Sun Country Airlines - Q2 2023

Transcript

Operator (participant)

Welcome to the Sun Country Airlines second quarter 2023 earnings call. My name is Josh, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Chris Allen, director of Investor Relations. Mr. Allen, you may begin.

Chris Allen (Director of Investor Relations)

Thank you. I'm joined today by Jude Bricker, our Chief Executive Officer, Dave Davis, President and Chief Financial Officer, and a group of others to help answer questions. Before we begin, I'd like to remind everyone that during this call, the company may make certain statements that constitute forward-looking statements. Our remarks today may include forward-looking statements, which are based upon management's current beliefs, expectations, and assumptions and are subject to risks and uncertainties. Actual results may differ materially. We encourage you to review the risk factors and cautionary statements outlined in our earnings release and our most recent SEC filing. We assume no obligation to update any forward-looking statement. You can find our second quarter earnings press release on the investor relations portion of the website at ir.suncountry.com. With that said, I'd like to turn the call over to Jude.

Jude Bricker (CEO)

Thank you, Chris. Good morning, everyone. Our diversified business model is unique in the airline industry. Due to the predictability of our charter and cargo businesses, we are able to deliver the most flexible scheduled service capacity in the industry. The combination of our schedule flexibility and low fixed cost model allow us to respond to both predictable leisure demand fluctuations and exogenous industry shocks. We believe due to our structural advantages, we will be able to reliably deliver the industry-leading profitability throughout all cycles. We crossed a few milestones since our last call that I wanted to highlight. First, Sun Country surpassed $1 billion in revenue for the 12 months ending in June, a first for our 40-year-old company. In 2Q, we carried over 1 million scheduled service passengers for the first time in any quarter.

We regained our position as the top margin carrier among the 11 carriers for the 12 months ending in the second quarter. Recall that we were the first into this pilot contract cycle. In July, we executed a record number of flights in a day. Being able to deliver quality operations during peak days is a key priority for us as we execute our variable capacity model. This growth and performance is a testament to all our frontline employees that deliver for our customers every day. Consistent with the theme of the last several calls, we've remained in an environment where demand across all our segments is strong. As it's been a common topic around the industry, I wanted to give some color on the revenue environment for our scheduled business. Our second quarter scheduled service TRASM was up 10% year-on-year on ASM growth of 6%.

Certainly, very positive results. We expect to be able to accelerate scheduled service ASM growth into the third quarter to mid-teens, and we expect TRASM to be down slightly year-over-year. However, I want to point out that scheduled service TRASM versus 2019 was up in 1Q and 2Q by 34% and 43%, respectively. We expect 3Q to fall between those bounds. We're seeing unit revenues stabilize at a substantially higher level versus pre-COVID levels. This reset seems to be persistent based on sales into our selling schedule currently out through April 2024. Minneapolis, by far our largest market, has been particularly robust through the COVID recovery. This summer, we launched 15 new markets. All are performing well. Since I've been at Sun Country, we haven't had any MSP markets that didn't have a positive contribution. It's pretty amazing.

One thing I'd like to call out is future cash flow. This year, we'll produce about 50% more flights than were performed in 2019. In two years, I expect departures to grow versus this year by over 30%. We can produce those growth figures with the addition of only three net aircraft to the fleet at about a $60 million cost, along with the redelivery of our 900s, currently leased out. All three of the expected deliveries already have committed financing, this free cash flow gives us the confidence in executing on the share buyback recently approved by our board. With that, I'll turn it over to Dave.

Dave Davis (President and CFO)

Thanks, Jude. Q2 was a historically strong quarter for Sun Country, despite it being among the seasonally weaker quarters for our business. Total revenue increased 19.2% year-over-year to $261.1 million, while earnings before taxes were $26.8 million versus a loss of $4.8 million in Q2 of 2022. Adjusted op margin was 15.3% for the quarter. Revenue, earnings, and margin results were historically record highs for the second quarter. Revenue from our passenger business continued to stay strong in Q2, increasing 16.6% year-over-year to $227.9 million. Scheduled service plus ancillary sales generated $178.2 million in revenue, which was 16.8% higher than last year.

This easily exceeded a 5.6% growth in scheduled service ASMs, was driven by a 2.7% growth in total fare to $177, and a 2-point increase in load factor to 85.8%. Scheduled service TRASM grew 10.3% versus Q2 of last year. Since the second quarter of last year, we've seen a significant sustained increase in our scheduled service TRASM versus pre-COVID levels. We believe this is driven by the continued optimization of our network and changes in the public's demand for leisure travel. As Jude mentioned, during Q2, our scheduled service TRASM was up 43% versus 2019, and in Q3 of this year, we expect scheduled service TRASM to be up at least 35% versus Q3 of 2019.

We don't see any sign of scheduled service TRASM numbers returning to pre-COVID levels, rather they appear to be stabilizing at the higher levels we're now experiencing. Charter revenue in the second quarter grew by 16.1% to $49.6 million on block hour growth of 23.9%. A portion of our charter revenue consists of reimbursement from customers for changes in fuel prices, as we do not take fuel risk on our charter flying. Q2 fuel prices dropped by over 38% versus last year. If you exclude the fuel reimbursement revenue from both Q2 of 2023 and Q2 of 2022, charter revenue grew 33.6% over the period, and charter revenue per block hour grew by 8%. Program charter flying was 87% of total charter block hours, versus 92% in Q2 of last year.

We'll continue to pursue more ad hoc business as our available capacity increases. Second quarter cargo revenue grew 18.1% to $25 million on a 10.4% increase in block hours. Last year, we had lower levels of flying due to scheduled maintenance events, and the annual increases in our Amazon contract occurred in December of 2022. We expect year-over-year aggregate growth to peak in Q3 and moderate thereafter. We're expecting full year 2023 block hour growth to be in the high single-digit range. As always, our unique model allows us to move capacity between lines of business as conditions warrant. Now, let me turn now to costs. Total operating expenses increased 4.5% on an 11.3% increase in total block hours for the second quarter.

Adjusted CASM was up 10.4% versus Q2 of 2022. This compares to a 14% increase in the year-over-year comparison for Q1. We expect year-over-year CASM growth to continue to moderate in the quarters ahead. Daily aircraft utilization was still 9.5% lower year-over-year, which continues to put pressure on unit costs. Total non-fuel operating costs increased by approximately 25% versus Q2 of last year. Significant drivers of this increase include the aircraft ownership costs for the five 737-900s we currently lease to Oman Air, as well as non-repeating costs for the vesting of management stock options and a payment to one of our labor groups to settle past grievances. Excluding these expenses, non-fuel operating costs would have increased by 19.8% year-over-year. Fuel expense decreased 32% versus last year.

Regarding our balance sheet, our total liquidity at the end of Q2 was $263 million, which was slightly higher than the amount at the end of Q1. Year-to-date through July, we've spent $210 million on CapEx, which has funded a majority of our planned aircraft growth into 2025. We expect to be able to achieve our growth objectives over the next two years with higher aircraft utilization and the addition of only three net aircraft. As a result, we're expecting CapEx to decline considerably in 2024 and 2025. Our net debt to adjusted EBITDA ratio at the end of Q2 was 2.3. Since we do not have a significant debt burden, we have flexibility in how we deploy our cash. Since Q4 of last year, we've spent $47.3 million on share repurchases.

Our boards authorized another $30 million in repurchase authority, which brings our current available share repurchase authority to $32.8 million. Turning now to guidance. We're anticipating Q3 total revenue to be between $240 million and $250 million, an increase of 8%-13% versus Q2 of 2022 on a block hour increase of 13%-16%. We're forecasting a $2.90 per gallon fuel price in the quarter. Operating margin for the quarter is forecast to be between 6% and 11%. The fundamentals of our unique diversified business remain strong, our model is highly resilient to changes in macroeconomic conditions. Our focus remains on profitable growth, with that, we will open it up for questions.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment for questions. Our first question comes from Duane Pfennigwerth with Evercore ISI. You may proceed.

Duane Pfennigwerth (Equity Research Analyst)

Hey, good morning.

Dave Davis (President and CFO)

Hey, Duane.

Duane Pfennigwerth (Equity Research Analyst)

Charter, can you, can you talk a little bit and just remind us how fuel change year-over-year impacts revenue trends in charter and also margins in charter?

Dave Davis (President and CFO)

I think there-- it's important to break out what charter includes. There's several track programs. We have a fleet of 60 aircraft. Five of them are dedicated to track programs, plus a VIP, so it's basically six aircraft, and those have absolute pass-through in fuel. We have a significant amount of ad hoc business that is predominantly sports programs. Again, that's a 100% pass-through. Sometimes, however, we need to position aircraft at our cost, so there's a little bit of flying that we do in support of those that has fuel at risk. Then there's the military business, which is 100% pass-through. It's effectively, you know, over 90% perfect pass-through.

Jude Bricker (CEO)

Yeah, I mean, think of it this way, Duane. We negotiate a charter contract. In that charter contract is a reference price, okay? If fuel is higher or lower than that reference price, we get reimbursed from the charter customer for either more or less, you know, based on the based on the fuel price. When fuel is really high, the reimbursement is higher, so the revenue looks higher. When fuel is really low, the reimbursement is less, so the revenue looks less.

Duane Pfennigwerth (Equity Research Analyst)

Got it. Then, for some of the seasonal flying that you do, can, can you just remind us to what extent, Mexico or Cancun, is a part of that seasonal set? Obviously, we heard some more cautious comments on Cancun, specifically from Spirit, yesterday. Could you just kind of comment on your trends to maybe Mexico and, and near Caribbean?

Jude Bricker (CEO)

Yeah, I'll give you some backdrop. Our international network is focused from Minneapolis in the wintertime. In the summertime, the predominance of our international network is focused on origination in southern large markets. The distinction there is that the southern business is largely a scraping business, where we don't support that flying with a lot of marketing. We're not focused on building a brand in some of these origination markets, in contrast to what we do out of Minneapolis in the wintertime. Therefore, you know, we're a little more subject in the summertime to the prevailing airfare in some of these international markets. That would be...

You know, I agree with Dave's comments about some of the weakness that we're seeing in southern markets, but these are still highly profitable markets for us, and we have the ability to dial capacity to whatever optimal level is supported by the fare environment at that given time. Most of our international markets in the summertime are now winding down and will be, will be out of by the end of August. Then we'll focus on building up our, our, largely Minneapolis, but also some Milwaukee and a few others where we fly, winter markets, as we approach into the fourth quarter. Any color, Grant?

Grant Whitney (EVP and CRO)

Yeah, no, I'd just echo Jude's comments, that there was a little pressure this year, but the results were, on an absolute basis, were still acceptable for us, down from maybe what we've experienced. We do some unique things down there. There's one market that has been particularly strong for us, which is Harlingen, which did not have sort of the competitive impacts, and that one performed very nicely. To Jude's point, our agility will make it work. We've been there for a while, and it's going to be something we continue to do in the summer.

Jude Bricker (CEO)

My diagnosis of Cancun was that it was a really strong summer in 2022, a lot of carriers chased that demand into this summer. If you look at capacity levels year-over-year, Cancun was the beneficiary of a lot of capacity growth, and that drove down fares. I think there's still strong structural demand, and we can, as I've mentioned, fly in any environment and be successful down there.

Duane Pfennigwerth (Equity Research Analyst)

Okay, makes sense. I'm going to have to look up that originating market that you talked about. I'll have to go look at my map.

Jude Bricker (CEO)

Yeah.

Duane Pfennigwerth (Equity Research Analyst)

Appreciate, appreciate the thoughts.

Grant Whitney (EVP and CRO)

Thanks, sir.

Operator (participant)

Thank you. One moment for questions. Our next question comes from Catherine O'Brien with Goldman Sachs. You may proceed.

Catherine O'Brien (VP of Equity Research)

Hey, good morning, everyone. Thanks so much for the time.

Jude Bricker (CEO)

Hey.

Catherine O'Brien (VP of Equity Research)

You know, hey, another topic that's been popular this earnings season is, you know, domestic carriers having to rightsize day of week, just based on their current view on, you know, where corporate now sits. Not, not that that's a market you chase, but, I know your network has less overlap with some of these carriers, but have you started to see any pickup in competitive capacity into the fall or, or early winter as, as these changes start to take place in other airline schedules?

Jude Bricker (CEO)

Generally, the capacity environment is constructive, meaning not a lot of growth. We are seeing some build-backs into Minneapolis based on 2019 levels, you know, stuff that was cut that's coming back from non-Delta carriers. That, that's perfectly fine. On the day of week stuff, I mean, this is sort of what we do, and I don't think it should be a surprise to anybody that Vegas is a little weaker on Tuesdays than it is on weekend demand patterns. You know, we built the business around that. It, it's not a substantial change. Here's a point that I can bring up, which is perhaps out of consensus. July doesn't have a lot of day-week sensitivity. There's a tremendous amount of demand, but it's elastic, as compared to March, which has these fantastic days.

There's really deep demand that's inelastic on a few given days, particularly around spring break travel patterns. July, we need to be a lot bigger than we were, and that means adding into off-peak periods. We have a capacity constraint that's a block-hour constraint based on pilot availability, and so we choose to put our flying on the very best of days during that month. However, if we had more flying, we would expand and flatten the schedule with a relatively moderate, or de minimis even, reduction in unit revenues, because the off-peak days are so powerful. In contrast, September is completely different, and as it always has been, you know, there's just not a lot of midweek opportunities in September.

I agree with the overall sentiment that there is a focus, a renewed focus, perhaps, from the Big Three onto leisure demand, which is crowding out somewhat, leisure carriers when there is limited demand. We already focus on flying around those limited demand periods, and so for us, it's really about adding into off-peak periods during peak months. It's a, it's a more nuanced and complicated matter, I think, than the market is making sense of it at this point. Our opportunity is to grow into these 40% variable contribution scheduled service networks that we have during peak months, and that's what gets our third quarter margins up into the mid-teens from where they are today at this fuel price.

Catherine O'Brien (VP of Equity Research)

Got it. That, that's really helpful. Thanks for the perspective, Jude. maybe just-

Jude Bricker (CEO)

Yeah.

Catherine O'Brien (VP of Equity Research)

Two quick ones on cost for Dave. You know, your just coming back to the CASM commentary through your end, that, that eases. Can you just give us some more color on, on if that's ratable, like, with the step down in each quarter or, anything we should be aware of on 4Q capacity growth? Just on the share-based comps, in the press release, you noted there was, like, a one-off vesting in stock comp, but 1Q wasn't too far below this quarter. You know, both were a little bit elevated last year. Can you just give us some color on how we should expect that to trend, just, just since it's outside of your commentary on CASM, thanks so much.

Dave Davis (President and CFO)

Yeah, sure. Essentially, I think this is consistent with Jude's commentary, is we're a little bit oversized. You know, we mentioned on, on the aircraft front, we have enough aircraft. We add a few more to really sustain reasonable growth levels through 2025. We're a little oversized. As we continue, and that's negatively impacting CASM. As we sort of roll forward into the quarters ahead, and you see some of this growth, particularly like some of the third quarter growth and then some growth we're going to have in the fourth quarter as well, those year-over-year numbers will continue to, I should say, moderate. You know, we should be single digit kind of stuff in the third quarter and fourth quarter.

I'm not giving guidance on yet, but we should just see continually improving year-over-year trends here on the CASM front. Regarding the management options, you know, there were a number of folks here who had considerable options from Apollo when the original acquisition was made. Apollo's ownership, which I think is an important point for investors, has continued to drop and is now sub 30% at the company. The overhang is getting less and less. That 30% was a sort of a trigger for the vesting of management options that happened last quarter. When we fell below that number, a significant number of management options vested. Those original options are now fully vested, so vesting costs will not continue to recur in the quarters ahead, at least for those, for those options. That number will moderate.

Catherine O'Brien (VP of Equity Research)

Okay, great. Thanks so much, Dave.

Operator (participant)

Thank you. One moment for questions. Our next question comes from Helane Becker with TD Cowen. You may proceed.

Tom Fitzgerald (Senior Equity Research Analyst)

Oh, hi, thanks very much. This is Tom Fitzgerald on for Helane. My question is just on what you're seeing in terms of pilot attrition and how you're, how you're feeling about getting first officers to upgrade into the captain seat. I appreciate any color you can have. Thanks very much.

Jude Bricker (CEO)

I'll make some very general comments, and then if, Greg, if you want to jump in. Well, we don't have any problem hiring pilots, and our attrition is consistently below where we had expected it would be at this time. The issue boils down really to getting pilots to upgrade to captain. We're constrained in the left seat, and we continue to make strides in improving that figure, and as we will grow, as we upgrade captains.

Greg Mays (EVP and COO)

Yeah, I mean, to Jude's point, we don't have a problem hiring pilots right now. We've got really robust applications. We've got a great recruiting team. On the attrition front, you know, we watch that daily. That's stayed within our expectations. We see these other deals that are going on, you know, out there now that might affect that attrition, but we believe we can moderate that with additional class sizes that we can fill. As Jude said, it really does come down to our ability to grow is at the rate of our captain upgrades.

Jude Bricker (CEO)

This is an industry-wide issue, as these, you know, in the case of the Big Three, they did a bunch of early retirements, and so everybody's trying to get pilots through their training pipeline and rightsize their pilot groups. It's taking a little time.

Dave Davis (President and CFO)

Yeah, I think one of the points is, you know, we've talked about this point for now a number of quarters. This continues to be a challenge for us, but I think, you know, you can look at the growth that we're looking at here in the third quarter as a testament to the fact that we are making progress. It's not linear, it's bumpy, and this is the focus.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one, one on your telephone. One moment for questions. Our next question comes from Mike Linenberg with Deutsche Bank. You may proceed.

Mike Linenberg (Equity Research Analyst)

Oh, hey, good morning, everyone. I did get on a few minutes late, and I, I apologize if you may have addressed this, but just, you know, going from a 15% operating margin, you're guiding 6%-11%. We're coming off of what was one of seasonally, one of your weaker quarters. What are sort of the primary drivers there? Is it things like fuel? I know September is a tough month for you guys. Can you just run through some of the puts and takes, your thinking behind that, decel and profitability? Thanks.

Jude Bricker (CEO)

I mean, the main thing is segmented capacity allocation. We have very consistent profitability from our track and cargo programs, track, charter, and cargo programs.

Mike Linenberg (Equity Research Analyst)

Mm-hmm.

Jude Bricker (CEO)

Then, you know, it's a good thing in many ways, it's a good thing that they are flat in capacity. Then we have scheduled service, which is variable, and as I mentioned, you know, and Dave alluded to, you know, we're flying our airplanes in July, one of the strongest demand months of the year, at about eight hours a day, and that number should be 10, 11. Those are 40% incremental margin opportunities that we're, that we're cutting out because of capacity constraints that don't have anything to do with the opportunity or airplanes. It's really about staffing. That's the biggest thing. In contrast, the second quarter is a relatively flat demand period as compared to the third quarter.

Third quarter, with the way the third quarter goes, July, in contrast, the second quarter has a really good April, a really good June. May is not great, but it's not that bad. It's not as bad as September, so it's a lot more flat. And that's the difference in the two quarters.

Mike Linenberg (Equity Research Analyst)

Makes sense. Jude, did you mention what your ASMs will be up, scheduled ASMs in the September quarter?

Jude Bricker (CEO)

We didn't mention that. I don't think we have an issue sharing it. I just don't have it in front of me. We can get it to you. I got it at about mid-teens.

Mike Linenberg (Equity Research Analyst)

Okay, just my last question, and this is more a modeling question. As we think about the rental revenue, the $6 million, is that sort of the right quarterly run rate? When does that start to fade out? What is it, sometime late 2024, 2025? Thanks for taking my questions.

Jude Bricker (CEO)

Yeah, that's right. The fadeout will begin really in November 2024.

Mike Linenberg (Equity Research Analyst)

Mm-hmm.

Jude Bricker (CEO)

And then continue through November 2025 as the five aircraft roll off and come to us to operate.

Mike Linenberg (Equity Research Analyst)

Okay, thank you.

Operator (participant)

Thank you. One moment for questions. Our next question comes from Christopher Stathoulopoulos with Susquehanna International Group. You may proceed.

Christopher Stathoulopoulos (Equity Research Analyst)

Good morning, everyone. We want to get back to the comment you made on, I believe you said that the stock comp should be moderating, giving the changes in the vesting schedule. Could you help frame the implied op operating income for 3Q? You know, how should we think about stock comp there? I believe this quarter was a little north of 15%. That's a significant step up from recent quarters. I just want to better understand how we should think about that underlying as we think about the second half of the year. Thank you.

Jude Bricker (CEO)

Yeah, I don't have that precise number in front of me. It'll just be a significant step down. I mean, in the second quarter, there was a significant chunk of options that had not yet vested. They all vested in one quarter, so there will be a step-down number. I just don't have that, you know, in front of me. As it pertains to the 2018 option grant that was associated with the Apollo transaction, all those options are either vested or done. So that goes to zero. Yeah. So exactly. So that number goes to zero, and as with any other company, we have an RSU program, which is ongoing. So there will be some stock comp expense that continues, just at a significantly lower level.

Christopher Stathoulopoulos (Equity Research Analyst)

Okay. The second question, so I, I think you're backing out the D&A associated with these five dry leases from your CASMx. Could you just walk us through the rationale why? I'm guessing because they don't have associated ASMs and, you know, but you're including the revenue side of it. Then also, as those come off, I think you said dry lease in 2025, if you could just kind of walk us through, you know, how we should think about the unit cost impact or unit margin. I just want to kind of better understand this relationship here as it's sitting in revenue here, but it looks like it's coming out of your CASM. Thanks. Or at least the D&A.

Jude Bricker (CEO)

Yeah. I mean, it's sitting in revenue, and it's sitting in expense in our financials, but since, as you pointed out, it doesn't generate any ASMs, we take it out of the CASM comp, and it's out of the TRASM comp. It's out of unit costs on the revenue side and on the cost side. You know, in the same way that our cargo revenue isn't in our cost per ASM or revenue per ASM number, they don't generate ASMs. Just strategically, I want to just reiterate from last quarter, we're not being a lessor. We're just acquiring airplanes for future delivery. You know, when we report, we're, we're doing our best to back out all those results so that you can kind of see the underlying success of the business, which is what we care about.

Christopher Stathoulopoulos (Equity Research Analyst)

Okay, let me get in one more-

Jude Bricker (CEO)

Yeah.

Christopher Stathoulopoulos (Equity Research Analyst)

I'm sorry. Go ahead.

Jude Bricker (CEO)

No, I just wanted to follow up quickly. I just pulled the numbers. Comp, you know, stock comp in the second quarter, I think, is around $4.5 million. That number will probably drop to $1 million ±.

Christopher Stathoulopoulos (Equity Research Analyst)

For 3Q or through the second half, or?

Jude Bricker (CEO)

No, for 3Q.

Christopher Stathoulopoulos (Equity Research Analyst)

Okay, great. Thanks. It's just if I could get in one more here. We've heard from U.S. peers talking about how this strong international travel is pulling from a pool of what would be domestic travelers, and, you know, are you seeing any of that? If so, you know, what are your thoughts on when that might slow? Thank you.

Jude Bricker (CEO)

I mean, my view is that we observe something and then try to make up a reason why it exists. So it's true that the transatlantic yields are much higher than they had been. I think it's a stretch to say that those folks that are flying transatlantic would have otherwise flown domestic. I think more confidently, we can say summer of 2022 was an outlier in demand recovery, with a lot of recapture from the previous years. Instead, we're going down to a fairly consistent year over four unit revenue environment, month-by-month, where improvements are between 35% and 45%, and that seems consistent going into all the bookings we're seeing through the spring of next year.

I think it's a little much to draw that conclusion, but, you know, I think what gets me excited is just, you know, it looks like fares have sort of permanently reset into a, into a post-COVID environment for, for our network anyway. Anything else, Grant?

Grant Whitney (EVP and CRO)

I would just add to that, that those unit revenues versus 2019, I think we're at the high end of that, so that's specific to us and a testament to the good job this team's done. And I also think Jude's comments are spot on. If you look at our network, we grew, Jude mentioned, 15 new markets this summer. They've all met expectations. Our load factors are up, so we saw strong, strong demand across our network, and really happy with the results.

Christopher Stathoulopoulos (Equity Research Analyst)

Okay, thank you.

Operator (participant)

Thank you. I'd now like to turn the call back over to Jude Bricker for any closing remarks.

Jude Bricker (CEO)

Thanks for joining us. Thanks for your interest in Sun Country. We'll talk to you again at the end of the next quarter. Good morning, everybody.

Operator (participant)

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.