Thanks, David. Good morning, everyone. Our second quarter results were within our guidance range, overcoming significant weather and extensive air traffic controls delay in late May and June, which we estimate to be 2 to 3 points on the quarter. Our third quarter guidance incorporates a similar impact for July. We're proud of Team Frontier for the contributions during the quarter as we navigated through this environment and for remaining focused on our top priority of delivering a safe and reliable experience to our customers.

We're seeing an improvement to our forward bookings for August and beyond as the industry adjusts capacity. Encouragingly, in Frontier markets specifically, we're seeing a greater reduction in competitive capacity than the average in the industry by about 3 points, which alongside with our commercial initiatives is expected to support mid- to high single-digit RASM growth in the third quarter on a stage-adjusted basis. I'm confident in our ability to generate incremental RASM benefit from our enhanced loyalty initiatives and our additional premium product offerings.

For example, our cardholder spend is up nearly 20% year-over-year. These product and loyalty enhancements, combined with our industry-leading total cost advantage are expected to provide a solid foundation for profitability in 2026. I'll now turn the call over to Jimmy for a commercial review. Jimmy?

I think I mean one of the big moving blocks, we're already kind of in it, and this is one of those where I almost wish we would report by month rather than quarter because you don't see the kind of the trends. I think if you take a step back, let's talk about just underlying baseline, and then we can talk about the building blocks from there. So if I go back to April, we had pretty big challenges. Everybody is well aware of what happened.

Things stabilized. And actually, we saw really good bookings, fares were going up and demand was really good. We -- it wasn't clear, there was some challenges. We started seeing a lot more weather ATC in late May and into early June. But then it became clear in mid-June that there was kind of a setback, kind of a slowdown, if you will. And it's hard for us to tell, was that demand or was it just oversupply in the summer.

And then we went kind of negative year-over-year on sales against, in our case, flat to down capacity. And then now in the last few weeks, it's been widely reported, we've seen significant jumps. In fact, we're running double-digit sales year-over-year for all forward sales against capacity that is actually down year-over-year. So you take that trend and you roll that out, and that puts pretty good RASM trajectory for the balance of the year.

So that gets you much closer to breakeven just on a sales trend basis and then you start adding all the incremental things that we're doing that are specific to Frontier. As I mentioned in my opening remarks, we see -- when we look at forward capacity, the industry capacity is getting better domestically. But in Frontier markets specifically, we're seeing about a 2 to 3 point better just in September alone, and we expect that to continue.

We see a certain carrier getting out of a lot of our routes. We suspect they're going to continue to do that. So we think that's unique to Frontier. And I think in broader, it's very clear with the majority of all domestic capacity losing money at this point, I think you should expect continued capacity reductions. But we're not counting on that, and we don't need it specifically, but you're going to get several points in RASM just from kind of the competitive capacity coming out of markets.

We also then, as we move into the fall, we move out of having a lot of new capacity. So I think we get that down to a much more manageable number, a little bit of redistribution. I mean we were running over 20% new flying in the fourth quarter last year. This year, it's down to 10%. I mean, so that alone, I mean, it's just math, right? Brand-new flying is about a 30% discount. If you have 10% less of it, that's 3 points right there.

So you get several points from kind of the less new flying. And then you actually take -- you get several more points just from our slowing our overall growth rate. So you actually get a RASM bump there. And then lastly, you get into kind of the product side and loyalty. We've got several points, as Bobby mentioned a moment ago, we've got -- we're 40% up year-over-year. It's I know it's on a small base, but that's a huge improvement.

Our credit card acquisitions are up materially. Our spend is up. People are liking the new Frontier. We're finally starting to see some maturity of that pay off. So that's another couple of points. And then lastly, I think you get into the premiumization with the first class seating that will be introduced late this year, but fully rolled out by spring. And we've also got an expansion of UpFront Plus that we're going to be continuing to do based on the success of that.

And so that's another couple of points there. So you add all these things up, and we believe we're more than back to profitability and you're back on track to hit our targets.

We have not put that out. But I think as we have said, and I think as we have reacted, and we said this earlier in the year, we will be the first probably to react to any changes -- but we have -- we've reduced capacity. We need to wait and see what the rest of the industry does, but the trends suggest. And again, I think the overall financial situation of most of the domestic market suggests that you'll continue to see less capacity in the industry.

But until we see that, it's hard to gauge what we're going to do for 2026. [ id="-1" name="Operator" /> Our next question is from Savi Syth with Raymond James.

Yes. And actually, I would add, in fact, I answered the question just on a RASM basis, how you get back to double-digit margin. But on the cost side, we're carrying several points just this quarter right, of cost and that translates straight to margin because of the excess pilots, because of excess flight attendants, we've got too many staff right now because we've planned to be larger close in, and this is a significant drag on our CASM at the second.

To answer your question, flexing up or down, you can always flex down, but you end up in a situation like this where if you do it close in as we have done, then you carry all that extra cost. And so I can tell you that we are not going to be hiring and adding to that problem. We will bring in some aircraft, not increasing day 2 through 6, but increasing the peak days of flying and use that excess over the next year.

And so you will get to the point where we will have plenty of aircraft to add capacity. But if we needed to increase capacity, the lead time on that once we get properly staffed and rightsize on the staffing is probably in the 6- to 8-month range. And the reason for that is flight attendants are much faster, but the long pole of intent on growth to increase utilization is on the pilot side. And you -- it's just a simple cycle.

You have to hire a first officer. You have to bring them in, get them trained, get them on the line. That then pops a spot, if you will, to upgrade an existing first officer to a captain. And if that cycle takes between 6 and 8 months from recruiting, making the decision and so forth. So it's probably a 2-quarter decision in the future if and when we see demand come back. But we're not planning on an improvement in demand to get back to our profitability.

We're planning for what it is, and we're planning for a similar utilization for right now unless we see things change. [ id="-1" name="Operator" /> One moment for our next question. And it comes from Duane Pfennigwerth with Evercore ISI.

Yes. Thanks, Dun. We're seeing -- and part of this is because we've -- I think we've rightsized our capacity probably more than most and probably got it nailed down. We're seeing increases in load factors. You saw that in Q2. We're seeing that materially now. We are consistently on peak days of booking to the high 80s, low 90s. And so we've seen it in load factor. But what's driving the double digit actually as we look forward, and I'm actually staring at a report for this morning and for today's sales and yesterday, it's actually the yield.

The yield is what's driving the biggest part of that. So we're seeing a few points of load factor, but what's driving double digits is actually you're seeing more than double-digit jumps in revenue per passenger. And by the way, that would include fare and ancillary.

Yes. So this started mid-July. We got about 3 weeks into it. This is for all future sales. So total sales for the last several weeks for all future periods. So yes, July was gone by that point. And that's why I made the comment earlier. I wish we could report by month. You would -- I think everybody would see what we're seeing, which is now that we're starting to get to fall and starting to see the benefits of all these capacity reductions, it is rightsizing demand with capacity is actually really starting to bear fruit.

So yes, it's all future periods. And so in our particular case, with our capacity down for all future periods to see sales up year-over-year, that kind of number, it's meaningful. Again, it's a new trend, and it's been a challenging year, but we're cautiously optimistic when you see these kind of numbers in the last few weeks.

Yes. I think it's been widely reported, but Las Vegas seems to have had some challenges. And it's probably the most pronounced on a leisure basis. I think conversely, we're seeing, obviously, your VFR markets and maybe their business markets, depending upon the airline, the big guys might call the business market. We're seeing a lot of VFR traffic being very strong. So kind of tough in Vegas, and I think everywhere else is actually really, really doing well. [ id="-1" name="Operator" /> Our next question comes from Michael Linenberg with Deutsche Bank.

Well, July is in, but -- and the first part of August is in, but we still have a decent amount of sell in the back 2 weeks of August and a lot to sell in September. Obviously, with the trends we're seeing, that's why we said if this holds up, we could clearly be to the high end of that guidance. But to your point, like we've been burned in the last 6 months in this industry in the domestic market. And so while we're optimistic, yes, we can hit -- I mean, obviously, when we put out a range like that, we all get together.

And Mark and Jimmy and Bobby and all of us look at this. And we are staring at some just big numbers, like when we look at the yield right now for August, the yields for August are up 5%. But the yields for September are up 15% right now. If that holds up, fantastic, Michael. But I mean, it's still a little early. And so that's why you get a larger range. And yes, I could have told you 5% to 7%, but I mean, I've heard in the last 6 months, I saw a dip in June, we didn't expect.

And so I'd love for it to be towards the higher end, but I've got to be realistic on recent history. When we saw the Gaza and we saw in Israel and there was consumer sentiment and things changed in the middle of June, you know what, kind of corresponded with sales in June. We've seen it come back, and now it's doing great. So it's -- we're in a month-to-month consumer sentiment game, I think. But right now, consumer sentiment is good.

And I think where I'm a little more optimistic even than just the demand environment is I think we're finally starting -- we're going to see the benefits of the competitive capacity coming out. I mean we're finally starting to see -- I mean I'll give you an example. I mean, South Florida, I mean, we opened a base kind of pre-COVID in Miami. And then in the middle of COVID, everyone decided Southwest Jet Blue Spirit, they all decided to all start flying in Miami.

I mean we're finally now seeing that kind of little battle all unwind, and you're starting to see all of these little battles across the U.S. that kind of took place. We're seeing all these competitive dynamics, all everybody is finally realizing that things are going to get back to normal and -- but we need to get capacity rightsized with demand. So we're really encouraged. But yes, we're just giving you the actuarial range based on history in the last 6 months.

We believe, looking at everyone's numbers and unpacking that, that everyone right now is losing money domestically. There are 2 carriers that are subsidizing it significantly with international. But I think as you have seen, the domestic marketplace without international or international codeshare or other benefits, they are not trending well. So history shows that this will not continue. And that's why we look at this and we say we've got one of the cleanest balance sheets in the industry.

And so we see plenty of opportunity for the carrier like Frontier to come out the other side of this because there's going to be a huge opportunity for the lowest cost provider. And I think there's going to be a lot less low-cost capacity competing with us. And I think there's going to be a lot less even legacy capacity in the United States because there is domestically too many narrowbodies in the United States, period. [ id="-1" name="Operator" /> Our next question comes from Scott Group with Wolfe Research.

The model needs growth to work. I think it works a lot better with growth, obviously. The whole airline industry has shown that forever. But I think I'm going to go back to before kind of the crisis that hit the United States earlier this year, we were up 20%. Our RASM was up 20% year-over-year in January, 20%. That fell to almost flat by the time we got to -- I mean it was a precipitous drop, went negative year-over-year in March, and went negative year-over-year in April, went back, say just positive then in May and June, slightly positive in July, now wildly positive in August.

And sequentially, as I just mentioned, we're looking -- we're starting up 15% yields in September right now in advanced sales. So I think once you get past kind of the economic shock that we had and the excess capacity, we think that we're going to be probably the best position in this marketplace because, again, just like the last question, we believe that the domestic flying for everyone is not producing positive margins today. You can't count the international flow.

I'm talking about on domestic fares in the domestic marketplace, we believe that the entire industry is not making money. You can't -- if you take out your code share, take out your international flow, all that, the domestic is not making money. And that's because there is too much supply relative to demand. However, as we have seen, the industry keeps as it always has, it will react to this. And unless you see a meaningful jump in demand, there's going to continue to be reductions in capacity in this industry.

Because July was not. Sales fell off in June for June and July, but it hit July the most. In fact, the first week or so of July, our sales were down year-over-year. July was kind of the month that didn't happen this year. Now again, unfortunately, there were plenty of things. There was a war breakout in the Middle East and all kinds of other things and consumer sentiment fell in June. It was probably the worst time ever.

But this is why I said a moment ago, I'd love to report monthly instead of quarterly, but also you're looking at revenue, not sales. And I think oftentimes, I think there's not a great understanding of revenue versus sales. Revenue is what you sold maybe 6 to 12 weeks ago and what you're flying now. Sales are a predictor of the future. And so as long as the sales trends hold up as the whole industry has reported over the last several weeks, we have seen the same thing.

And I said, I guess we're one of the last ones to report so we can kind of put a punctuation on it. Yes, starting in mid-July now for several weeks, sales are up materially year-over-year. If that trend were to continue, you're going to see a meaningful jump in RASM year-over-year. As I said just a moment ago, our yields for September on a forward basis are up 15%. But we haven't booked that much September yet. There's still a lot of September to go. But if these trends hold up, we're going to have a great remainder of the year.

Look, I don't know. I haven't followed the M&A across industries. I have to believe there from what I understand, more accepting than the last administration. Setting that aside just in our industry, yes, I think if you look in history, there's going to be and continue to -- there already is and there's going to continue to be reductions in capacity. And one of the mechanisms that helps make that easier to do is consolidation. [ id="-1" name="Operator" /> Our next question comes from Atul Maheswari with UBS.

It is. It's absolutely. I'm going to repeat kind of what I said a moment ago. If I look at the sales trends through the year and the revenue trends, we started off the year fantastic. We had the kind of the episode in the spring, then it recovered kind of late April into kind of the end of May, early June, then kind of around -- pretty much -- I think it was around the June 10 or so to kind of the 10th of July, really that 30-day period, we saw a significant sales slump.

And that hit July, which is -- I don't know the exact number, 36%, 37%, it's over 1/3 of our quarter. And on a capacity basis and then on a revenue basis, it's closer to half. So we took a significant hit to sales in one of our best months of the year. And I'm not ruling out making money in the second half, but when that happened, while we now are seeing huge improvements in sales. And as I mentioned, I mean, these are staggering numbers to be -- for our yields to be up 15% in September, these are big numbers.

If that -- obviously, if that trend goes through the fourth quarter, we are going to make money through the second half, but we're just cautiously optimistic. As I said a while ago, we gave a 4-point range because if I actually look at this year and the volatility we've seen, that is a more accurate range. If I had to give you a range for the full balance of the year, it will be even wider than that because of the variations.

But again, I'll say this, I agree with you, given the current trends, barring any other major exogenous event or kind of economic slowdown that we're not -- hadn't already seen and continuing to see a favorable capacity backdrop, yes, it's still on the table. We're just not guiding the fourth quarter yet.

Yes, it continued to improve through the whole quarter. In fact, one of my directors in revenue management one day, I was walking through there, and he was just so -- he was glowing. I think this is early June -- late May, early June. And so what's going on, I think it was the Sunday after Memorial Day. So it wasn't even a great period. It's like we booked a 94%. We haven't booked to a 94% on a non-holiday in a long time.

So yes, we're seeing really good momentum and traction for our product. I mean if I take out kind of the slump for July, yes, we're seeing good results. I mean we said this earlier, but in the year, when it happened, but one of the largest carriers in the United States is now charging for bags on its primary -- on a check bag basis on its primary product. So now the new Frontier in our product lineup of how we sell of having a basic product, an economy product and some premium options, we're on a level playing field and customers are figuring that out. And so we're seeing greater demand for our product as our product mix and what we charge for those relative products is the best value in the industry.

Yes. So I think one of the things that we have is a tailwind for us, I mean, that shape of capacity, even flat capacity is actually better seats. So what you have to remember, we're using lower utilization with more flying on the peak days. So what that enables us to do is to command a lot better load and a lot better yield. And so that's why I think we will be an outlier on a performance basis because of what we've done and the actions we've taken to get rid of our own excess capacity. [ id="-1" name="Operator" /> Our next question is from Brandon Oglenski with Barclays.

Yes. Look, listen, I don't take offense. I mean, I didn't buy wide-bodies 10 years ago, and maybe I'd love to have them, but I think history shows that there's periods of time where international is really good. If I go back to the late '90s, the legacies were minting money on international, it really helped. Their corporate was really good and low cost actually underperformed. You flipped a few years later and well, those fortunes change.

I think what's become clear, and we actually think the model is now vindicated, is this is not a model issue. If you go look under the hood, this is a domestic oversupply issue, period. And what we now see is that these larger carriers and small, in some cases, competitors will be reducing capacity in the United States. full stop. And we then with the lowest costs and one of the cleanest balance sheets will be a huge beneficiary of that.

So I think it's always darkest before the dawn. It's been a very difficult year, but it's starting to become clear that Frontier will be the winner when we move into 2026. And there's no one in the ultra-low-cost space that is going to be our size, scale, our cost structure and our relative cost advantage, there's going to be no one that can win in the domestic like us. And I'm just telling you, history shows you will not see this oversupply for a long time, and we'll want every one of those airplanes when it starts to become our turn.

Yes, I think I answered what you're hinting at on the last one a moment ago. But look, I think there are strategic things that others may do. I think there's been moves by some others, the kind of precursor for some potential consolidation opportunities. But ultimately, I think this is a situation where supply is going to come out. Are we fully stimulated? It's funny. I mean we went through all the places we're not flying, and we're kind of filtering through today places we're not flying.

We're not chasing places that have ultra-low-cost carriers in them, where we can stimulate. And yes, there is a significant part of the United States and near international that is still kind of untapped, if you will. And so there's more than enough, we believe, for our growth. And we don't think that anyone else in our space is going to be growing to fill that void. And I think it's going to be, again, against a backdrop where fares are going to go up across the industry because everyone is going to be chasing margins, and that is going to give us more room to move our fares up as well. [ id="-1" name="Operator" /> One moment for our next question that comes from Jamie Baker with JPMorgan Securities.

Yes. So thanks. Good question. Look, there are plenty of other airlines, one based in Dallas, there's one based in Atlanta and ourselves that probably buy airplanes probably one of the best in the United States. And components and engines and all the things go with them, and we tend to probably be on the tighter end of what we pay. And that's what drives the sale leaseback gain, okay? And in other cases, other airlines, it's embedded in a lower cost of ownership.

We have spent a significant amount of time illustrating this that whether we did sale leasebacks or whether we did debt finance, we would have an advantage because we buy everything lower than we believe on a benchmark basis. And so I don't believe because we didn't see in recent years the ability to raise that because of -- I mean the market prices haven't gone up that much. So I don't know -- I mean, I would take exception of that comment.

We are, however, having said that, we are always concerned about things in the future, and that's why Mark made a point to explain how far out we are now in committed sale-leaseback transactions. We tend to stay 12 to 24 months way ahead of the airline. So we have firm commitments on all of those. So we don't see a challenge in that regard. And so if there's any kind of slump, I think we've got committed financing to it.

And then quite honestly, there might be a bank, possibly yours, Jamie, that if the market wasn't there, we could flip to a financing world. So if that were to happen, we would potentially go the other way. We're going to have the lowest cost of aircraft ownership on a per seat basis of anybody in the industry, period. And we will achieve that through whatever financing is available in the marketplace, but we do kind of hedge, if you will, by staying ahead way in advance on committed transactions.

Yes. The only thing I would say on the aircraft, I mean, Jamie, what we've seen in the past, right, when these kind of situations and we can't -- we don't have to debate which one of us has been around longer in this industry. But what typically happens is that -- and one of your competitors puts out a chart every now and then that shows, I think it's 17 -- the value of a 17-year-old aircraft. That's where the market -- if you want to say something has gotten frothy, I think that's where it's frothy, right, is these end-of-life -- the end-of-life -- the values of these end-of-life aircraft has gotten very high.

I do think you're going to see a lot of those parked or parted out or moved out. And I think if there's a change in residual value or financing abilities, it's probably on that end, not on the new stuff because typically, what happens is when people are skinny down, they're going to want the most fuel-efficient stuff. And so if you've got the latest next generation, that's what people want.

Yes, it did actually -- yes, I mean, it could cause other volatile craziness. But yes, we thought about it. Yes, I think what's happened this year, we've talked about it. We don't want to overreaction up or down. I think it's -- again, I'm going to say it again, probably the best way to say this, we are cautiously optimistic. Jamie, the numbers -- I mean, I just -- we just gave you the facts, interpret them how you want.

But we're staring at these massive double-digit yields over the next 30 days or so, and we're like, wow, if that holds up, we're starting to see a change. I think the other thing that's happened, too, Jamie, I mean just to kind of put a footnote to this, is what we're finally seeing, and there was kind of a question about stimulation a moment ago. What we're finally seeing, I think the industry has figured out that 79 is the new 49 and 99 is the new 79.

I mean there's really no need. I mean we've seen the data on this. In fact, we ran a sale, I think it was about a month or so ago, maybe 6 weeks ago, and we dropped the fare and the total dollars stayed the same. Yes, you got some more volume, but it's just -- you get so low. And I think that's what happened over the last few years. I'm not going to name names, but I think the levels have just gotten silly. I mean when you've got a $29 fare, by the time I take out PFCs and I take out taxes, that's only $15 to the airline.

I mean you don't make it up in volume, right? You don't make it up on $49 fares. And so when the big airlines are running $49 sales every week, I think you've seen those slow down because I think they've discovered the same thing as us is they're not actually accretive. You just -- you can't make it up in volume. And so that's why you've seen -- I mean you go out and look, I mean, on a year-over-year basis, for those of you that kind of watch scrapes and so forth, that's why you've seen the fares come up because you don't make it up in volume, and that's one of the big things that I think is benefiting the industry.

And I think as you clean up the capacity, then you clean up the pricing, and that's how this works. [ id="-1" name="Operator" /> Our next question comes from the line of Chris Stathoulopoulos with Susquehanna.

Yes. So a couple of questions there, I guess. So first, on the 3 points, it wasn't certain markets. That is all of our markets. So if you go look and you do a capacity weighted industry capacity in Frontier markets. So I recognize that the industry is closer to flat or slightly down. Our markets, it's actually down almost 3 points going into the fall. And we expect that to accelerate as we get into winter with kind of the tea leaves of what kind of we've seen, if you will, from the competitors that are making those changes and so forth.

As far as the shape of the capacity, we are flying down -- we are now down on Tuesday, Wednesdays going into the fall. We're only going to be flying around 3 or 4 hours on Tuesday, Wednesdays. And that's not all the way down to maybe an Allegiant level. But at the end of the day, the best way to stop losing money is stop doing things that lose money. And the things that we've been doing to lose money is, quite honestly, is flying on Tuesday, Wednesdays and not covering our variable cost.

And this has gone on for a while, and we kind of keep chasing it. But we finally think we've gotten to that level. I'm sitting here today, I mean, on a Tuesday, and I look at the report this morning, we're booked to 88. So did we go a little too far? Maybe, I don't know. But a year ago, we were at 7 or 8 hours. And all I know about picking the forecast, I know you're going to be wrong, 3 or 4 hours may be too low. Maybe the answer needs to be closer to 5, maybe 6.

I don't know. But as I've joked with everybody, when you show you can fill up airplanes on a Tuesday, I'll let you add some more. And so if we continue to run in the mid- to upper 80s on Tuesdays, we might add a little bit more. But my commitment, as I've said before, is we are going to match capacity to demand, and we're going to get back to profitability. And that right now means flying maximum on the peak days and on the off-peak days less.

And we've got to figure out. We've got to dial in what that is because when you go too low, it's probably going to impact our CASM too much. If we can cover the variable on Tuesday, Wednesday, we probably should do it. So I think it will probably take us a quarter or 2 to keep that dial in, if you will, and what the number is going to be, but it's probably north of where we are now, but still south of 7 or 8 hours. So I'm guessing the real answer is probably going to be in the 5 to 7 hours. But as far as next year, again, it's too early to say on next year.

Yes. On the fleet, it's -- Mark, we've got...

But we do take a step back a little bit shortly because we're taking a higher mix of 320s over the next

But in the near term, that will be accretive for load factors as we kind of take our foot off the gas a little bit on the gauge, continue to drive the loads higher and higher with the other commercial things that we've done. So -- but yes, in the out years, it will be more 321.

Yes. Look, I mean, if you've got higher cost than us and you're in a similar business model, that's probably -- Kmart didn't do itself any favors opening stores next door to Walmart, right? So that's not a really good strategy. So I suspect that we'll continue to see that improve. But yes, on the revenue management side, I think it's very clear, right? Classic PRM you got to get full to drive yields generally. There's examples and there's markets that do well at a 60% to 70% load and really high yield and so forth.

But those are, in our business, very small percentage, I mean, less than 5% of the system. The majority of the time in our business, we tend to find that we stimulate enough to get full. And then once you're full, start to work on the yield. And the challenge we ran into in April is we ran some of the lowest load factors in -- I think, since COVID, actually. And so it took a few months to kind of repair that. By the time we got to early June, we had done that.

And in fact, we're running some of the highest loads, as I mentioned earlier, some of the highest loads we've run in years. We then were able to start translating that into yield, saw, again, as widely reported by everyone, saw a little bit of slump in sales in mid- June to mid-July. That has now reversed and actually come back even higher than we were on a trend basis before. But when you look at the RASM benefit that we're seeing, and we put out a guide that is up to high single digits, that is a couple of points in load, but the majority of that is yield.

And in this particular moment, what we're seeing is a couple of points in load. And as I mentioned a while ago, the August yields are up 5% year-over-year, September forward yields are up 15%. And by the way, I think that's going to roll through to the fourth quarter. But in the fourth quarter, you'll get kind of the full benefit of it, right? Because we didn't change the capacity meaningfully until kind of actually next week.

So the back half of this quarter is finally seeing the benefit and the fourth quarter will get all that benefit. [ id="-1" name="Operator" /> Our final question comes from the line of Tom Fitzgerald with TD Cowen.

Look, I mean, we're always -- we're paranoid people. We're always looking at the downside. I think you almost have to think about it as a flow chart. If this happens, then what if this happens, then what? What we're excited about is that, that could happen. Let's say that does. Do you realize how much domestic capacity is then going to come out? And so I'll just point out again, we've got one of the cleanest balance sheets in the industry.

We are going to be last man standing in the low-cost space when you get to next year. No one is going to have our cost structure. No one's going to have our balance sheet, and we see that the capacity -- it may not come out by next spring, but it's coming out. And history shows it actually will be out by next spring, maybe it goes a little further, but I can't imagine that. I just don't believe that the balance of the industry is going to accept money losing flying for a full another year. [ id="-1" name="Operator" /> And this concludes our Q&A session. I will turn the call back to Barry Beffel for closing remarks.

Thanks, everyone, for joining. We appreciate you being on, and we look forward to talking to you next quarter. Thanks, everyone. Have a great day. [ id="-1" name="Operator" /> Thank you. And this concludes our conference. Thank you for participating, and you may now disconnect.