Q2 2021 Allegiant Travel Co Earnings Call

[music].

Good day and.

Thank you for standing by and welcome to the Q2.2021 Allegiant travel company earnings Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone.

As a reminder, this conference is being recorded on.

And I'd like to hand, the conference or with your speaker today charity and Wilson.

Please go ahead.

Thank you Betty.

Recent travel company second quarter 2021 earnings call on the call with me today are more a gallagher the company's chairman and Chief Executive.

Officers and John Redmond, the company's President, Greg Anderson, our EVP and Chief Financial Officer, Scott Sheldon, Our EVP and Chief operating Officer, Scott D'angelo, Our EVP and Chief Marketing Officer drew wells, our SVP of revenue and planning and a handful of others to help answer questions. We will start the call with commentary and.

And then open it up for questions. We ask that you. Please limit yourself to 1 question and 1 follow up the company's comments today will contain forward looking statements concerning our future performance and strategic plan various risk factors could cause the underlying assumptions of these statements and our actual results to differ materially from those expressed or implied by our forward looking statements.

Risk factors and others are more fully disclosed in our filings with the SEC any forward looking statements are based on information available to US today, we undertake no obligation to update publicly any forward looking statements whether as a result of future events, new information or otherwise the company cautions investors not to place undue reliance on forward looking statements.

<unk>, which may be based on assumptions and events that do not materialize to view this earnings release as well as the rebroadcast of the call to visit the company's Investor Relations site at IR Dot Allegiant Air Dot com with that I'll turn it over to Maurice Thank.

Thank you share and good afternoon, everyone and thank you for joining US again this quarter and we had an excellent Q2 quarter.

And our numbers showed while we averaged only 65% load factor in April and May on average June 77% brought us for the quarter average up to 70%.

And as is usually the case June dominated the quarter with over 40% of our passengers and departures and that 1 month.

And these highlights from June.

Quarter provides a backdrop for our comments today and our cautious optimism for the remainder of this year and on into 2022.

And our operations every summer for approximately 75 days for Memorial day through mid August.

And this particular quarter, we grew capacity 3.3% while.

While June was up 4.6%. This is again against 2019.

And speaking also applies to the major support partners critical to our operations.

And the off repeated shortage of personnel and the past 60 days.

It was a critical problem for our operational partners, including TSA Our airport contractors.

Fuel suppliers and others.

And which have resulted in less than stellar operation.

And when it's been 2 years I might add since we and the industry have had to operate at peak capacity given we took off last summer.

This operational Russ does and I like to call. It has been a challenge for all aspects of our industry.

These speed bumps however demand.

June and June results were proof of this fact, we continue to lead the industry out of this COVID-19 blackhall. The trend is there and we're moving back to our historic industry, leading profit profile.

The leisure sector has been extremely strong and it's been a bit of a wild wild west as the industry has focused its post COVID-19 opera.

Operations, almost exclusively on leisure and given the problems with business and international traffic.

But this additional leisure focused by others and our industry has not affected our competitive footprint.

We are still maintaining our 2019 profile of approximately 75% noncompetitive refill.

We finished our Airbus.

Thus transition and late 2018, and while we had fewer aircraft and 2019 compared to that 2018. Our 2019 performance was exceptional and we increased our operating margin to an industry, leading 20%, which is a 36% increase compared to 2018.

Our model at the end.

2019 was fire firing on all cylinders as we headed into early 2020.

That last early last year, we were continuing our growth and on.

Our outsized results in both January and February ASM. During those first 2 months were up 16%. This is all before the onset of Covid.

And in July 2021, and it's my strong belief we are now positioned to continue where we left off in early 2020, we're bullish on our model and its ability to continue to perform our near term results suggest a good outcome for 2022 currently we are planning above average growth.

But Moreover.

Moreover to that and we have acquired all of the aircraft. We believe we will need for 2020 to save.

And we'll airplane and Greg will have additional thoughts on these.

Comments on these ideas.

Another promising development has been our ancillary and third party revenue efforts. We've discussed previously our focus on generating additional revenues from our.

Customers, we want to leverage our direct 1 on 1 relationship we have with them.

We've introduced our ancillary bundling offering early last year, just as covered was beginning fast forward to today and the hope for benefits are being realized.

And we will have a few more comments and on this particular issue.

Regarding third party revenues, we have seen.

Excellent results for the Companys credit card efforts as well as a strong uptick and a rental car contribution you may recall, our relationship with enterprise as 1 of the strongest railcar partnerships and the leisure space.

The recent shortage of railcars has benefited us on the pricing front and.

Another part of our optical optimistic belief is sunseeker.

Sunseeker is located and the very middle of perhaps the best leisure vacation area and the country southwest, Florida, and the easy driving distance of 3 of our top performing markets.

He put into Garda and Sarasota historically, we have carried over 4 million people per year in and out of these terrific destinations.

And as I.

And in early 2020, we were well on our way to grow and our model, including building out Sunseeker, we're back and the same position today as we were and that early part of 2020. Given this thought process and believe we will be restarting and completing the construction of sunseeker and continuing what we termed our allegiant 2 <unk> plan sunseeker.

<unk> will contribute nicely to this strategy.

Lord unanimously agreed with our recommendation to finish the resort and <unk>.

John will have further comments about our plans and the associated financing.

Lastly, we have seen a dramatic increase and our cash balances and early may we completed a $335 million secondary offering.

These funds combined with our aggressive cash management during the last year plus the benefits from PSP and tax refunds has improved our cash balances to $1.2 billion.

Up 79% from a year ago.

This 3 fold increase in liquidity has dramatically improved our balance sheet and positioned us for growth.

And we've been talking about and not only next year, but the years thereafter.

Lastly, our team members continue to be the backbone of our company, particularly in this difficult COVID-19 dominated period over the past year.

They have been there during these difficult days, taking care of our passengers and.

And getting them safely to their destinations.

John.

Thank you very much Maury and good afternoon, everyone first and foremost I want to take this opportunity to thank our incredible team members.

We have who make it all happen and put us on this and enable position of producing these incredible results.

And as Morry stated, we have made the decision and a restart and finished construction of sunseeker.

Resort you May recall on May 12, 2020 during our Q1 earnings call I made the comment we would suspend construction for 18 months until we had greater clarity on business impacts on the pandemic and ensuring we had a better stronger balance sheet.

For 14 months since.

On CCAR made the comment and 17 months since we stopped we have that stronger balance sheet I referenced significantly stronger I might add.

We recently signed a non binding term sheet to borrow $350 million less the resort as collateral and Allegiant guarantee a structure that gives us the best best flexibility.

<unk> cost.

We expect to have final loan docs completed within the next 30 to 45 days.

And now for some additional funds secret data points.

We will announce the start date and opening timeframe at a press conference to be held at the resort site and Shiloh Harbor, Florida on August 3rd.

<unk> immediate relations team, we'll announce details so depressed as we get closer to that date.

And this will be the only opportunity for members of the media to access the site since it will be and active construction zone.

We will host an investor call on August 5th.

To discuss all things <unk>.

The format will be similar to an earnings call with management presentations followed by Q&A.

We intend to leave and uptime to answer all questions.

Because we will provide this dedicated opportunity we will not be taking any questions regarding sunseeker during today's earnings call.

Please save.

Your questions for the Investor call next week.

For any analyst interested and taking a site tour and I will be available and happy to host you between August 9th through August 11.

Please contact Sherry Wilson to make the necessary arrangements.

Similar to my comment about the press.

Yes, this will be a unique opportunity to tour the site before it becomes and active construction zone. Once construction is underway, we will no longer be able to host tours until the property is ready for its public opening.

We will discuss the golf course renovation start date and opening timeframe as well at the August.

Press conference.

These are only comments today regarding sunseeker stay tuned for August 3rd and fifth next week.

As I've done in past earnings calls I thought it'd be helpful to provide some directional data points to help you understand how we see things for full year 2021.

All of the data point and time, providing are on a GAAP basis basis with fuel assumed at $2 <unk> per gallon for the full year.

EBITDA inclusive of PSP should exceed $525 million with a margin around 30%.

Fully diluted EPS in excess of $13 a.

<unk>.

Year end cash balance around 1.3 billion, assuming receipt of the $136 million NOL.

And this does not include any proceeds from any financing related to sunseeker.

Yearend net debt around $300 million again, assuming receipt of the 136.

Sure NOL and.

And again this does not include any proceeds from the sunseeker related financing.

As a point of clarification the capital expenditure guidance provided in the release the airline only and does not include any estimates for some secret so again and that investor.

<unk> day on the fifth we will talk all things Sunseeker and you will get incredible amount of data in detail with full transparency on everything.

With that note, Greg will provide more detail around the data points I just provided in his commentary.

And with that I'll turn it over to Scott the envelope, thanks, John from a marketing.

Marketing perspective, this past quarter, we saw a strong return and domestic leisure travel demand and we laid the foundation with major initiatives that we expect to drive continued strength throughout the remainder of this year into next year and beyond.

Visits to Allegiant Dot com were up by 5% this past quarter versus 2019.

<unk>.

And while transactions were up by 10% and the same time period.

Fact that transactions increased at double the rate of web visits points to Allegiant heightened brand awareness increased marketing efficacy and enhanced web and app experience all of which combined to attract and convert more new and more returning.

And the lowest cost ways.

And nearly 80% of visits to Allegiant Dot com came without any incremental variable advertising cost because the visitor came to us by directly entering the allegiant dot com <unk> by.

By clicking links and marketing E mail or by clicking organic search engine links.

Custom also saw deeper levels of customer engagement across all we offer at Allegiant Dot Com overall third party revenue, which comprises co brand credit card hotel stays and car rentals was up by 26%, despite 11% fewer passengers and the quarter versus 2019.

Most notably.

Our Allegiant World Mastercard thoughts number 1 and number 3 best month, and new Cardholder acquisition and the program's history. During this past June and May respectively.

Total new card sign ups for the quarter were up by more than 20% and total co brand compensation for the quarter was up by more than 35%.

We are versus 2019.

This is and especially promising foundation upon which to introduce our new non credit card base loyalty program always rewards, which is set to launch in Q3 and.

And some may recall from our 2019 Investor day always rewards will be Allegiant first ever loyalty program.

Graham and the traditional non credit card.

And yet there's really nothing traditional about it always rewards name for all the ways Allegiant served leisure travel customers and all the ways those customers can benefit from this program was not designed by following the footsteps of traditional frequent flyer.

Flyer miles based programs that feature high touch benefits that are appropriate for business or international travelers, but are often not attainable for less frequent domestic leisure travelers and whose complexity and costs would detract from the U LCC model.

Weather always rewards built off the success of our credit cards.

Simple point, earning and point redemption model and also draws inspiration for the most effective programs engage with by our customers and all aspects of their life that includes Applecart, Amazon Prime and target circle rewards just to name a few.

We patterned always rewards to be a tech forward program that maximum.

Maximizes, our customers' ability to earn and redeem points and any amount at any time for anything we sell at Allegiant Dot com, all while minimizing operational complexity and costs by making it low touch and digital centric.

Ultimately, we believe always rewards will be distinct evidence ability to.

Show sustained value to all domestic leisure travelers, we think we're uniquely positioned to appeal to millennial and Gen Z customers, who collectively now represent both the largest and fastest growing age group of allegiance customer base.

While the primary intent of this program is to promote repeat purchasing.

Savior among our customer base. It is also engineered to stimulate larger transaction sizes by motivating purchases across all of the leisure travel products offered at Allegiant Dot com.

Program has also been designed with an eye towards leveraging existing and new strategic partners to create a distinctive programs and.

<unk> not only delivers value to current customers, but also enables us to reach new customers and introduced the Allegiant brand via co marketing through these partner relationships.

And to that and earlier this week, we announced an exclusive partnership with select live nation and venues Ticketmaster and music festivals.

<unk> to give customers access to unparalleled live entertainment experiences across the country.

The multi year strategic partnership brings together the best of travel and experiences and it includes digital and commerce elements that will enable fans, who discover and live events and purchase tickets across the.

Our live nation, and Ticketmaster platforms to gain access to turnkey travel packages from Allegiant when planning to attend concerts and festivals across the nation.

Additionally, as customers book travel and Allegiant Dot com and there'll be offered exclusive experiences and events at their destination national sweepstakes opportunity.

<unk> and more on.

Ultimately, we expect this partnership to help us accelerate new customer acquisition and email database growth dramatically enhance our leisure travel offerings with top live entertainment and key cities and how quickly elevate always rewards into a leading leisure program.

And help pave the path.

And for winning over more Genex millennial and Gen Z consumers to the Allegiant brand.

Our goal with this partnership along with the Allegiant Stadium and all of our major leisure product partnerships is just strategically we've allegiant and to the fabric of the most important aspects of leisure travel and a continued asset light fashion that enables us.

Within our core airline businesses existing network and focus city destinations as well as our high margin third party revenue streams through both direct media and physical engagements that attract new customers and inspire incremental larger transactions from existing ones and with that I'll pass it over to drew wells.

The strength you Scott and thanks, everyone for joining us this afternoon.

Revenue momentum continued into the second quarter with total revenues down just 3.9% versus the second quarter of 2019 on scheduled service ASM growth of plus 4 and 5%.

Essentially all of this growth came during the peak and memorial day through the end of June <unk>.

And that number is incremental breakage associated with credit vouchers amounting to roughly 5% of the quarter's revenue.

A huge part of this growth is the increase and our total ancillary revenue by 2%, despite carrying 11% fewer passengers and the quarter.

As Mory mentioned, our bundled air ancillary program launch and fourth quarter 2019 and.

Larry and more than held its own through the pandemic. The recovery is helping to showcase for significant value of the program aided by website redesign can deliver as.

And as we continue to test product mix and pricing as well as further develop the program to appeal to a broader subset of itineraries bundled will continue to produce value.

Additionally.

And if the RM team has done a phenomenal job alongside <unk> and Scott These team managing a unique rental car market.

Despite the sizable reduction and inventory available and in turn cardiac gold we recorded the highest net revenue figure in company history.

These along with the co brand wins for Scott or a fantastic story and made even better.

And your trends continuing to improve as well.

Loads of improved sequentially and each of the last 5 months and we will do so again in July and we will cross the 80% Mark.

All of the above sequential improvements led to total revenue and the month of June 2021, surpassing June 2019 total revenue despite headwinds.

And my past fixed fee and other revenue.

I expect the third quarter, we will replicate this and we're guiding <unk> total operating revenues to be plus 3.5 to plus 7.5% versus the third quarter 2019.

We will accomplish this on scheduled service ASM growth between 16, and plus 20% versus <unk> 19.

<unk>.

As opposed to the second quarter cadence. However, this growth percentage is relatively level across each month.

We are built to follow seasonal demand trends of the leisure customer and this year is no different as we anticipate September flying to be about 50% for July ASM.

While still early demand trends would find for the off peak and I am pleased with how capacity.

Capacity and demand are aligning there.

A sizable part of the growth through the back half of the year will come on new routes from year round service to hyper seasonal 1 weekend and we will have over 100, new markets begin service between April 1 and December 31 of this year.

Among those routes are service to for new cities announced and the second quarter.

Quarter.

Minneapolis Amarillo.

Washington, Dulles, and Melbourne, Florida, and addition to complementary Phoenix services Sky Harbor.

For context, roughly 13% of third and fourth quarter ASM will come from Ralph and their first 12 months.

This is about on par with the distribution during our network investment and.

And the groundwork laid in 2015 and 16.

We're not the only carrier interest and pursuing new leisure opportunities.

However, as Morry mentioned, our current competitive overlap outlook is virtually identical to our 2019 position.

And with that like defense order for Greg.

Thank you drew and good afternoon, everyone.

Before I begin on 2.1.

To echo others' comments and thank our team members for their incredible commitment drive and hard work over the past quarter as we continue to ramp up.

So looking at the current tone of our business for the second quarter, We reported GAAP net income of $95 million for $5.49 and earnings per share and.

Adjusted net income excluding.

Impact of PSP was just under $60 million for $3.46 per share of nearly $7 per share for the previous quarter. This increase and EPS is with the added and headwind of the incremental shares issued with the common stock offering during the quarter.

So for the remainder of my prepared remarks, I will plan to reference adjusted numbers.

<unk>, which excludes the impact from PSP.

Second quarter's substantial margin improvement was fueled by June performance as its total revenue was the highest monthly revenue and our company's history.

Now. This does include a tailwind resulting from recognition of incremental voucher breakage revenue as drew just mentioned.

And so early and.

Only <unk>, we extended the expiry of our vouchers to 24 months as such we appropriately adjusted our estimate of breakage rates in order to monitor for variability and customer redemption patterns as.

As we continue to observe sustained trends that reflect no meaningful changes to the redemption patterns, we have updated our estimates accordingly.

Which has also been incorporated and our forward revenue outlook.

So even excluding this breakage tailwind June was still a top 3 all time revenue month.

Turning to costs.

When comparing <unk> results with the previous quarter, our adjusted non fuel costs increased sequentially by only 5%, which is well below our sequential ASM growth of 15.

15%.

Our reported adjusted unit costs, excluding fuel came in at $5.86 for the second quarter down 1% year over 2 and in line with expectations.

Moving to liquidity adjusted EBITDA came in at $138 million, just shy of our average per quarter during 2019 yet.

We're strengthening our conviction of getting back to $6 million and annual EBITDA per aircraft.

The hefty cash generation during the quarter was aided by forward booking strength.

And as evidenced by the increase and our total ATL to $440 million and increase of 8% sequentially.

We reinvested $46 million back into the.

Net first during the quarter and the form of airline Capex, which includes $28 million for the purchase of 2 aircraft.

<unk> 9 million for spare engine for a spare engine and the remaining for kits and parts for future aircraft.

Adjusted free cash flow generation of $100 million during the quarter aided our total ending balance of $1.2 billion and $400 million and net debt.

Business. These balances exclude the $136 million of incremental cash we expect to receive in the coming months and the form of our NOL refund.

Our already strong liquidity position was greatly enhanced by the equity raise and may which resulted in $335 million and incremental cash to the issuance of $1.6 million shares.

This opportunistic equity.

Raise was very well timed to balance growth capital for the airline while also limiting dilution are.

Our fortress balance sheet will serve us extremely well as we continue to grow the airline and take advantage of the numerous aircraft opportunities we see in front of us.

Turning to our second half of 'twenty, 1 outlook based on current trends we.

The back half of 'twenty, 1 capacity to be up around 18% year over to you.

Using such capacity assumptions adjusted unit cost, excluding fuel should come in and around $6 <unk> for the back half of the year, which is 6% less and the same period and 2019.

Since our last earnings call. These estimates reflect incremental cost.

$10 million per quarter, primarily spread over areas, such as stations labor and sales and marketing.

Addressing these essential areas help us day, a step ahead.

So for stations a major driver our strategic wage increases our third party service providers need in order to remain competitive in light of staffing challenges.

And I might add this isn't unique to allegiant as all carriers and other industries seem to be experiencing staffing challenges.

And for Labor, we are hiring additional operational heads to ensure we are prepared to support not only our stated growth target targets, but also future longer term opportunities.

For sales, we are seeing an uptick and total credit card processing fees.

And that's primarily due to the higher than expected bookings, which I also might add as a high quality problem to have.

And finally for marketing we are planning for some additional strategic marketing spend which we believe will be accretive to the bottom line.

So even with these incremental costs I just outlined we still expect our full year 'twenty, 1 CASM ex to be around $6.2.

Fees and <unk>.

Nearly 5% below 2019 levels on a capacity increase of roughly 10% year over to you.

Combining our second half 'twenty, 1 cost expectations with our 3 key revenue guide and current booking trends, we expect adjusted full year EPS to be more than $5 per share. This assumes fuel at $2.

<unk> 7 per gallon for the back half of 'twenty, 1 or $2 <unk> for the full year as John mentioned earlier.

And this also takes into account the incremental share count as a result of our equity offering.

So getting back to sustained earnings enhances our flexibility around minimum cash levels and deploying excess capital our top priority, which with such as.

And I'll, let capital is to reinvest back in the airline followed by deleveraging. We expect our total full year 'twenty, 1 airline capex to be $220 million. Additionally, based on current debt maturity profiles, we expect our ending 'twenty 1 balance of gross debt to be $1.5 billion.

Turning to fleet during the second.

First quarter, we placed into service 3 aircraft, bringing our total and service aircraft with jeans, and a 103 and expect to have and 108 aircraft in service by year's end.

The onset of the pandemic our fleet team has now signed up 24, <unk> hundred 20 series aircraft 21 of them since the beginning of this year all at an average price discounted.

Second <unk> percent when compared to pre pandemic levels.

And in fact, I am excited to announce that just this week, we finalized a deal with air lease for the acquisition of 10, <unk> hundred 20 series on aircrafts under a finance lease.

All aircraft and are expected to interest for all these aircraft are expected to enter service in 2000.

22 press release, followed by an 8-K will be forthcoming.

We've deliberately these deliveries largely round out all the aircraft needed for next year and our plan includes 19 incremental aircraft to be placed into service throughout 2022, bringing our total expected fleet count by the end of next year to 127 aircrafts.

Our fleet strategy gives us enormous flexibility in the coming months and years as we have the optionality to pace our growth to not only match demand, but also ensure it is in lockstep with our operational support.

We will be finalizing our 'twenty 2 budget this quarter and expect to provide its outlook during our October earnings call.

Lastly.

And fleet all the aircraft, we have signed up since the onset of the pandemic will be inducted into service at 186 seats, bringing our estimated total of 186 seat.

Aircraft ending in 2022 to <unk>, 71, which equates to roughly 55% of our total fleet <unk> by way of comparison, the 180 <unk> Air.

Lastly on <unk>.

Only made up 26% of our total fleet back in 2019, the higher gauge $180.60 producers more EBITDA per aircraft and our other 2 configurations of 156 and 177 seats.

And closing with Sunseeker and as John noted, we have a non binding term sheet under our sunseeker subsidiary to borrow capital to complete.

Aircraft auction of our resort.

Wanted to reframe that this debt is secured only by the assets under our sunseeker subsidiary with a guarantee from Allegiant.

We believe the materially lower interest rate enhanced flexibility and larger advance amounts by having by having a corporate guarantee outweigh the benefit of.

For non recourse structure.

So with this debt financing. This project is expected to be fully funded with no additional equity capital from Allegiant and we're excited about restarting the project along with the increased Optionality. It's completion brings and look forward to providing further detail on August 5th.

And with that I'll turn it over to the operator for questions.

And as a reminder to ask a question you will need to press star 1 on your telephone.

Each caller to please limit your questions to 1 and 1 follow up only for mine raws and compile the Q&A roster.

I guess.

For instance that suddenly have Joseph de Nardi from Stifel.

Sir your line is open.

Hi, Thanks good.

Good afternoon, everyone I'll, let someone else ask about sunseeker and.

Respect your wishes.

Drew and I think the plan is to and 'twenty..2 you said at 127 aircraft.

If that suggests the potential for pretty good growth and 22. So can you just maybe put that into context, how you're thinking about ASM growth and then Greg.

And what seems like good growth next year can you talk about the cost leverage that you can get off of that potentially thank you.

And I think George I think I'll provide a little bit of a.

I guess are you are right, we have the potential for growth up to that but we haven't yet set any sort of 'twenty 2 target.

And the final strokes of planning the spring now and summer is obviously going to be I think a longer salt so.

There is a wide range of options and still available for 'twenty, 2 we're happy with where the ceiling is such that we can reach all that.

Appointing but.

Like Greg said, we are going to be moving in lockstep with the operational groups and making sure that we're growing at the appropriate and measured.

Right.

And Joe just on for Ryan.

We will have some more and better outlook next quarter. After we have our budget finalized, but just in general high level.

We have really good control.

Potential of our costs.

The unit cost will depend on the growth that we haven't yet set but overall I think we can drive low.

On the 6 standard 630 day.

And kind of range for next year 'twenty 2 based on capacity growth.

Some of the headwinds that I think that we might face this year as compared to our I'm sorry next.

Low repaired this year would be labor just as I mentioned, we're we're staffing up operational groups to support growth I'm also this year. We just didn't have as much profit sharing as we normally have so I think that to next year, we expect to be profitable, which will put some pressure or headwind on that.

Also I think some tailwind.

And there will be ownership I think we'll get some benefit there as we continue to kind of better utilize our aircraft and we'll have to see what the capacity outlook that we put out but there could be and tailwind there along with stations some of our station cost that we're seeing I think there'll be some benefit and.

In particular like airport and landing fees, we have.

Right now there is some pressure there.

<unk>, Gary just giving kind of less capacity from an industry perspective, but those we think will level out as full industry capacity starts coming back so.

And so stay tuned we'll have more information, but thought we'd just provide a little high level. There for you. Okay. That's helpful. And then drew I think a couple of quarters ago, you said that the network was maybe 10% to 15%.

Are they ship and Marty and his remarks, and it's 75% noncompetitive. So can you just reconcile that and maybe just I know there are many.

Different ways to calculate that but can you talk about how you're maintaining.

A similar level of kind of non competition across the network with what seems to be increased competition.

Petition.

Yeah, and it really depends on kind of a starting point that you are looking at for your frame of reference lab and in the middle of the pandemic, we were down I believe as low as 13% I don't have that number in front of me, but it's about 13% and.

And then we just kind of move back from that so the amount of capacity that came out has now largely been matched by.

The amount coming back and to put it back and those 2019 levels.

It's really just a timing element there of pandemic and changes to industry networks and addition to all of the announcements that we've made that have by and large and somewhere in the 5% to 10% competitive range. So we still continue to do.

And of this by by continuing to diversify.

Away from competition.

Yes.

Thank you.

For the next question, we have Katie O'brien from Goldman Sachs Katy Your line's open.

Hey, good afternoon, everyone and thanks, so much for the time.

Maybe maybe just 1 on the fleet so you've talked.

About <unk> <unk>.

<unk> 'twenty, 1 incremental aircraft since the start of the year for your 2020..1 Capex has remained the same since February. So did you have line of sight for these aircraft deals back then or should we expect cash capex to step up a bit next year as the rest of those aircraft deliver.

Hey, Tony its Greg.

Great question and.

Helpful for us to clarify that.

And.

Several of the aircraft that we've acquired.

And I'd like to deal I, just mentioned with air lease those are on a finance lease so I think from a net capex perspective.

We're roughly in line.

I think that those 10 aircraft for will.

Bird this year and 'twenty, 1 and then the remaining will be next year, but under a finance lease. We just we didn't update our capex guidance to reflect that and then but it's still that that's those 'twenty 1 numbers that we put out there today for full year airline Capex, we feel good about that from a I guess to put it in like a cash capex perspective.

Got it got it very clear.

And then maybe a question for Scott. So last quarter, you were kind of hinting that we had some coming asset like co marketing and sales channel partnerships that sounds like we got 1.

Live nation announcement.

I just want to better understand how.

We'll be the types of relationship work. So is it just like if someone buys a concert and Vegas, what's going on maybe a credit card billing address or something like that outside of Vegas will they get an email from live nation, pushing and allegiant, Sir or how does that work and then just like really high level.

How does the payment structure work for that type of marketing opportunity. Thanks, so much.

You bet Noah and thanks for the question you're exactly right from the customer point of view, 2 things will happen and.

The <unk>.

Live nation, and Ticketmaster venues that we're partnered with.

They buy tickets.

Tickets, they will be presented with Allegiant and of course ultimately here at Allegiant.

<unk> dot com, we will be able to sell <unk>.

And inventory to those venues and events, but Moreover.

And the same 1 should think about this as a data.

Digital and of course, as we mentioned at Commerce partnership and so it's the.

Yes nature of these partnerships that enable us to re.

So many more consumers and the markets that we collectively serve and be presented up exactly as you said, sometimes digitally and sometimes physically.

But.

Gaining access.

And to individuals and potential.

And customers and a very focused and targeted way.

And at this time.

We've released that it's on mulch.

Multiple year, we look forward to having a long term relationship.

But arent disclose and any other financial arrangements other let's say debt.

It's a.

2 way deal.

Where we will be looking to.

Help them as a partner and they will be looking to help us as a partner.

Got it thanks.

For the next question, we have Helen Becker from Cowen and then.

And your line's open.

Thanks, very much operator, hi, everybody and thank you very much for your time, just kind of curious about fuel availability on the and.

Some of your smaller airports on the West coast.

How is that how's that working out for you.

Are you able to get what you need are you tinkering, how should we think about that and and.

If you're tinkering, what's what's the cost that we should think about that maybe not be there.

Once this issue and.

And this is Scott Sheldon.

Yes.

What we've seen really since early summer, there's upwards of 20 markets base.

And basically in the Midwest and the upper.

And northwest.

Some still to this day and don't have any availability. So all this is tinkering.

More often than not then most emissions can be accomplished just by tinkering and there's very few.

Situations, where we got to do with fuel textile.

As far as the cost.

Clearly.

The cost of extra pounds.

But you are starting to see what used to be upwards of 20 markets I want to say I saw a list today, it's upwards of maybe 13.

And as fuel production comes back on line.

On trucking and fuel supply and logistics come back on line.

And that stuff will be available.

For for normal operations.

Got you that's very helpful. And then the other question I have not sure who can answer this for Arthur can behave and.

And so we think about that capacity that you were talking about for 'twenty, 1 and rest of 'twenty, 1 and 22.

Had the pandemic not happened what was the base have been like in 2020.

So that.

On a I don't know if you can do the spin on an adjusted like pandemic adjusted basis, what's the actual growth rate versus the year over 2 number.

Yes.

I'll take a stab as I, obviously don't have the exact number off the top of my head, but we're going to be.

Effectively close to where we expected on kind of that 2 year 2 year horizon and I mean, if we're 20% now and thats going be just shy of a 10% CAGR on on both of those years. So maybe just a tick below where we had expected, but I don't think were entirely far off where we thought we'd be at this point.

And we agree on for Stephen.

<unk> I'm, sorry that was a better way.

We grew the first 2 months of the year, 16%. So that gave you an indication.

And the 19 was not as much growth is only 9% because we have limited airplanes coming out of 18. When we finished our transition, but we were we were looking to pick.

And it up a little bit and as we went into 'twenty.

Yeah, Okay. So that's really helpful alright, well thanks Maury.

And thanks, Tim Thanks for those answers very helpful.

For the next question, we have Mike Lindenberg from Deutsche Bank, Mike Your line is open.

Yes.

Good afternoon, everyone, Hey, just a quick 1 here on when you look at the markets that are the traditional Allegiant markets. Now we have I don't know for 5 carriers, who seem to all be targeting some of these interesting markets like Mesa, Arizona put to Gorda, Bellingham and I'm just curious.

On the surface.

It looks like Youre going to have a lot more competition on 1 hand on the other.

Some of the city pairs are different and in fact, it may actually.

There is a halo effect I guess, if you will that these airports that were probably not on the radar screen and when you have a south West Airlines now flying.

And to Fresno, and Bellingham, and the Florida Panhandle.

Theyre actually may be some benefit to 2 allegiant and especially if these markets arent.

Look at it from a city pair presence. So just curious on on whether or not it's driving more traffic to some of these smaller airports and there is a halo effect and you're benefiting from it thoughts on that thank.

Thank you.

Sure drew here.

For the time of announcement and we definitely see kind of a traffic Halo effect I think probably still too early to say, what the long term impact and thats going to be I'm, certainly going to stop short of saying that I embrace their presence and our airports.

But in terms of traffic and awareness.

Youll definitely see it on the short term and we will circle back and 12 months and talk about the long term the only thing else I would add there is depending on the carrier as you all well know we are all non stop flights and in many cases.

And where those competitive routes are really bringing someone state of Las Vegas to connect on a flight to somewhere else.

It's kind of the Halo effect that it's driving exposure from and that case and origination point.

But it does very little actual competitive damage since the person really isn't playing to be where our endpoint is thank you.

And just finished and I don't Michael.

Everything we do is point to point so.

Have any hub a lot of this activity.

And southwestern anymore is going through a hub for connection. So if you do on BWI 2 EPS, that's that's nice, but they're connecting all the way up and on the northwest or into some of our cities.

Not as competitive product.

We think so.

And we will see.

Okay, Great and then just 1 second question on as.

As we think about PSP and the various restrictions that it does have on Allegiant and Greg maybe can you just remind us at what point do the shackles come off and I realize there's a really cheap loan that youre benefiting for.

And so I'm, not sure where things come out and whether or not that has to be paid down completely before you could reinstitute a dividend potentially consider share repurchases.

Pay executives more handsomely in the past, what's the timing on that and how are you thinking about that among all.

The carriers you are in the best position to kind of come away from that and to get out from under the microscope on the government.

Hey, Mike Thanks for the question it's Greg.

The shackles come off October 1 of next year in terms of <unk>.

Dividend the ability to issue a dividend again and share repurchases.

And the like there.

In terms of like executive comp restrictions I think Thats April 1 for 23, just to put those 2 kind of into perspective and.

We are on a nice liquidity position as we've talked about we have the largest shareholders sitting here to my left so I wouldn't be surprised if we consider.

Returning value to shareholders either through the form of a dividend when those shackles come up.

Or even looking at the share repurchase, but nothing to speak to today. It's just something we'll keep in mind back and the back of our minds and then I would just say on to your point about executive comp and just I think the company Morry, John and the board has.

Really nice job of getting creative to.

Ensure that our our executives and our senior leadership team.

Are well taken care of through the pandemic and beyond and so we tried to get creative and that way and I. Just my sense is that everybody is pretty happy with what they've been able to do.

Great. Thanks, Greg and thanks, everyone.

Done.

For the next question we have.

<unk>.

Thank you Bruce from Evercore.

Helane your line is simple.

Hey, Thanks, I appreciate it and congrats on these results.

Just with respect to the breakage what line does that fall in.

Is it all is it all passenger revenue our base fare and and could we see more breakage in future quarters.

Hey, Duane this is Greg I'll kick it off and if you want to add it's basically spread throughout so youll see it and scatter and second and third part agents proportionately. So I would think about it from that perspective, and then the way.

I would just think about it on a go forward basis is and the second quarter really why you saw the number is large as you did and that we were catching up right and then so I think on a go forward basis I would just expect it to be back at a more of a normalized run rate pre pandemic.

Great and then.

And the disclosure.

Just going back and looking at a hotel room nights sold almost 70.373000.

Can you talk about attach rates, if I recall Vegas.

At a higher attach rate so maybe you could talk about.

We're attach rates are trending and how you see that across some of the bigger.

Leisure.

Installations.

Yeah, I'll kick that off maybe and then its got for you have anything on the biggest thing to watch with hotel room nights and what we've what's kind of tracked historically is the distribution of fleets that touch Vegas.

Our attach rate here is by far the best and the system and we've kind of slowly been drifting away from Vegas as a percentage of the.

Leisure debt.

Really over the last 10 years.

And so you've kind of seen that through the hotel results and of course, that's offset by the higher east coast presence and rental cars. So there is a pretty clean.

The correlation between that.

And I would say strategically there remains a lot of upside I provided a similar metric.

<unk> back in 2019, but I haven't updated 1 for every 1 hotel on a state that is attached there are 15 debt are actually put in the shopping cart, but not checked out on so a lot of what we will be doing to help bridge the difference and those 14 that make it all the way for the shopping cart, but.

Our whole checked out on a variety of these initiatives, Greg referenced them as strategic marketing initiatives and are part of just our continued digital evolution and the next 6 to 12 months.

Thanks, and then just just on Vegas, specifically and I don't know if you have a you're not revenue managing hotel.

Total rooms, yet but.

To the extent you have a view into Vegas.

And what are you seeing into the fall and in September specifically.

And as some of these large conferences come back online we've heard anecdotally rates for you.

Very high relative to kind of where they've been.

And don't get and General Vegas is holding up reasonably well for us into the fall.

Certainly it doesn't experienced at quite the same seasonal.

And chaos that Florida will through through September and through the fall.

On the hotel side things look fine and general kind of on powerful it seems.

And through the summer.

I would stop short of saying that were a big beneficiary of conferences directly, especially as it comes to the hotel, we will see a little lift here and there, but not quite as clean as confidence comes back we should see a massive uptick here I'd pause a little bit short of that for 1 additional point I'd make about Las Vegas is where we are a drag.

We're a beneficiary and inextricably linked and will be on the at least 9 weekends of NFL games at Allegiant Stadium.

<unk> seen that thanks for the top 10, selling NFL games is determined by overall secondary market ticket prices.

Our home games tiara.

Here at Allegiant Stadium and.

And drew and Kristen and team have done a terrific job of standing up.

And the capacity and those visiting markets be it in Chicago, Baltimore et cetera, and so for the leisure travel are on those weekends and theres a variety of other major events.

That will be happening.

1 the yield should be way up hotel to directly answer your question and 2.

Allegiant does have a very natural play and we're seeing that pay dividends with the investment with Allegiant Stadium.

Thanks for the thoughts.

Thanks Duane.

For the next question, we have savi seat.

From Raymond James Savi. Your line is open.

Thank you good afternoon, everyone.

Just curious on.

And I appreciate the longer term outlook here, but curious on how you're thinking about how post summer looks like.

Great quarter.

Yeah.

Yeah.

So just curious in terms of what demands.

Exactly and then a lot a lot of your seats are and I think our in September. So are you expecting that low passenger drop and our yields to drop or how should we think about how you know post.

Summer looks this year versus kind of historical or or even last year.

And my view on September and keep in mind as I mentioned on the opening remarks September fell about 50% the size of July so.

Still a small portion of the quarter and really even in the year.

And so with that I do think that there is a chance low.

Low factor will step back a little bit and.

Naturally does I do think the floor continues to lift a little bit on what it could be people that were priced out of the summer trips because of hotel rates because of railcar inventory and rates.

We will be kind of shifting that travel into the fall period.

And I do still expect a leisure falloff.

Losses, as we would always expect but I do think the floors, a little bit higher than normal.

And then they put it on the.

Aircraft side I'm, just curious how many of the aircraft that you've secured has been since the capital raise which is for aircraft and.

And just kind of tied to that from a upright and operational.

And within this by Scott or Greg.

And just historically I think of Allegiant, taking about 1 aircraft a month and thats something that the team's been able to handle without too much disruption. So.

What's your view on taking time and 21 aircraft next year.

Hey, Savi, it's Greg I'll kick it off and then turn.

And it over to Scott or P. J here.

13 since the capital raise is how many we signed up 13 aircraft this quarter postpaid and in terms of bringing these aircraft and the pipeline Scott Sheldon and Robert nail here and their respective teams have put together.

Really nice facility induction facility.

I wanted to make sure that we kind of day risks that that pipeline and getting those aircraft on through but a few.

J R. Scott anything you want to add on that price.

And I think the.

I think in order to.

Obviously deploy the aircraft on the hiring for pilots.

Started early July so we're hiring upwards of 270.

<unk>.

365 attendance and I suspect that the hiring cadence won't and.

We're kind of at the upper threshold of what we can do.

Just from a training footprint internally and so it's.

The factories back in high gear so to speak.

Okay.

Thank you.

Oh, sorry, 1.

1 other thing too that we've got and get the system back in place to pay you a surprise to me as the dislocation of on.

And everything that's going on and personnel being the number 1 issue.

And many people are leaving bags and people at the gate because they can't get through TSA.

And just.

And amazing kind of as I said the rust.

Still lingering around the operation So that's going to be to me a marker as to how fast we can get into 'twenty 2 as well.

But we certainly you go back and look at the operations for the industry and 18, and 19 and it was really top notch and the industry has not held.

And of the bargain up but so much of that too is not under our control.

I think we're short 10000, and TSA agents something like that so.

Yeah, Scott, we got to get the whole system back.

All the supply chain and conversations you are hearing we're right in the middle and 1 of ours.

Okay.

Yeah.

For the next question, we have Hunter Keay from Wolfe Research Hunter and your line's open.

Hey, Thank you Hey, Scott Dangelo as you studied other loyalty programs and the airline industry. What are some of the biggest features.

Obviously not.

For 1 of competitor programs debt side people really strongly dislike the most.

Yes.

For the question Hunter.

The biggest thing we found and.

And how about 30% to 40% of our customers are members of.

And name your top program.

<unk> Sky miles rapid rewards advantage.

The Big thing was about 90% said they didn't benefit from those programs and they never flow enough to earn any kind of status is certainly not enough to to get a free trip anywhere hence why we chose to kind of on the Apple card. If you will for those familiar.

And where you spend money you get.

And our case points that are in effect currency and you use it and.

Anytime you want for anything you can buy at Allegiant com, but I think the despite the most is the moving around on.

<unk> debt.

Im going to include myself and day and that's the 1 they're moving.

<unk> around of some day Thats 20, someday that 60000 miles and other day right, even if their seats on the plane. This blackout date that they cant use their miles so those would be that the direct answer to your question.

And we decided just not even to play in that space, just given the quote unquote Allegiant money.

Thank you all and we don't call it that but thats, an add back what it is and let them spend at <unk>.

All right.

That's interesting thank you.

And then drew.

Yes.

Demand for leisure travel is amazing right now I've got to say all things considered are you starting to think that maybe leisure travel is.

Money and elastic.

And as maybe a lot of US thought it was or is this just kind of a fluke situation because of this perfect storm of stimulus money and flow industry supply and pent up demand how is what youre seeing right now and informing your overall sort of decision making on revenue management on the next couple of years.

And I'm certainly inclined to believe the first.

Not and years of our company's history over the last 12 months to 18 months in terms of the price elasticity and customer behavior.

And I think this is very much the perfect storm of virtually missing out on the entire year of travel stimulus checks things really coming together.

To kind of drive different behavior.

I think thats really starts to revert to normal.

And 90 really even in the back half of this year by and large.

And seeing it now.

On it.

You've seen our loans return at the expense of some yield which was our strategy all along the whole yield up and the expenses.

So I think we're in in the midst of thing that returned to normalcy now and we'll do that full fledged pretty soon.

<unk> on it alright, thanks a lot.

On it.

For the next question, we have Dan Mckenzie from Seaport Global.

Dan Your line is open.

Questions here.

With respect to the aircraft order the 19, new aircraft next year, suggesting.

You could potentially hit the 2024 aircraft goal of 145 planes a year early so I guess first question here has that free cold changed.

Hey, Dan its Greg I will just say that.

Yes, it gets us a nice head start on that if you take a 10% CAGR in 2.

<unk> and 'twenty for I think that puts you closer to 160, but as you know we're always opportunistic here at Allegiant and when it comes to acquiring aircraft. So we don't have and order out there or anything like that will continue P. J P. J Neal and his team will continue to look at the market and see what's available, but yes. It gives us a nice jump start on that and if you just take a 10%.

23 year on those outer years, youre up to closer to $1.61.

And that on day, 1.2 is that if we have good deals on airplanes, which are presenting quite a few we should buy those airplanes sooner, but that doesn't translate into youre going to put them into service right away.

Operations will get good deals and good deal and.

On the marketplace.

And these fields for sure.

Yep Yep understood Okay.

And then just also a multiyear question here as you think about the business reverting back to the $6 million and EBITDA per aircraft.

Given the digital efforts that I.

And Kate past Investor Day, as you've said are 3 times the profit potential of the airline operating operation could the real answer would be a profit contribution that's more than 6 million per aircraft and the next cycle and does that include a and apologies for the Sunseeker question does that include a sunseeker contribution.

I guess.

And where I'm going with this is if the goal is to have a 145 per 160 aircrafts potentially in 2020 for that seems to imply over $30 a share and earnings and I guess just big picture is this how youre thinking about running the airline.

Hey, Dan its Greg, perhaps I'll kick it off and <unk>.

Angela or anyone.

And they may want to jump in here on the on the EBITDA per aircraft per.

First no. It does not include sunseeker that would be excluded from it.

Getting back to that number as you think about it I mentioned that we're bringing on 1 more 186 seat aircraft and in 2019, those aircrafts produced on average 8 million.

And maybe a little bit north of 8 million per aircraft EBITDA per aircraft per year. So so I say that to say, we believe that we can get back to that $6 million and EBITDA per aircraft and that's our goal with the day to get it to restore that as soon as possible.

And I do believe that there is upside to that as well and.

And where we're at I don't want to get ahead.

And my skis here and say, we think it could be this for that but job number 1 is getting back there.

We feel like the cost structures in place to support that and then drew and Scott the Angelo and on the revenue side and see what they can do there which would only.

To help enhance that Scott the only thing I would add is just strategically I think youre spot on.

I know I've said it before the most expensive day any business ourselves included can do is attract customers to their store and our case the digital store Allegiant Dot com once in the store and the most accretive thing. We can do is have them add more things to that shopping cart and.

So we talked a lot here about selling beyond the aircraft.

So, yes based fair, but all the air ancillary that drew talked about the third party and.

And.

Double emphasize what Greg said.

There is absolutely upside as we're able to.

And sell more of different things beyond the aircraft to the customers that.

We're already paying to come.

And this story is just getting them to put more on their card.

Understood and if I can just squeeze 1 last 1 and here drew 13% of the ASM and routes and less than 12 months and I'm curious 1 and what the RASM discount to the system average RASM was in the second quarter and then as we look at 2022.

And should we anticipate in terms of the percentage of flying and that would be and markets less than 12 months.

Thanks, and I don't.

Have the <unk> number in front of me in terms of RASM discounts. So I'll have to come back to you on that 1 but in terms of route distribution with only 7.4% and second quarter. It really is a back half of the year story in terms of.

Whats also being 700 for youre going to be relatively in line with what we've done over the last.

3 to 4 years, so you probably wouldn't notice anything material on a comparison basis.

Yes.

And 2.

And I still anticipate a fair amount of new rail growth I think the distribution will come down a little bit.

As we do more same store growth kind of filling and some gas there. So I'd expect something south of that 13% to 14%.

Good thanks for the time you guys.

Thank you.

For the next question, we have Conor Cunningham.

And Kent and partners.

Sir your line is open.

Hello, everyone and thanks for the time it seems like Youre clearly prioritizing yields during the recovery.

And on load factors just on the other side of the pandemic should we assume that youre willing to take a lower load.

Going forward and maybe you can kind of protect yields are you going to revert back to your historical norm, we're trying to just get people on <unk>.

And then.

Drive drive revenues for ancillary fees. Thank you.

Yes.

More generally it's promoting load factor over yield as we look forward really the question for us came down to size the demand pool and as the demand pool that smaller we thought it made more sense to prioritize the yield as we werent stimulating and incremental customers.

<unk> to fly with discounted rates.

As that pool is generally returned to.

And on par if not larger for us here into the summer it made sense to revert back to kind of older strategies of pushing that load and I'm not 100% of the network and all the way there yet and there are places where yields still makes sense, but by and.

Total thumb is pushing that load factor and once again.

Okay, Great and then you guys also have interesting data point and on your customer base and so I think and the first quarter you mentioned that people on a book their phone on your airline and have a vaccination rate of above 70%. So curious where that sits today and the reason why I ask because theres a lot.

Largely real conversations gone around and about the Delta there and then.

And all that stuff that could hurt demand. So just it just seems like your customer base is more insulated from any COVID-19 related issues kind of going forward and I. Appreciate the time. Thank you.

Yes, I'll quickly answer that.

And basically is and the high 70.

And so much like we've seen everywhere else.

Okay.

3 months later, it's climbed up and it was.

Many of 8 percentage points, but and.

Net 80.20 and.

Long tail from from here, not just our customer base, but the nation as a whole.

I appreciate.

Thank you.

For the next question, we have Chris <unk>, Chris Your line is open.

Hey, good afternoon, good afternoon, everyone and thanks for taking my questions. So 2 for me.

As we work into the leisure recovery here.

And looking at cost or are there areas that you're you're doing better and versus others.

That perhaps have come on faster than you might have expected.

Or it might be harder to work off as you spool back up and capacity.

Hey, Chris This is Greg.

Got it thanks.

Sorry, I just want you.

You broke up on there for a minute there on the cost side and just wanted to know if there's areas that were performing better.

As we spoke capacity I, just want to make sure I understood it right.

Yes areas that youre doing better as a few months ago when.

Demand really started to take off.

Relative to today areas that youre per perhaps.

<unk> outperforming and and versus areas that there's a little bit more pressure than you expected or perhaps areas that might be harder.

For you to work off through productivity or or other measures.

No. Okay I got you okay. So some of the areas and I think we're doing a lot better on today is even fit as compare to the pandemic as we ramp up.

And in our other area and our other line item, we've seen some benefit from things such as.

On taxes, and just training efficiency things like that.

And so we've driven.

Driven some tailwind on that front.

Say, though as we start to ramp up we're going to see and we bring on more pilot discussed above and alluded to.

We're going to probably see some headwinds down the road on that but I think where we sit today and feel good about that.

And some of the headwinds that I mentioned earlier like on the airport cost we think.

Those are transitory those will go away and we also mentioned that our ground service providers and my opening comments I talked about that and.

Inflationary and we're doing what we can to make sure that they they have to pay to to remain competitive there.

But ultimately the other areas that we're trying to do better on I think from a capital perspective as.

And as well as like aircraft I mentioned that Vijay and his team are out there finding aircraft for 30% discount that's meaningful savings.

Prepaying debt or in this pandemic world.

To put that into perspective, if that $6 million per aircraft.

Discount and we just signed up 24 aircrafts since the onset.

For the pandemic, that's like $150 million or savings last quarter, I talked about a little bit the strategic parts initiative, where we went out and we allocated $20 million for strategic parts debt.

We ended up getting like a 50% discount so essentially $40 million worth of strategic parts that we paid 20 million on and those.

Is that we are I think taking the what the pandemic and thrown at us and being more efficient combating some of these inflationary cost and just doing the best we can and that regard.

And I hope that answers your question, but let me know if they didn't think I could follow up on with that.

Okay, and just as a follow up.

On the.

Other side.

I'm curious you know and I know what makes your model and unique because you have relatively lower route overlap, but could you comment at all on the share dynamic youre seeing and if possible split that between some of the larger network peers, and then versus some of your low cost and ultra low cost peers. Thanks.

Or wait for.

First thing I'll note here that our general overlap with what kind of mainline legacy.

The flying is pretty low so I don't think I'll be able to give you a great read through on that.

And that front, that's not fairly well biased sample there.

And in general there's been a lot of commentary lately.

And from other carriers about third quarter yields being flat.

And folks even had mentioned the same thing for June and I think the pricing environment at least from where we sit and the leisure world.

Primarily into your markets.

Pricing is fairly healthy.

And I'm not concerned with what I'm, saying, we pushed higher yields and all 3 months for the second.

Quarter.

And like I said, we've heard the same from others. So.

And we've seen a lot of weakness from from where I sit.

Okay. Thank you.

And there are no further questions at this time I would now like to turn the call over to Maurice Gallagher for closing remarks.

Thank you all very much and we'll see you in 90 day.

Have a good evening.

Yeah.

Okay.

Ladies and gentlemen, this concludes today's conference call. Thank you all for participating you may now disconnect.

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