Thank you for joining us. Welcome to the Second Quarter 2022 Allegiant Travel Company Earnings Conference Call. At this moment, all participants are in listen-only mode. Following the speaker’s presentation, there will be a question-and-answer session. Please note that today’s conference is being recorded. I will now turn the call over to Sherry Wilson, Managing Director of Investor Relations.

Thank you, Leeway. Welcome to the Allegiant Travel Company's second quarter 2022 earnings call. On the call with me today are John Redmond, the company's Chief Executive Officer; Greg Anderson, President and Chief Financial Officer; Scott DeAngelo, our EVP and Chief Marketing Officer; Drew Wells, our SVP of Revenue and Planning; and a handful of others to help answer questions. We will start the call with commentary and then open it up to questions. We ask that you please limit yourself to one question and one follow-up. The company's comments today will contain forward-looking statements concerning our future performance and strategic plan. Various risk factors could cause the underlying assumptions of these statements and our actual results to differ materially from those expressed or implied by our forward-looking statements. These risk factors and others are more fully disclosed in our filings with the SEC. Any forward-looking statements are based on information available to us today. We undertake no obligation to update publicly any forward-looking statements whether as a result of future events, new information or otherwise. The company cautions investors not to place undue reliance on forward-looking statements, which may be based on assumptions and events that do not materialize. To view this earnings release as well as the rebroadcast of the call, feel free to visit the company's Investor Relations site. With that, I'll turn it over to John.

Thank you very much, Sherry, and good afternoon, everyone. I should probably advise that Scott Sheldon is not here today, but obviously we'll still take whatever questions you have. This is, of course, the first earnings call in the history of Allegiant, Maury has not participated or provided his opening comments. No one in the industry has the depth of knowledge and awareness of the industry that Maury has. So as long as your questions are more present-day focused, we'll get by. I have started every earnings call thanking our amazing, dedicated, and passionate employees, so I would be remiss if that commentary was not repeated. Thank you all. You are the best. With this new chapter beginning, it's fully fitting I announce the promotions of Scott Sheldon and Greg Anderson to President effective 8/1. Every one of you on the call knows them, so they need no introduction. We have the best management team in the industry, and this is one of many steps we are taking to ensure consistency, continuity, and execution. Scott, Greg, Scott DeAngelo, our CMO, and Rob Wilson, our CTO have all signed employment agreements through December 2026. In regards to our operations, Q2 is not our best or an industry best for that matter, but we're reacting fast to this ever-changing environment. In July, we started to get back within reach of where we should be with a 99% controllable completion, and we expect Q3 to be at the same performance level or better than July. July was better than June on every metric from STAR D0 to A14 and controllable cancellations. We have always been a margin-focused company, and that won't change going forward. With strong load factors and improving operations, margins will grow given reduced IROPs. We are in negotiations with our pilots, but have no updates regarding financial impact or timing. Maury did mention in the Q1 earnings call he was personally involved in those negotiations. So having a decision-maker like him with his intimate knowledge of the issues and understanding of the business model is invaluable for all parties. In addition, we are having partnership conversations with several flight schools to ensure a predictable stream of pilots into the future. There has been plenty of dialogue and commentary out there regarding how people see 2023 unfold. We have never been ones to overpromise and underdeliver, but trying to make predictions or forecasts in this environment, given the many variables, is not something we will do. We have a history of year-over-year growth, but that history provides no crystal ball during times of multiple variables moving in unpredictable ways with no line of sight. Having said that, our model was built to handle times like this, and our DNA is to remain very flexible and act or react based on changing circumstances, and we will continue to do that as we always have done. This approach has served us very well to date. As for Sunseeker Resort Charlotte Harbor, we are still targeting to open in May of 2023, but will not finalize the opening month until early Q4. To date, we have booked 1,100 transient room-nights at an ADR of $390, which is impressive in that most of these reservations are in the May through September time frame, which is historically the slowest months of the year. In addition, we've booked 31 groups totaling 31,300 room-nights. The total contracted rooms, food and beverage revenue for these groups was roughly $13.4 million. An interesting point to make here is, we have already booked 5.6% of the total room-nights for 2024, none of which are transient bookings, and have stopped taking group reservations for February of 2024. This impressive booked percentage will only increase as we move closer to opening. Allegiant has a direct relationship with its guests, meaning we don't use GDS or OTAs to book travel. Sunseeker, of course, follows the same high-margin approach, which requires a significant number of emails to perform at the level we expect to. To date, we have roughly 3.1 million emails in the Sunseeker database, and project this number will grow to over four million by opening. These numbers are unprecedented in the resort or hotel world and show the power and synergy of the Allegiant model and Sunseeker Resort. They also speak volumes about our excitement in opportunities in the asset-light space. Building an email database is absolutely critical and foundational to success in this space. After all, how can you fill a hotel if you don't have a database to market to? I can't think of a more efficient and cost-effective approach to filling a resort or a plane than email marketing. You are starting to see the pieces coming together of what we refer to as Allegiant 2.0. Last but not least, we have made the decision to pay off our CARES Act-related government debt of $24.6 million before month-end. We appreciate the assistance the CARES Act provided during the unprecedented early stages of the COVID pandemic. Given the guidance and decisions of our board, the untold number of analyses and conversations between the management team and the sacrifices made by all of our employees, we find ourselves in the amiable position of paying off this loan well before its maturity date. And with that, I'll turn it over to Scott DeAngelo.

Thanks, John. The second quarter again saw exceptionally strong demand for Allegiant, in terms of both web traffic to allegiant.com and passenger segments booked. Total visitors to our website were up by nearly 35% in the quarter versus 2019. Most notably, new visitors were up by nearly 60%, and visitors coming to allegiant.com by directly entering the URL or by using our mobile app were up by more than 85% versus 2019. What's more, we've added nearly one million new emails to our customer database in the first half of this year. The continued huge increases in both new visitors and direct visitors to allegiant.com speaks not only to the ever-increasing awareness of our brand but also what that brand stands for: low fares and nonstop flights, the two most important buying factors during what's been a turbulent time in terms of both airline industry operations and inflationary economic conditions. Put simply, our addressable customer audience continues to grow, as more new customers consider Allegiant for their leisure travel needs, more than 85% of which are coming to us after either last flying or most frequently flying Southwest, Delta, American, or United. Less than 15% are coming from all other airlines combined, and less than 10% are coming from other ULCCs. Customers are looking to find relief from sky-high fares, as well as avoid the risk associated with connecting flights through overloaded major airport hubs. To that point, our weekly tracking of customer sentiment, which was originally focused on COVID but now expanded to include customer sentiment towards the economy and air travel, shows a meaningful change in the top three considerations for customers when selecting an airline for leisure travel in the current environment. In past years, price, non-stop service, and schedule were the prevailing top considerations. But in the past several months, while price and non-stop service not surprisingly continue to be the top two factors, the airport itself, namely the convenience of smaller, less crowded airports has replaced schedule as the third most important factor. This represents yet another material development that favors Allegiant and our attractive network of alternative airport locations like Mesa, Sanford, and St. Pete-Clearwater, to name a few. These factors not only explain the historic highs in web visits and bookings but also why the number of visitors to allegiant.com in the past several weeks to conduct flight searches for travel sometime during the August through November time period is up between 40% to 100% for all weeks compared to the same booking and travel periods last year. And while bookings from all customer ages continue to increase on a year-over-three-year basis, customers 65 years and older again showed dramatic booking increases at more than 60% above 2019 levels. This is great news as this age group represents our most frequent travelers, many flying between a primary residence and vacation home, with great flexibility and resiliency as a general rule, given their discretionary time and income. While air travel demand remains strong for the capacity we have posted, we also continue to aggressively focus on driving greater value per customer by selling outside the aircraft through the attachment of asset-light high-margin third-party products. The Always Allegiant World MasterCard remains the prominent driver, continuing to post record-setting months in terms of new card sign-ups, average spend on the card, and total compensation to Allegiant. New card sign-ups for the quarter were up by 35% versus last year and 65% versus 2019, and revenue to Allegiant was up by nearly 130% versus last year and more than 150% versus 2019. In addition, our non-credit card-based loyalty program Always Rewards is just coming up on its one-year anniversary, but already we're seeing engaged Always Rewards members spending 34% more on average than non-members, driven by increased take rates on air ancillary products and the attachment of third-party products as customers engage with our simple but compelling rewards currency to maximize their point earnings for use on future leisure travel with Allegiant. Also of note, we continue aggressive technology development efforts to boost our ability to sell more hotels at increased attachment levels by connecting with more hotel inventory, experimenting with price presentation and better hotel merchandising, and streamlining the checkout process to be on par with leading online travel agencies. In closing, we believe our unique value proposition of low fares, non-stop flights, and a broad service of smaller alternative airports remains and will continue to remain an attractive, distinctive value proposition, especially in these uncertain economic times, that is attracting new and returning customers alike in record numbers. And our focus on continuing to grow our high-margin asset-light third-party product sales can help us drive revenue per passenger growth in the upcoming years to provide at the very least a partial but nonetheless material offset amidst otherwise choppy conditions. And with that, I'll turn it over to Drew for a deeper discussion of revenue and capacity.

Thank you, Scott, and thanks to everyone for joining us this afternoon. As has been mentioned, demand hit astronomical levels in the quarter. Scott talked about the outstanding web visitation, and that turned into the highest load factors we've produced since 2014. Along with accomplishing our targets to fill aircraft, we produced a second-quarter best of $66 per passenger in ancillary revenues. In total, the quarter finished with nearly $630 million in revenue, an increase of 28.1% over 2019. Core demand exceeded our expectations at the outset of the quarter. However, some non-core elements drove a headwind that Greg will detail shortly. Additionally, in what is an encouraging but a revenue-offsetting dynamic, the use of vouchers given out above and beyond refunds or through marketing efforts encouraging folks to travel when ready were up nearly 200% per passenger; a great sign that beyond the great work Scott and his team has done to aid awareness and produce new visitors, our previous flying guests are returning to Allegiant for additional trips. Scheduled service ASMs grew 13.4%, resulting in a TRASM change of 15.7%. And while I'm pleased with the summary results, this quarter was truly a story of the peaks and the off-peaks. As we mentioned on the May call, because the rise in fuel was so rapid, we opted to maintain the majority of the flying through the off-peak April and May time frame due to the proximity to departure. It is worth noting that this flying was still earnings accretive despite the fuel expense. Meanwhile, June produced arguably the best revenue story in company history, both in terms of total recognized revenue and revenue per flight. We narrowly missed 90% boarded load factors, recorded nearly $70 per passenger in ancillary, and had the third highest monthly increase when comparing to June 2019 in air revenue per passenger over the last 15 years of Allegiant and certainly the best with any amount of meaningful ASM growth. However, not all ASMs are created equal. And candidly, we did not have a schedule to fully realize all the potential revenue in the second quarter nor will we in the third. At the beginning of the year, we had aspirations for 30% 2Q growth and 35% in the third. And while demand did its part, fuel prices and operational considerations have resulted in the current growth rates. Much of this came at the expense of peak flying. June and July are the lowest year-over-3-year growth months in their respective quarters with utilization roughly 20% below 2019 levels. In fact, June and July featured less flying than the same months in 2021. We do take some solace in the unitized metric benefits we see in these months. And looking forward, July will mirror the best of what we saw in Q2. That phenomenal story features boarded loads over 90%, a July record ancillary per passenger, and the fourth highest air revenue per passenger increase comparing to July 2019 over the last 15 years of the airline. Furthermore, the operational integrity intended from the flight cuts materialized in the month, with a 99% completion as John mentioned. However, we are still a 100% leisure airline, subject to the whims of traditional leisure seasonality, and the distribution of growth between peak and off-peak within the quarter will drive a modest headwind to unitized revenue. All in all, we expect to grow the scheduled service ASMs approximately 18% in the third quarter, and system ASMs approximately 16%. Further, we expect total revenue to grow roughly 29%. And with that, I'd like to turn it over to Greg.

Drew, thank you, and good afternoon, everyone. For the second quarter, we reported GAAP net income of $4.4 million; excluding our recognition bonus that would have been $11.1 million. We have the best team members in the industry, and we are excited to recognize them for their incredible efforts day in and day out. Thank you, Team Allegiant, for everything you do. Our second quarter financial results did not meet our initial expectations, which is largely explained by three areas. First, around revenue, we estimate we left roughly $10 million on the table during the second quarter as we transitioned to a new credit card processor, and this drove an additional $4 million headwind in July. This issue has been resolved and is behind us. Second, fuel. From mid-April into May, we saw our fuel price per gallon increase by nearly $0.50, another step-function increase in fuel. The rapid rise in fuel intra-quarter resulted in $19 million more in fuel costs than initially planned. Third, IROPs. Irregular operations drove an additional $9 million in incremental customer compensation. We are trending in the right direction as these costs were 40% down compared to the first quarter and driven by an improvement in completion factor. And we are encouraged to see reliability in our operations continue to improve as the peak flying month of July resulted in a 99% completion factor, or the highest of the year. If we adjust for the $10 million in revenue, $19 million of fuel, and $9 million in additional customer compensation, our 2Q operating margin would have been 11.4% and in line with our initial guidance. Turning to the second quarter costs, excluding fuel, our unitized costs for the quarter were $0.0676 and in line with expectations. Excluding our recognition bonus accrual and our IROPs customer compensation, our CASM-X was up 11% compared to the second quarter of 2019. Decreased productivity drove the majority of our CASM-X increase. The lower productivity can be seen through aircraft utilization, which is down 17.5% as compared to the same period in 2019. In addition, inflationary pressures primarily at the airports drove nearly two points of CASM-X increase. Looking at the balance sheet, we ended the quarter with $1.2 billion in total liquidity, inclusive of cash on hand. In August, we signed up a $100 million warehouse revolver with MUFG, bringing our total liquidity to $1.3 billion, or 70% of 2019's revenue. Our net debt balances increased slightly to approximately $750 million. This is largely due to construction draws for Sunseeker. However, this net debt balance is still well below pre-pandemic levels. And for the full year 2022, we expect to make $185 million in principal debt payments and $90 million is expected for interest expense. Turning towards the third quarter, our guidance issued today suggests an operating margin of 5% on system ASM capacity growth of 16% year-over-three. This guidance also assumes an average of $3.80 per gallon of fuel. Throughout 2022, we have action-trimmed our initial planned capacity by roughly 15 percentage points. These capacity reductions were primarily driven by staffing challenges, the volatility around rising fuel costs, and adding more buffers for operational stability. As mentioned, operational stability for the month of July improved as it had a completion factor of roughly 99%; just want to point out a nearly two-percentage point improvement when compared to June. And based on third quarter capacity growth of 16%, we expect CASM-X for the quarter to be up 10% year-over-three. This increase is primarily related to inflationary pressures and productivity, similar to the second quarter. Lower aircraft utilization versus the third quarter of 2019 should drive roughly four points of CASM increase for assets and other fixed costs. Lower labor productivity should result in another two points of that increase. And inflationary pressures primarily again at our airports and with our service providers is roughly two points. As we look towards 2023, there remains significant uncertainty around fuel, the broader travel ecosystem, and labor challenges. And while the US consumer is strong and the demand environment remains incredibly robust, we know the future macroeconomic environment is uncertain. Allegiant has a strong track record of industry-leading financial performance regardless of the macro or fuel environment. Our differentiated model is built to outperform. And as John said, our focus is on margins. And in the coming months, we will closely monitor the landscape and said factors as we continue to refine our capacity plans for 2023 with an eye towards improving margins. So please stay tuned. Turning to fleet, we are fortunate to have a fleet plan with tremendous flexibility. As mentioned last quarter, we decided to hold three aircraft in storage this year and place them into service in the first half of 2023. This change means we will end 2022 with 124 aircraft in service. And currently, we have 34 unencumbered aircraft, which also helps aid our fleet flexibility. Turning to reinvestments in the business, our full year 2022 total airline CapEx expectation has slightly reduced to $240 million in aircraft CapEx, which is inclusive of pre-delivery deposits of $140 million and $60 million in other and heavy maintenance CapEx respectively. And in closing, we truly believe Allegiant has a differentiated business model. Over the past 20 years, our differentiation has come through major pillars such as our asset acquisition strategy, uniquely vast network, direct distribution to our customers, selling third-party products, and most importantly, our people. We are continuing to refine and enhance these pillars as part of our 2.0 strategy. Our MAX order with Boeing is expected to provide assets that are 30% more efficient and at the same time monthly ownership costs on par with our used A320 aircraft. Our vast domestic network currently includes more than 610 routes and we serve 128 cities—more cities in the US than nearly every carrier. And our network team has identified more than 1,400 incremental routes for us to expand our non-stop service to a runway of airline growth for many, many years to come. Opening our Sunseeker Resort will enhance our ability to sell products outside of the tube of an air frame with our direct distribution channel and set the stage for unlocking our asset-light strategy around hotels. Always loyalty program enhances the value proposition we have with our guests, their ability to earn and burn points through multiple platforms and should further deepen our relationship with them. And increased investments in systems tools and infrastructure will better equip our team members while arming them with the data to enhance our execution and drive further efficiencies. Each of these initiatives should meaningfully improve our bottom line and our long-term earnings potential. And with that, we'll take your questions.

Thank you so much. Our first question comes from the line of Savi Syth from Raymond James.

Maybe if I can start off with on the revenue side kind of the outlook here in the third quarter. It seems like maybe unit revenue not as strong as what you thought it could be in the third quarter maybe a couple of months ago. I was just kind of curious if that was the case and what might be driving that?

Thanks, Savi. I think that's generally a fair statement. We're certainly off the absolute ridiculous highs that we were seeing from a demand front. We're still quite elevated, higher than what we've seen really through any of my 11.5 years. But off the highs a bit, which I think you see reflected in the guide here.

That makes sense. I'm curious about the operations. What changes are contributing to the positive improvement we see for July? As we progress through the quarter, do you expect performance similar to or better than July? Are the ATC issues being resolved, or is there something different happening at Allegiant?

Hey Savi, it's Greg. Why don't I take a stab at it first here? One, July we've seen steady improvements continue, not only in July but we would expect August and September to improve as well. Some of it's just capacity and rightsizing and making sure that we have that out there and that we can support that with our crews. Earlier in the year, we saw some unplanned absences spike. We've seen that—we've been able to better manage through that. Certainly, to your point, weather in June and ATC issues have been a drag on operations. And that's something we'll keep an eye on. I'd say, like in our stations and airports, we've seen stabilization there. Our team, Kenny Wilford and his team, have gone out and there's been a couple of airports where we've had to change out service providers. And once we've done that and lessons learned, we've seen vast improvements in those respective areas and turn times. But we know we struggled a bit and didn't meet expectations in the summer. We're getting better. One of the things I think that's worth mentioning again, and we talk about it quite a bit is customer compensation. That's expensive, and it's meant to make it sting on our side, but it also helps mitigate some of those operational disruptions and kind of help with the brand performance from our customers. So hopefully that helps answer the question, Savi, but anything else?

That's it. Great. Thank you.

All right. Thank you so much. And your next question comes from the line of Helane Becker from Cowen. Please go ahead.

Thanks for the time. Just on ancillaries, how high do you think they can go? I mean, you're getting a lot better at selling them. You're offering new products. What should I think about in terms of, I don't know, goals?

Sure. Helane, I think as we look out over the next few years, Scott DeAngelo talked a little bit about some of the systems changes that we'll be implementing and putting in place particularly on the third-party side. There will also be some on the airlines. I think as we look out five years, another $10 per passenger is totally reasonable. I'll look over at Scott DeAngelo too to make sure I'm not overselling his thoughts too, but something getting into the mid-$70s I think is completely feasible.

And I guess I would also throw in there, as the product evolves over that same time frame in the next several years, Drew has brought up before Allegiant Extra, which would be our kind of entree into Economy Premium with extra leg room, priority boarding etc., as kind of a sub-bundle, right? There become different ways to merchandise more in that case ancillary product to sell across the fleet over time that could help get to that number that Drew pointed out.

Okay. That's helpful. Thanks. And then I don't know John if you're willing to answer this question, because it's Sunseeker, but the numbers that you called out for forward— I don't know if you call them forward bookings or advanced reservations—how does that compare with your experience at your prior firms in terms of level of bookings this far away from the actual date of the trek?

Those are great questions, Helane. In terms of when we began selling, it's unusual to start that early. For example, the last major MGM property that opened, Barrera, didn't start selling until six months prior. We chose to sell much earlier because we had many insights to gain from the process. As we engaged with customers and began selling our product, we had entirely new systems in place and wanted to ensure they functioned well. There are several reasons for our early efforts in transient sales, which is why we are seeing significant success there. Group bookings are particularly impressive, as customers are choosing us without having seen the product. They're comparing us to established properties where they already know what is offered. Many decisions are influenced by the reputations we all have, and often, potential guests are visualizing what they can expect just by walking around the area. We're thrilled with these early insights, the initial bookings, and the group reservations. Achieving 31,300 room nights is remarkable, and already securing 5.6% of our total room inventory for 2024 is exceptional. This highlights the importance of our email strategy, which we've been developing for a while. No hotel has ever opened globally with more than four million emails—most have had less than half that amount at launch. So, stay tuned. These are aspects we've been discussing for some time to ensure the success of this property, and it's encouraging to see those data points starting to materialize.

That’s helpful, John. Thanks for the answers.

Thank you.

Thank you so much. Your next question comes from the line of Scott Group from Wolfe Research. Please go ahead and ask your question.

Guys, I'm curious, why do you think your RASM increases are lagging peers? And maybe just on the third quarter margin guidance, you said the airline is running a lot better. Fuel is coming down versus last quarter. Why are the implied margins lower in 3Q than 2Q?

Hey, Scott. It's Greg. Why don't I start, and I think Drew will add some commentary on the revenue side. Just as you're aware, we're 100% focused on leisure. And just historically, I think in 15 of the last 17 years, the third quarter is the lowest performing quarter for us, because September and off-peak is just so drastic. And so that's a big element of why I think our ASMs sequentially are meaningfully down second quarter to third. And then, maybe perhaps Drew can add color on the...

And taking it one step further, if you think about our ASM cadence, yes, the growth will be the smallest in July, which impacts the RASM cadence. But fuel will be the highest as we see it today in July, which had the most absolute ASM. So, they kind of work against one another there as it pertains to a full quarter on both the RASM and the margin front. I think beyond that—and maybe it impacted both 2Q and 3Q, as you think about unitized metrics, I think we're one of two carriers that both increased stage and gauge versus 2019, which is going to put some headwinds against the unitized metrics there. And I think it comes out to about three to four points in each quarter.

Okay. That's helpful. And then maybe just some early thoughts about 2023 in terms of capacity growth and what that may mean for CASM. Do you think it's going to be down next year versus this year? Things like that.

Sure. Hey, Scott. It's Greg again here. As John mentioned, and we're trying to get across here is that 2023, the focus is going to be on improving margins, and we would expect 2023 margins to be better than 2022. As we talked about, there's a lot of uncertainty out there as we kind of refine and get to a capacity plan for 2023. In addition, we're going to start taking aircraft for Boeing next year as well, which we'll have to have pilots available for that, which will help kind of cap that growth if you will. I would say, historically, it's been a 10% growth. That's what we typically target at Allegiant. We flex that up and down based on the environment. And what we're seeing today, again coupled with the Boeing taking delivery next year and extra pilots for that, I think 10% growth in 2023 would be the cap. You may see that come down from there. In terms of CASM ex, that's going to be dependent on capacity. We’re also—and as John mentioned, we're in active discussions with our pilots, trying to drive a deal, making progress there, in addition to our flight attendants. So there's some labor costs that will be associated in 2023 or potentially if we're able to drive a deal. We would expect 2023 though to also, again, as we mentioned the improvement in operations to drive out of the business those IROPs costs, which were meaningful, and that should help on the margin side. I'm hesitant though just given all the uncertainties, Scott, to go in and give you a guide for kind of CASM ex. But I just—I think hopefully you could take away that we're focused on cost and doing the right things. But ultimately, we're going to drive margin.

Thank you, guys. Appreciate it.

Thank you so much. And our next question comes from the line of Michael Linenberg from Deutsche Bank. Please go ahead and ask your question.

Sylvia calling in for Mike. So last quarter you talked about the pilot attrition rate a little bit and that it was elevated. And it's really encouraging to hear that you're partnering with various flight schools for new recruits. Could you talk a little bit about how the attrition trends looked in the second quarter? And do you think the attrition rate will remain elevated for the rest of the year?

This is Greg again. I'm just going to kick it off, but then we have Allen Thieman in the room who's our VP of Flight Crew Planning, who's really close to this. But we're actively at the table. Our pilots are paid candidly as it is in the market, but we want to get their pay back up there. We're working on improving the level of service to our pilots and also better systems around scheduling. So we're making a lot of effort in that regard. And then with Allen, he could give you more color on hiring and attrition.

Sure. Happy to be here. So as we discussed during the last time we spoke covering Q1, to your point, we did see pilot attrition spike in the first quarter with February in particular. Since that time, we have actually seen a drop in monthly attrition. Last month, July of 2022 was the lowest number that we have seen since before December of 2021. And so certainly positive news, but we are prepared for attrition to be choppy, and it will certainly fluctuate, and probably closely align with legacy hiring patterns. That continues to be where most of our pilots are heading. And then just to put some numbers around it, Scott during the last call provided the trailing 12-month attrition. That was at 123 from May 2021 to April 2022. Today, our trailing 12-month is only 132 pilots. So it is trending slightly up, but it is very much in line with our expectations.

Got it. That was really helpful. And then just another question regarding the PSP. So you said you were going to pay that back before the month-end. So does that free you from engaging in like buybacks or paying dividends or any other transactions that you weren't allowed to do? Does that free you earlier than previously outlined?

No, I don't think the quid pro quo people should read into it any of those types of activities like dividends and buybacks. It was strictly something that we thought is the right thing to do. We're sitting on a very enviable position in terms of liquidity, and this is just something that we debated at length at our board, and we think it's the right thing to do. So we've been pretty much a thought leader throughout the pandemic, and I think this just continues that approach where we're the first ones to do this. And we just want to get it behind us. We appreciated what happened, but I think companies when they no longer need the assistance should pay it off. So that's why we decided that.

And John just for all airlines, right, those restrictions lift October 1 for the dividend and share repurchases irrespective of when you pay back the debt.

Okay. Got it. Got it. Thank you. That was very helpful. Thank you very much.

You’re welcome.

Thank you. And our last question comes from the line of Daniel McKenzie of Seaport Global. Please go ahead.

It looks like flying is going to be up roughly 30% in the month of September just looking at the schedules data and please correct me on that. But based on what we know about July, the implied September TRASM does seem to be negative. But I'm just wondering how much of the revenue deceleration is something that's being intentionally engineered by the network planning team? And how much is a—weaker consumer that you're anticipating later in the quarter? And then that's kind of one part. And then just why the unusual growth if that's correct in an off-peak month? And should we extrapolate those September trends into October and November?

Thanks, Dan. A lot here. Let me try to unpack that. So you are correct that there will be elevated September growth relative to the other months in particular. I'll point out though that utilization remains under five hours per aircraft per day. I mean it is a very lowly utilized month still. So more a function of some day of week versus 2019. Labor Day moves a bit further back in the month. We capture more of the Labor Day traffic in the month of September. And believe it or not, given the low amount of flying, that is meaningful from a growth perspective. I do not believe that September will be negative on the TRASM front. I'm not running away with an incredible TRASM at this point. So ideally there's some upside there. But I do not believe it will be negative.

Okay. And I'm going to pass along a question that was actually asked to me by a long-only investor on the asset-light side of Sunseeker. So for those that are taking a three-year outlook, what are you anticipating that revenue stream could look like? And then separately, just given the current trends of the hotel, when do you expect to make a decision on the remaining 13 acres of undeveloped land? And then I guess just I'll throw one I'll squeeze one more in there. That $390 average room rate, I'm just curious what percent of the rooms booked are the larger suites. So just kind of a mix question related to that average room rate.

I appreciate it, Dan. If I miss anything because I think there's like three or four questions there. But maybe the most recent will be easiest. The mix we're seeing right now between standard rooms and suites is about 84% standard rooms, 16% suites, so a lot of demand for the suite product which has been great. And keep in mind that we haven't posted an area to be able to fly into that market. So 70% of the reservations we're taking now are from locals in-state which has been amazing, and they're the people most aware of the project. So when we start getting bookings that are going to come through the Allegiant passengers when they book air, that's when we'll start to, I would imagine, see that suite mix even pick up a little bit. Asset-light, one of the absolute critical factors to that is having an email database. So not only does that serve us well, obviously, for opening up a new property, but for taking on other opportunities is critical. When you look at picking the other management company out there, I don't care whether it's Marriott, Hilton, Hyatt, or whoever, they don't let you use their database to market a property when you sign them up. So that's a big differentiating factor for us moving into that asset-light space that anyone whose property we choose to manage will be able to—we will allow them to use our database to be able to market to fill that hotel. And then in terms of the Phase three, as we call it, which would be effectively doubling the size of the resort, we haven't made any decisions on timing there. Clearly, we would not start a project that in essence copied or followed the same blueprint as Phase one and two did until we saw that the results were there, the strength was there, and the demand was there for the product before we'd ever recommend to the board that we would want to start a project like that. And of course, there's always the opportunities to do anything with that property. I mean, we've had inquiries from a multitude of different types of developers. So those of course are always possibilities down the road. So I think by the time we ever make a decision on that, it would be at the end of this year or early into '23 before we decide when to start something or what to do with it.

Okay. Thanks for the time, guys.

Thank you.

Thank you so much. And we don't have any more questions. I would now like to turn the conference back to John Redmond for closing remarks.

Well, in closing, we appreciate everyone's time. We're glad we were able to be responsive to everyone's questions. And stay tuned for...

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