Scott Kirby: Look, I think it took us a while to work it out. It also helped that some of our competitors with the other direction. I mean charging people $99 at the gate and pay your employees a commission to take their purses away cross the line. And so while they’ve gone in one direction, we’ve gone the other with an improved product. But the other thing that’s really changed during the last year is we finally started to get the gauge right. We couldn’t make this work when we were flying 650 regional jets around the country. And like — that’s why I like this is all coming together. I love when a plan comes together. This is coming together. And I know it’s not reflected in our stock price yet. And the market is skeptical of it.
But this is a plan that is working exactly like we thought it would. And that is the big change for Basic Economy. It’s a better product for us. We’ve figured out how to make it work, but we now have the gauge to be able to sell the product.
Operator: Our next question comes from Duane Pfennigwerth from Evercore ISI. Please go ahead.
Duane Pfennigwerth: Mike, I was going to congratulate you on the promotion, but given I’m so far back in the queue. No, I’m just kidding. Congrats on the step up here. I don’t want to pile on, on Basic Economy, but I did think the disclosure was kind of interesting. You called out 50% growth, is that simply a function of kind of inventory availability. So this time last year, things were really tight and they’re a bit looser this year, so we can so we can drive that growth. And I guess, depending upon the environment, that 12% of customers was also an interesting stat. So, you can turn the dials and maybe you have kind of half of Spirit Airlines within United inventory to maybe kind of multiple Spirit Airlines within United inventory. I’m guessing you probably pushed back on that metaphor, but maybe you could just speak to kind of inventory availability as a driver there.
Andrew Nocella: Well, we’ll probably save that for a more smaller conversation, to be honest. What I would say is the comps last year, we just couldn’t execute the way we wanted to execute. And so, it’s off a small base, it creates a big percentage, but it is a meaningful change. And as I said earlier, we’re going to lean into it. We have these big aircraft coming, and we’re going to be more competitive in the future, not less.
Operator: Helane Becker from TD Cowen. You are unmuted. Please go ahead.
Helane Becker: Kristina, congratulations. Given I was quoted in the article, I knew it was coming. And Mike, same to you. So here’s my question. As I think about the fact that we have all these infrastructure issues, especially in the New York area that are going to persist for several years, how should we think about two things? You increased gauge, obviously, to capture the demand. But then there’s a point where you want to capture higher ticket prices. So, what’s the sweet spot where you can do both, where you can benefit from capacity limitations with higher aircraft and raise ticket prices so that you improve margins?
Scott Kirby: Helane, we think about it through a different prism. We want to provide a good experience to our customers. And New York and New Jersey have not been a good experience for a decade. And the core reason they have is there are more flight schedule than the airports could handle. We are — we think it is a win for everyone, particularly starting with customers to have the number — a realistic number of flights that the airport capacity and our traffic control handle in those airports, and we’re very grateful to the FAA for doing that or listening and follow through on that. And we’re anxious to serve as many customers as we can, and so we are upgauging. So we’re flying more seats. We fewer number of flights but more seats as we’re upgauging.
And so, we’re focused on delivering for our customers, and that means flying bigger airplanes. Good news is bigger planes also have lower cost per seat. And when the operation runs better, it’s even lower cost per seat, which customers ultimately benefit from, and that’s what we’re doing.
Helane Becker: So, is the conclusion that I should have that the revenue is what it would have been, had the infrastructure issue not existed and you flew more flights, but you would have had higher costs, right? This way, you have lower costs and the same amount of revenue. Is that right?
Scott Kirby: I don’t know that I’d kind of get into that level of detail you have in your spreadsheet. What I think is we’re going to have a much better experience for customers. I think, we will have lower costs because we’ll have fewer irregular operations, and we’ll have bigger airplanes. And I think that will probably keep prices certainly in line to growing with inflation, be better for our customers, and we’ll be more profitable because we don’t have all the expenses associated with disruption and we don’t have a lot the frustration that comes from that — from customers. I think this is one of those few situations where it’s a win-win-win for everyone.
Mike Leskinen: The worst thing from a cost perspective is irregular operations. That’s what surprises us. We built lots of buffers into the system to control for that. And with a better air traffic control, with airport that is capacity — appropriately, we can do a lot more optimization.
Operator: Our next question comes from Brandon Oglenski from Barclays. Please go ahead.
Brandon Oglenski: I know it’s been a long call. I just want to get one more in here. But Andrew, I know you’re not — technically got into 2024, but you also mentioned domestic capacity, I believe in your prepared remarks, we should think about it being pretty much flat, I think, in the first half of the year. But maybe you can clarify that. And what’s driving that? Because I know under your Next strategy, you did want to upgauge domestically. So, is this in concert with OEM delivery expectations, pilots, commercial? I mean, what are you seeing that’s driving that?
