Sales and Distribution Impact
Q: What caused the revenue shortfall, and how are you addressing it?
A: Our sales and distribution strategy implemented in 2023 led to a $750 million revenue impact in the first six months and is expected to total $1.5 billion for the year [0]. We overemphasized direct channels and missed out on indirect revenue. We're making immediate adjustments by making our content available across all channels, renegotiating agency contracts, and rebuilding relationships with travel management companies and corporate customers [7].

Capacity Reduction Plans
Q: Why not reduce capacity more aggressively given the supply-demand imbalance?
A: We've taken swift action to adjust capacity. Our total capacity growth in Q3 is now planned to be slightly less than in Q3 2019 [1]. In August, capacity growth is pulled down to around 2%, and in September, it will grow by less than 1% [1]. We'll continue to assess and ensure we don't outpace demand, especially as we plan for 2025 [1].

Regaining Business Share
Q: How are you winning back business passengers?
A: We've made our content available on all channels, resulting in regained passenger share [7]. We're reestablishing relationships with travel management companies and agencies, renegotiating contracts, and reaching out to corporate clients to provide valued support [7]. Our focus is on capturing indirect revenue and enhancing corporate agreements [7].

Cost Management
Q: Can you maintain cost performance while rebuilding the sales force?
A: We've been industry leaders in unit cost performance, focusing on efficiency and technology to drive productivity [5]. While we expect some cost pressure from increased commissions as we rebuild the sales team, we plan to continue outperforming on costs into 2025 [5].

Liquidity and Debt Reduction
Q: What is the outlook for cash flow and debt reduction?
A: We're producing free cash flow this year, expecting around $500 million in 2024 [1]. We ended Q2 with over $11 billion in liquidity and have reduced total debt by $13 billion from peak levels [8]. We aim to meet our $15 billion debt reduction target by 2025 [8].

Co-brand Credit Card Negotiations
Q: How are co-brand credit card negotiations progressing?
A: Loyalty revenue grew by 8% year-over-year [2], and we're in discussions to enhance our co-brand partnerships. We're optimistic about achieving better deals that will produce positive results in the long run [17].

Network Strategy and Hubs
Q: Are you considering changes to your network or hubs?
A: We're pleased with our hub positions, especially in Dallas/Fort Worth (DFW) and Charlotte (CLT) [10]. Growth has been focused there, and we're looking to expand in Philadelphia and Chicago as regional networks recover [10]. Our network is poised to serve nearly 90% of global destinations [10].

Investment in Premium Products
Q: How are you investing in premium offerings amid competition?
A: We're investing in real, hard premium products. We have the most premium seats in the market today and plan to grow them by 20% by 2026 [16]. This includes introducing A321XLRs in 2025, upgrading 777-300s with new flagship suites, and receiving 787-9s with flagship suites [16].

Flight Attendant Agreement Impact
Q: Is the new flight attendants' deal included in your guidance?
A: The new agreement isn't accrued in the first half of 2024 [14]. It's included in our guidance starting in September upon assumed ratification and reflected in our Q4 outlook [14].

Operational Resilience
Q: How did you manage to recover quickly from the recent global network outage?
A: Our experienced operations team acted swiftly during the CrowdStrike outage [18]. Within an hour, we assembled teams to restore systems, allowing us to return to normal operations by the end of that day [18]. Our focus on technology and proactive measures ensures resilience against disruptions [20].