Operator: All right. Thank you, James. And our next question comes from the line of Dan McKenzie with Seaport Global. Dan, please go ahead.
Dan McKenzie: Hey, good morning. Thanks, guys. Matt, putting a finer point, I guess, on the network question. Big picture, what percent of the network needs to get reconfigured to get back to profitability? And I guess how far along are you today? I mean, are we halfway there, three quarters away there? And just sort of the timeframe for completion. I’m just trying to get a sense of how easy or how hard it is from where you sit?
Matthew Klein: Yes, Dan, thanks. That’s a great question. I would tell you that the moves we’re making now and the moves that we had planned to meet throughout the rest of the first half of this year, is what we need to do to get us back on track to head towards profitability. I quoted some numbers for you there earlier in terms of city exits and new routes and suspensions all of that is us moving methodically towards getting the network to a place where we can take advantage of our strengths all of that is us moving methodically towards getting the network to a place where we can take advantage of our strengths And look for where the supply/demand balance is more appropriate. So, I don’t have an exact percentage that I’m going to give to you for that question.
It’s a great question. But the moves that we’re making throughout the first half of this year should set us up for that. And of course, once we then hit after summer and into the fall and winter, we may have some additional moves that are just seasonal in nature. But the vast majority of what we should be doing should be in place by the first half — by the end of the first half of this year.
Dan McKenzie: Yes. Okay. Very good. And then, Scott, in response to an earlier question, you mentioned generating operating cash and margins being positive. And I think that was for the second and third quarter. Does that positive margin reference reflect the compensation from Pratt? And does the current outlook contemplate profitability in any of the quarters this year?
Scott Haralson: Yes, it does. I mean as I mentioned earlier, the guidance that we issued does include compensation from Pratt. Now, I mentioned in my prepared remarks as well that the compensation doesn’t fully cover what the impact of the AOGs are for the business as well and partially offset in both the direct cost and an opportunity cost. I mean our unit cost would be lower but for the AOGs. Our margins would be higher but for the AOG. Just to be clear, that is the case. But notwithstanding, we do still think that we will be in a situation to have positive margins for the second, third, and probably the fourth quarter as well. It’s all part of the discussions we had earlier around market recovery and our own unit cost management.
Dan McKenzie: Thanks for the time you guys.
Operator: Okay. Thank you, Dan. And our next question comes from the line of Savi Syth with Raymond James. Savi please go ahead.
Unidentified Analyst: Hi, this is Zara on for Savi Syth. Our question today is that there seems to be investor concern around credit card holdback, which seems premature. What type of discussions are you having with your administrator on this topic? And what are the thresholds they’re looking at?
Scott Haralson: Yes. As I mentioned earlier, we can’t disclose the credit card holdback number, and that is a competitive commercial arrangement. Well, I mentioned that the ATL balance today is just under $400 million and credit card holdback is usually some factor of that number. And we had an agreement renegotiated with them a couple of years ago that lowered the actual holdback that we were required to have or the, I should say, lower the minimum cash balance that we were required to have. So, we feel like we’re in a pretty good spot there.
DeAnne Gabel: Hey Greg — sorry go ahead.
Scott Haralson: Go ahead Zara.
Unidentified Analyst: No worries. And then one more, although you guys touched on this earlier, if you could talk about any additional cost headwinds and tailwinds in 2024, that would be great. Thank you.
Scott Haralson: Yes, sure. I mean I think it’s a similar story. As we’ve talked about, the big movers are labor costs, aircraft rent due to more leased aircraft than owned and as we look through the year, it’s going to be those things that we’ll have to address — airport costs are also part of that. And the good guidance, though, I mean we saw in the fourth quarter was running a good operation. That was critical for us. We saw that throughout the P&L, including fuel burn. As I mentioned, running a good operation has obvious direct expenses with labor and interrupted trip expense, but we benefit the fuel burn and not having to fly so fast and really thinking about as the network team allocates NEOs to market appropriate places we’ll see real benefit in fuel burn in 2024.
Operator: All right. Thank you, Savi
DeAnne Gabel: Greg, we have time for one more question. Move on to the next one, please.
Operator: Okay. No problem at all. And our final question comes from Helane Becker with TD Cowen. Helane, please go ahead.
Helane Becker: Thanks very much. Matt, can you say what percentage of the forecast revenue for first 2024 first quarter is already booked.
Matthew Klein: Yes. So we don’t comment specifically on that, Helane. I would tell you though that for the spring break period, we like the set up very well. We think our revenue management plans there are going to bear fruit for us. And we’re looking forward to getting closer and closer to March because we do believe that the setup is really good for spring break, and we’re looking forward to getting there.
Helane Becker: Okay. Thanks. That was my only question.
DeAnne Gabel: All right. Well, thanks, everyone, for joining us today, and we will catch you next quarter.
Operator: All right. Ladies and gentlemen, that does conclude today’s call again, thank you all for joining, and you may now disconnect. Have a great day, everyone.
