Savi Syth: That’s helpful. And then if I might, you’ve heard some of your competitors talking about where a lot of the extra capacity is in some of the kind of bigger markets, crowded markets, and wanting to redeploy the capacity. I’m wondering and on the other hand too you have regional airlines that I think trends are bottoming and maybe starting to as you get into 2024, possibly being able to pick up their utilization as well. Just curious kind of based on the visibility you have what you’re seeing from a competitive standpoint in your markets?
Drew Wells: Yes. Drew here. The relative level of competition has been quite flat for the better part of two years and is relatively in line with what we saw in 2019. Obviously the dynamics change a little bit who it is and where it is, but the overall level has been remarkably consistent.
Savi Syth: And that’s what you’re seeing in the forward schedules, Drew here?
Drew Wells: Correct.
Maurice Gallagher: So you’re just going to — you can’t see capacity grow with the way fuel stays at this level and there’s a good argument to suggest, it’s been permanently changed given the environmental issues and what’s going on in the world. Capacity can’t grow that much if people are going to make money. It just doesn’t work. Capacity has got to come out to raise pairs to offset the fuel increases. So that’s a macro statement.
Savi Syth: Is that negative for your model too Maurice, isn’t it? Because you talk about leisure, travel?
Maurice Gallagher: I’m not going to sit here and say we’re going to grow like a weed but we have better opportunities to grow because we have less competition. I think we’re not facing a lot of headwinds that everybody else is with our 75% noncompetitive. And that profile will continue we believe going forward. So it’s not a rosy picture for the industry. I’m not going to sit here and say it is but oil has to come down somewhat. It’s the big variable we can all face.
Greg Anderson: And further — so remember, we can pull our September capacity down to half of what we do in July as a reflection of the broader fuel environment recognizing that demand is thick enough in the peaks to withstand the capacity and we’re going to withdraw it where it doesn’t make sense for all factors including fuel. So I feel really good about how we think about capacity deployment in the face of persistent high fuel.
Savi Syth: That makes sense. Thank you.
Operator: Thank you. Our next question will be coming from Duane Pfennigwerth of Evercore. Your line is open.
Duane Pfennigwerth: Hey, thanks. Good morning. Welcome back. Drew, maybe you could just expand on your RASM commentary. I think you made some statement like normal sequential change or normal seasonal change in RASM. Could you just expand on that?
Drew Wells: Yes. I mean just look back I think I was leaving even like 2005 to 2019 sequential change in absolute TRASM from 3Q to 4Q seems to be the right barometer as we’re looking at 2023. So hopefully that gets to what you’re driving at.
Duane Pfennigwerth: Yes. It just looks like it’s up in — or sorry in 2018 and 2019, it looks like it’s up sequentially. So I just want to make sure that’s not what you’re suggesting there.
Drew Wells: 2018 and 2019 were definitely on the high end of — if you look at all, however, many in 14, 15 years there. So I would expect something sequentially less than that, but in line if you take a much bigger sample.
Duane Pfennigwerth: Okay. And then just taking a step back, I know you’ve got some of the team on the phone here, but early thoughts on Sunseeker ramp in 2024? What kind of top line and EBITDA margins we should be thinking about? I understand this could be a two to three year ramp, but maybe in year one, how you’re thinking about it.
Maurice Gallagher: Micah, can you comment
Micah Richins: Yes, I think right now, it’s really too early for us to guide. We’re happy now to just be announcing the date being able to kick off our bookings and get going on the marketing. The real indicator — the only real indicator that we have right now is group bookings that are on the books and we’ve got about 30,000 on the books and another 32,000 that are–
Maurice Gallagher: 35,000 room nights.
Micah Richins: Yes. So, that’s probably the best leading indicator right now. We’re still outside the booking window and we’ll know a lot more in about 90 days.
Duane Pfennigwerth: Okay. Well, good luck with the launch. Thank you.
Maurice Gallagher: Thank you, Duane.
Operator: Thank you Our next question will be coming from Scott Group of Wolfe. Your line is open.
Scott Group: Yes. Hi. It’s — I think this is me. It’s Scott. I think you called me. The — I just want to — Maury, you made a comment about — I get the seasonality in Q3 we see that. You made a comment about like Q4 is a lower margin this year. I wasn’t sure I was following your point. Can you just maybe go back to that?
Maurice Gallagher: Well, it just goes to the theme that we’ve got more in the way of off-peak flying that we can’t peak-up as much as we have historically because of just utilization crews, all the things we’ve talked about. We’re somewhat relearning how to do all this stuff too, I might add. But our first priority this year was to make sure we ran a good operation. So, we didn’t — we got conservative and pulled back being pushy and edgy that we might have been in the past times. If you go back to 2019 versus 2018, we flew eight hours a day, and we came out of — we only had, I think, like 775 airplanes down from 90 airplanes in 2018 when we moved out of the MDs. And we pushed the edge and that saw dramatic benefits of being able to push the utilization up. So, those are the things we have to relearn and we’ll do that. That’s one of our top priorities going into 2024 and beyond.
Scott Group: Okay. And then just following up on that last question, can you just maybe be a little bit more explicit with what you’re assuming for RASM or at least what that historical 3Q to 4Q, absolute RASM trend should be? I just want to make sure we’re all on the same page. And then in an environment where capacity is up mid-single-digits next year, any early thoughts how you’re thinking about CASM for next year? thank you.
Robert Neal: Yes, I’ll take the first part and maybe I missed something is the look around the table. Just taking the absolute RASM from third quarter, the absolute RASM from fourth quarter historically, we’ve tended to step up a little bit, not by a huge amount, low singles. That’s generally what I’m expecting. So, not a year-over-year commentary, but simply an metered sequential.
