Conor Cunningham: Appreciate. Thank you.
Operator: And our next question will come from Andrew Didora with BofA Global Research.
Andrew Didora: Hi, good morning, everyone. It’s very early days since the instance, but comments today in the National Media this week. Just where does your relations along after this? And guess what needs to happen to make you rethink your single fleet type at this point?
Ben Minicucci: Thanks for your question, Andrew. Well, look, where I stand is flight 1282 should never have happened. It should never have happened at all. So we have a long-standing deep relationship with Boeing. But like I said, it’s not acceptable what happened. We’re going to hold them accountable and we’re going to raise the bar on quality on Boeing. So we have the relationship. We’re having tough candidate conversations. And my goal to CEO of this airline is for every airplane that comes out of that factory it’s going to come out with a higher degree of quality and reliability that has been in the past. So I think it’s the virtue of our relationship that we can have these tough conversations, maintain the relationship and continue.
We got 231 737s that we’ve been happy with. And until the sensing, we were happy with the MAX. We have 185 on order that are coming to us. We believe with the network configuration we had, this is, of course, ex-Hawaiian. The network configuration we have, the Boeing airplane is 737 is well-suited for our network. So that is the long-term plan, but we’re going to hold Boeings feet to the fire to make sure that we get good airplanes out of that factory.
Andrew Didora: Thank you, Ben. And then my second question for Shane. You have to say like most of the calls last year, I think you were certainly a bit worried about industry domestic capacity growth over the course of 2023. As we sit here in January of 2020 for you, most outside of getting the MAX 9 back up and running? Thanks.
Shane Tackett: Yeah. Hey, Andrew, you cut up just a tiny bit at the end. But yes, I think — and Andrew was alluding to it, it’s been — there’s been a lot of predictions across management teams across analysts and observers about what the new normal of demand would be coming out of COVID. I think it was a little bit anybody’s guess, and we were all trying to respond to the best information we had last year. We were all also trying to get our companies back to pre-COVID operational levels, which made sense. And so a lot of that seem to come at the tail end of the huge demand surge that started in 2022 and sort of carried through 2023 summer. The good news is, it seems like demand is holding very well into the first quarter this year.
I think the airlines across the board are starting to understand that demand is looking a little different than it did pre-COVID, but probably not as different as we all thought it might have been. And so there’s still seasonality in the business that looks a lot like pre-COVID. And I think Andrew and his team have done a great job responding to that this year as evidenced by the improvement of the Q1 profile ex the grounding. So we’re feeling really good about our capacity outlook. We, obviously, want these planes. We felt like we had a good plan for them this year. If we don’t get them, we’ve got some work to do to make sure we maximize the results we can get with the current fleet.
Andrew Didora: Thank you, everyone.
Ben Minicucci: Thanks, Andrew.
Operator: And we’ll move next to Jamie Baker with JPMorgan.
Jamie Baker: Hey, good morning everybody. Ben, I can only speak for myself, and I’m not under the illusion of my opinion really matter that much to you. But I actually think you and the team have been handling the MAX situation very, very well. My first question actually relates to Silicon Valley Bank implosion last year. We’re coming up on the anniversary in March. Can you remind us how California in particular, California demand behaved in the aftermath both in terms of magnitude and duration?
Andrew Harrison: Hey, Jamie, you’re testing my memory here. But what I recall at the time — in relation to our California network, it was not that significant. There was already a high-tech softness. I will tell you to take the opportunity that we’ve been very happy with California performance. We remain 18% down pre-COVID level, but we’ve seen unit revenue performance from California this year in 2023 outperform system average. We’ve seen whether it’s profitable and in fact, it continues to close the margin gap from our system. So we feel really good about the continuing refinement and strengthening of our California franchise.
Jamie Baker: Okay. Thanks for that. And then just a quick question on guidance. Most of my earlier questions have been addressed. But assuming you do revise an ex-fuel CASM guide after this quarter, will you be accruing for the flight attendant contract? Thanks.
Shane Tackett: Thanks, Jamie. I think that we will guide when we’re prepared to do so inclusive of all of the costs that we think are coming our way this year. I don’t think we would start accruals. It hasn’t been our practice in the past, and I don’t foresee us changing that practice.
Jamie Baker: Okay. Helpful color. Thank you, everybody.
Andrew Harrison: Thanks, Jamie.
Shane Tackett: Thanks, Jamie.
Operator: And our next question will come from Helane Becker with TD Cowen.
Helane Becker: Thanks very much. Hi, everybody. So I just have kind of two questions here. One is as you think about the MAX coming back into — MAX 9 coming back into service, do you think you’ll have — customers? And do you think you’ll have to discount to encourage them to fly the plane, or do you think that a plane’s a plane to a customer who may not be a sophisticated observer?
Benito Minicucci: Helane. Good morning, it’s Ben. Like we said before, we have customers who love our company. They trust us. They know we put safety and reliability first. There’s no doubt that the MAX 9 has a lot of attention, and people are looking what they’re flying. But our goal right now as we reenter the MAX 9 just to give our employees, particularly our crews, the confidence that Alaska has done everything it can to put our MAX 9 safely and an airworthy condition back in service and to communicate with our guests. And if they have any concerns to reach out directly to us, to our crews, to assure them that the aircraft are on are safe. And we won’t put any, of course, an aircraft back in service unsafe. But I think at first, people will have some questions, some anxiety, just like they did two years ago or when the — after all the deep certification process the aircraft went through, but I believe over time, the confidence will get back into this airplane.
Andrew Harrison: And Helen, I just might add real quick that what we’ve been seeing in is just really schedule reliability. And that’s been the concern. But sort of in eight days from now, we’ll have an fully back deployed and we fully expect our completion rates to go right back 99%, our on time back to our goals so that our guest can be assured that when they book on Alaska, they are going to get to where they need to go safety and on time.
Helane Becker: Okay. So, can I push back just a tiny bit and say from what I’ve read, and if I’m wrong, if the reports are wrong, that’s fine, just tell me. There was an indicator like that went off a few times that caused you guys to move the aircraft in question out of the Hawaiian market where it was flying and overland in case something happened, and of course, something did happen. Is it that the indicator didn’t tell you where the problem was, or is it that maintenance thought it was faulty. I mean, how should people think about that because when your check engine light goes on in your car, you check it out.
