Duane Pfennigwerth: Hey, thanks. Good morning. Appreciate the time. Kind of an industry question, but we’ll go ahead and ask it of you. Just with respect to 4Q RASM guidance down 6.5% at the midpoint, which is actually a little bit better than what we were modeling, and the cost pressures you are outlining into next year, what needs to go right to get that unit revenue back to positive territory. I mean, the 5% growth that you’re outlining, you know, may or may not be crazy relative to GDP. If we’re just thinking about it year-over-year, right, 5% doesn’t sound crazy. But if we think about where your margins are exiting here, the exit rate on your margins, you know, any thoughts about how we get back to positive RASM, which it appears you’ll need to stabilize your margins here? Appreciate the thoughts.
Robert Isom: Hey, thanks for the question. Look, and the answer is both very simple and consistent with the stuff we’ve been saying. What we get to do is, the stuff we have to do is within our control. It’s bringing back our regional jet network, which creates a lot of revenue benefits for us and a lot of unique markets for our customers. And two, it’s growing the revenues from AAdvantage, both through our brand of credit cards and how we go issue and enable the redemption of miles. Both of those things are tops on our plans for next year. We’re excited to go and execute on that. And we see a lot of upside.
Duane Pfennigwerth: I guess just maybe thinking sequentially, like how patient will you be with sort of breakeven-ish, negative margins? Like is that a one or two quarter phenomenon? Is it a multi-year phenomenon?
Devon May: Hey, Vasu, I’ll take this. Hey, Duane, thanks. Look, we are going to be incredibly focused on making sure that we deploy assets where we can make money. The kind of things that we’re talking about and focusing on our strengths are where we see that happening. And look, I think that we, you know, to the contrary, I think we carry momentum in a lot of the work that we’ve done this year that that Vasu has been at the center of in terms of making sure that we have the best network and we can sell, shop sell and service it digitally, is all groundwork for next year. And so as we take a look at not only the regional network, further enhancing premium product, what we will intend to do with AAdvantage and less variable revenue.
I think that all plays into a lot of strength. And on top of that, look, we’re in the midst of recovery still. And so as we go from quarter-to-quarter, we know that there are things that we could have done differently, you know, over the past summer that we’re going to make sure that we’re addressing in terms of where we’re flying and how we’re doing it, but we will have very little tolerance for what you would consider, kind of, investment or development flying. We’re going to fly where we make money.
Duane Pfennigwerth: No, it’s not an easy question, but I appreciate the thoughts. Thank you.
Operator: Thank you. Our next question comes from the line of Conor Cunningham of Melius Research.
Conor Cunningham: Hi, everyone. Thanks for the time. Just your capacity has been pretty stable relative to the industry. And a lot of the constraints that we’ve talked about this year seem like they’re going to carry forward next year if not get a little bit worse. And so, at the same time, the domestic competitors are really struggling. So I’m just curious on how you may take AAdvantage of that situation next year, if those themes continue to play out, or are you just happy with the current execution of what you’re doing right now?
Robert Isom: No, no, I’ll start, Conor and Vasu can join in. Look, you know, when we talk about the kind of capacity that we are going to be putting back, we’ve described it over and over again. I think that, you know, first off, we’ve got assets that on hand today that provide some of that benefit. We’re certainly going to make sure that, that gets deployed in a fashion that is productive. I do think that there are constraints out there that continue on and whether that’s ATC or it’s some of the supply chain, both engines and air framers, I think that, that kind of stuff is we’re going to have to work through. And then on top of that, look, we’re all getting through the pilot shortfalls as well. So there’s ups and downs to that.
But overall, you will see us, we’re going to play our game. And that means find our Sunbelt hubs, strengthening the rest of our network through getting capacity back up in the air, and doing all the things that Vasu has talked about in terms of taking advantage of AAdvantage and our co-brand deals and then also modern retailing.
Conor Cunningham: Okay and then you know you’ve executed you know, pretty remarkably on your plan, but your margins, maybe to Helane’s earlier question, just, you know, continue to lag Delta United and, you know, your operations been better, all that stuff, and I get it, but, you know, When you think about the opportunity ahead to close that gap, is it more a revenue equation or cost? I think historically Americans talked a little bit about the revenue gap, but it seems to be that there’s more of a cost opportunity here. Just curious on your thoughts there. Thank you.
Devon May: Hey, Conor, it’s Devon. I’ll take that. And certainly, this isn’t something we look at a quarterly basis, but we do spend a lot of time on benchmarking. And if you want to talk about benchmarking margins, we do think it’s important to look at it and look at it on a 12-month basis and the right margin to be using when you’re comparing us to these other network peers, is EBITDAR, because it just takes out financing decisions, so aircraft rent versus depreciation and interest expense, and it takes out capital structure, which we just know right now, we have a difference, but that’s an area we also know we’re going to improve on going forward. So let’s talk about that. On EBITDAR margins, I think we stack up really well with our competitors.
