we will be able to bring down our average fuel price too.

Robin, I just wanted to follow up on -- you mentioned some delays in getting some of the long-range aircraft for Airbus. Are you -- any sort of sense of confidence given your latest guidance on CapEx and delivery schedule, what you've most recently said? We heard earlier, there were some updates given from Airbus at year-end. Still waiting to see when the next update would come. Where do you stand in terms of your confidence level?

So we have an assumption around 2023 of 19 airplanes coming. Obviously, quite a few of those are coming in December, so we'll see if they'll actually come in December. And then I think we're working with Airbus now to get sort of better parity over 2024. I mean my sense is that 2024, we're going to continue to expect delays to aircraft that are coming in. It's just a question of is it -- is the trend getting better? Is it the same? Or is it worsening? Hopefully, getting better as we get into 2024.

How many of the 19 are in December? Just curious.

I think it's a few, right? 3, 4.

3 or 4?

Yes.

Okay. So 19 could become 15 pretty easily, though, for this year.

Hopefully not. I'm sure -- hopefully, Airbus want to get...

Ursula is shaking her head.

Hopefully, Airbus wants to get the right money wired by December 31. But yes, clearly, they could slip into the following year. And look, it's been challenging. By the way, I do want to give a shout out to Pratt & Whitney, who have been actually terrific partners in managing some of the engine delays with us at the moment. It's hard. It's a great engine. It's going to take some time, longer than we expected, I think, to work through some of the issues. But right now, we're sort of blessed with no airplanes on the ground. And hopefully -- we have had airplanes on the ground, but they've been good partners as we work through that.

Most of your competitors have thrown them under the bus today. So...

Yes. Well, I didn't know that, but I'm not going to do that because they're visible. We spend time with their engineering team, not just their sales team. And they are -- what they do is they give -- they do their best to project for us when engines are going to come off the wing and so we have time to think through what that means. So for Dave Clark, who does the network, if he knows that we have a period of risk coming up where we may be 2 or 3 AOG, you can pull down the schedule proactively to minimize crew cost, to minimize disruption. Now they don't have perfect line of sight, but they know it better than we do. And so I think that is -- I'm very appreciative of that, and we want that to continue.

Excellent. Any other questions before -- yes, one in the back.

[Steve Hosley] said that the geared turbofan is actually more expensive to run than the V2500 because of its short on-wing life, combustor problems. It saves more fuel, but the maintenance costs offset that. Are you finding that?

Well, we have a flight hour agreement on the engine. So there is the disruption in terms of it coming off wing more often, but we have certainty over on the cost side.

That's great. I think that's all we have time for. Thanks, Robin.

Thank you, Tom. Thank you very much.

Thank you.