Andrew Nocella: Just at a really high level, I would say that the [cap is] up domestically, I think is rough as in probably Q2, but gets better in Q3 and particularly better in Q4 is our estimate based on what we look at. So I think that is a nice trajectory. Second, we added a considerable amount of Asia Pacific capacity middle to late last year. And so as we lap that capacity, so it’s now fully spooled up, we expect the line to improve. And as we make capacity adjustments to unproductive capacity in that region, we also expect that’s going to show some improvements. And that follows always through Q1 of next year. Latin America, the capacity picture has been particularly difficult for the first half of this year. As you all know, the second half looks, I think, very different.
And so I’m optimistic that Latin is going to turn the quarter in Q3. Although Q2 is still a very — [poor] results. And in Europe, I think we’ve really sharpened our pencil, we paused growth for the most part this year on purpose. And I’m particularly optimistic based on how we deploy capacity that Europe is going to look fine. So I’m not giving you the exact numbers, but that’s how I look across the globe and see what’s happening and think about positive or negative trajectory by region.
Scott Group: And then, Mike, I appreciate all your sort of comments on free cash flow. And I’d love maybe, Scott, to get your perspective on this discussion as well and maybe your thoughts on CapEx. Like if we wake up in six months and Boeing can start delivering a lot more planes again, could that — in your mind, Scott, does that $7 billion to $9 billion go up again? Or maybe alternatively, is there something in your control that says, hey, maybe that $7 billion to $9 billion could come down even more?
Scott Kirby: I think the $7 billion to $9 billion is probably a pretty good number. And I think of it as we’ve ordered a lot of airlines more than anyone in history has ever done. And when you combine that with the supply chain challenges, as Mike described, is kind of a ballot, you have 40 airplanes that are supposed to be delivered in 2023, they got pushed to 2024 and none of them got delivered and then yet another 20 in 2023 got pushed and so now you have 60 in 2025. That also — that wasn’t just hard on the planning for us, it may things like our flight training center, really hard to run effectively, because constantly changing capacity plan, those are — you’re thinking about upgrading pilots and things like 18 month out decisions.
So one of the things we attempted to do was level out the capacity, the aircraft deliveries, which we’ve done at approximately 100 per year. And so we’ll have a lot — at least a lot less variance, the standard deviation will be a lot less than it’s been in the past. It’s also kind of split 60-40 Boeing, Airbus, so there’s a little more diversity in that number going forward. I don’t think we’ll take it out, but — well, I know we’re not planning to take it up because taking it up, drives things at the flight training center, just drives a lot of other complexities, this is just not worth it. I think the other thing that we will — I know that we’re going to do now and going forward is build a little hedge into or build a bigger hedge into our schedule.
And like if we think we’re going to take 100 airplanes this year, we’re going to only put 90% or some lower number into the schedule. And if everything is on time and on plan, then we’ll have a few extra spares around for a couple of months. That will cost a little bit but it doesn’t cost nearly as much as overstaffing by 40 airplanes. And so I think it will give us not just certainty on CapEx, it will give us a lot more operational certainty for running everything better and more efficiently.
Operator: Your next question comes from the line of Helane Becker from Cowen.
Helane Becker: So I have two questions. I think, Andrew, you talked about the quality of your product and the network and the loyalty and so on in your answer to somebody’s question. But when you think about some of your alliance partners, they don’t have the same commitment to service and any of the things that you just talked about that you have. So as you think about alliances going forward, and maybe this is a question for Patrick. How do you think about getting everybody on board to the same standard that you’re setting so that you don’t distress your customers when they have to connect because you’re not flying some place non-stop that they want to go aspirational or they let your customers down?
Andrew Nocella: I’ll start off with that. I’m not sure I agree with the premise of your question. I think our core partners have the highest standards when I think about ANA and Air New Zealand, to name a few. And also think that Lufthansa has the higher standards, look, they’ve gone through a number of strikes recently, which has been think rough on Lufthansa, the team and the customers, but I think they’re behind that now. And I think their commitment and all of our commitment to customer service is actually pretty consistent. And we’re so proud to be in joint ventures with each of these airlines. And we sit around the tables, I’d like to say, without lawyers and we work through difficult problems, and we talk about how to make the level of customer service more and more seamless each quarter.
That being said, we are from different countries and different cultures and we have different ways of approaching our business. And quite frankly, we think that some of those differences are really important. They reflect who each of these airlines are and their unique identity. So we don’t — we’re not trying to harmonize across every single product detail on how we build alliances. But that being said, I do think we have a similar alignment of customer first and going forward. And we — and I’ll also plug in, we have the best alliance partners with the best hubs around the globe, which is one of the reasons that we have the leading network, and I think we’re more profitable in this global network relative to our primary competitors.
