Maurice Gallagher: Conor, let me editorial on top of that. You can’t understand the mindset inside of an airline in March February with the pilot issues going on. You just didn’t know what was going to happen particularly ,if you’re in the middle of the sandwich like we are where a lot of our guys are going up the hill to American Delta and United. And can you — we literally train 200 pilots in 2022 and kept 10. So a lot of expenses going in just to training these guys but now that you’re seeing the world I mean Spirit announced they’re not hiring any pilots for 2024. I mean, there’s a radical shift in mindset of how you can think about having access to crews. And for us we need to make sure we get — we need some extra crews certainly for the Boeing as we transition.
So we needed to have that type of mindset and it’s there. To Greg’s point get a contract done. Our pilots are very much on board with growing this business and we’re also being much more selective in who we bring into the business. We need to know that they want to be in our model and want to be here long term not to say we weren’t selective before but it was much more could you fly an airplane than what are your personal needs. So, those are the kinds of things we’ve learned from this effort. And not only us, but everybody in this industry is going to be much more comfortable that they can make a forecast on pilots and availability. So you can put a schedule out nine months from now and still operate it.
Conor Cunningham: Appreciate the thoughts. Thank you.
Operator: Our next question will be coming from Andrew Didora of Bank of America. Your line is open.
Andrew Didora: Hey everyone. Thanks for taking the questions. Maury, welcome back. Maury or maybe Greg, just on the pilots here. Where are you, kind of where do those negotiations stand right now? And if you can, just what are the sort of the key holdups at this point?
Greg Anderson: Hey Andrew, it’s Greg. So earlier this year, we combined with the union, started remediation process. And while we’re progressing, candidly, it’s not at the rate I’d like to see. So — but we’re still working through it. And there’s a variety of items we’re working through, but we understand the important items that we need to get done to get a competitive contract is fair in our view. And I have all the confidence that we’ll continue to make progress, and then we’ll get a deal done.
Maurice Gallagher: Yes, Andrew, there is some practical applications. We’re both at the table young in our maturity in many ways in doing a contract. This group of pilots has never been involved in negotiating a contract before and so they’re, I think, kind of feeling their way forward as to what that they want to see in a contract and you have proper people at the table that know how to do this. So United American and Delta have been 70 years. They have 500 page contracts that they don’t have a lot to talk about. We’ve got a lot of items that are still young and tender and both sides need to feel their way through it. So to Greg’s point, it’s been slower than we would have liked, but we get the materiality of what we want to do.
But I think both sides are getting a better deal candidly, if I had to say, so just to get something done. As we all know, this is not — these contracts never end. They’re just extensions until we sit down and do it again three or four or five years from now.
Andrew Didora: Got it. And then as a follow-up, I know you spoke a little bit about kind of the contracted deliveries for 2024 in that context, how should we be thinking about CapEx for next year?
Robert Neal: Hey Andrew, it’s BJ. We’re live in discussing some of this with Boeing. What I’ll tell you is in 2023, we were paying large amounts of predelivery deposits substantially focused on aircraft delivering in ’24. And so you would see the same thing in ’24 for aircraft delivering in ’25, given the new schedule. I would expect CapEx to be elevated next year versus 2023, but don’t have a guide for you yet.
Andrew Didora: Okay. Thank you
Operator: Thank you. Our next question will be coming from Christopher Stathoulopoulos of Susquehanna Financial Group. Your line is open.
Christopher Stathoulopoulos: Thank you, operator. Good afternoon, everyone. I’ll keep this to one. Maurice, so I want to understand if you could a little bit more on the composition of your 2024 capacity with the idea here that not all capacity is created equal it comes with different margin profiles et cetera. So I think you said 70% 75% of routes non-competitive 1,400 new domestic routes identified and that you have a line of sight or looking to get back to 2019 utilization levels. On the other side of the ledger mid-single digit ASM growth is below what you’ve typically done. So as we think about the moving pieces, and if you want to frame it departure stage engage or however else is this about frequencies within existing dots, adding dots, a little bit of both? Just want to understand here the moving pieces that makes up and build into that mid-single-digit capacity guide in that soft CASM-X guide that you gave for next year? Thank you.
Drew Wells: Hey, Christopher Drew here. Probably a little early to get into all of those dynamics today. I think maybe speaking fairly generally, I wouldn’t anticipate seeing that utilization rebuild in the first half of the year with the flat ASM that probably goes without saying. As we bring on the Boeing, we will get a little bit of gauge benefit as the 8,200s will come in at 190 seats, which is larger than what we have today by a little bit. I don’t foresee massive stage differences through the year although we’ll get back to you maybe on that in 90 days. But I think as we think about the overall network, I would foresee a bit more frequency restoration coming earlier than new route announcements than kind of relative to our typical split before probably more on the late 2024 but really more of a 2025 and 2026 story on network expansion would be my guess at this point..
Robert Neal: Hey, Chris this is BJ. The main thing to think about for CASM-X next year is really just the full year of the pilot payroll cost and the full year of labor agreements that were implemented this year. Other than that, we don’t have most of the other buckets moving so much on the capacity that we just outlined.
Christopher Stathoulopoulos: Okay. Thank you.
Operator: Thank you. Our next question will be coming from Helane Becker of TD Cowen. Your line is open.
Helane Becker: Thanks very much, operator. Hi, everybody. Welcome back, Maury. Just two maybe clarification questions. All your peers are calling out maintenance and you didn’t really mention that. Is there something I mean what’s different between you and them, anything?
Robert Neal: Helane, it’s BJ here. I think one of the things is potentially that our heavy maintenance is capitalized or we use a deferred method. And so you don’t see the immediate impact of it in the period that the cash goes out. So there has been some pressure in heavy maintenance expense, not to the degree that, like we’ve been hearing from some of the other carriers’ calls, but also expecting some pretty nice relief on that as we move through 2024 and 2025 and those aircraft with the most expensive heavy checks would be retired prior to undergoing maintenance.
