Jetblue Airways - Q3 2023

Transcript

Operator (participant)

Good morning. My name is Joelle. I would like to welcome everyone to the JetBlue Airways Q3 2023 earnings conference call. As a reminder, today's call is being recorded. At this time, all participants are in listen-only mode. I would now like to turn the call over to JetBlue's Director of Investor Relations, Koosh Patel. Please go ahead, sir.

Koosh Patel (Director of Investor Relations)

Thanks, Joelle. Good morning, everyone, and thanks for joining us on our Q3 2023 earnings call. This morning, we issued our earnings release and the presentation that we will reference during this call. All of these documents are available on our website at investor.jetblue.com and on the SEC's website at www.sec.gov. In New York to discuss our results are Robin Hayes, our Chief Executive Officer, Joanna Geraghty, our President and Chief Operating Officer, and Ursula Hurley, our Chief Financial Officer. Also joining us for Q&A are Dave Clark, our Head of Revenue and Planning, and Andres Barry, President of JetBlue Travel Products. During today's call, we will make forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

All such forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in these statements. Please refer to our most recent earnings release and our most recent 10-K and other filings for a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements. These statements made during this call are made only as of the date of the call, and other than as may be required by law, we undertake no obligation to update the information. Investors should not place undue reliance on these forward-looking statements. Also, during the course of our call, we may discuss certain non-GAAP financial measures.

For an explanation of these non-GAAP measures and a reconciliation to the corresponding GAAP measures, please refer to our earnings release, a copy of which is available on our website and on SEC.gov. Finally, I'd like to add an important note for today's call regarding our proposed transaction with Spirit Airlines. Given our trial has now begun, we will not be taking questions or commenting on Spirit beyond what is in today's prepared remarks. We appreciate your understanding and look forward to answering your questions once the trial has concluded. And now I'd like to turn the call over to Robin Hayes, JetBlue's CEO.

Robin Hayes (CEO)

Good morning, everyone, and thanks for joining us today. I'd like to start by thanking our incredible crew members for their hard work, dedication, and service to our customers. This summer, airlines faced an exceptionally high number of disruptions given air traffic control and weather challenges, and our outstanding crew members rose to the occasion each and every day to support our operation and deliver the JetBlue experience. Before getting into the results, as many of you are aware, the antitrust trial related to our proposed merger with Spirit Airlines began today. We look forward to presenting our case to court over the next few weeks, as we strongly believe our combination with Spirit is the best opportunity to disrupt the industry by increasing competition and choice, creating a long-overdue national low-fare challenger to the dominant Big Four airlines.

We expect the trial will proceed according to the process the judge laid out and is currently scheduled to conclude during the first week of December. Assuming a successful outcome, we remain on track to close the transaction in the first half of next year. For obvious reasons, it would be inappropriate for us to comment on any matters relating to the to this transaction while a judicial proceeding is underway, and therefore, as Koosh mentioned, we won't be answering any questions related to Spirit on today's call or making any other public comments while the trial is underway. Now, moving to the results on slide 4 of our presentation. We reported a Q3 adjusted loss per share of $0.39.

We planned and prepared for several challenges in the quarter, including the wind down of the Northeast Alliance, air traffic control delays, and shifts in post-COVID customer demand. However, weather-related disruptions were significantly greater than expected, and increases in jet fuel costs also weighed on results. While we are certainly not satisfied with these results, our team is working hard to mitigate these headwinds while also working to protect the customer experience. Turning now to slide 5. We are updating our full-year outlook to reflect the impact of these midterm headwinds, including higher fuel prices and industry capacity that is outpacing domestic demand. We now expect a full-year loss per share of $0.45-$0.65. Our team remains focused on taking steps to control what we can control while identifying additional levers to deliver value to shareholders.

First, with respect to weather and ATC staffing challenges, we are pleased that the FAA has extended its 10% slot waiver in New York through to October 2024, which we will be taking full advantage of. This is a critical step in affording much-needed support to a fragile ATC system. Importantly, the waiver was announced well ahead of the 2024 planning cycle, providing time to efficiently reallocate capacity, which we were not able to do in 2023. Secondly, as customer travel patterns continue to evolve, we're taking steps to better match capacity with demand. While overall demand remains healthy compared to pre-pandemic levels, inflationary pressures, including the recent uptick in fuel prices, are impacting margins in certain markets. We recently announced the closure of two Blue Cities and other capacity adjustments.

As we look ahead, our capacity growth is expected to moderate in the Q4 and will be driven primarily by international markets, which have demonstrated yield resiliency this year. Finally, the NEA wind down continues to progress. We began returning LaGuardia slot pair to American, and as we head into 2024, we plan to continue reallocating capacity out of LaGuardia as we return additional slot pairs. These changes are expected to benefit revenues and costs in 2024, as LaGuardia is one of our most expensive airports. Turning now to slide 6. While we continue to face challenges in the near term, we firmly believe we have the right building blocks in place to position JetBlue for success. Our large footprint in the slot-constrained New York market is a key competitive advantage.

New York remains our largest focus city, with well over 200 departures per day and has historically been a profit engine for JetBlue. While margins in New York have not recovered from their pandemic, pre-pandemic levels as quickly as the rest of the network, we are encouraged by the continual progress we are seeing in the market. We clearly have more work to do, but our comparable margins in New York will fully recover to pre-pandemic levels over time. We're also driving long-term structural improvements in our profitability from JetBlue Travel Products, where we have seen a 30% year-over-year increase in commission revenues for hotels and cars year to date. In addition, our redesigned TrueBlue program continues to be an important source of loyalty revenue, which increased as a percentage of total revenue by approximately one point year to date compared to 2022.

Finally, we continue to deliver steady programs, progress, I should say, on controllable cost execution this quarter. We have seen great success from our structural cost program, which is on track to deliver $150-$200 million savings by the end of 2024. We also continue to make strides in our ongoing fleet modernization program as we benefit our E190 fleet with the margin-accretive, fuel-efficient A220s. In conclusion, I'd like to thank our crew members again as they continue to go above and beyond to deliver for our customers and for each other day in, day out. While near-term headwinds persist, including the Pratt & Whitney GTF engine issue, which Ursula will provide an update on, we are focused on controlling what we can control.

I'm confident we have the right foundation in place to navigate the current challenges and work towards improving margins and driving profitable growth. With that, over to you, Joanna.

Joanna Geraghty (President and COO)

Thank you, Robin. I'd also like to thank our team as we continue to navigate a challenging operating environment. We very much appreciate your unwavering efforts to take care of our customers and support each other. We continued to experience greater than expected operational disruption during the quarter due to unusual September, far worse September weather, far worse than we've historically seen, coupled with unprecedented ATC restrictions. In the Q3, we had 68 days of significant operational disruption versus 40 days in the Q3 last year. Often, these events occurred on multiple consecutive days, causing extended delays and cancellations in subsequent days as we recovered. The severity of ATC constraints was also worse than previous summers, based on airborne holding, diversions, taxi time, and cancellations seen throughout the industry due to ATC. However, our investments enabled us to recover faster and better protect completion factor.

As a result, for the Q3, capacity grew 7.1% year-over-year. As Robin mentioned, we are pleased with the FAA's recent decision to extend the 10% slot waiver in the New York City area through October of 2024, and we are taking full advantage of it. However, given that the extension was announced after our Q4 schedules were published, this resulted in close-in and therefore less efficient schedule changes for the Q4. For 2024, we will be able to better plan our network, proactively address associated costs, mitigate customer disruptions, and appropriately manage our hiring plans.

While this slot waiver is a good initial step, we recognize that there is still a long way to go in terms of getting the right level of staffing and experience within ATC to drive substantial improvements in their performance and minimize the number of cancellations. We expect ATC disruptions to continue for the foreseeable future, and we continue to plan the operation with conservatism and with elevated crew reserve levels. With Mike Whitaker's recent appointment, we are hopeful that we will see progress as a permanent FAA administrator can serve as a champion on these critical infrastructure issues. For the Q4, we are forecasting capacity to grow between 0.5-3.5 points year-over-year, a five-point sequential reduction in scheduled capacity growth versus the Q3 of 2022.

We are proactively managing our capacity in light of higher fuel costs and aircraft constraints and have temporarily reduced flying in certain markets in off-peak periods. Our Q4 growth will be driven by international markets, where we have seen yields holding up relatively well. For the full year, we are narrowing our capacity growth outlook to 5%-7% year-over-year. Turning to revenues. Q3 revenues decreased 8.2% year-over-year and were impacted by the challenging operational backdrop, as well as softer than expected off-peak and close-in leisure demand in September. Our premium offerings remained a bright spot, with year-over-year Mint RASM outperforming core by 4.5 percentage points during the quarter. We continue to see strength in Mint, even with our Mint capacity up 19% year-over-year.

All of our A321neo deliveries for the foreseeable future will be in the Mint configuration, which we believe will allow us to continue to grow our strong premium leisure offerings. We are also seeing strength in Even More Space, with revenue growing double digits in Q3 year-over-year on roughly equivalent load factors, and we look forward to the continued expansion of Even More Space as our A220s have 30 Even More Space seats, compared to 16 on the E190s that they are replacing. Transatlantic also continues to deliver strong results as we continue to ramp. This quarter, we launched service to our third transatlantic Blue City, Amsterdam, from both New York and Boston, and we look forward to continuing to expand our transatlantic network as we take delivery of additional A321LR aircraft. This includes the new summer seasonal service announced last week to Dublin and Edinburgh.

In New York City, as we continue to wind down the NEA, we are rebalancing our capacity to better match supply and demand. We are meaningfully reducing our footprint at LaGuardia, reallocating this capacity to geographies with stronger performance, such as the Caribbean, where we are launching new services in the Q4 from Orlando to Punta Cana and Santiago in the Dominican Republic, and from New York to Belize and St. Kitts and Nevis. In addition, we are also taking full advantage of the FAA slot waiver extension to allocate capacity away from New York. These changes will drive continued improvement in our New York performance in 2024 and beyond. Looking to the Q4, we continue to see healthy travel demand during peak periods. Specifically, demand for travel around the Q4 holidays is in line with our expectations.

However, during off-peak periods, we are seeing elevated industry capacity significantly outpacing demand. That being said, we have seen an acceleration in corporate bookings since Labor Day, an encouraging sign that recovery in business travel is picking back up after notably dropping off through the summer. For the Q4, we expect revenues to be down 6.5%-10.5% year-over-year. For the full year, we now expect revenues to grow between 3% and 5% year-over-year. Finally, we remain pleased with the strength in our loyalty program, as active members have grown nearly 10% year-over-year, and member engagement has more than doubled across all customer levels following the launch of our redesigned TrueBlue program earlier this year.

Co-brand card spend has increased double digits year to date, and we expect to reach record contributions from our Barclays co-brand portfolio this year as engagement grows. We recently introduced the ability to redeem TrueBlue points on key partner airlines directly on our website. We are excited by the growth these enhancements have delivered so far and are expected to deliver as part of our multi-year journey in evolving our TrueBlue program and closing the gap to our peers. I'd like to close by once again thanking our crew members for everything they have done to serve our customers amid a challenging operational backdrop. With that, over to you, Ursula.

Ursula Hurley (CFO)

Thank you, Joanna. I'd like to add my thanks to our incredible team for their hard work and commitment to ensure we are delivering for our customers, our fellow crew members, and our owners. As Robin mentioned, we delivered a Q3 loss per share of $0.39 as we faced unprecedented levels of weather and ATC-related disruptions and rising fuel prices. CASM ex-fuel was up 5.9% for the quarter, just above the high end of our guidance. Our proactive planning and operational investments to boost resiliency through additional pilot reserves and capacity pulldowns drove 4 points of CASM ex-fuel pressure in the Q3. However, a greater volume of extended ATC delays versus plan resulted in higher labor premiums, hoteling, and disruption-related costs, driving an incremental 1.5 points of CASM ex-fuel headwinds in the Q3.

Excluding these unprecedented headwinds, we would have delivered CASM ex-fuel near the midpoint of our guide. Looking ahead, for the Q4, we are forecasting CASM ex-fuel to increase 8.5%-10.5% year-over-year. As a reminder, the uptick in expected Q4 CASM ex-fuel includes 4 points related to the additional compensation step-up tied to our pilot agreement and 2 points related to the timing of maintenance events. In addition, we've made a number of near-term capacity cuts to utilize the New York slot waiver. However, as Robin and Joanna mentioned, the waiver was announced shortly before the start of Q4, so many of the costs associated with that flying were already fixed, resulting in an incremental 3-point headwind to our Q4 CASM ex-fuel.

For the full year, we are raising our CASM ex-fuel outlook to up 4.5%-5.5%, just above the high end of our prior range. This includes two points of headwinds from the challenging operational disruptions we have faced this summer and the proactive investments we made to more quickly recover from these challenges. While we have been successful in identifying levers to offset some of these incremental costs, the sheer magnitude of the ATC and weather-related delays has been staggering. Our team is continually looking for opportunities to mitigate additional costs. With respect to the GTF engine issues, we continue to have conversations with Pratt & Whitney to assess the longer-term impact, and discussions around compensation are ongoing.

Based on Pratt & Whitney's initial analysis, we expect to end 2023 with up to 6 of our aircraft grounded due to GTF engine issues, and we anticipate the number of out-of-service aircraft to increase throughout 2024, ending the year with high single digits to low double digits of aircraft out of service... These issues are also driving an elevated number of engine changes. Despite introducing a number of self-help measures over the last 18 months, we expect our 2024 capacity plans and cost outlook to be meaningfully impacted. Given the increase in unscheduled GTF-related downtime, coupled with the aircraft delivery delays and aircraft retirements, we are planning capacity in the Q1 of 2024 to be slightly down on a year-over-year basis. With the slower capacity growth, we remain laser-focused on executing our structural cost program and delivering efficiencies.

We expect to drive approximately $70 million in cost reductions this year and $150 million-$200 million in run rate savings through 2024 under our structural cost program. We expect these savings to ramp quickly throughout 2024 as we streamline input costs for onboard offerings and ramp up our use of technology-based solutions to enhance productivity. Additionally, through our fleet monetization program, we have achieved $55 million in cumulative cost savings to date and remain on track to achieve $75 million of maintenance cost avoidance through 2024 as we replace our E190 fleet with margin-accretive A220s. Additionally, the A220 is 20% more efficient compared to the E190 on a unit cost basis, which will be a long-term benefit to our cost structure as we transition out of the E190s.

18 E190s have already exited the fleet, and as a reminder, we continue to plan for all our E190s to be retired by the end of 2025. Turning to slide 11, we ended the Q3 with $2.1 billion in liquidity, including our $600 million revolving credit facility, which remains undrawn and which we're pleased to announce we recently extended by one year. We continue to take a conservative approach to managing liquidity as we step up our fleet monetization efforts. We have been actively financing and have committed financing in place for approximately $1 billion year to date, of which $600 million is reflected in our quarter-end liquidity position. We took delivery of five aircraft in the Q3, bringing our year-to-date total to 11 new aircraft.

We expect to take delivery of 6 additional aircraft through year-end, for a total of 17 new deliveries this year, with 2 deliveries now pushed into early 2024. As a result, we now expect our full year 2023 CapEx to be $1.2 billion. Finally, rising oil prices have led to increased fuel prices. We continue to look for opportunities to layer in hedges to help mitigate this risk. As of today, we have hedged approximately 30% of our expected fuel consumption for the Q4, which we expect to provide a $0.05 per gallon benefit to our Q4 fuel price. In closing, while we continue to manage through an exceedingly dynamic and challenging operating environment, we are focused on controlling what we can control and executing our plans to mitigate these challenges.

We have reduced our Q4 capacity in markets where yields remain pressured, and as we trim our New York schedules, we are reallocating that capacity to margin-accretive leisure and VFR opportunities. In addition, we're aggressively focused on pulling the levers at our disposal to manage costs, including our structural cost program and fleet monetization plans. We are confident in our strategy and believe these actions, coupled with the strategic initiatives we have in place, are creating a strong foundation, positioning us to drive profitable growth, return margins to historical levels, and deliver long-term value to our owners and all of our stakeholders. With that, we will now take your questions.

Koosh Patel (Director of Investor Relations)

Thanks, everyone. We're now ready for the question-and-answer session. As we mentioned, we will not be answering any questions related to Spirit on today's call. With that, Joelle, please go ahead with the instructions.

Operator (participant)

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Savi Syth with Raymond James. Please go ahead.

Savanthi Syth (Managing Director, Airlines and Advanced Air Mobility)

Hey, good morning, everyone. If I might, on the kind of next year, you know, excluding what kind of the earnings contribution or, or any merger-related spend, you know, how should we think about some of the key, cash outflows and inflows as you think about, you know, CapEx and, and then maybe financing and, and debt payments?

Ursula Hurley (CFO)

Good morning, Savi. Thanks for the question. So as a reminder, we continue to work through our fleet monetization program. Next year, we do have a step-up in terms of the number of aircraft deliveries. So we're expecting 28 aircraft to deliver next year. The majority of those are the margin-accretive A220. So we will have a step-up in our CapEx profile related to that fleet modernization program. We also have a manageable debt tower next year as well, and we continue to have a really healthy balance of unencumbered assets. So the debt raises that we have done thus far this year is inclusive of not only deliveries this year, but previously purchased aircraft that we did with cash. So I think the headline is: I feel comfortable about where the liquidity number is.

We do have a step-up in CapEx next year. The debt paydown is reasonable, and we continue to have a healthy, unencumbered base to support a healthy liquidity level as we navigate through 2024.

Savanthi Syth (Managing Director, Airlines and Advanced Air Mobility)

Great. That's helpful. And just to, if you can provide the unencumbered assets, and I would also kind of like to ask just the timing of the LaGuardia wind down and how you're thinking about it. I know you shared plans earlier, but I wonder if that's changed, given, you know, the kind of new capacity view.

Ursula Hurley (CFO)

Sure. So in regards to the unencumbered assets, as I mentioned in my prepared remarks, we have $1 billion of liquidity coming in the door. $600 million of that has already hit through the Q3, and the remaining will come in the door through the end of the year. Once we complete that cash inflow, we'll have about 50 aircraft that will still be unencumbered. As a reminder, we have the bridge facility currently in place to support the Spirit transaction. That bridge is encumbered by our loyalty program, we have aircraft, we have engines, and we also have our slot gates and routes.

So once that bridge is taken out, we will also have some of those unencumbered assets fall back into the portfolio that we could use in the future to raise additional liquidity. And I will hand it over to Dave to answer the LaGuardia question.

Dave Clark (Head of Revenue and Planning)

Hi, good morning, Savi. For LaGuardia, we'd flown as much as 52 departures a day at the height of the NEA. We handed back 6 slot pairs as we entered the winter season here, so we're about mid-40s in terms of departures per day from LaGuardia as we go through this winter, and then in late March, we'll step down to roughly 30 per day and continue that pace through next summer.

Savanthi Syth (Managing Director, Airlines and Advanced Air Mobility)

Very helpful. Thank you for all the color.

Operator (participant)

Your next question comes from Daniel McKenzie with Seaport Global. Please go ahead.

Daniel McKenzie (Analyst)

Good morning. Thanks, guys. You know, just kind of looking at the stock here, there's a lot of skepticism, and I'm just hoping you can help us understand the path, you know, and the timing back to profitability. Maybe not necessarily in 2024, but, you know, say 2025. And so I guess, high level, yeah, can you just help us size the hit to pre-tax profits, you know, say, from the slower than expected recovery in New York City, the ATC cancellations, and the Pratt &Whitney engine issues? It just seems like there's a huge chunk of revenue, a huge chunk of cost, you know, that at some point, you know, go away and just, you know, how can we size that?

Ursula Hurley (CFO)

Yeah, thanks for the question, Dan. I mean, our goal is to get the business back to consistent profitability, and we believe that we have specific tailwinds to JetBlue that are gonna come to fruition as we navigate through 2024. The New York recovery has been slower than we anticipated. However, we continue to see meaningful progress in New York profitability levels. We still need to get them back up to pre-COVID levels, but we're seeing progress. The 10% slot relief obviously provides us meaningful runway to redeploy capacity to more margin accretive opportunities. The second issue is ATC, and as I mentioned, the slot portfolio reduction of 10% allows us to plan more effectively as we build the 2024 plan.

And so that will definitely provide some relief from a cost perspective. And then our continued execution of structural costs and our fleet modernization program. We're still in the very early stages of our fleet modernization program. We're about a third of the way in. And so that will continue to deliver meaningful value, given the A220 provides a 20% unit cost benefit compared to the E190. And then I'm pleased with the structural cost program progress. We've achieved $70 million to date, and our 2024 plan will assume that we achieve the $150 million-$200 million commitment that we made. So on the whole, I believe we have the right foundational pillars to bring the business back up to consistent profitability.

Joanna Geraghty (President and COO)

I'll also add just loyalty and JetBlue Travel Products. Those are continuing to expand with profitable growth, and I think you could expect, you know, 1-3 incremental points of margin tailwind as we move through 2024 into 2025. And then just to kind of re-emphasize Ursula's point on New York: New York is progressing nicely. It's not back to where it was pre-COVID, and pre-COVID, it was a margin engine for JetBlue. It will get back there. It's a constrained environment, and over time, we think it's strategically an important, incredibly important part of our network and our efforts here.

Daniel McKenzie (Analyst)

... Yeah. And I guess, you know, to that point, I'm wondering if, as a second question here, if you'd be willing to address the Credit Card Competition Act of 2023. And so I guess maybe this would be for Robin. You know, we are seeing other CEOs predict that these programs would go away, but I wonder if you can elaborate what that would mean for JetBlue. And I guess, you know, just in particular, is this revenue that would necessarily disappear? Or, you know, I guess, how should investors think about that at this point?

Robin Hayes (CEO)

Yeah. So thanks for the question, Dan, and in case everyone isn't aware of the issue, this is a proposal to basically bring more competition into the interchange space so that merchants have an alternative to either Visa or Mastercard to process the transaction. It's really a follow-on to what we saw on the debit card side, 2010. Personally, I think that this is likely to continue to face a lot of opposition. The majority of Americans have a rewards card, whether that's a travel card or another sort of benefit, and that would be lost if this act passes. Because you know, the way those consumer benefits come through that, you know, that interchange network.

And so, you know, the argument goes that price reductions would get passed on by retailers to consumers. I think there's a healthy level of skepticism whether that would happen. I think it's, you know, it's far from clear that there were benefits to consumers when we saw the debit card changes back in 2010. And frankly, you know, if consumers want the cash option, there are plenty of 2% cashback cards available now that they can go and get. So whether it's kind of cash off or whether it's travel, whether it's hotels or airline or these travel cards, these are very, very popular.

And I think that, you know, if this thing progresses, then I think members of Congress across both sides of the aisle will hear a significant number of complaints from their constituents because these cards are popular, and they make vacations, and they make other things more accessible for people than they would be otherwise. And I think people want to keep the benefits rather than see them be passed to big box retailers who, you know, could decide just to keep the profit for themselves. So I've got a great level of skepticism as to whether this would pass.

Daniel McKenzie (Analyst)

Mm. Okay. Thanks for the time, you guys.

Operator (participant)

Your next question comes from Jamie Baker with J.P. Morgan. Go ahead.

Jamie Baker (Analyst)

Oh, hey, good morning, everybody. So, you know, obviously lots of talk about, you know, air traffic control, weather, and oversupply and all that. But, you know, one thing that Mark and I have been, you know, thinking about is the remuneration from your credit card partners, you know, from loyalty. So if we tie loyalty back to earnings, and if we think about your margins relative to, you know, just pick one, Delta or United, and I know Joanna talked about closing the gap, but do you have an internal estimate as to how many points of margin differential loyalty might currently be driving?

Robin Hayes (CEO)

Yeah. Hi, Jamie. You know, look, it's clearly a margin gap to us, right? I mean, you know, I think all these airlines report sort of roughly what their percentage of revenue is, and then, you know, if you assume that the margin on these programs are high, you know, it's definitely single digit, low single digit percentages of difference. This is why actually we've been so focused on not just building our travel, build our own loyalty program to sort of play catch up, but also creating JetBlue Travel Products. You know, we know that we do not have the same exposure to business travel as some of these global leisure airlines. And so how do we gain more exposure, more share, share of wallet for leisure customers as well?

And so our goal over time is to get to a point where our JetBlue Travel Products and our loyalty program together can be at a point where they can compete for what I'd call a legacy airline-type margin. So that's the road we're on, Jamie. We're not there yet, but you know, we're, I think, making really good progress.

Jamie Baker (Analyst)

And thank you, Robin. As a follow-up to that, you know, you've talked about loyalties, the means to, you know, fund the business, you know, particularly if you do find yourself hypothetically with greater leverage a year or so down the road. You know, Spirit and Hawaiian loyalty is now trading north of 20%. I guess, you know, how are you thinking about loyalty as a funding option going forward? Do you need to identify some contingencies in terms of funding potential?

Robin Hayes (CEO)

Hey, Jamie. I think we're just going to kick that question to, you know, following the trial. I'm not really addressing any of the Spirit-related questions today on the call.

Jamie Baker (Analyst)

Well, it had more to do with leverage than Spirit, but fair enough. Okay, thank you.

Operator (participant)

Your next question comes from Conor Cunningham with Melius Research. Please go ahead.

Conor Cunningham (Senior Analyst, Airlines & Travel)

Hi, everyone. Thank you. Could you just speak a little bit to the puts and takes as you think about the cost structure into 2024? It seems like maintenance is going to be up a fair bit. You have the flight attendant deal, but you also have some self-help initiatives. Just curious on how you're thinking about it in the context of, you know, you're talking about 1Q capacity being down year-over-year. It just seems like CASM ex is starting to track up year-over-year as per 2024. Just curious on how you're thinking about it now. Thank you.

Ursula Hurley (CFO)

... Yeah, thanks for the question, Conor. So maybe at the highest level, JetBlue typically has targeted mid to high single digit growth rate and then flat CASM ex-fuel. That profile is going to look different next year because of aircraft delivery delays. We have GTF aircraft that will be grounded, and also we're continuing with the E190 retirement plan. And so the growth profile will look different. As you mentioned, capacity will be down in the Q1, slightly down year-over-year, and we're still working through our 2024 planning assumptions. You should assume that we will pinpoint CASM ex-fuel to be competitive compared to where we put, depending on where we put capacity.

The headwinds, which we've always known about, is maintenance next year, just given the aging fleet, and also continued pressure on labor, right? And just the inflationary environment, which is consistent with what others have been seeing. We obviously have another pilot step-up in August of next year. So those are the headwinds, but those are really the reasons whereby which we put in place the structural cost program, and so those are the structural cost program is meant to, to offset some of these headwinds. So working through the planning process, you can expect us to have a competitive CASM ex-fuel number next year once we pinpoint capacity.

Conor Cunningham (Senior Analyst, Airlines & Travel)

Okay. Thank you. That's helpful. And then, on premium products, are you needing to discount those in the current environment? The reason why I ask is you're seeing a sequential deceleration versus 2019 from 3Q to 4Q, and I would have thought that Mint and maybe Even More Space would have protected you a little bit. Is that. I think you called out four points of premium RASM benefit from Mint. Is that continuing into 4Q? Just curious on how-

Joanna Geraghty (President and COO)

Yes

Conor Cunningham (Senior Analyst, Airlines & Travel)

... those products are specifically holding up. Thank you.

Joanna Geraghty (President and COO)

Yep. Thanks. This is Joanna. Great question. Yeah, we are, we are really pleased with how well premium continues to hold up, and we would expect those trends to continue into the Q4. As we mentioned in the scripted remarks, as you look at next year, we're actually taking all 321s in the Mint configuration, and the 220 E190 retirement will be seeing going from 16 EMS seats to 30 EMS seats. So we're very pleased with the strength that we are seeing in the premium in the premium sector moving forward.

Conor Cunningham (Senior Analyst, Airlines & Travel)

Okay. Thank you.

Operator (participant)

Your next question comes from Michael Linenberg with Deutsche Bank. Please go ahead.

Shannon Doherty (Equity Research Associate, Airlines)

Hi, good morning. This is actually Shannon Doherty on for Mike. Just a quick one: We are hearing that the GTF engine inspection requirements are not based on aircraft manufacturer dates between mid-2015 and mid-2021, but rather the production of the, and the timeline of the contaminated parts, which could be spilling into newer aircraft deliveries. Can you confirm this? And at this point, do you think that your A220s are going to be affected by this issue?

Ursula Hurley (CFO)

Thanks for the question. So Pratt has given us an initial asset assessment of JetBlue's exposure. So we highlighted on the call today, we'll have up to six aircraft grounded by the end of this year, and then that will increase as we navigate through next year. So we'll end next year with mid-high single digits, low double digit number of aircraft on the ground. So in regards to your specific serial number question, so on the PW1100, so that's the A321 aircraft, a service bulletin is coming out imminently, and that's important because it will give a very detailed view of serial numbers, and it will solidify what we believe to be our exposure in 2024 and beyond. In regards to the 1500, the majority of our engines were manufactured post-2021.

We have a very small amount of engines that were manufactured pre-2021, and so I think that's what you were referencing in terms of the handful that are pre-2021 are gonna need full part replacements. We do have a view on how the A220 PW1500 will impact us next year, and that is built into the mid or high single digits, low single digit number by the end of next year. It's very small compared to the A321 aircraft in terms of exposure. So hopefully that helps.

Shannon Doherty (Equity Research Associate, Airlines)

Yeah, that's really helpful. Thanks, Ursula. And, you know, we saw that you pulled 8 percentage points of capacity growth from the March quarter schedules over this past weekend. Was that driven by, you know, the anticipated acceleration of the groundings? Or, you know, was that a demand-driven cut, maybe something that you're seeing in the off-peak period before spring break or something? Thank you.

Dave Clark (Head of Revenue and Planning)

Sure. Thanks for the question. This is Dave. The Q1 2024 capacity cut is driven by aircraft availability, constraints, so largely the engines and the delivery delays, and we expect that to remain the case throughout 2024.

Shannon Doherty (Equity Research Associate, Airlines)

Thank you.

Operator (participant)

Your next question comes from Duane Pfennigwerth with Evercore ISI. Please go ahead.

Duane Pfennigwerth (Senior Managing Director, Equity Research)

Hey, thank you. Can we talk a little bit about the revenue outcome, capacity up 7, revenue down 8? Obviously, you're taking some steps on capacity into Q4 and into early next year, but maybe within domestic, can you speak about, you know, relatively stronger versus weaker markets within the domestic entity? How does your Latin RASM compare with that domestic decline? And obviously, many of these NEA changes were forced on you without much lead time... and I guess, you know, over time, you'll be able to plan for that a little bit better. Can you quantify how much the NEA wind down impacted you in the quarter?

Dave Clark (Head of Revenue and Planning)

Sure. Thanks, Duane. This is Dave. I'll take that. So clearly, it's been a challenging environment as we've seen demand sort of transition out of the domestic space in the Q3 on a year-over-year basis, while at the same time, a lot of capacity was coming in from the industry. Where we've been reallocating capacity out of, and have seen, I think, the most acute demand challenges have been in some of the shorter haul markets and some of the business markets. So we've really focused there to rightsize that capacity to the new reality in those markets. You know, the corporate side continues to recover for us, but it's still well below, about 20% below the revenues of pre-COVID.

Latin continues to be pretty resilient, and we've been growing there, and traditionally have done extremely well there. And then some other places, you know, like Florida has a lot of industry capacity right now. Demand is healthy. We have no concerns there, but it's a bit, I'd say, temporarily pressured by industry capacity, which should, you know, I'd say, absorb over time. But we've really been focused on the places where we've seen demand roll out and making sure that we're aligned. With regards to New York City, the NEA for the Q3 was about a 1-point headwind. We did have a partial quarter there, as we didn't terminate until late July. So we did have some sales for the quarter.

It grows to about two points this quarter, which we expect to be the biggest impact, and then starts to get better next year as we can allocate more capacity out of New York City and take advantage of the redeployments we've done recently.

Joanna Geraghty (President and COO)

I'll also add just on transatlantic, also some very strong performance there. 140% ASM growth with flat year-over-year RASM. I think you see some of the moves we're making in terms of Dublin and Scotland, trying to take advantage of that leisure seasonal, leisure seasonal flying.

Robin Hayes (CEO)

Yeah, Duane, you have the honor of having all three of us answer a question. I think that what we're trying to be very thoughtful. It is very easy to reallocate capacity in this industry. You know, it's very mobile, it moves quickly, and sometimes, you know, things become hot very quickly and everyone moves towards it, and then ends up being oversupplied. And so what we're trying to do is kind of be very thoughtful around not just the sort of the immediate trends that we're seeing now in some of the commentary, but, you know, what do we think kind of sits behind that?

Because the really good news for us is the new slot waiver, which we know about now, means that we can be much more considered about these changes rather than sort of having to pull flights at short notice, already have hired the crews. We've got the costs embedded in the business, not really an opportunity to efficiently redeploy that. It's a very different chessboard we have in front of us for 2024.

Duane Pfennigwerth (Senior Managing Director, Equity Research)

Okay, thanks for those thoughts. And then just, just for my follow-up on 2024 CapEx, it looks like you have a contractual delivery table and then some footnotes with kind of likely deliveries. Simple question: Does the aircraft commitments CapEx of roughly $2.2 billion reflect your contractual or likely deliveries? A very long-winded way of asking you what your total CapEx will be next year.

Ursula Hurley (CFO)

There's definitely a difference between our contractual commitments and what we're planning. We're planning to receive 28 aircraft. However, the CapEx number you referenced is ballpark, where we should end up.

Duane Pfennigwerth (Senior Managing Director, Equity Research)

What would we add to that $2.2 billion? What would your total be?

Ursula Hurley (CFO)

It'll be slightly less than that.

Duane Pfennigwerth (Senior Managing Director, Equity Research)

Okay. Thank you very much.

Ursula Hurley (CFO)

The contractual commitments are higher.

Duane Pfennigwerth (Senior Managing Director, Equity Research)

Thank you.

Operator (participant)

Your next question comes from Catherine O'Brien with Goldman Sachs. Please go ahead.

Catherine O'Brien (Vice President and Equity Research Analyst)

Hey, good morning, everyone. Thanks for the time. I just wanted to dig in on New York a little bit more. You know, now that you have the advanced notice of the slot release in New York this upcoming summer, you know, how should that impact profitability? And, I guess longer term, do we need to get back to full ability to fly our New York slot portfolio, you know, with, like, pre-COVID operational reliability for those New York margins to recover? I guess, how do you think about getting back to 2019 margins on a system basis without a New York recovery or a full New York recovery? Is that possible? Thanks.

Joanna Geraghty (President and COO)

So we do expect a full New York recovery. It's just a bit slower than I think anybody would have hoped. But if you look specifically at JFK, for example, we're really pleased with the progression that JFK is making. In terms of the operational impact in ATC, you know, our hope is now that there's an administrator, we'll see even greater focus on how to ensure that New York is staffed appropriately from an air traffic control perspective. And, you know, that's a couple of years in the making. It takes a little while to fully bring on staffing, but we're hopeful that, you know, with these slot waivers, that's not something that's sustainable. And at some point, you know, the underlying issues got to be addressed in a more thoughtful way.

Making sure that we're prepared to take full advantage of that with the slot portfolio that we do have here, it's constrained. That's a good place to be, particularly when you're a leisure carrier. You know, we're looking forward to seeing New York fully return, but it'll take a little while to get there, but on pace for probably call it 2024, 2025.

Catherine O'Brien (Vice President and Equity Research Analyst)

I got it. And then how should we think about the puts and takes between aircraft on the ground increasing over the course of 2024 against aircraft deliveries? You know, sounds like we should stay tuned for official guidance, but just high level, is down slightly year-over-year in the Q1, is that the high watermark with declines getting deeper through year end? Or just anything high level on where year-over-year capacity goes from 1Q? Thanks.

Ursula Hurley (CFO)

... Yeah, so I think the Q1 is probably close to a representation. I mean, just to put it at high level, right? We take 28 deliveries next year, we're retiring 24, and then we've got grounded aircraft due to the GTF. So in the mid, the high single digits to low double digits. So that progresses throughout the year. So we start with 6 at the end of this year, and then that will end the year at low double digits. So I think that the Q1 is a fair representation. We are still working through our 2024 planning process, so we'll obviously provide you more color on the next call.

Catherine O'Brien (Vice President and Equity Research Analyst)

Got it. Thanks for the time.

Operator (participant)

Your next question comes from Andrew Didora with Bank of America. Please go ahead.

Andrew Didora (Senior Equity Research Analyst, Airlines)

Hi, good morning, everyone. So Robin, just seems like a lot of the capacity pull down that you talked about on the call is coming from more like external factors in the GTF slot extensions at JFK. Can you speak to maybe some of the more proactive capacity adjustments you're making? What, you know, what markets make the most sense for your product now? You know, I, I know you're looking at, you know, moving capacity to international markets, but what are the real structural changes you're, you're considering right now to kind of help the margin profile going forward?

Robin Hayes (CEO)

Sorry, I turned the mic off. I'm back. I said I'm gonna start and then hand over to Joanna and Dave. I mean, we've actually been extremely proactive over the last couple of quarters in reallocating capacity. You know, clearly, you know, we've seen the strength in international that others have seen. We just don't have as much exposure to it. But I think we, you know, we've got to be really thoughtful around what trends do we see into 2024. You know, if everyone starts pulling domestic capacity, and that's, you know, some of the commentary has been made, you know, we could see a bounce back to domestic much more quickly than we think, and then you may have too much exposure to international.

So, you know, the team is kind of constantly reallocating and moving things around, you know, and we're gonna continue to do that. I think the other thing that's going on with our fleet renewal is that, you know, with the A220, there's a broader set of markets that would work compared to an E190. You know, the E190 historically had some range considerations, and the A220 removes that as well. So that also creates the opportunity of redeploying outside some of these shorter, more business markets that have sort of been really served by the E190 into sort of more leisure-focused A220 markets as well. So I don't know if you and I, Joanna or Dave, you want to sort of,

Joanna Geraghty (President and COO)

Yeah. Maybe I'll just add on the leisure front. I mean, I think if you look at JetBlue overall, knowing that this is, you know, our core bread and butter and what we were built for, you know, we've got the point-to-point network, we have the product offering that covers an array of customers who want different, different things from a more basic unbundled product to a premium product. And then our strength as we see it growing in sort of the premium sector. And then you look at that overlaid with, you know, being in these constrained environments, whether it's Boston with gate constraints, or JFK, Newark, and places like that. You know, we've got, we've got a network over the long term that should perform very well in these leisure markets, and a product that also performs well.

And then you wrap that with loyalty and JetBlue Travel Products, creating that leisure ecosystem. You know, over time, we expect, you know, we expect it to produce some nice results. We're just in a more challenging environment right now, as we navigate through this quarter into next year with some of these external headwinds facing us around engines and excess capacity in some of the leisure markets.

Andrew Didora (Senior Equity Research Analyst, Airlines)

Okay, thanks for those thoughts. And then just as a follow-up, I know you mentioned corporate travel has improved, and sorry if I missed this, but can you quantify that, quantify the corporate travel improvement? And is this more of a New York comment, or are you seeing it more broadly across your network? Thank you.

Dave Clark (Head of Revenue and Planning)

Sure. This is Dave. So corporate travel has had a very nice step-up since Labor Day. We'll admit it had sort of softened over the summer. It appeared to be a seasonal thing that happened beginning in the summer, then bounced back at the end. But, you know, if you look at, say, since COVID, if you look at our best 7 booking weeks, since COVID started 3-4 years ago, 6 of them are in the past 2 months. So we've seen a real nice pickup here. I mean, in terms of percent recovered, we're still sort of 80% or low 80s, but we are seeing that sequential improvement. Also seeing some areas like media and entertainment, which has seen some softness over the summer with strikes, pick back up in the fall.

So feel good about how we're progressing on the corporate side, but still feel it's largely in steady state and will just grow sort of with the economy going forward.

Andrew Didora (Senior Equity Research Analyst, Airlines)

Got it. Thank you.

Operator (participant)

Your next question comes from Helane Becker with TD Cowen. Please go ahead.

Helane Becker (Senior Research Analyst, Airlines)

Oh, hi, everybody. Thanks very much for squishing me in here. So I just have a clarifying question. Well, I have two questions. One is, I think, Ursula, you mentioned competitive CASM ex. Can you just say what competitive CASM ex means?

Ursula Hurley (CFO)

Yeah, I think, we're obviously gonna have a much lower growth profile than we have historically. And so if you look at competitors' performance at a lower growth profile, I, I would envision us being in, in that same realm. Again, we're still going through the, our planning process for 2024, but I guess you can expect us to ensure that we're building a plan with, a, a CASM ex that, that is competitive based on the growth rate that we pinpoint compared to historical competitor performance.

Helane Becker (Senior Research Analyst, Airlines)

Okay. I think that's helpful. Thanks, Ursula. And then just, my other clarifying question: on, corporate, where you're talking about, you know, New York being slow to come back, actually, can you parse out how many or, a way, is there a way to parse out trips that are just one days? Like, are those the ones that aren't coming back versus trips that are two or more days?

Robin Hayes (CEO)

Yeah, thanks, Helaine. So certainly, yes, we're seeing the most pressure on the short-haul day trip markets. And we're seeing that in our network and sort of the global data seems to be indicating that in other parts of the world as well. And that's one of the places we've been right-sizing is on those sort of day trip markets. Keeping still a robust schedule, but some places were hourly, we're now sort of hourly when it counts at the key times of day, and then, you know, every couple of hours, the rest of the day. So that's certainly been our experience, is the shorter the haul, the slower it's going to come back.

Helane Becker (Senior Research Analyst, Airlines)

Got it. Okay. Thank you.

Operator (participant)

Your next question comes from Stephen Trent with Citi. Please go ahead.

Stephen Trent (Analyst, Airlines)

Good morning, everybody, and excuse me, and thank you very much for taking my question. Just one clarification here. I appreciate, you know, a lot of this weather stuff is out of your control, but you mentioned taking some steps to, you know, try and ease the disruptions. And could you just give a little color, if you know, that was adding crew bases or doing something in your schedule, you know, maybe AI in your flight scheduling or something? Would just love to hear that. Thank you.

Joanna Geraghty (President and COO)

Sure. Yeah, I can speak to that. So a few things. I think number one, how do you make sure the day is more resilient? You do that by ensuring you have adequate reserves in place, whether that's pilots or in flight. And so we've done that. I think the good news is we're getting smarter about how we do it, so it's more efficient. But for the foreseeable future, we will have additional reserves in place during peak and summer periods to protect the operation, so that when you experience long delays and crews bump up against their hours limit, we can replace them. So that's kind of the first thing. We've also gotten, I think, much smarter around how we think about the day.

So AI tools that can enable our system operations team to better plan the day, and we're in the process of introducing a number of these. So one example, when you have lengthy delays and long air traffic control initiatives, it can be longer to fly from New York to the Caribbean, for example, and so you may protect that flight by double crewing it. We want to make sure if we double crew these things, we're doing it in the most efficient way, so we save costs. So we're getting smarter about making decisions on which flights to double crew and which flights not to double crew, by way of example.

Also, how you cascade delays through the day and making sure that we understand when we do see air traffic control delays earlier in the day, that cascade through the day. We're making smart decisions on what flights to hold on to versus what flights we may want to proactively cancel. We're not there yet, but well underway in terms of building tools to better enable our team to make decisions day of, as we address this more challenging operating environment that JetBlue operates in.

Robin Hayes (CEO)

Yeah, and if I could just add to that. You know, I do think that we, we've got a whole summer of experience to look back on and really partner with the FAA, who are absolutely committed. We have a new administrator who is the perfect person for the job in Mike Whitaker. And whilst the staffing challenges won't go away, you know, we can accomplish a lot by mitigating. Now, you know, we've got the 10% slot waiver. It's been done ahead of time, which is terrific. You know, we at JetBlue is gonna continue to advocate that 10% may not be enough or 10% should be mandated. You know, 10% should include international carriers. No, this is our view.

Ultimately, the FAA is the final decision-maker on that, but we can advocate for our perspective. And also, you know, as the summer went on, and as the airlines and the FAA kind of built sort of ways of working to deal with these issues, we saw better performance overall as well. And so, you know, I think, we got now, a whole year nearly to work with the new administrator and his team to, do an even better job. And, you know, when we can create more things on time, when we have delays, you watch revenue, from, you know, add and cost out of the business really quickly.

You know, if you're taking a trip, and you've got to perhaps recruit for the second or third time that day because of multiple delays in the system, you know, it's really expensive quickly, you know? And I know it's not always panning, the numbers will work, the team has done. But, you know, JetBlue is number one in completion factor in July, which is the month in New York City. And, you know, the team should be proud of that achievement. It's not easy. And let's remember, it's a network coming in every day, so it has a big system impact. So we're gonna continue to... It's our really number one operating priority is to kind of improve, try and make sure next summer is better than this summer.

Stephen Trent (Analyst, Airlines)

Many thanks, Robin. You were breaking up a bit there, but I think I got the gist of what you were saying, and thanks for the time.

Robin Hayes (CEO)

...

Dave Clark (Head of Revenue and Planning)

Operator, can we move to the next question?

Robin Hayes (CEO)

They shut the line down again.

Helane Becker (Senior Research Analyst, Airlines)

Did they shut it off?

Dave Clark (Head of Revenue and Planning)

No, they shouldn't have. The operator said they would do it more.

Helane Becker (Senior Research Analyst, Airlines)

Operator?

Ursula Hurley (CFO)

I'm not sure if it was our network or not, but he's breaking up. Are you still here?

Helane Becker (Senior Research Analyst, Airlines)

Operator?

Dave Clark (Head of Revenue and Planning)

Operator, can you hear us?

Ursula Hurley (CFO)

I thought we were.

Dave Clark (Head of Revenue and Planning)

Operator, if you can hear us, we can go ahead and...

Operator (participant)

I'm so sorry about that.

Dave Clark (Head of Revenue and Planning)

Okay. Are we back on?

Operator (participant)

Yes. Your next question comes from Chris Stathoulopoulos with Susquehanna International. Please go ahead.

Chris Stathoulopoulos (Analyst, Airlines)

Thank you. This is Susquehanna International. I'll keep it to one question. It's been a long call. So Robin, I want to go back to your comments you made around this chessboard as it relates to thinking about your network for next year. You know, Ursula spoke about reallocating capacity to margin-accretive leisure and VFR markets. I'm curious where those are. We've heard from another competitor, that's sort of the plan here. It doesn't seem that there's sort of, you know, areas that are perhaps untapped and, you know, kind of looking at some of these more leisure-focused destination capacity as it stands today is up double digits.

I realize you have the mid piece here, but trying to square that away, you know, with how, for instance, the travel products might kind of fit into all this. So is this sort of a wholesale relook at geography or kind of fine-tuning? Just would love to hear some your thoughts there on this.

Robin Hayes (CEO)

Yeah, I'm going to, Dave, to maybe pick that up. Thank you.

Dave Clark (Head of Revenue and Planning)

Sure. Thanks, Chris. This is Dave. As mentioned before, we're increasing our mix of leisure even more heavily as we reallocate out of some of the shorter haul business. But we feel very confident in our ability to compete and win. I mean, these are the markets JetBlue was founded to and designed to serve 23 years ago. These are the markets we had in mind when we built our loyalty program, when we updated it earlier this year to introduce things like tiles, that give infrequent customers even more rewards and more incentives than they get through other loyalty programs. It fits right into our JetBlue Travel Products, which is designed to provide a holistic experience and drive a lot of ancillary revenue. It goes with our point-to-point network, it goes with our customer service.

So, we have our, our 6 focus cities and our leisure, you know, our leisure focus, and, we're going to compete hard, and we're going to win in these markets. And of course, there'll be tweaks, around the corner or around the edges, and we're doing that very actively with... We had about a dozen markets we've closed or announced the closure of in the last 2 months. We've closed 2 cities. But for our bread and butter, for, for Florida and the Caribbean and Transcon, we're going to fight and we're going to win in those markets.

Robin Hayes (CEO)

Yeah, I think the point, yeah, just... I mean, the point I was trying to make as well is that, you know, obviously the industry fare data we have is historic. You know, we see short-term sort of trends. You know, it's also trying to kind of get ahead of that and think through, you know, what markets may be... You know, there was lots of commentary last week about Las Vegas, and so, you know, there's now so much capacity get put out of Vegas, Vegas becomes a stronger performer again. So all I'm saying is we're trying not to just respond to what's in front of us, but be thoughtful and think through, you know, what are the things we need to do that are more closely with, aligned with our strategy to drive margin, recovery?

And, you know, that's what we're going to be focused on, and, you know, more news to follow as we get into next year. But I think, you know, I think that the message for 2024 is going to be capacity constraints because of the engine issues and the delivery delays we have. And so, you know, we want to make sure we're flying the most margin-accreted markets, given those constraints.

Chris Stathoulopoulos (Analyst, Airlines)

Okay, thank you.

Operator (participant)

There are no further questions at this time. Please proceed.

Dave Clark (Head of Revenue and Planning)

That concludes our Q3 2023 conference call. Thanks for joining us, and have a great day.

Operator (participant)

Again, that will conclude today's conference. Thank you for your participation.