Michael Linenberg: Alright. Great. Thanks Shane. Thanks Andrew.
Andrew Harrison: Thanks Mike.
Operator: Your next question will come from Jamie Baker with JPMorgan.
Jamie Baker: Hey. Good morning everybody. So, the 45% of revenue outside of main cabin, can you break that down into various buckets. Is it as simple as premium being 31% and then the rest is just loyalty in cargo. Also, as part of the main cabin, so it was part of the 55%. Any color on how basic – sorry, Sabre contribution has changed year-on-year?
Andrew Harrison: Thanks Jamie. We are not going to go into the details of that, obviously. I think you have heard other airlines quote. We don’t have MROs and other things, but we feel very diversified as it relates to what is not the main cabin. I think in our slides, we provide some of that breakdown there, about 35% of it is premium cabins and some carriers have 0%. So, I think as we have shared all along, we feel like we live more in the group right now that has premium product and global reach as it relates to our business model versus those that do not.
Ben Minicucci: Yes. I think Jamie, I think the point in here with those stats is just to differentiate us among domestic carriers. We are the only domestic carrier with that suite of offerings with the premium, again, lounges, the global access, this equivalent redemption of miles, we do separate ourselves from I think what do you call them low.
Jamie Baker: LMA, low-margin airline.
Ben Minicucci: You came up with a new acronym. Like my point here is we are not in that group based on the offerings. We invested heavily in our product. We have over 300 airplanes in our fleet. Every airplane in our fleet, including regional has a first class, has a premium product. And again, when you add our oneworld membership, our global access, our lounges, it is a compelling product. And to be honest, Jamie, it’s why our margin is equivalent to Delta and United in Q3 despite not having the international tailwinds and having the headwinds of Maui and the refining margins. So, the business model is resilient.
Shane Tackett: And last, Jamie, you asked about Sabre, it’s doing quite well, too. It’s up strong double digits year-over-year. And I think it also speaks and you have heard this from other airlines, we can access the price-sensitive part of the market really well, too. So, we have been able to…
Jamie Baker: That was one reason I asked. Yes. No, listen, I appreciate the color. But so let me press on premium, you cited – you are obviously enthusiastic about it. It’s an area for growth. You leaned into this when you answered Robbie’s question a couple of moments ago, should we think about premium growth more as yield upside, or as you think about that 4% to 8% capacity number, are you considering possibly expanding the cabin? I ask in part because American spoke to this just a couple of hours ago, so it’s top of mind.
Shane Tackett: Yes. I will take that. I think I don’t think you are going to see like a wholesale refurbishment of the interiors. I will say that we are still working on our MAX 8 interior, and we would love to get 16 first-class seats, and that our 8s carry 12 today. The rest of the mainline fleet carries 16. And it’s relatively small, but could have…
Andrew Harrison: 59 airplanes.
Shane Tackett: Yes, 59 airplanes. And it could have a good impact, obviously, for us once we get there, but that’s a couple of years off if we end up getting it done.
Jamie Baker: Okay. Cool. Thanks gentlemen. Appreciate it. Take care.
Shane Tackett: Thanks Jamie.
Operator: We will hear next from Scott Group with Wolfe Research.
Scott Group: Hey. Thanks. So, I just want to go back to this fourth quarter RASM re-acceleration just given the implied September trends. So, I just want to understand, are you seeing this already show up in October, or is this more of a November, December? And I guess that’s a direct question. Just philosophically, like if we are slowing capacity and we are seeing sort of an immediate RASM benefit, like why you even think about 4% to 8% for next year? Why isn’t it like we are not going to grow until we actually start grow at all until we see positive RASM again?
Shane Tackett: Yes, I will let that Andrew. Yes. No, I think it’s a good question, Scott. Andrew can speak to the – where we are seeing the sequential improvement if it’s already on the books or sort of to come. I think on the capacity, I think the way to think about it is we have been pretty clear about our first quarter capacity being relatively modest, certainly versus 2019. Andrew mentioned in the script, we were up 6 points versus 2019 and Q3, 2 points in Q4. So, at least from our view, Scott, I think what you are asking is exactly what we are doing. We are not ready to talk about full year next year yet. But right now, given fuel and where we see pricing, we are making the right decisions in terms of capacity management.
Andrew Harrison: And the only other thing I would add there, Scott, and you don’t see this obviously in the details, but even the reduction in growth relatively speaking has been helpful for sure. We also had some regions with some very significant growth. And I mean very significant. And I think we have abated those back down to more normalized levels, and that’s where we are seeing the greatest upside with some of this slowing capacity. So, there is micro regions which we have really dialed it back, and we are seeing immediate help from that.
