All right, folks. The third and last of the global premium airlines presenting here this morning. Thanks for everybody reconvening and helping us keep on schedule. Looks like you have a presentation with you. No Form 8-K file, so that's a relief because it's been a day of sort of mixed guides so far. Very curious to hear the update from the American Airlines. Let me turn it over to Robert Isom. Thanks so much.
Thanks for coming. Jamie, thank you. Good to see you. Thanks, everybody, for making time for me this morning. You're right, Jamie, there was no filing. Let's see, forward-looking statements. Everybody is aware of that. Quick read-through. What I'd like to start with is just, you know, where American has been over the last year. It really has been, you know, tough coming out of the pandemic, certainly. For American, coming out has really been all about focus, and that has been really run an airline that is reliable and then ultimately get back to profitability. There's an imperative that we had to do both coming out of the pandemic. It fits with our long-term goals and where we stand today.
I'm going to talk to you about why I have confidence in what we're doing, the progress that we made, and the outlook for the future as well. As we take a look to 2023, it's all about reliability, profitability, and then holding ourselves accountable to delivering on our goals. In 2023, look, we intend to build the best network and have the best travel rewards program for our customers. Operating excellence, it means that we are going to plan the airline right, operate to the resources that we have, execute really well, and then inevitably, like we're having in New York today, there are going to be disruptions, and we've got to recover well from them. We have the opportunity to modernize our technology, so we brought on a new CIO that is gonna help us in that regard.
It fits with customer experience. People want to be able to be in control of their travel itineraries. Ultimately, you know, in producing profits, we have to drive financial performance, and that means efficiency, improving margins, and ultimately deleveraging American. Just first off, in terms of operational performance, I'm just really looking at American Airlines. On the kind of things, the output metrics that we look at for our customers, completion factor, controllable completion factor, on-time performance, departing exactly on time and arriving on time. We've seen steady progress over the last year, and that's good news. We had to improve quite a bit. On those things that we really put our mind to, it's translated into better performance.
I'll tell you that, you know, there's no better correlation than between on-time performance or completion factor and things like likelihood to recommend and Net Promoter Scores. We're really pleased with this. As we take a look on a quarterly basis of outperformance, you know, the thing that I'm most proud of is that when, you know, you really need to be on time and you really need to complete flights, we've been exceptional. That's especially over the year-end holidays and really all holidays. We've really picked up the pace. We certainly had our bumps and bruises throughout the pandemic, but we've learned from them. As we take a look into the coming year, we've seen really solid performance in both January and February outside of, you know, the inevitable weather events.
We recovered quickly, and we're back on pace. We're positioned well, not just for the coming year, but even immediate. Those of you that have spring break travel plans, fly American, we're gonna get you there. That work and the results are really all due to a tremendous amount of planning that's gone back over the course of a couple of years. First off, making sure that you have the resources to run the airline that you want to from a planning perspective. Executing, make sure you have the tools that when inevitably something comes up or there's disruption, that you can keep yourself on time as much as possible. When the big events happen, getting back on schedule. We've invested in technology.
We've brought on, you know, really, we've hired more people than we ever have before in our history. We've concentrated our assets in places like DFW and in Charlotte, which so happen to be the places that we make the most money, and we've gotten those to run better as well. Next, you know, I'll translate or I'll go from the reliability of part of the presentation to profitability. A year ago, my predecessor, Doug Parker, was here, Jamie, with you. He based his presentation on coming out of the pandemic and saying, "Hey, look, there is a historical relationship between GDP and industry that flows and revenue that flows to the industry."
That had been something that had been out of whack during the pandemic, off by a considerable amount, and something that, you know, for the most part, we saw as, you know, hopeful in 2022. What I see right now as we exit 2022 and as we go into 2023, that relationship between industry revenues and GDP, it's returned to the norms that we had seen in the past. That bodes well, certainly in the short run. I know others in the industry have said the same thing. If you go back to 2019, the economy has grown, you know, on a nominal basis, you know, maybe, you know, a little bit less than 25%, you know, over the since 2019. Airline industry capacity has grown less than 5%.
We're still in a period where there's catch-up, and still in a period where I think that there's, you know, an opportunity to take advantage of the mismatch between supply and demand. We're in a, we continue to be in a decent pricing and yield management environment right now. As we take a look at what that demand translates into, it's been profitability. For American, again, at the time that Doug was here last year, we were about to, you know, talk about first quarter results that produced a loss of $1.9 billion. A huge sum. It's a huge sum of money. Big hole to climb out of. Fortunately, revenue production and managing the airline well, it produced results over the course of the year where we were able to not just rebound,
But actually able to produce a pre-tax profit for the year. A really nice result. Small pre-tax profit, but still something that, you know, we're really proud of $2.4 billion in pre-tax profits over the last three quarters that resulted in that full year profitability. That leads me to this, which is everything that we've done to make the airline reliable, translating into profitability, taking advantage of the economy, and revenue flowing into the industry. We've done the right thing so far. As I take a look into 2023, what we've seen in the first quarter so far, it just leads us to that there's continued strength in the first quarter. As we take a look out into the rest of the year, we're reaffirming our guide on both the first quarter and for the year as a whole. It's good news.
It's what we expected, but as well, I think it speaks to the demand environment that we continue to be in. That profitability, though, it wasn't just through focus and returning to reliability in the last year. It was a lot of work that took place over the course of a number of years. Remember, prior to the pandemic, American had just about every flavor of aircraft that you could imagine. We greatly rationalized that down to having two types of narrow bodies, two types of wide bodies, and that has created a lot of simplicity in the operation. You know, whether it's, from, you know, a scheduling perspective, whether it's from an operational recovery perspective, having the right mechanics, the pilots trained for the right equipment, all of that becomes much, much more efficient as you get some commonality in terms of the fleet you're operating.
At the same time, you know, we've done a considerable amount of upgauging as well, especially on our regional fleet. All of that has put us into a position where we are much more efficient than we had been in the past. Now, we still have some recovery to do here, and that's what I think gives me a lot of confidence in terms of our unit cost production going forward. That is that, you know, we still at American have a lot of underutilized assets. At American right now, we probably have, you know, 30 aircraft- 50 aircraft worth of Mainline aircraft that are underutilized and probably still 150 + of Regional aircraft that are essentially, you know, on the ground. That's capacity that we have the resources, the gates, and in some cases, even, you know.
The people on board to be able to put back up in the air. You know, over time, I think that that is going to be something that continues to drive efficiency for American. At the same time, you know, over the last from the merger all the way to the pandemic, you know, American invested almost $30 billion of money into new aircraft. You know, we find ourselves in a position where we have the youngest fleet in the industry. Really even for our oldest aircraft, you know, those are aircraft that are probably gonna stay in the fleet for some time. We're really well-positioned from a capital expenditures perspective. We've done our fleet renewal. We're taking advantage of some of the efficiencies that we get from that lower fuel burn and whatnot.
We're in a position where I think that there's a lot of efficiency comes from the work that we've done, plus the fact that we've made these investments, and we're in good shape as we take a look from a capital expenditure perspective. That translates into, you know, these figures that I'm showing now, which says, hey, look, in 2023, you know, we're estimating $2.3 billion of Capital Expenditures, only about $1.7 billion of aircraft CapEx. That's not what we anticipate for the long run because of aircraft delivery delays, that number is suppressed a little bit. As you take a look out into 2024, and we get back to $3.5 billion of capital expenditures, about $2.7 billion of aircraft CapEx.
And getting into that $3 billion-$4 billion range of Capital Expenditures as we look out into the future, we're in a period of fairly stable capital expenditure spending and having a fleet that is relatively strong as well. You put all that together, okay? You've got profitability or reliability that drives profitability. That profitability and lower capital expenditures as we go forward, it puts us in a position where we're finally earning a lot of free cash flow for the first time, certainly since, you know, the merger. This is a position that we have to get to because ultimately, you know, one of the big concerns is that American is carrying too much debt. This free cash flow puts us in a position where we're gonna make good on our commitments to reduce overall leverage. That leveraging reduction cycle, you know, continues.
We made a commitment in 2021 to reduce total debt by approximately $15 billion by the end of 2025. We find ourselves looking at by the end of 2023 to be $10 billion-$1 1 billion, you know, down that path. Again, you know, In the third quarter of 2021, we paid down the spare parts loan. Second quarter of 2022, the 2019 unsecured, and most recently, the LaGuardia and DCA term loan in the fourth quarter of 2022. You're going to see us focused on making sure that, you know, leverage comes in, is a top priority. When we do have free cash flow, which we anticipate as on a go-forward basis, this is where we're going to be spending our money.
That then leads us into a position where, you know, on some important metrics, like net debt to Adjusted EBITDA, you know, over time, we're gonna find ourselves in a position where we have some of the best metrics that we've had, even lower than we found ourselves at the time of the merger way back in 2017. Now, we don't, you know, we haven't talked about specific targets out there, but getting to credit ratings of BB flat, and I think that that's gonna be able to put us in a position where we're gonna be able to borrow at the rates that we want and still have the flexibility that that would, that type of rating would afford us.
We're in a good spot, I believe, on a go-forward basis. This is, you know, all keyed off of really, you know, just producing free cash flow that is at the midpoint of our 2023 full-year guide. Again, feel good about how that all shapes up. I sum all this up with, we've got tremendous confidence. We're reaffirming our guide. We're running a reliable airline. We can always get better. We're going to continue to invest in the right way. Fortunately, we have a great asset base to begin with. We're at a point where we're producing free cash flow. We're gonna use that to pay down debt and ultimately put ourselves in a position where, you know, we've got a, a really exciting 2023 and 2024 and beyond.
You know, I'd tell you that, you know, while that's a really promising picture, on top of that, we're finally at the point where we've merged the airline, gotten out of the pandemic, and we can really take a look at optimizing performance of the airline. On that front, I'm really excited about what that portends as well. Jamie, with that, I will open it up to questions.
Well, first off, I'll start with an apology. I was watching the clock when I ran up before, and I failed to introduce.
Oh.
The industry's most newly minted CFO, Devon May, and Meghan Montana, Treasurer of American Airlines, who are up on stage for those that are listening. In 2019, had somebody asked me to envision a scenario where ultra-low-cost carriers would lose money at the summer peak, but American would be profitable, I would have considered that at the time to be a pretty provocative question. In fact, I'm not sure I would have even come up with a good answer because it would have sort of flown in the face of sort of generally accepted airline principles gap at that time. It's what happened. Does that speak more to discount airlines or more to American? Is it sustainable? What's your answer, and what do you think Vasu would say?
What do I think Vasu would say? Okay. That I'm not gonna take on. Okay. Well, Jamie, you teed it up as, you know, American Airlines, you know, versus low-cost carriers. I'd go back and I'd talk to you as well. You know, look, what's happening right now is I think what we've been working for for a long time. It was hard to show it. Look, I do think that it's worth taking a look at where American has come from an analyst perspective into where we're going. You know, look, you know, I know that even from, you know, kind of an EPS, you know, guide perspective, you know, analysts today, you'll still greatly, you know, discount what we're going to do in 2023.
You know, what we did going through the merger, the massive fleet investment, there's a couple of things that, you know, I think were probably overlooked, and Devon can chime in here as well. You know, first is we took on this fleet commonality project, harmonization project, where, you know, we made sure that our 73s were all sized the same, our 321s were all sized the same. That actually, you know, added quite a bit of capacity, you know, with not that much cost. We did the same thing on the regional side as well. We greatly reduced, you know, our 50-seaters. Also, you know, in 2019, don't forget, okay, we were still operating under different labor contracts for some really important groups within American Airlines, so we couldn't put all the pieces together. Now here we go through the pandemic.
We rationalize the fleet even further, which I think, you know, just bodes really well. We certainly, you know, take a look at our network and our partnership relationships, and we have drastically changed where we fly, how we do it to make sure that we're flying where we make the most money. As we come out of this, you know, and we weren't operating that well from a, you know, on time performance perspective or completion factor perspective. You put all that together into what we're encountering right now in 2023, and it's not that surprising to me. Okay? This is, you know, what we've been working for. Devon, you wanna add anything?
Okay. All right. No, the only thing I'd add, there was a lot of work done during the pandemic to have this result in 2022. As Robert talked about, a lot of it was on the fleet. Some of that was just accelerating initiatives that we knew we would eventually get to. Like, this was the expected fleet we would get to. We just used the pandemic to get there a couple years earlier than what we did otherwise. Then we talked about it a lot. We did become more efficient during the pandemic. We talked around $1.2 billion of cost efficiencies. I think most of those efficiencies have stuck. We're seeing that in the P&L as well. Without commenting on what's happening with kinda other areas of the airline business, we do feel pretty good, with all the work that was done at American.
Devon, you are the new sheriff in town. Overseeing the industry's most controversial balance sheet. We haven't had a chance yet on conference calls, it's not quite as intimate as this room of a couple 100 people to sort of talk about what's gonna change, what's different. You know, Derek obviously had a great track record, right? Kept the airline out of bankruptcy. I remind people about that a lot of times, 'cause they don't understand the old history with US Airways and so forth. Obviously, there was a level of risk tolerance that a lot of people in this room simply weren't comfortable with on the equity side or on the credit side in terms of where the balance sheet was taken. That I know is in the, you know, repair process is underway, but how are things gonna change under your stewardship relative to the prior regime?
Yeah, sure. Well, I'll start on the balance sheet side, and I think we've made it pretty clear in this presentation and with a lot of the commentary we've made what our expectation is for the balance sheet in the coming years. Coming into the job, I feel fortunate of the timing to enter into it in 2023, despite economic uncertainty. It's a lot better coming into this job in 2023 than it would've been in 2021 or 2020 or I guess even 2022. As for the balance sheet, we talked about it. Summer 2021, we said, "Hey, this is where our debt level's at today. As we focus on the balance sheet, we want to have $15 billion less debt by 2025, and with that, we think we can get the credit rating of BB flat."
That's gonna be our focus for the next several years, and as we get to that point, I think we're all going to feel really comfortable with where American's balance sheet is at. Listen, we're, whatever, 2.5 years into this deleveraging process, and we're already seeing credit metrics that were better than what we had in 2019. You can't fix a balance sheet overnight. This is gonna be something that takes a couple of years. I feel we have a fantastic treasurer in Meghan, and she's focused on making sure we're making the right moves and refinancing when we should and paying down debt as scheduled and finding some early opportunities to pay down debt as well. I like the track we're on.
I spent a lot of time with Derek and with Robert and Doug before that as to where we're going to go with it. Speaking a little bit broader, I just think in terms of my view on the company, it's shaped by my 20-year history here. I've been, I guess, 10 years or 12 years on the finance side, another 7 or 8 on the commercial side, 4 or 5 on the operations side, if that all adds up. I know the business well, I know this finance team really well. All that being said, American does have a lot of new leaders in a lot of different areas of the company. As I come into the job, we are taking a fresh look at everything we do, and really, this is impacting earnings more than balance sheet.
The goal is to make sure we are best in class in terms of process. We're finding technology solutions where available to become more efficient. We have been working with some outside advisors on that Robert and I have engaged, and I think there's some real opportunity to improve our efficiency and ultimately improve earnings in the coming years as well.
Mark, look, we're the beneficiaries of a tremendous amount of investment that was made. As I take a look going forward as well, you know, certain things that have happened that, you know, I've been in the business quite a long time. You know, you think back to, you know, 9/11, and you think to the, you know, financial crisis in 2008, 2009. Okay. You know, we've just put ourself through something that I couldn't have ever drawn out, you know, or imagined in terms of the pandemic. We learn from that. You know, as we take a look forward, you know, we're gonna be mindful of, and make sure that, you know, we can, you know, survive through any type of storm.
You know, credit to Doug and to Derek, they made sure that we had the liquidity and then, you know, helped arrange for the liquidity to make it through it. We're gonna have a strong, you know, bias to making sure that, you know, we have a balance sheet that's appropriate and then also, you know, have the resources to make it through whatever comes our way.
Robert, just another one from me for you. There was an interesting contrast this morning where Delta talked about how their domestic margins are stronger than their international margins and that they're, you know, looking forward to the upside in international. United talked about how their international margins are already stronger than their domestic margins. Where does American fit into this debate about domestic versus international margins? Where is there more upside for you? How are the regions performing? Maybe just, you know, help us get our arms around that because your network peers are clearly in different spots.
Okay. Well, I'd tell you this, I think that there's upside on both on internationally and domestic. For American, right, international is hinged off of, you know, what we do, you know, out of our domestic hubs. They're absolutely complementary. You know, international for us, it doesn't exist without, you know, a really robust, you know, strong domestic. From what I see, the kind of changes that we've made to our network to make sure that we're flying in our sun belt hubs, you know, fortunately, we benefit from, you know, where population and commerce is happening. That bodes well from an international perspective. I tell you that, you know, we're probably, you know, less exposed to secondary cities, just that's the way our network. International secondary cities.
That's just the way our network is set up. We're more oriented to big business markets. We have the biggest, you know, footprint with our partner, BA in London Heathrow, which is a good place to be right now. That's very fortunate. You know, we've got a strong Latin network that I think, you know, over time comes back. Short-haul international, especially, you know, leisure, is something that we're incredibly strong at and is doing very well. From an Asia perspective, we just don't have a lot of exposure. Right now, I'd tell you that, you know, that's probably a place that, you know, we don't need a lot of exposure. I look to a lot of strength domestically, especially as we get to, you know, the high season here.
That's only gonna make international, you know, stronger for us. Right now, you know, we're really weighted toward, you know, the London Heathrow and our partners. I think we've got the best partner network in the world. You know, whether it's the international relationships we've set up or, you know, throughout the pandemic, the West Coast International Alliance with Alaska and what we've done with the Northeast Alliance with JetBlue, that makes us a stronger international carrier.
I did try the new lounges at JFK.
Did you?
I enjoyed them.
All right. Well, would you have told me if you didn't?
Um.
He didn't get in the best lounge.
Jamie, that's reserved for you. Go ahead. Yes.
That is true. I got into the second one. Right. Okay, questions from the room.
Happy to ask another one.
Jamie, we've got one over here too.
Oh, we do. Great.
Thank you. You guys have a pretty big debt wall in 2025, I believe, right? That includes a bond with a very significant interest rate. Can you give us a sense of how you're gonna approach that debt wall? I mean, you know, is the goal gonna be to try to build cash towards tackling that high-interest debt outstanding? Do you anticipate, like, that debt being kind of a permanent part of the capital structure, just refinance going forward? Just because I think in the past, like, the underlying collateral had not been part of the capital structure, but it sounds as though that those route slots and grids are going to be, like, a permanent part of the capital structure going forward.
Meghan.
I'm happy to take that. I think you hit on the right theme, which is what do we view as permanent versus non-permanent parts of the capital structure. Our 2025 tower is larger than most of our other towers as a function of we took on a lot of debt during the pandemic to shore up our liquidity position. I think we've been very proactive in demonstrating our focus on that tower. Earlier this year, we extended what I describe a permanent part of the capital structure, our LatAm franchise. It was a $1.8 billion term loan that we termed out in the form of a bond and a term loan to 2028. I think you'll continue to see us be very nimble about how we manage that tower. That reduced the size by about 20%.
As we look forward, one of the premises of our deleveraging program will not only be freeing up high-quality collateral and paying down debt, but it'll also be smoothing our towers. When I look at 2023, we feel really good. We just have amortization this year. Similarly for next year as well. So all eyes are on opportunistic ways to manage 2025. We'll be doing that very same analysis of what do we want to be part of the long-term capital structure and what are instruments that were very helpful during COVID, but probably better served as free borrowing capacity or unencumbered assets as we pay those things down. How we get there is a combination of the cash flow generation that Robert spoke to and excess liquidity.
Right now we have a target out there from a liquidity perspective of $10 billion-$12 billion over time that will recalibrate in line with balance sheet progress. We feel really confident on our ability to do that. You saw in the chart that Robert showed, we're ahead of schedule, which is a great place to be. We'll just continue to focus on reliability, profitability, and the cash flow generation that will spill out.
Thanks, Meghan.
Hi. Delta and United have partnership and ownership in CLEAR, which has been a pretty successful program. I guess, how are you guys thinking about kind of identity management technology and, you know, as a differentiation for customers?
Well, that's an interesting question. You know, look, we work really closely with the TSA. You know, ultimately, you know, all these programs are based on what, you know, the TSA, you know, says is what we need, you know, for, you know, security for the country. We're working on recognition technology with the TSA. I think that over time, that is something that can actually be applied to a much broader audience. That's really where we need to go. As opposed to, you know, charging extra for security, right? There absolutely is a way to take that same technology, deploy it through the TSA and do it in a different manner that's more secure. We spend, you know, the vast majority of our time there.
Down the road, you know, with recognition technologies, you know, there's application in so many places. The concern is all about, you know, privacy and control of that information. We're making sure that we take a balanced approach, and also, you know, ultimately what our customers want and will accept and, you know, what's appropriate for, you know, security and privacy.
The question I have is, obviously great recovery coming out of COVID. It's a very interesting story. What signs, just taking the other side, though, what signs would you see or that could come up with that would make you concerned over the second half of the year? You know, one of your competitors talked last night/this morning about this sort of shift in terms of where peak periods sort of are. You know, given that we've had, you know, the past 10 days have been pretty traumatic in terms of some banking and so forth, you know, does the consumer retrench? I think we're all trying to figure that out.
Is there something you would look to or a sign at a period of time over the next few months, you say, "Ooh, I need to pay attention to that." Love to just get your thoughts generically on that. Thank you.
Oh, we always, we're always, you know, out making sure that, you know, we're doing, you know, right by, you know, the marketplace and the overall economy. I take a step back and again, go back to some numbers that I shared, which is just simply this, that, you know, there's a tremendous demand for air travel. I don't think it's pent up. I think this is just us returning to, you know, the way customers, you know, want to use our product and the desires that they have. As I said, the economy has grown by, you know, almost, you know, 25% on a nominal basis. Airlines are still, you know, less than 5% from where we were in 2019.
I think that, you know, suggests that there's still a lot of room to go before we get supply and demand in balance. There could be, you know, a number of things that come up. We've seen, you know, we've been through, you know, from an airline perspective, the largest recession that we could have ever imagined. We've seen other things, you know, happen throughout the world as well in the interim, even, you know, issues with banking, you know, most recently. From a demand perspective, I can tell you that what I see coming, you know, coming to the summer, you know, it looks really positive. Travel is coming back differently, okay?
The day of the road warriors, you know, I see some friends out here that used to take the, you know, Chicago to New York flight and, you know, go there, you know, back same day. You know, that kind of traffic used to be, you know, almost 3% of American Airlines', you know, revenues, and now it's less than 1%. It used to be that you could forecast, you know, the peak of the peak days leading up to Thanksgiving and, you know, the New Year's holidays. Now those peaks are spread out. That's a good thing. It means that, you know, our assets are being utilized more.
You used to be able to say that, you know, Mondays and Sunday nights, you know, are big travel days, and Thursdays and Fridays, you know, returning back were huge travel days. People are spreading those weekly peaks out. There's a mix between business and leisure traffic. We know that there's some aspect of the strength that we see in leisure that's really, you know, has some tinge of business to it. You've got all these dynamics going on. I think the hard thing for us to do is really to keep up with the changing travel patterns, making sure our revenue management systems are, you know, fine-tuned and as up to date as possible, and then all the while making sure that we're, you know, have an eye out for whatever may come our way.
On that point, you know, I'll just say that American is in a terrific position, you know, from a liquidity perspective and also from a, from an asset perspective. You know, we're able to react to what may ever come our way, and we can modulate our growth and do that in a very efficient fashion if that were to come to be necessary.
Robert, I'll ask the last question. Well, it depends on how long your answer is.
Could be quick.
I shouldn't lead the witness like that. Help us understand some of the changes that are taking place in sales.
Yeah.
I'm not referring to, you know, staffing gyrations, but it feels as if you are taking a different approach towards sales, towards corporate, and it's not something that I fully understand.
Oh, okay. Well, Jamie, you might be referring that we've made some organizational changes, and we've realigned our sales team. What I would say is we've realigned it and we've changed it and to some extent, you know, made some reductions. We've also reinvested in other places as well. Where I'd take a step back, and it's really that, you know, last question that, you know, was asked, which is, hey, well, demand is shifting. Are you ready for it? On that front, you know, look, we're gonna be a more nimble company. Right now, we see, you know, so much more, you know, direct sale, you know, growth over the last year.
Sure, some of that's pandemic-related, but also it's due to how people are flying, and they wanna interact with you, right? You can get a better experience, you know, today versus the past. You can get a better experience dealing directly with American Airlines 'cause you can control, you know, more of your itinerary, more of your experience by booking direct. Our intent is to make sure that all those that distribute American Airlines' product, right, offer that same type of product level and also sense of control. The more we do that, the more that our partners become more effective, ultimately, you know, the higher levels of revenue that we can achieve. The moves that we've made are as much about reacting to the post-pandemic world as anything. For us, corporate travel is incredibly important.
You know, American depends on, you know, leisure all the way to corporate the, you know, the highest end of, you know, luxury all the way down to, you know, those that really need, you know, the bargain of the day. You know, an airline American size, we need it all. For us, we're dedicating our resources to those places that we can create the tightest relationship. That's the story behind it, Jamie. Yeah.
I'll sneak in one more just because you didn't run out the clock. We haven't really had a discussion this morning yet with any of your peers on loyalty.
Yeah.
Given the industry shift towards more leisure, more bleisure, whatever we wanna call it, still corporate, not fully recovered, what are the implications for loyalty? 'Cause it's such an important financing tool. It's such an important part of the value of American. For the industry, when we think about this shift towards more leisure, is there a higher propensity, lower propensity to sign up for a credit card?
Yes
Redeem points? How should we be thinking about going forward, how we think about the loyalty business?
Mark, I'd say it's also tied to Jamie's question, right? The closer that relationship you can have, the more that you can engage that customer, the more benefits that you can offer. It's also, you know, getting the customer what they value, and they may be willing to pay more for. For us, you know, I look at this, you know, if Vasu were here, you know, he would talk to you about this being one of the great opportunities, right? The shift last year that we made in terms of, you know, earning points within our program, that you can basically, you know, spend your way there, through, you know, purchasing on American or, you know, through our co-brand and the other ways that we offer to earn mileage.
You know, it's great to talk to people now when they say, "Hey, you know, I wish I could get from, you know, gold to a higher level." Well, it's easy. Go get a, you know, a Citi / AAdvantage, you know, Platinum card, right? You can do that. You know what? Customers are recognizing that, and I think are embracing it. We've never seen enrollments higher, okay? We also see from our co-brand, you know, cards, we've never seen you spend on the cards as high as we've seen today. Key to all this, though, okay, for us, is the most important aspect of what we do. First off, you know, running a reliable airline, you know, sustainable that people wanna be a part of.
It also has to be an airline that gets you where you wanna go, okay? Throughout the pandemic, and I'll tie all this back. Throughout the pandemic, you know, American has done a great job of making sure that we offer more O&Ds, you know, certainly organically, and then also with our partners than any other, you know, carrier or combination of carriers. That is the real tie. Offering a great product, a reliable product, having a personalized relationship, that translates into, you know, the ability to actually, you know, earn a premium. I appreciate the question, but it's something we're really excited about. I think, again, it's one of the things that you're gonna hear a lot more from us.
When I do pull all this together, it's that we've got a great story, again, reaffirming guide today. As we look forward, we've got a solid 2023. Beyond that, with Devon's help and some of the other new executives that we have on our team, we're looking to re-engineer the company from a technology perspective, from an operations perspective, from a commercial and really a business model perspective. That, I think, you know, bodes well for the employees of American, you know, certainly all of our customers and ultimately, you know, our shareholders.
I'm gonna sneak in my last question.
Okay.
What's the Plan B if you lose the NEA case or JetBlue trades away the NEA as part of its negotiating effort down the road? What's Plan B for American?
Jamie, we're really confident in the NEA. The NEA is producing value that I can't envision it being ruled against. You know, look, you know, I've spent quite a bit of time with our JetBlue partners. I know that they're committed to it. This is foundational to, I think the way they look at the world. You know, everything that we have done, you know, has produced consumer benefit. You know, all the concerns, you know, have not come. We've been operating this now for a couple of years, I'm not looking at Plan B.
See, this is why I like this better than earnings calls, 'cause he can't cut me off. I can cut you off.
I know you can.
Thank you.
Thanks, Jamie.