Catherine O’Brien: I guess first, I want to say my thoughts have been with you all since the devastating Maui wildfires. And I had a question on Maui. So I know you’ve spoken to the impact on demand and lost revenue in the quarter with things still trending below normal historical but starting to pick up. Can you just speak to how bookings look for Maui for the holidays and any early look on spring break into next year?
Brent Overbeek: Yes. So right now, the holidays, both kind of Thanksgiving and Christmas generally look pretty good. Pricing, those are really strong demand periods and so average fares in those remain pretty strong. So I think we’re encouraged with that, I would say, in the context of spring break. It’s still a little early on that, where load factors at the end of the first quarter there are still relatively low and there was a bit of a pause around the event where folks were a little bit uncertain about planning further out travel. We have seen — as we mentioned in our prepared remarks, Katie, that in close demand has been pretty strong and so I think things have been pretty — have been fine for the spring. But as we get out of the fourth quarter and into the first quarter, we anticipate those will continue to strengthen.
Catherine O’Brien: And then a 2-part question on 787, if you’ll allow it. I guess first quickly, why is that starting service on the West Coast? Is there some like operational consideration? Or I just figured that would ultimately be deployed international? And then maybe one for Shannon, just like, as you send out the RFPs for the financing of those first couple 787s, what markets are initially looking attractive? I’ve heard sale leasebacks have gotten a bit more expensive over the last 6 months but not sure if on a relative basis, that’s still more attractive than, traditional debt financing, given where interest rates are today.
Peter Ingram: Yes. Why don’t I take the first part of that and then turn it over to Shannon to talk about the financing. It’s actually quite an insightful question, Katie, because as I think about the 787, it is our most fuel-efficient — will be our most fuel-efficient long-haul airplane. It’s got greater capacity and it’s got a big premium cabin, so you want to put it in a market like New York, where you really check every box of high premium demand ability to fill up the airplane even on days in the middle of the week and really take advantage of the fuel efficiency. There are operational considerations that compel us to put the first one on the West Coast, though. One is we need a place where we can do overnight maintenance on the aircraft and that is initially going to be in Los Angeles, as we start ramping up.
And we need a place where the aircraft is going to be on the ground for 8 to 10 hours a night so that every third day or so we can get some maintenance attention on it. And we don’t have that on our longer-haul flights, where the aircraft tend to turn after being on the ground for just a couple of hours. The other thing it helps us with is building up initial experience for our pilots on that aircraft. They — having a shorter route to the West Coast gives us more takeoffs and landings and the ability to build up that experience. And so those 2 factors push us to starting on the West Coast but we’re definitely going to want to stretch the legs of that aircraft as we get deeper into ’24 and into 2025.
Shannon Okinaka: Yes and I’ll take up the RFP on financing. To your point, we are looking at a variety of different vehicles. Unfortunately, we’re not going to get to the sub-1% Japanese yen debt that we did back with the A321neos but we’re finding that there is a lot of opportunity, albeit a little bit more expensive than what we’ve had on our books prior but we see the regular debt financing markets, the public markets, as well as some opportunities in Japan that we’re pursuing. So we’re still in some of the initial phases of the process but we’ll provide updates as we progress.
Catherine O’Brien: I’m sure we’d all love some sub-1% financing.
Operator: Our next question comes from the line of Andrew Didora with Bank of America.
Andrew Didora: First question for Brent. Just wanted to ask about kind of Japan and the cadence of the recovery expectations there. I think you said in your prepared remarks that Japan capacity would be 70% recovered by the end of the fourth quarter relative to 2019. How are you thinking about the build back there in 2024? And when do you think your Japan entity could be back to 2019 levels of capacity?
Brent Overbeek: So, we think that kind of industry, 2019 ends up with a little bit of a strange comp as you flip from 4Q to 1Q. We — from what we see in kind of industry schedules, industry capacity excluding us is pretty flat quarter-to-quarter as we go from December into the first quarter. We ramp up a little bit more capacity in terms of our night slot and service to Kona and our midnight frequency to Honolulu. And so that will ramp itself up over the first quarter and have a little bit more growth in Japan capacity. Obviously, the longer — the further we get away from Japan opening up is allows greater time for booking curve and allows more traffic to come on the books. And so we’re trying to match our capacity coming back in line with Japan point of origin travel in particular continuing to strengthen.
Andrew Didora: And then maybe a 2-parter for Shannon. Thank you for the color around liquidity in your prepared remarks. Do you have — what percentage of your assets are currently unencumbered? And then the second part of my question, are you seeing any credit card holdbacks given the cancellations you’re experiencing?
Shannon Okinaka: Yes, I don’t know the exact percentage but we’ve got a number of aircraft that remain unencumbered to the value of about $560 million. On the credit card holdbacks, no, we’re not seeing anything like that. I think we’ve still got a very strong business. Bookings are beginning to build back. So we haven’t had even any discussions about things like holdbacks.
Operator: Our next question comes from the line of Helane Becker with TD Cowen.
Helane Becker: I just have a couple of clarification questions, actually. I saw an article this morning that talked about you guys signing up Lufthansa Technik to do A330 and A321 maintenance. And I’m just kind of wondering if that article is accurate and what the timing of that will be?
Peter Ingram: Yes, the article is accurate. I believe the agreement there is for Lufthansa Technik to provide component support for A321s and A330s. And I think we’re also going to use them for our 787. So this was business that we had elsewhere previously. And when we did our A330 end sourcing, it gave us an opportunity to run a comprehensive RFP and get the best market terms that were available. And so we’ve done that. So it’s really around providing component support for various pieces of equipment on the aircraft.
