Mike Linenberg: Okay. Very good. And then just the second one to Ryan. When I think about the $500 million pretax benefits coming from various revenue initiatives. As I look at loyalty and ancillary, they were both records in the quarter. Can you give us a sense of maybe where ancillary is per passenger today, where it’s been historically? Where does that go? And any sort of rough numbers on just remuneration from loyalty, maybe the size of that program?
Ryan Green: Yes, no problem. Yes, ancillary and loyalty were both. We had several records in the third quarter, and I expect good performance here as we look forward into the fourth quarter. Ancillary revenue is significantly outpacing our passenger growth, largely on the back of our upgraded boarding benefit. We’ve been able to increase prices there and hold on to take rates. EarlyBird as well is a strong performer. We’ve been able to increase price rate — or prices on EarlyBird as well as some of our other ancillary products that went into effect in August. We raised prices on excess bag fees, pet fees, things like that. So ancillary, absolutely is a standout. And I think I’m expecting it to continue to exceed passenger growth in the fourth quarter.
Loyalty overall, as you — as I’m sure you’re following it, it’s a very — it’s a key part of our strategy going forward. Rapid Rewards is the most preferred loyalty program in the industry on lots of different measures, primarily because customers are able to actually use the points that they’re earning. And so that’s driving spend on the card. Third quarter spend on the card was a record, and we expect to continue growing the program over time. We also made some additional changes to Rapid Rewards here earlier this month that I think is also going to continue to drive engagement from our customers. And it’s all about making it easier to get value out of the program for customers. We see when customers make a redemption, after that redemption, they fly us more, they spend more on their card.
It just drives further engagement with Southwest Airlines. And so, doing things like adding the ability to combine cash and points, that’s all about making it easier to use Rapid Reward points, which will then in turn provide value back to Southwest. Same thing with lowering the tier requirements for A-List and A-List Preferred. We’re kind of bucking the industry trend there. Our competitors are making it harder to access benefits. We’re making it easier. And again, there’s value to the consumer there, but there’s also value back to Southwest. Customers stretch to reach A-List, A-List Preferred, Companion Pass. They fly more, they spend more on their cards as they get close to that. And so bringing those thresholds in closer makes it better for the customer, but it also drives value back to Southwest.
So, we’ll continue to invest in Rapid Rewards and the program and ancillary overall. And I think we’ll — we should expect to see continued growth.
Operator: And ladies and gentlemen, we have time for one more question. We’ll take our last question from Helane Becker from TD Cowen.
Helane Becker: Just a couple of questions to follow up. With the changes in Rapid Rewards and making it easier to earn what you would call status, isn’t that kind of amounting to fare cuts across the board?
Ryan Green: Amounting to fare cuts across the board?
Helane Becker: Yes. I mean if it makes it easier for me to redeem my points, I mean, don’t you wind up selling fewer revenue seats?
Ryan Green: So, the way that we’ve designed the loyalty program and the value exchange from the customer and the number of Rapid Reward points that it takes to redeem, we are — we’re indifferent whether or not the customer is flying for us on Rapid Reward points or paying cash. So, we’ve taken that equation kind of off the table. The change here really is post-pandemic the same number of customers are traveling for business today than what they were before, and then leisure customers are actually up. The difference and what the gap in managed travel is, is that those individuals are flying a bit less frequently. And so, what our change to make the threshold easier to achieve is really just capitalizing on that fact, bringing the threshold in earlier. And as I was just explaining, we’ll get benefit from that, too, because more customers will be able to stretch for A-List and A-List Preferred, which drives value back to us.
Helane Becker: Got it. Okay. That’s really helpful. And then the other question I had for my follow-up was, I think at one point, you guided to $1 billion to $1.5 billion in EBIT contribution in 2023. But I feel like that might be — is that — I guess, is that an easier comp because of Elliott last year that you’ll be able to achieve that?
Tammy Romo: Helane, we’re delivering on the initiatives. And obviously, that includes things like our fleet modernization, our investments in GDS, our new revenue management system, et cetera. And even what just — but in terms of the initiatives, those are driving and those are tracking in line with what we’ve shared with you. And then we’re continuing to invest, as Ryan took you through. And those investments just drive more engagement from our customers that makes them more and more loyal. So the initiatives that we’ve shared with you are driving incremental value and we’re continuing to track in line with what we’ve shared with you. So, those are actually delivering. Now, that said, we’re not — we’ve already shared with you — we’re not satisfied with where we stand now going into 2024.
But as we’ve shared, we’re just not ready to lay it all out for you today, but we are working on our 2024 plan, and we’ll certainly fill in more of the answers so that you can kind of see how it all weaves together here. So, stay tuned and more to come there.
Julia Landrum: Okay. That concludes the analyst portion of our call. I appreciate everyone joining, and have a great day.
Operator: Ladies and gentlemen, we will now begin with our media portion of today’s call. I’d like to first introduce Ms. Linda Rutherford, Chief Administration and Communications Officer.
Linda Rutherford: Thank you, Jamie. I’d like to welcome members of the media to our call today. Before we begin taking questions, Jamie, would you just give them instructions on how everyone can queue up.
Operator: [Operator Instructions] And our first question today comes from Alexandria Skores from The Dallas Morning News.
Alexandria Skores: I wanted to ask, obviously, the flight attendants reached their tentative agreement yesterday. And pilots were picketing at headquarters today. So I kind of wanted to ask a little bit about — I know that NMB has meetings scheduled with you all throughout November. What — can you give us a sense of when a pilots’ deal may come and what the time frame might look like on that?
Bob Jordan: Alexandra, I just want to — I’ll answer your question, I promise, but I just wanted to say I’m grateful, we all are, that we have a tentative agreement with our awesome flight attendants. There’s still more work to do. The union is working on materials and training and then so they can get the information out to our flight attendants here quickly, so that they can then vote. But I’m just real pleased with the milestone. Obviously, we’ve had a really good 12 months. I think that’s our eighth agreement in 12 months and we are committed to finishing up the others. Our swap agreement — our swap negotiations are continuing. There’s progress. I believe, Andrew, we’re meeting every week. But obviously, we’ve got to get it over the finish line. I don’t know, would you like to add?
