Dan Janki: Yes. The driver is $75 million to $100 million, really driven by interest expense. And as we’ve accelerated the debt reduction action that drives the benefit, we expect pension to be flat on a year-over-year basis. The team did a great job. The pension delivered at or slightly above its targeted return, so no headwind associated with that. You get some – a little bit around some of the equity earnings of our partners, but we expect to be pretty consistent throughout the year due to the interest reduction and savings coming through as you progress through the year.
Duane Pfennigwerth: Thanks. And then just a follow-up for Glen. You’ve done a nice job taking some active steps to – on the capacity sequentially 4Q to 1Q. But could you just speak to seasonality and maybe by entity? Where is seasonality a lot different than it used to be? Where is it kind of normalized? So any sort of key trends you’d highlight in change in the underlying seasonal patterns here into the first quarter?
Glen Hauenstein: Yes. I think we’re at our new norm, and our new norm is different than 2019,but what I see mainly is an extension of the international seasons. So we mentioned that in an earlier question that it used to be the summer peak was just June, July, August, and now I think we’re moving into April through March. All the way through October is a very strong season, particularly for southern Europe. Northern Europe starts a little bit later. And then the other thing I just mentioned, I mentioned in an earlier call as well, is that the beach Mexican and the Caribbean beaches just seem to have a little bit too much capacity this year, and we’ll work through that as we go through the year. But if you look, those are up 20%, 30% across the board and having a little trouble keeping up with that – the demand keeping up with that kind of capacity increase.
And I imagine, it is – people plan next year that they’ll trim on the margin those back down again or let that demand catch up. So generally, I think we’re in a good spot here with supply and demand as far as the I can see, we’re positive in all the future months and almost all the future – in almost every entity with the exception of lab.
Duane Pfennigwerth: Thank you
Operator: Thank you. Your next question is coming from Brandon Oglenski from Barclays. Your line is live.
Brandon Oglenski: Hey, good morning, everyone, and thanks for taking my question. I guess, Ed or Dan, I mean, looking back from your prior 2021 targets, you guys are guiding at the top end here to effectively reach that. And I think not a lot of people gave you credit. So that’s the context of my question. But that said, valuation in your stock is still pretty low. I think investors are just concerned that we’ve seen peak airline profitability, and your guidance would effectively say about flat profitability this year in 2024 versus 2023. So maybe coming back to some of these prior questions, what is in your control that can get profitability higher? Maybe looking beyond this year, that can give investors comfort that this business should be earning mid-teens.
Ed Bastian: Thanks, Brandon. And you’re right. When you think about when we set that target, it was in December of 2021. I’ll never forget we were at the exchange. I believe you were there, and Omicron was just being announced as the newest variant. So the level of knowledge that we had to the future and where this thing was going, it was candidly, kind of maybe a bit crazy for us to put out a three year plan. But I thought it was really important and instructive for us as well as our investors to let them see how we’re thinking about the progress. And the great news is, through the first two years, we are at, if not ahead of plan along the headway. And I think if I was to go back and say what has changed, that maybe has given me a little bit of pause for seven, not longer term, but just in the short-term, I think it’s the higher cost of labor certainly was not known back then.
The higher inflation rates were not known back then. And most importantly, the supply chain constraints, the full extent, were not clearly not known, have no knowledge of the challenges we face. So when you think about all the macros we encountered, I think we’ve done a very good job of controlling those things that we can control. And as you’ve heard from several of the questions, I still internally am targeting us to get to that $7 number this year. And I think we can, I really do. But I think it’s also prudent that we give a nod to some of those macros that we’re facing. I think the optimization opportunities, as I mentioned, are significant, and they run across every single part of this business. And all of our leaders are working hard to ensure that we’re delivering an excellent quality product which unleashes that optimization benefits.
I think the work that we’re doing on the balance sheet with all the debt reduction is derisking and taking that down is important. We’re on track with our free cash flow guidance, $3 billion to $4 billion this year, and we’re still looking at a $10 billion target between 2023 and 2025 for free cash. So I think you’re right, there’s a lot of noise that, “we were lower inguidance”. I don’t really look at it that way. I just think it’s giving nod to some of the macro realities and wanted to give you a prudent estimate to what we are confident we can deliver this year with a nod towards there’s some real upside here.
