Financial Data and Key Metrics Changes - The company reported its twelfth consecutive quarter of profitability, achieving a total revenue of $263.6 million, which is 3.6% higher than 2024 despite a 0.5% decrease in total block hours [14][15] - The GAAP pretax margin was 3.2%, and the adjusted pretax margin was 3.9%, marking the third consecutive quarter of total revenue growth year-over-year and improvement in pretax margin [14] - Total operating expenses grew by 2.2% with adjusted CASM increasing by 11.3%, heavily impacted by a 6.2% decline in scheduled service ASMs [18][19] Business Line Data and Key Metrics Changes - Revenue from the passenger segment, including scheduled and charter services, decreased by 0.8% year-over-year, primarily due to reduced scheduled service operations [15] - Scheduled service TRASM increased by 3.7%, with total fare rising by 6.5%, offsetting a 1.3 percentage point decline in load factor [16] - Charter revenue grew by 6.4% to $54.3 million, supported by a 7.9% increase in charter block hours [16][17] - Cargo revenue surged by 36.8% to $34.8 million, marking the highest quarterly cargo revenue in the company's history [17] Market Data and Key Metrics Changes - The company expects third quarter total revenue to be between $250 million and $260 million, with block hours projected to increase by 5% to 8% [21] - The anticipated Q3 fuel cost per gallon is $2.61, with an expected operating margin of 36% [21] Company Strategy and Development Direction - The company aims to grow its cargo business significantly, expecting to double cargo revenue once additional aircraft reach mature utilization [7][11] - The strategy includes maintaining a flexible capacity allocation between segments to maximize profitability and minimize earnings volatility [21] - The company is focused on organic growth opportunities and maintaining a strong balance sheet to capitalize on potential disruptions in the industry [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving approximately $1.5 billion in revenue, $300 million in EBITDA, and $2.5 in EPS by 2027, contingent on fleet utilization and demand [11][12] - The management noted that the current operating environment remains strong, with bookings showing year-over-year improvements in unit revenue [51][56] - There are expectations of a potential shakeup in the low-cost carrier space, with the company prepared to act on asset acquisitions or organic growth opportunities [66][68] Other Important Information - The company has a total liquidity of $206.6 million and plans to pay down an additional $44 million in debt by the end of the year [19][21] - The company does not anticipate purchasing additional aircraft until 2027 and beyond, focusing instead on optimizing current resources [19][20] Q&A Session Summary Question: Can you discuss the path to $2.50 EPS and its dependence on industry conditions? - Management indicated that long-term revenue forecasts include a general inflation tailwind of about 3% and are based on stable utilization and growth assumptions [23][24] Question: How is the peak season shaping up for Amazon revenues? - Management noted delays in asset utilization and entry into service dates, affecting the fleet's commitment [26] Question: What is the strategy regarding industry capacity and potential opportunities? - The company plans to execute well and remain nimble, focusing on organic growth opportunities as they arise [33][34] Question: Can you provide insights on margin improvement and cargo ramp-up? - Management expects the fourth quarter to be a good measurement point for cargo ramp-up, with pilot availability being a key factor [39][42] Question: How do you view the competitive landscape and capacity trends? - Management observed that many airlines are not extending schedules past January, leading to a favorable capacity environment for the company [82]