Unit Revenue Outlook
Q: Why is 2Q TRASM improving but not matching peers?
A: Our TRASM is improving sequentially as three first-quarter headwinds—competitive capacity growth, excess off-peak flying (about 60% of growth ASMs in off-peak times, 10–15 points higher than competitors), and a distribution strategy transition—begin to subside. We anticipate industry capacity reductions, especially in the narrow-body segment, which favors us. Optimizing schedules by reducing off-peak flying and leveraging our refined distribution strategy will drive revenue and profit improvements.

Regional Fleet Expansion
Q: How is regional fleet growth affecting margins?
A: We're expanding our regional jet fleet from approximately 465 in Q1 by adding 20–25 jets each quarter, reaching around 535 by Q4. These jets generate higher unit revenue but slightly increase unit costs; however, we expect to remain within our unit cost guidance. The increased regional capacity enhances connectivity at hubs like Dallas and Charlotte, boosting profitability as the year progresses.

Latin America Revenue Trends
Q: What's driving RASM performance in Latin America?
A: Our short-haul international network (Mexico, Caribbean, Latin America) is crucial, making up to one-third of our flying—larger than competitors. While short-haul Latin America shows double-digit negative RASM due to industry capacity growth, it's still profitable. We expect improvements in both short-haul and long-haul Latin America throughout the year.

Growth in Chicago
Q: Why is capacity in Chicago growing faster than the system?
A: Chicago complements our Dallas and Charlotte hubs by enhancing connectivity, especially to the Upper Midwest. As regional jets return, we're adding flights through Chicago, providing high marginal RASM and profitability. This growth leverages our increasing regional fleet support.

Distribution Strategy Shift
Q: How will agency booking changes affect revenue?
A: We're optimizing our distribution by transitioning agencies to NDC; most agencies are adapting, and we expect the majority to join our preferred program upon rollout. Business revenue is growing faster than capacity, with distribution expenses down 7%. Many customers are booking directly with us, enhancing revenue and reducing costs.

Premium Revenue Growth
Q: How has premium revenue mix changed year-over-year?
A: Premium content now comprises 61% of our revenue, up 17% year-over-year, with nearly a 10-point shift from non-premium. This growth indicates customers value experiences and are willing to spend more, and it's increasing across channels, especially direct bookings.

Flight Attendant Contract Negotiations
Q: What's the status of the flight attendant contract?
A: We aim to pay flight attendants at the top of the industry, matching recent Delta increases. This may slightly raise costs beyond prior guidance, but we'll still stay within our full-year CASM guidance. We're finding efficiencies through reengineering the business, so this doesn't hinder our cost-saving initiatives.

Impact of GOL Bankruptcy
Q: How does GOL's bankruptcy affect Latin operations?
A: It doesn't significantly impact us. We have the best network and rewards program in Latin America and remain a constant presence despite industry changes. We hope GOL restructures favorably and continues as a partner.

Credit Card Agreement Renewal
Q: When is the credit card deal renewal, and any updates?
A: We're actively working on recommercializing our credit card programs and expect to share news this year. We haven't renewed in 10 years. Active accounts are up 10%, and spend per active account is growing at 4%, outperforming industry cards.

Regional Fleet and Embraer Relationship
Q: Would you consider larger Embraer aircraft for mainline flying?
A: We're committed to Embraer, operating the world's largest Embraer fleet with the largest order book. The E175 is ideal for our regional network and fits our mainline and regional mix constraints. We feel confident about our fleet plan and have sufficient aircraft through the end of the decade.