Interview with Frontier Airlines President & CEO

Transcript

Michael Bell:So we've known Barry a long time. Actually, I remember meeting you at, I think it was Washington National, when you were first considering coming down to Spirit.

Barry Biffle:That's right.

Michael Bell:And ultimately you made your way down there. Had a huge impact on the transformation of Spirit into the successful ULCC it is today. Um, then I actually recruited you to Colombia ever so briefly, right?

Barry Biffle:To, to lead— Yeah.

Michael Bell:To lead Viva, uh, which is today another successful company, before Bill Franke convinced you to go work with him again at Frontier. And that's been another great, a great story. And of course, you know, the big news, which we're going to talk about momentarily, is How these 2 airlines might come together, kind of bringing both your legacies into, into one. So Barry, thanks for taking the time to come down from Denver. I understand you got in at 2 in the morning, so hopefully you've had some coffee this morning to, to get ready. Last time I was on stage with you, I think it was at the Takeoff conference in Denver, which was literally in the middle of the pandemic. It was sort of maybe just as we were starting to come out, everyone was wearing masks. We've come a long way since then. You said at the time that you expected your traffic to be fully recovered by Q3 of 2021. Tell us where you're at relative to where things were pre, you know, pre-pandemic and what you're seeing going forward in terms of just the traffic for Frontier.

Barry Biffle:Well, that was like a year ago, I guess. So it turns out I was wrong. I only had like a bachelor's or master's in epidemiology at At that point, but now I guess we've learned a lot more. We had the Delta variant last summer, Omicron through the winter, and Frontier we had planned on full utilization, and unfortunately we were just ramping up to that. We had done a lot of hiring and so forth, and of course we had to cut the capacity last summer, and we were just getting past that again, and of course we hit Omicron, kind of messed up the holidays, and then hit probably the worst time of the pandemic in the first part of Q1 where I think we, I think we got down to 50% load factors midweek. So it's, it's changed dramatically, um, since we talked then, and, and now we have the greatest revenue environment I've ever seen in 3 decades.

Michael Bell:So— Highly volatile.

Barry Biffle:Yeah, it's a little volatile. So we go from one of the worst I've ever seen to one of the best we've ever seen in the span of about 3 or 4 months. And, and there's a lot of factors, right? I mean, there's, there's, there's fuel prices, as you mentioned a while ago, the pressures are real. But it's also converging at a time, and then you would argue the reason why the fuel is up so much is because demand is up. People sat at home for 2 years, both in business and leisure, and now they're all back, and it's not— we're not even done yet.

Michael Bell:And what's back? I mean, what clearly drove the beginning of the recovery was the leisure traffic. Obviously, that's where you guys focus, but is that what you're seeing? Is it continued strength in leisure? Do you see other segments starting to come back?

Barry Biffle:Yeah, so domestic leisure is, you know, depending upon your data set you look at, is back. We're back to 19 or even higher in many cases depending upon the region. We're still, you know, you kind of have some legs to go, right? I mean, you just had the mask come off. We're just now seeing the benefits of that because there were some people that just wouldn't travel or use other forms of transportation. And so sort of see some of the benefits of that over the last couple of weeks, but you still have the international testing as a real drag.

Michael Bell:Right.

Barry Biffle:And so that hurts the near international. It hurts the Caribbean, not necessarily Puerto Rico, but they've been a beneficiary in some respects of this. But it really hurts some of the neighbors down here because people have heard the horror stories of going there and getting stuck and spending an extra week or 2. And while it sounds great, trust me, my family got caught in this. It's not as fun as you might think. And so when you're trapped somewhere, it's problematic. We need to get rid of that, and hopefully that happens soon. I think, you know, look, with the level of infection that you've got everywhere, I think whether somebody transported on a plane or not is the least of the worries. And then you've got the business traveler, right? The business traveler is just now starting. It's great to see everybody here. But, you know, conferences of this size have started to come back, but you're not seeing yet the 3,000, 5,000, 1,000, you know, 1,500, 2,000. But the good news is, is you've You talk to Vegas, you talk to Orlando, you know, you talk to a lot of those hotels, you're starting to see those bookings happen for this fall. So we're only kind of halfway through kind of the business return. So a lot more legs to come, both international as well as domestic business.

Michael Bell:How are the financials looking? You guys posted some results which were, I guess, maybe mitigated by the rise in fuel prices, etc. But what's going to get you guys back to profitability and get the stock back to Sure.

Barry Biffle:So, so we announced on our last earnings call that we will be profitable this quarter. And yes, we have the highest, highest fuel prices we've ever had, but we'll have the highest revenue. But that's going to enable us to be profitable. And we feel really good about the second half because, you know, we pulled down capacity to be profitable. So our ex-fuel costs went up considerably. We're carrying a lot of extra staff, pilots, flight attendants. And you're going and to be profitable this so quarter?

Michael Bell:forth.

Barry Biffle:But we'll be able to utilize those folks in the second half of the year. And so as far as the stock price goes, I mean, I'm as disappointed as anyone. I speak to investors all the time and, and very frustrated. And I had an interesting meeting last week with a gentleman who, who told me, I really like that you're frustrated. And he said, he said, that's what I look for. He said, I look for things like yours where you're trading at 4 to 5 times, which is like Maybe a third of what it should be for a carrier like ours. And, you know, I know I'm going to get paid in a day, a week, a month if I just sit here. So, you know, I think you've got the broader market issues. You've got a lot of retail concerns.

Michael Bell:So your ancillary numbers are really strong, right?

Barry Biffle:Oh yeah, ancillary is very strong.

Michael Bell:And that's obviously high profit stuff. And what's driving that? Is it just this leisure traveler sort of picking up more as they go? They seem to be buying more and more.

Barry Biffle:So you've got 2 things going on. I mean, one, we, um, you know, you control the things you can control. And so our team spent a lot of time during COVID you know, what are the next things we can do, next generation, you know. And so that's probably 2/3 of it. But we're also seeing a robustness in, in customers. Yes, they are buying more products and services, and we're seeing more affluence now. And we're, you know, it's early in this, but we're starting to see higher incomes, and we're not sure if that's Are our customers the same customers making more money, or have we gotten some trade down from from some of the big guys? We don't know, but their propensity to buy more things is higher.

Michael Bell:Super. Well, let's come to the to the big news. It's not like maybe it was the shock to hear about the announcement of the proposed merger with with Spirit, but maybe when it happened, it was still big news and remains big news in the industry. Obviously, it's gotten complicated by JetBlue's overtures to Spirit. But talk about how you guys see this. What is the real thesis behind this merger? Why are you guys looking to make this happen?

Barry Biffle:Well, look, I think if you, if you look at Spirit ourselves, I mean, we've both kind of shared the same kind of challenges, if you will, living in a marketplace that is, you know, 80% controlled by the Big 4. And then if you throw in the other high-cost carriers, you know, with JetBlue and Alaska, they literally control the market. And so, you know, behaviorally they've had basic economy, they've tried to stop us from growing, which is at the detriment of consumers. And so this means that people have to pay more money. And so by us coming together, it increases our scale. We're nowhere near the size of the Big 4 at that point, but at least we'd have the footing.

Michael Bell:You'd be number 5.

Barry Biffle:We'd be number 5, but we'd be half of number 4. So, but at least we'd have, you know, kind of the beginnings to be able to compete and give real low fare choice across the country. And so that's one of the things that's so great about the merger, especially at a time with high fuel prices and so forth. Our merger is about, you know, more low fares to more people in more places. And so I think, you know, when you talked about the JetBlue, that, that's a completely different combination, right? That, that combination is about taking seats off planes, raising their costs, and ultimately raising the cost for customers. I mean, you've got 50 million passengers a year. You know, think about a family of 4. They would be paying $600 more per round trip. I mean, just stop and think about that. I mean, I can't imagine anyone who thinks that's a good idea for consumers. So just 2 totally different—

Michael Bell:You guys cited like $1 billion in consumer savings, right?

Barry Biffle:That's right.

Michael Bell:Where's that going to come from? How do you disaggregate the $1 billion?

Barry Biffle:Yes. So that's just by giving people a lower fare versus what they could have paid Or didn't pay because they couldn't afford to go before when you compare to legacy prices.

Michael Bell:So that's $1 billion more than each individual carrier, like the addition of the 2. Is that what—

Barry Biffle:No, I don't think there's, there's, there's some, there's some accretion and some of that was going to happen. But, but the total is $1 billion together. But what's important to understand too is we would have grown maybe, but together it increases the probability of growth. I mean, there's nothing We have an order book. They have an order book. But without this merger, you know, given the, you know, the domination of the Big 4, you know, our growth is not— it's not guaranteed. And so our growth together is much more guaranteed. And so the fact that we can deliver that billion dollars is really important, again, especially with inflation where it is.

Michael Bell:So you're saying that the proportion of total travel in the U.S. on ULCCs will increase as a result of having a bigger ULCC carrier.

Barry Biffle:Absolutely.

Michael Bell:And that translates into the savings for the consumers.

Barry Biffle:Correct.

Michael Bell:$500 million in expected synergies. Where's that going to come from?

Barry Biffle:So $100 million of it's from cost. We're both very efficient today. So, and actually that's EBITDA. So that's, that's, you know, on the revenue side would be net of incremental cost to carry it. But, but $100 million, you know, roughly, roughly 20% is from costs and the others from revenue. And the biggest chunk of that is simply You know, Spirit.com, which is strong in the eastern time zones, and FlyFrontier.com, which is strong in the western time zones, pushing each other's metal. So you're just going to have higher load factors on on both carriers. And so this is not from charging people more money. You know, the $500 million there's not one penny of higher fares in that. This is about two brands getting together, driving better efficiencies, and delivering more utility, which enables. It enables more flying, which is just more utilization. But distribution—

Michael Bell:It's just better utilization of the fleet.

Barry Biffle:Better utilization. But the distribution is the big winner. And also the frequent flyer program too. I mean, it gets back to, you know, today you have the choice of, you know, the big 4's frequent flyer programs, and then the rest of us are kind of, you know, competing for scraps. We'll have, you know, nothing that will compete on the full scale, but much better than we can today with a lot more dots on the map for people To earn and burn is an example.

Michael Bell:You guys mentioned 10,000 new direct jobs by 2026. What kind of jobs are we talking about and how are you going to find these people? The perennial question, right?

Barry Biffle:Sure, sure. Well, look, I mean, these are, these are direct jobs. There's even more on the indirect side. We both have business partners in the airport environment and so forth. So this is principally flight attendants and pilots. And so those are the— make up the bulk of those numbers. And on the pilot side, you know, we've talked about this a lot in the pilot shortage that people discuss, but when we designed our contract, we spent a lot of time making sure that when you couple our growth rate with our pay rates, that you upgrade from the right seat to the left seat, you know, within 3 to 4 years at us. And so when you look actuarially, you make more money in the first 10 years than you do working for the Big 4. And you— and actually Make very similar over a 20-year period. So you actually make very similar money with us and you have better lifestyle. I mean, you're going to have weekends and holidays off decades before, you know, and you're going to be sitting right seat reserve at JFK forever. So, so better lifestyle, better money, and quite honestly, we think a better sustainable future given our low cost structure. So, so we think we'll be attractive to be able to find the pilots that are coming. And I've spent a lot of time recently, by the way, in the general aviation training world. And, you know, we're worried about the shortage today. But if you, if you look, you can't buy a Cessna 172. Every flight school in America is busy. If you go out to your local airport, you'll, you'll see that they're flying. So the market is reacting and you're seeing pilots that will show up over the next couple of years.

Michael Bell:Do you believe that the combined carrier will be a more attractive employer for direct employees?

Barry Biffle:Absolutely.

Michael Bell:Because of its scale?

Barry Biffle:Absolutely. Yeah, because there's more places that they want to live. I mean, if you're a pilot, right, you know, you care about your money, but you also care about, you know, where can you live. And, and, you know, if you compare us, you know, to some carriers that have, you know, we're gonna stuff you in New York or we're gonna stuff you in Boston and sit you reserve, you know, you can be in Florida right out of the gate with us. You could be in Vegas. You could be in, you could be in, in an attractive place that people want to live and/or commute out of.

Michael Bell:You mentioned growth and maybe creating a better platform or the license to grow by being bigger, by being stronger, being more robust on the future. Where do you see the network growth for— first, just take Frontier without Spirit. Let's assume it doesn't happen. Where do you see Frontier growing? Putting the new airplanes that you guys are hoping to take and then combined?

Barry Biffle:Yeah, so, so on our own, I mean, we've talked about this a lot. I mean, we, we focus on small, medium, and some large-sized markets, but we've spent a significant amount of time growing in the Caribbean, Central America in recent years. We continue to do so through COVID, and that's been very successful. We look to continue growing that. I think what's important is together with Spirit, though, we can do a lot of things that we couldn't do on our own, either one of us. And, and, you know, if you think about some, especially your smaller to midsize routes, you know, together we can drive a lot more demand, as I mentioned before, their distribution and ours. And so there's places that we have flown, say, take Huntsville, Alabama as an example, that we've had a tough time, but maybe together we could actually make it work. And so that's why we talk about more low fares to more people in more places. That's why the merger is so important.

Michael Bell:Do you think it's going to address the question we heard in the introductory comments about some of these markets losing service because of the lack of supply of pilots, maybe even airplanes? Are you guys going to be able to go in and capture some of that?

Barry Biffle:I think it absolutely enables us to fly many of those types of routes that we couldn't do on our own. I don't think it solves the whole problem. It'll give them some access, but, you know, you're going to have to You know, it's going to be a couple of years of painful transition, you know, for some of these communities because— just because of the loss of regional aircraft.

Michael Bell:So, you know, I, from my McKinsey days, remember reading these studies that 2/3 of mergers either fail to create or actually destroy shareholder value, right? So how are you guys going to avoid that? They're never easy. The synergies always look good on paper, but there's a lot of heavy lifting and labor issues, cultural issues. What's the plan?

Barry Biffle:So I've seen a few mergers, been a part of one or two, been a part of some failed ones— United, US Airways. Um, so look, I think, uh, if you look at the ones that have been disasters, if you will, and caused a lot of problems, hurt shareholder values, this one is completely different. In fact, there's nothing There's nothing that I'm familiar with in the last 30 years that's similar to this in the U.S. First of all, we have the same aircraft, so both A320 family aircraft, very similar. In fact, we'll even have— we have the full engine suite, so we have all the parts tooling. That's not an issue. We both have ALPA. We both have AFA. So same unions on the biggest workforces. And in fact, One of the things that's caused problems is when people have merged in the past is, you know, you had one airline that was, you know, maybe much bigger, much older with, you know, you know—

Michael Bell:The big brother.

Barry Biffle:The big brother with the longer seniority had the, you know, the one with the shorter seniority, less years. Take US Airways, America West. I mean, you had pilots on furlough on the US Airways side. that had more seniority than people that were flying the line. And so that makes some friction in between the two. So we don't have that here. Both have been, you know, very successful growing companies, so there shouldn't be the friction. And then you just go down through the systems. I believe there's, you know, 80 to 90% commonality on the technology side. So this is—

Michael Bell:Sounds like a merger made in heaven.

Barry Biffle:Yeah, I mean, it's, it's, it's— I mean, my CIO is going to shoot me for saying this, so I mean, it's not as simple as It's flipping the switch, but it is a whole hell of a lot easier than truly migrating systems. And then you get to, you know, what the business model— business models are very similar. You know, I'm excited to work with them at some point. You know, they do very well in ancillary, we do well. You know, how could we work better together?

Michael Bell:Can you learn from each other?

Barry Biffle:Yeah, we can learn from each other. So if anything, I think we're more complementary, and our cultures are—

Michael Bell:Well, let's talk about the cultural piece, right? You're sort of in a unique situation having played such a big role, and it was admittedly, you know, several years ago, in shaping Spirit and its culture. How similar are they? What challenges do you anticipate bringing 2 organizations together?

Barry Biffle:Well, look, they're different culturally. I mean, there's— one's in Florida, one's in Colorado. There's things outside that make them different, but I think philosophically they're very similar. And so, you know, I think that when you look at their mission and Ours that are very similar, you know, you're not going to have— and I think well respected on both sides, you know, you don't, you don't have the issue where, where one's going to look down on the other or vice versa. So, so I think that, I think the culture could be very good. I think from a leadership perspective, I think it'll be much easier to do this because you have a much more simple plan for people to follow.

Michael Bell:It sounds like a very well thought out merger. You guys have done a lot of this And maybe you've had a lot of time to think about this one as well. It wasn't sort of an impromptu decision to do that. So, you know—

Barry Biffle:About 17 years for me, I guess.

Michael Bell:17 years. We wish you well with pulling that together. Just to— I want to touch on a couple of other areas, and I'm going to turn it over to the audience, see if anybody has questions for you. We see some new entrants in the business. I have to commend, you know, people like David Neeleman, Andrew Levy, for raising money, launching airlines, in the middle of COVID for actually bringing an organization together in COVID, which is really quite remarkable. What do these new carriers and the Avelos and, and Breezes of the world mean for you guys? Are you thinking about your business model differently because of what they're doing, or how do you see it?

Barry Biffle:I don't know. Look, they're, they're small and just getting started. I mean, I, I actually have a lot of time for, for David Neeleman and Andy Levy, 2 of the smartest I know, and I think they'll do well. But look, we're a lot further down the scale than they are. We have a much, much, much bigger challenge with competing with the big guys, but they have a long way to go before I think we would bump into them. I mean, there's, there's a lot of white space out there for them to grow given their size. So—

Michael Bell:They're both proposing trying to deliver, let's say, I would say simplicity, ease, you know, the whole concept of breeze, like friendlier, easier, etc. How are you guys looking to reshape either Frontier or the combined entity to be more like that, if you think that makes sense, if consumers want that?

Barry Biffle:Well, I've always talked about inexpensive, uneventful travel. The truth is, is that weather and other things—

Michael Bell:Like last night, right?

Barry Biffle:Yeah, like last night on another airline that I won't, you know, call out that delayed me getting here. Look, we all have our problems, and, and I think we're all striving for that. We'll see how David does with it. I think if anybody can do it, maybe he can. So we'll be watching with interest and see if we can emulate some of the things they do well.

Michael Bell:You've been a real leader in this business, either from a content standpoint about how you innovated the business model at Spirit, now Frontier, and you had sort of another chance to iterate on that ULCC Talk about how you've changed your leadership approach because of COVID what challenges that presented for you as a CEO, how you, how you run and lead your business differently today.

Barry Biffle:So COVID was hard. I mean, I'm a very— I like talking to everybody in person, and I think it was one of my strengths, you know, pre-COVID. And the first couple of weeks going into COVID, I was like, I can't see anybody, I can't shake hands. And it was, it was hard. It was very, I don't know, it was very stressful to me. And then I learned what every teenager already knew. You can just take your phone and record a video and send them out. And so I started sending out as many as 2 or 3 times a week during the heart of COVID sending out videos, you know, 1 to 5 minutes long. And I still do that today. And it was one of these things that had been sitting there in my pocket for years and just never used it. But it's been extremely— and it's a tactic, but leadership is developing a plan and getting others to follow it. And we oftentimes have the carefully written email or letter to employees that the attorney signed off and the corp comm wrote for you, and it's not even your words, right? And people get that, right? But if you record—

Michael Bell:They see through that.

Barry Biffle:They see through that. And so then they don't read it, right? So when you think about—

Michael Bell:It's not Barry talking.

Barry Biffle:Yeah, it's not me talking. And so, and that's why they would rather see me in person anyway. But we have 12,000 people, right? So it's impossible to see them all. And I've just, I just never realized the power or appreciated the power of the video. The other video that's not so good is Zoom and Teams, and those were around as well. We learned how to use them and there's a place for them, but I'm just a little worried that, you know, they're getting overused.

Michael Bell:Right.

Barry Biffle:I think everyone's learning that— I hope you find this out today— that being in person is just so much more rich and a much better experience.

Michael Bell:And related to that, you know, Barry, we do work for you guys recruiting people, and you guys have held pretty firm to wanting at least director level and above people to be there for the most part in person. There's a huge shift towards virtuality in terms of work. How are you guys thinking about that? How do you see it personally?

Barry Biffle:Well, look, so another CEO that, that not in our industry, but that I follow a lot, he said he had this big Zoom call and he said, he said, hey, and the topic was, was virtual work. And he had 1,200, 1,400 employees on this call. And he said, he said, no, you're all interested. And he said, he said, those of you that have been around a while, have a little more experience, I appreciate you'll understand that I really need you in the office. office because I need the young folks to learn from you. And he said, you know, and if you're young, you're new in your career, and you don't have a lot of experience, you know, I'd like you to be in the office so that you can learn from the folks who've been around. The rest of y'all can all work from home. And, and it was kind of funny, but, you know, they're, they're in the office 100%. I don't know that we're, we're going to be 100%. We have, we have certain jobs that are zero we've identified, but these are typically individual contributor roles. These are not These are not gonna be career, these are not gonna be fast-track career roles. And people have just gotta understand you're not gonna get the experience that the people get inside. And so I'm not gonna say you have to be there every day, but you need to be there, what our policy is, the majority of the time. And, you know, we're flexible, but you need to be there a lot. Leaders need to be there. They need to be accessible especially. But the individual contributor role, maybe we're more flexible.

Michael Bell:Thank you.

Barry Biffle:But those aren't going to be the ones that, that win, right? You must be present to win even in your career.

Michael Bell:All right. Sounds good.

Barry Biffle:Well, let's open it up.

Michael Bell:Does anybody in the audience have any questions for Barry? I think right there.

Barry Biffle:2.

Michael Bell:Do we have mics to bring around? Somewhere in the darkness, the question is going to emerge here, Barry. Hi, Barry. Anita Mosner Holland tonight. As you know, after, you know, the COVID crisis hit, the government stepped in to assist airlines and airports in responding to the crisis and keeping employees on site or not. How would you rate the U.S. government's response to the crisis, and are there things that you think could have been done that you would have liked to have seen happen?

Barry Biffle:Yeah, look, I think, I mean, United States government did, and our elected officials did a great job supporting a lot of industries and basically every industry. I mean, if you, if you think about what happened In our case versus, you know, industries that weren't supported by name, you know, there would have been massive layoffs and there would have been a lot of people on unemployment. And so I think if you, if you look at that, if you weren't an airline, you just laid your people off and the government plussed up the unemployment, right? In our case, they actually took a portion of what they would have paid and reimbursed us and put together a program. And it kind of forced the employees in most part to stay. I think if you had to do it over again, I mean, this is getting nuanced and in the details, but given your background, you'd appreciate, and hopefully we do listen if there is a next time or another industry. A couple things. One, they used Form 41 data, and so they reimbursed a portion of payroll, And what happened in our case, because we use business partners, you know, a large portion of ours wasn't covered. Maybe this was by design. It benefited the big 4. The other thing is that, you know, they didn't put restrictions on these voluntary leaves, which has been one of the problems with the pilots and so forth. And some people got a little cute within that. So I would probably, if they were going to do it again, I would have some kind of reconciliation on the background to make sure that everyone got an equal amount. So if you— I'm making this up— if you had $1 billion and they're only going to reimburse 60%, you got your $600 million. And something on the back, if you only did $500 million— if you got $500 million of $1 billion, they would plus you up and take it out of somebody else. That would have been a good thing. And then the other thing is, yeah, make sure that people didn't cheat. You know, we didn't lay anybody off. We didn't have voluntary furloughs, none of that. And so, and I think that's one of the problems that we're facing in the industry, and that shortage is still being felt today in a lot, a lot of corners of the space.

Michael Bell:I think we got time for one more, maybe right in the center here, maybe 2, please. Hi Barry, good morning.

Barry Biffle:Wade Davis, Montgomery, Alabama Airport. As an airport, we have an extremely aggressive MRG and also marketing and waiving fees.

Michael Bell:What advice would you have to regional airports in this environment to attract ULCCs?

Barry Biffle:I think, I think one of the biggest things is just make sure that, you know, your costs are competitive. I mean, look, we have seen, um, you know, a lot of airports that have, you know, during COVID they even sped up projects and, and some of the projects didn't actually increase capacity. You know, nothing's worse than spending, you know, $100 million, a billion, whatever, and you don't increase your capacity. And everybody gets worried about their experience and so forth. I get that. But, you know, you need to keep in mind, you know, you're in a business too, and, you know, you want to run an efficient operation, and costs matter. And airplanes, I mean, they can move anywhere. They're fungible. So, you know, we're just going to move where we can be the most efficient.

Michael Bell:Okay.

Barry Biffle:And, you know, we've done some pretty high-profile things. We pulled out of LAX, we pulled out of Newark, we pulled out of several airports because I can move the airplanes. I mean, I don't have to fly anywhere. So all I would say is just make sure that you manage your costs and run your business as efficiently as we do ours, and I think good things will happen for you.

Michael Bell:I think we'll just do one more. One more over here, maybe.

Barry Biffle:Yeah.

Michael Bell:Good morning, gentlemen.

Barry Biffle:Fellow Adrian, MPS training provider. Mr.

Michael Bell:Biffle, How do you foresee your pipeline for pilots to be sustainable with the Big 4 sooner or later raising their, their salaries? Are you looking at a pipeline provision for your pilots? And if so, how are you planning to do so?

Barry Biffle:Yeah, look, so, so look, I mean, the way contract negotiations work, there's pattern bargaining, and if one goes up, others go up, and And there's a rationing up, and over time you just see that happen. That's just what— that's how it works. As far as the supply, though, goes, I think you're seeing— I mentioned a while ago, and I've been talking to a lot of the GA manufacturers, there's, you know, this shortage is seen and people are working on it. We've looked at it ourselves. You know, do we have our own academy and—

Michael Bell:Right.

Barry Biffle:Or do we look at it? The other reality, there was a chart up here, you know, just before we came on stage that talked about the debt. And, you know, people talk about deleveraging. Well, okay, well, to deleverage, you got to have cash, which means you, you know, the best way to do that is actually through cash flow and profits. And so I think that probably constrains capacity more than people realize. I mean, one of the big shortages, and I mentioned it in Anita's question, you know, one of the big shortages was a lot of people just You know, took some packages and left the industry, and that's caused a kind of a shortage that is largely temporary, but it could be sustained if we don't figure out the pipeline. But look, there's a lot of people working on this. I know there's the debate about the 67 age. There's debate about, you know, should we have better quality, and, you know, we live in a country in the United States that That in a few hundred hours we can train you to fly a 50-ton airplane that drops bombs all over the world, but yet we want 1,500 hours to fly an airplane, you know, for an airliner. And what it— if you dig into it, 1,500 is pretty arbitrary, right? What it should be is the quality. And so we should focus on the quality of training and their credentials because that's actually what happened in that—

Michael Bell:Yeah.

Barry Biffle:unfortunate incident up in New York that caused a lot of those rules to come in. So I think there's probably going to end up being some focus on, on what are the real credentials that you need in the training. And that would actually be good for safety as well as good for the pilot shortage.

Michael Bell:Terrific. Well, our time is up. Barry, thank you for your great insights into Frontier, into the merger, into the industry. Your candor is greatly appreciated. Obviously, you're masterful in your knowledge of this space. So I'll ask you to all join me in thanking Barry for coming out and joining us today. Thank you.

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