Unidentified Analyst: Okay. Thanks.
Operator: And our next question will come from Ravi Shanker with Morgan Stanley.
Ravi Shanker: Thanks. Good morning, everyone. So just on the closing commentary, your comments on the strength of close in was particularly notable because some of your competitors have been having some challenges with close end strength or weakness, actually. So are you doing something differently as the strength idiosyncratic to you as the weakness idiosyncratic to them? If you can unpack that, that would be great.
Andrew Harrison: Hi. I can’t specifically speak to other carriers. What I can tell you sitting here looking into April, demand is coming in very nicely with double-digit increases in unit revenues year-over-year as we move through the month of April. And as we look to May and June, where we have, obviously, a little bit more industry capacity. We are also seeing a very positive direction in the yields that are coming in through our system. So overall, we feel that Q2 is going to continue to be strong. Our network is well configured. Our premium class is performing. Our ancillary revenues are performing, they were actually up 6% in the first quarter, even though passengers were down. So we feel good about our setup for the second quarter.
Shane Tackett: And Ravi, I might just — there could be some effect that, as you know, the West Coast have been more depressed on a business recovery basis. And I think that’s caught up pretty quickly here in the first quarter, and that could be helping us. And then I also think just premium continues to be the place where most of the demand growth is happening, and I think we are doing a good job meeting that demand.
Ravi Shanker: Got it. That’s helpful. And maybe a follow-up to that. Thanks for the detail on the slides in the CASM and the RASM walk. Can you maybe help us understand kind of what that gap between CASM and RASM might look like in 2Q and maybe for the rest of the year as well?
Shane Tackett: Well, Ravi, we are not going to give guidance on those two unit metrics, but I would tell you, I think that as we mentioned earlier, maybe the first question, I think CASM will perform better in the second quarter than it did in the first quarter, just given the higher capacity, we will be able to see a better result. It could like approach flattish. I think CASM could in the second quarter, we will see ultimately, if we get to the midpoint of our capacity guide or not, based on deliveries over the next couple of months. And I think unit revenues, they’re going to be still pressured a bit by the grounding impact of 1282 and some of the book away in spring break that happened over the first quarter. But I think they’re going to be strong.
I think they’re going to continue to perform amongst the best in the industry, on a domestic basis — anyhow. So I think we are looking at a strong second quarter from a margin perspective, which is what we said in the script.
Ravi Shanker: Understood. Thank you.
Shane Tackett: Thanks, Ravi.
Operator: And we will move next to Duane Pfennigwerth with Evercore ISI.
Duane Pfennigwerth: Hey, thank you. Can you talk a little bit about what you’re seeing in Hawaii, how you’re thinking about the recovery in Maui and your capacity recovery there? And what you’re seeing competitively, any changes there?
Andrew Harrison: Yes, hi, Duane, Yes, so on Hawaii, actually, we were very pleasantly surprised as far as just the general framework and strength of Hawaii in general. That said, I think our capacity was down close to 40% out of Maui in total, still going to be down 20% as we move through. So outside of Maui, Hawaii is performing within expectations. I think it’s going to be some time before Maui recovers, just to be frank. And so we are adjusting our capacity to meet the demand that we are seeing there. But it’s certainly a slow journey.
Duane Pfennigwerth: Okay. So maybe the down 40% recovers to down 20% and you kind of wait and see at that level, is that a fair way to think about it?
Andrew Harrison: Yes, I think the way to think about it is we get through this summer and then as we look into the back end of the year, which is more seasonally weak, we are going to assess how demand is and we will adjust capacity appropriately.
Duane Pfennigwerth: Okay, great. And then, I guess, Shane, you piqued my interest with self supply of fuel. Can you just elaborate on that?
Shane Tackett: Sure, Duane. Thanks for asking about fuel supply. Look, I think we’ve been pretty passive other than the hedging program on managing the fuel line in the business. As you know, we’ve had significant headwinds that are unique to us, relative to the rest of the industry. And I think it prevented us from being the top margin producer in the industry last year, just on a refining margin basis on the West Coast relative to Gulf Coast. So we are not going to sit idly by and let that continue to impact our results. We spent a lot of time in the first quarter understanding why we have a $0.30 differential relative to the rest of the industry. And one of the things we believe we can do is ultimately buy our own fuel from other places around the globe and ship it into some of our larger cities.
Takes a while to get that done, other airlines do it. It’s not a brand new idea to the industry. And I think there will be a way of saving a few pennies per gallon, which we are going to go after, later this year and into next year. We will say more about it as we firm our plans.
Duane Pfennigwerth: That’s great. And if I could sneak one more in here, just on regional mix. Can you talk broad strokes what regionals would be as a percent of your capacity, maybe this year versus last year? And I know you’re not giving point estimates on the metrics, but just broad strokes how we should be thinking about it kind of tailwind to RASM, headwind to CASM and maybe margin impacts. It feels like there’s probably parts of your network that we are starving for more regional lift. Which is help us — help us think about that. Thanks for taking the questions.
