If you look at 12 months ended third quarter, I think we’re right on top of one of them and maybe there’s a small gap to the other. But I think our progress versus 2019 has been really good. And the opportunity ahead is on both sides. I do think we’re going to be able to produce capacity at lower unit costs going forward or at least decelerate this unit cost growth. And I do think we have top line opportunities as well. And then the only other thing I’d close on is, well, I think we’re in pretty nice shape on margins. And there’s opportunity ahead. When it comes to free cash flow, I think we are unique amongst our network peers with our capital requirements going forward, and we should be able to outproduce on free cash flow for most of this decade.
Robert Isom: And Conor, I’ll just underscore one more time. Please take a look at the past year. There’s a lot of variability in quarters in terms of whose network is aligned to do better one to the next. And also, a lot of noise in the numbers in terms of just building back the airlines from the pandemic. We feel really confident about how we’re seeing ’24 especially on a competitive basis against our peers.
Conor Cunningham: Alright. Thank you.
Operator: Thank you. Our next question comes from the line of Savi Syth of Raymond James.
Savi Syth: Hey, good morning, everyone. I was kind of curious if you could provide a little color on the international indices. I know you mentioned in transatlantic is really strong. It seems like LatAm is a little bit weak in what that is. And along those lines, when you’re talking about going into your strength, do you mean next year, kind of most of the growth will be domestic and not as much in international?
Vasu Raja: Yes. Hey Savi, this is Vasu. I can take that, and I’ll take it in two parts. First, just around the world, yes, we see really strong long-haul revenue trends, regardless of the entity, long-haul Atlantic, long-haul Latin America, long-haul Pacific and as I mentioned earlier, versus any prior period of time, whether last year 2019 or really anything as far back as it goes we’ve seen uniquely strong revenue performance. But what we’re encouraged by is that our revenue performance, though it’s not where we yet wish it to be, has never grown at a faster rate than some of our international partners. And for many of them, fly into North America is the very best thing that they do. So we’re encouraged by the journey we’ve been on we see more opportunity ahead as we do simple things.
Configure airplanes smartly, get low-cost jets like the XLR. And so our future in international is one which is well within our control and very practical. It doesn’t involve any great prognostications of how the world would change. And then as far as next year goes, look, a lot of our overall entity mix is largely to be similar, where we’re going to be about a 70%, 75% short-haul carrier and a 20% to 25% long-haul carrier. But those areas would grow at a similar rate, which is why the mix stays on.
Savi Syth: That’s helpful. And if I might, just next year’s growth should we assume a lot more kind of regional like a mix next year just as that regional entity comes back versus mainline as we kind of think through maybe what the pressures on CASM might be, but maybe the kind of the benefits to RASM?
Devon May: Yes. It’s probably a little early to get into too much detail. We do expect to build back the regional network. We’re also looking at better utilization on the mainline side. So we’ll give a little more detail as we get into January.
Savi Syth: Appreciate it. Thank you.
Operator: Thank you. Our next question comes from the line of Daniel McKenzie of Seaport Global.
Daniel McKenzie: Oh, hey. Good morning, guys. I wanted to see if I could put a bigger spotlight on the distribution strategy. So I guess, Vasu, building on the prior remarks around direct distribution, what percent of Americans revenue has now shifted to direct channels versus, say, a year ago? How big a change has that been what is it that American can do today that it couldn’t do before? And then finally, if you can just help us frame what that revenue upside means, not just today, but more importantly, for those investors that invest longer term, what that revenue contribution could look like, say, three years from now?
Vasu Raja: Hey Dan, I appreciate the question, and I’ll do that be your answer sequentially, too. Look, first and foremost, like I said, we’re very encouraged by the changes that we’ve got there, largely, because they’re simply responsive to the customers. And we’re retailing our product the way customers expect, which is really just through the Internet. And unsurprisingly, customers have responded. So what we saw as we were going through COVID, was already without American Airlines making any strategic changes, we went from about selling 50% direct to selling about 60% direct and right now, what we’re in taking in terms of revenue is actually about 80% going through, as we call it, Internet-based distribution, of which about 70 of those 80 points is going through our true direct channels .com and app and the balance coming through new distribution technologies.
In fact, our Internet-based travel agency technologies is now a bigger source of bookings than any of the legacy global distribution systems are. So we’re encouraged by that, but also very clearly not that surprised. I mean customers want that experience, which is the second part of your question. The very simple benefit is through what we do, we can go and create more offers for customers that they value. We’ve seen this, and we continue to see this at a number of customers who come to aa.com or the app shopping for the cheapest fare that we have end up selling up, like roughly 70% of the customers who come to our websites actually come looking for the lowest fare, but buy something higher than that. And through these new tools, we can go and offer them a whole lot more that creates value for them.
We can differentiate things like how they’re able to redeem miles for different fare products or even they’re able to earn miles for different fair products. And then the other thing that I would say is, which is we’re finding to be very, very impactful. And as we shift to Internet-based distribution, our servicing becomes a whole lot simpler. So it’s hard to do what three years out look like. Looks like, but I can talk about the next several weeks and quarters. And what you will see from us are things where we do much more consciously differentiate. All the content we offer will be through Internet-based technologies. We will look to do things like offering more miles for buying premium cabin for shopping through our direct channels for using our credit card.
