American Airlines Group Inc. (NASDAQ:AAL) Q2 2023 Earnings Call Transcript

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But what we’ve found is something like 25% to 30% of our calls to reservations are actually bookings at a travel agency originated and is, for some reason, unable to go in service. So there’s a lot of implicit savings that we see from it. And last and maybe most importantly, we’re encouraged by what we see is really the durability of these customers’ demand. These are customers who tend to use our network where it’s most unique. They fly more times in a year. They already have bookings out into the fall. They tend to sell themselves up. And importantly, they prefer coming to us direct. So we’re currently in taking roughly 70% to 75% of our revenues going through our direct channels. We anticipate that will grow. We’re encouraged by this, and we’re actually going to continue to accelerate the changes.

By the end of the year, 100% of what we sell, customers will be able to service online through our app or our dot-com. We’ll roll out those features also over time for new distribution technology. But as this happens, we’ll make increasingly less and less of our fare content available through traditional technology where customers aren’t able to get that quality experience that they’re looking for from us.

Michael Linenberg: Great. Awesome response. And then just my second question, I guess, is to you as well, when I sort of look at it in the forward schedules, it does look like even up to summer of next year, that JetBlue is still maintaining a significant presence in LaGuardia. And so presumably, you will still continue to lease those slots to them and maybe maintain a smaller presence in LaGuardia than what you had pre-NEA? Or is that just — are those placeholder schedules and that’s TBD. Thanks for answering my question.

Robert Isom: Yes, Mike. A lot of that is TBD right now. And in fact, Priya Aiyar is here our General Counsel. We’re still in a process of determining how to wind down the NEA most notably how we transfer back all of the slots to American Airlines as soon as we can.

Michael Linenberg: Great. Very good. Thank you.

Operator: Thank you. Ladies and gentlemen, we will now move to media questions and answers. [Operator Instructions] Our first question comes from the line of Alison Sider of Wall Street Journal. Your question, please Alison.

Alison Sider: Hi. Thanks so much. Do you have a sense yet of how much more costly the pilot deal could be if you have to go back and boost the pay rates and other adjustments to match the United deal?

Robert Isom: I’m looking at Devon. We’re working on that right now. Look, one of the things I do know is that in our TA, there was significant quality of life and compensation improvements. The vast majority are very close to what United has supposedly in their TA. And while there may be some adjustments that would be required for wages, it’s not an indoor amount. Devon, do you have any idea on that?

Devon May: Yes. We’re working through the numbers right now. Obviously, the wages are close, but a couple of percent higher than what we have in our tenant agreement. And we’re trying to get more detail on other items that we think might be material. But what we have with our attentive agreement is really significant improvements for our pilots. And as Robert mentioned earlier, the wages is some we’re focused on right now to see if we can work with the APA to get some done where we match what United or for.

Alison Sider: Great. Thanks. And I guess, Robert, you talked a little bit about this earlier this morning, but just curious if there’s any kind of impact you’re seeing from this crazy heat we’re seeing in parts of the country, if that requires any operational changes or different ways of thinking about things for crew and for customers and how you’re dealing with that?

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