Mike Linenberg

Mike Linenberg inquired about specific statistics on recent initiatives, including the inflection in connections, entertainment outperforming passengers, and improved load factor. He also asked for details on the basic economy rollout, particularly the buy-up rates and how the proportion of tickets sold in the bottom fare bucket has changed.

Answer

COO Andrew Watterson confirmed positive load factor inflection post-summer, attributing it to enhanced connectivity, third-party channels, and the basic fare rollout. He noted a mid-single-digit increase in optional buy-ups, with a larger step-up expected in Q1 2026. CFO Tom Doxey and CEO Bob Jordan reiterated that all initiatives are on track, with early bookings for assigned seating showing encouraging trends and a four-point higher Net Promoter Score on reconfigured aircraft, even before assigned seating officially launches.

Inquired about the financing for new 2024 aircraft deliveries and the drivers behind the forecast for positive operating cash flow starting in March.

Answer

All 2024 aircraft deliveries are fully financed via sale-leasebacks or direct leases. The positive cash flow forecast is driven by an expected domestic market recovery, seasonal strength, and internal cost management initiatives, leading to expected positive margins in Q2, Q3, and Q4.