Daniel Cravens William Douglas Parker - Executive Chairman, Chief Executive Officer, Chairman of Labor Committee, Chairman of US Airways and Chairman of AWA Derek J. Kerr - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Chief Financial officer of America West Airlines Inc J. Scott Kirby - President Robert D. Isom - Chief Operating Officer and Executive Vice President Stephen L. Johnson - Executive Vice President of Corporate & Government Affairs

Hunter K. Keay - Wolfe Trahan & Co. Jamie N. Baker - JP Morgan Chase & Co, Research Division Michael Linenberg - Deutsche Bank AG, Research Division Helane R. Becker - Cowen Securities LLC, Research Division Glenn D. Engel - BofA Merrill Lynch, Research Division Savanthi Syth - Raymond James & Associates, Inc., Research Division Daniel McKenzie - The Buckingham Research Group Incorporated John D. Godyn - Morgan Stanley, Research Division Jeffrey A. Kauffman - Sterne Agee & Leach Inc., Research Division

Good day, everyone, and welcome to the US Airways First Quarter Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] And now I would like to turn the conference over to your moderator, Managing Director of Investor Relations, Daniel Cravens. Please go ahead.

Thanks, Dana. And welcome, everybody to the US Airways First Quarter 2013 Earnings Conference Call. Joining us on today's call are Doug Parker, our Chairman and CEO; Scott Kirby, our President; Derek Kerr, our Chief Financial Officer. And also in the room for the Q&A -- or on the call as well for Q&A are Robert Isom, our Chief Operating Officer; Elise Eberwein, our EVP of Corporate Communications -- or People and Communications; and Steve Johnson, our EVP of Corporate. Like we typically do, we're going to start with Doug, and he'll provide an overview of our financial results. Derek will then walk us through the details in the quarter and provide some color on the -- on our 2013 guidance. Scott will then follow with commentary on the revenue environment and our ops performance. And then after we hear from those comments, we will open the call for analyst questions and, lastly, questions from the media. But before we begin, we must state that today's call does contain forward-looking statements, including statements concerning future events, our future revenues and fuel prices. These statements represent our predictions and expectations as to future events, but numerous risks and uncertainties could cause actual results to differ materially from those projected. Information about some of these risks and uncertainties can be found in our earnings press release issued this morning; our Form 10-Q, which was -- for the quarter ended March 31, which was also issued this morning; and our 2012 Form 10-K. In addition, we'll be discussing certain non-GAAP financial measures this morning such as net profit and CASM, excluding unusual items. A reconciliation of those numbers to the GAAP financial measures is included in the earnings release, and that can be found on our website at usairways.com, under the Company Information, Investor Relations section. A webcast of this call is also going to be archived on our website. The information that we're giving you on this call is as of today's date, and we undertake no obligation to update the information subsequently. Thanks, again, for joining us. And at this point, I'd like to turn the call over to our Chairman and CEO, Doug Parker.

Thank you, Dan. And thanks, everybody, for being on. First, I want to note that I'm in New York City with -- and Steve Johnson is here with me. The rest of the team, Scott, Derek, Robert, Elise and Dan, are all in Tempe. So I just note that in case, when we get to the Q&A, if we sound a little more disjointed than usual, that's why. But I'm sure we can manage through. Anyway, thanks again for being here and listening in. We are pleased to report a record profit, excluding special items, for the quarter of $55 million. That compares to a loss of $22 million, excluding special items, last year, so tremendous improvement. That's due to the US Airways team that's doing a phenomenal job of taking care of our customers, which is driving the record results. And we, of course, are very thankful for their efforts. The -- of course, the biggest news this quarter was our February announcement of the merger between US Airways and American Airlines, which will create the largest airline in the world and a highly competitive alternative for consumers to other global carriers. Bringing together our 2 complementary networks will result in significant benefits for customers and employees within American and for the communities we serve. We've made a lot of progress since announcing the merger in mid-February. The first important milestone was receiving bankruptcy court approval on March 27 to proceed with the merger. And as you saw last week, the preliminary proxy and the S-4 registration statement were filed with the SEC, and American filed its plan of reorganization and disclosure statement with the court. Our work to get antitrust and competition approvals is on track. We filed with the Department of Justice on January 31. As expected,…

Okay, thanks, Doug, and good morning, everybody. As is our custom, we filed our first quarter 10-Q this morning. And in that Q, as Doug said, the company recorded a record first quarter net profit, excluding special items, of $55 million or $0.31 per diluted share versus a net loss, excluding special items, of $22 million last year. This represents a $77 million year-over-year improvement or a 230-basis-point increase in our pretax margin. On a GAAP basis, the company reported a net profit of $44 million or $0.26 per diluted share for the first quarter of 2013 versus a net profit of $48 million or $0.28 per diluted share last year. Company did recognize approximately $11 million of net special charges in the quarter. Please refer to the tables included in our press release for the details on the special items. For the quarter, total capacity was 21.4 billion ASMs, up 1.3% from 2012, primarily due to larger-gauge aircraft and longer average stage length, offset by fewer departures. On mainline capacity for the quarter was 18 billion ASMs, up 1.4% from a year ago. Express capacity was 3.5 billion ASMs, up 0.8% from 2012. We ended the quarter with 346 mainline aircraft in our fleet, and we'll continue our fleet replacement plan throughout the year. We will retire 21 aircraft this year: 18 737-400s and 3 767 aircraft. There's a slight switch from previous guidance to replace our older A321-1 aircraft. We're now going to replace 3 767 aircraft. And we will take delivery of 5 A320s, 16 A321s and 2 Embraer 190s. By year end, we will only have 14 legacy 737-400s left in our fleet, all of which will be retired by 2014. In the first quarter, we did take delivery of 4 A321s and acquired from Republic…

Thanks, Derek. And before discussing the revenue environment, I'd also like to thank all the people of US Airways for all the hard work and the great airline that we continued to run during the first quarter. Turning to the revenue environment, I'll start with a review of Q1 and then give you a little bit of commentary on the outlook going forward. Demand remained strong in the first quarter, but RASM did underperform our initial expectations. As we commented in our traffic releases, we saw a decline in business demand that began in the weeks leading up to the sequester. While it's impossible to say for sure how much impact the sequester had, we do know that government revenue was down 37% in March, so that was partially driven by the Easter shift. Government revenue is about 3% of total revenues last year, so on its own, that decline is meaningful to the system RASM. But the real impact is probably magnified because there's obviously a lot of government-related business that isn't government employees, and we believe that this travel was impacted as well. The good news, however, is that underlying demand has remained strong. Business demand is much more volatile than leisure demand and is subject to headline volatility. As we've seen in the past, when the headlines are bad, we see business demand drop off quickly, but when the headlines are good, it also bounces back quickly. Leisure demand, on the other hand, is much more stable, and I think is a better indicator of the strength or weakness of the underlying economy. As long as leisure demand remains strong, it usually indicates that the economy is at least doing okay, and that eventually translates into good corporate results, which translates into increasing business demand. And the…

Thanks, Scott, and thanks, Derek. We are ready for questions now, operator.

[Operator Instructions] We'll go first to Hunter Keay. Hunter K. Keay - Wolfe Trahan & Co.: Scott, did you say June, July, or May, June was flat to down 2%? Was it...

I said June, July, but I meant May and June. Hunter K. Keay - Wolfe Trahan & Co.: Okay, good. So I'm going to start with a stat here and lead into a question. I don't know if you realize this, but when the America West merger closed, America West employees were 29% of your employee base. Now as you look forward to this merger, US Airways are 29% of the pro forma employee base. So Doug, can you tell me what you did to ensure that your culture survives that merger? And if you want to give me some specific examples, that'd be great. And can that work on a bigger scale with this merger?

Yes, Hunter, look, the -- I don't know that I'd just give the numbers you rattled off say that it certainly represents a change in the culture. I thought this culture at US Airways had a lot of positives, and indeed, we tried to take the best of each and built an airline that now today we're really proud of. So and I think that's the -- that's going to be the case with American and US Airways. We certainly are proud of what we've built at US Airways. The American team is rightfully proud of what they have there. In most cases, what you find as you go talk to people is they're incredibly similar in that both have really great groups of professional employees who care about running airlines and taking care of customers, and that's something we'll build on. We have some cultural differences in the management teams, of course that we all recognize they're there, and -- but each of them have their benefits. And we're going to try and meld those together and end up with the best of both. Hunter K. Keay - Wolfe Trahan & Co.: Okay. And maybe, Scott, this one's for you. I'm looking at the capacity guidance, and you guys are still looking up about 6.5% on an ASM basis in the fourth quarter. And American's going to be growing probably mid-ish-single digits at that point. I mean, that's a lot. That's -- we're talking about some pretty meaningful capacity growth at that point in time. And given the decelerating RASM that we have here, I guess, I'm hoping you can convince me why I shouldn't be concerned about this and what sort of flexibility you might have maybe as it relates to the labor agreements you have in place or not to adjust that capacity as we go into 2014.

So for the fourth quarter, you do see a relatively large capacity increase for us. At the same time, I'd point out, you see large CASM decline for us. So a lot of our capacity increase is driven by having more seats on the airplane, on average. That's true throughout the year, but also true in the fourth quarter. And the first and second quarters, we've got about 2% more seats per departure on our aircraft, which has a depressing effect on RASM but has a much larger effect on CASM. And so that's very P&L positive, and you can see that reflected in our first quarter results. For the fourth quarter, we do have a lot of flexibility. We have a lot of time between now and then to prune capacity if we want to. Under the existing US Airways agreements, we have flexibility to reduce capacity if we need to in the fourth quarter, some flexibility. And assuming the merger closes, we will have even more flexibility to reduce capacity in the fourth quarter because our agreement, the restrictions we have on minimum fleet and minimum utilization are changing. And in particular, they're going to a rolling 12 months, as opposed to a month-by-month calculation, which gives us a lot more flexibility. So the fourth quarter, we're telling you what our plan is today. You see really strong CASM as a result. But we have a lot of time between now and then to adjust that based on what the macroeconomic outlook and fuel outlook are.

And we'll go next to Jamie Baker. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Scott, even before sequestration, I think many of us were growing frustrated with revenue performance. It just seems light relative to how much consolidation has taken place. And I asked Delta about this earlier today, as to why the industry isn't extracting a greater share of revenue as a percent of nominal GDP. Their answer was kind of along the lines of "Well, it just takes time." So I'm curious as to your take on why air travel spend seems pretty stagnant here, whereas rental cars, hotels, rails back in the day, waste management, when I think of other sectors, they just seem to be doing better in terms of pricing. Any comment on that?

Well, first, I don't know that I would attribute -- agree with the attribution to consolidation or not for this answer. But I'd start with the fact that US Airways just reported an all-time record first quarter profit; Delta, I know, today reported -- at least I think that they said that their first quarter profit in over a decade. So if you look at the bottom line results, I think airlines are doing quite well today. It is true that, relative to total GDP, our percentage -- our revenue as a percentage of total GDP remains below where it was a decade ago. And I think that's recovering independent of consolidation, that that's recovering back to that level. It's not a smooth ride, but from where we were in 2009 to today, it's made quite a recovery. That continues. There also tends to be a correlation, with a little bit of a lag, between fuel prices and the economy. So when fuel prices go up, our revenues go up pretty soon thereafter within 2 to 3 months. And it's less rational, I suppose, although maybe it's because of economic weakness, but when fuel prices come down, sometimes, the revenue momentum slows as well. So there may be some of that happening right now. Clearly, right now also, sequestration and just the uncertainty that, that creates not only for the direct impact of government travel, but the uncertainty, that creates noise around the data. There's more volatility, I think, in airline revenue data than some of those other data sources. But I feel like we're on a good trend even if it's not always a straight line up. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Okay, that's helpful. And as a follow-up, when you updated Q1 guidance in early April, one of the metrics that had changed over the course of the quarter was the other revenue line. I got the sense in talking with Dan that this might have come as a bit of surprise to management as well. Is that a fair characterization? Has there been continued momentum in this category? What's driving it? Any thoughts?

Well, I know that it was a surprise, but there's certainly been continued momentum. In prior years, for example, we had started to see consumer behavior change with regard to bags, so we had some of that built into our guidance. Baggage revenue was up year-over-year. We've seen significant growth in some of the other ancillary lines, like Choice Seat revenue, which is doing very well. Really, almost all the lines of ancillary revenues grew at significant rates. So we do see strength there. I don't think it was really a surprise, but it was positive compared to, I guess, where we thought when we built the budget for 2013. But we've continued to see and continue seeing strengths in that line. Jamie N. Baker - JP Morgan Chase & Co, Research Division: And any additional new ideas as it relates to ancillary trends?

We always have ideas, but those fall into the category of pricing that we can't [indiscernible]. Jamie N. Baker - JP Morgan Chase & Co, Research Division: Okay. Yes, yes.

[indiscernible]

One thing I'll say is, we said on previous calls, Choice Seats is a big revenue line. It's now running at a run rate of about $100 million a year for us, and it can grow much larger as we expand the scope of the distribution. Today, it can only be sold through direct channels for US Airways. And we now today announced our first partnership where we've got the fifth largest online travel agent that's going to be selling it directly in the booking path. So we're making progress on being able to sell Choice Seats through more distribution channels. And that's one that as we continue to make progress, has significant upside in the hundreds of millions of dollars, to be able to sell more and more Choice Seats through all the distribution channels, which also allows you to sell a higher percentage of the seats on the airplane.

And we'll go next to Michael Linenberg.

A couple questions here. Scott, I want to go back to, you talked about that the trends that you gave us on RASM, where April was, and I think you said May and June flat to down 2%. You said, "Look, that's based on what we saw in March and the first 3 weeks. And we're not assuming any incremental impact from sequester." And I just -- I want to reconcile that with, I know there was the lawsuit by the A4A that wasn't able to stop the process. But I believe, in the documentation, it indicated that, among other carriers, I mean, US Airways indicated that the annual revenue impact would be something like $250 million. Is that -- and again, that's assuming that you don't make it up in various ways, but is that -- would that be an incremental piece? Or is some of that actually finding its way into your unit revenue forecast for May and June?

So first, the $250 million is an estimate of the cost of delays for us, as opposed to an estimate really of customer book-away. And so there's not -- in my guidance, there's nothing that assumes customers will be booking away. It does assume that sequester continues to impact demand, you know that government revenue continues on the trend that we've seen for March and the beginning of April and that business demand affiliated with government travel continues on that same trend. But it does not assume any incremental effect from the FAA furlough issue.

Okay, great. And then just my second question. From the earlier Delta call, they talked about the impact and what it meant for cancellations and how, yesterday, I believe there wasn't a single mainline cancellation but there were a lot of regional flights that were being cut. When we look at US Airways yesterday, was it a lot more regional than mainline? And I guess, maybe the bottom line message here is that small-town America is going to get disproportionately hurt as long as this sequestration or these furloughs remain in place. I mean, is that a fair assessment?

Yes. Let me go, and then Scott or Robert can chime in. I think that's probably a fair -- well, it's certainly true. Given the ability to flight -- to get fewer flights in and out of airports, airlines do -- our -- we do our best to minimize the impacts to as few customers as possible. And what that means, of course, therefore, if you're going to have to just cut back flights, you cut back the smaller airplanes which tend to be in the smaller airports. So yes, small communities will see -- be -- more of the effect from this than others, which is highly unfortunate. And on top of that, I mean, Robert can give you some more details. But we've certainly seen an impact over the last couple days already. We've been able to manage it, thankfully, for our customers. Much like, I think, Delta's said they've been able to manage it as well, but this is the kind of thing -- we have really good people that can manage through situations like this. And you can do it for periods of time. But this can't continue. This is a situation that we will absolutely need to get resolved. It will have an impact on smaller communities in the near term, it's going to have an impact on everybody in the longer term. And we've got -- this doesn't make any sense. And it's something that we have to, as a country, get resolved because it does -- it's not the right thing for the flying public, it's not the right thing for our country. We – it's not the right thing for the FAA to be doing. There are other ways to cut these costs rather than harming the air travel system and the flying public. Robert, do you want -- Robert, you got any details you want to provide on...

Sure. So far, we've only been a couple of days into it, but we've seen an impact. Just on Sunday, late at night, we had a lot of delays out in L.A., shouldn't have been there. We're in programs out on the East Coast and New York. And again, those, in many respects, would not have been there. Just yesterday, for example, and this was really just due to a jury duty, a couple of jury duties and then some sick calls, in Charlotte, with their ATC operations, we really had a slow day in terms of arrival performance out of Charlotte, our biggest hub. So our A14 in Charlotte yesterday was 64%, something like that, and it should have been well in excess of 80%. So the issues that we're dealing with right now are that, look, you can't predict this stuff. You don't know when people are going to be out. We don't have a lot of advance warning from the FAA, there's not a lot of preplanning going on. And the impact, as Doug said, if this continues on for a long time, it's just simply something that we're not set up to manage over a long-term basis.

We'll go next to Helane Becker.

Just 2 questions. One, when will you be able to codeshare with American Airlines? And two, I noticed this morning that United announced a $50 increase in change fees for domestic tickets to $200 and, in some Latin and South American markets, from $250 to $300. Are those change fees something you could or would consider matching?

On the first question, about codeshare, we are working with our soon-to-be coworkers at American to do that as soon as possible. We hope to have that implemented within 5 to 6 weeks after closing. So a lot of planning work going on for that at the moment. And on the second question, unfortunately, that's a future pricing-related action, so I can't comment on it.

I see. When could we think about you moving out of the Star Alliance?

Well, we're working with our Star partners today. Everyone is working together, both the Star partners, US Airways and our future oneworld partners, with the guiding principle of doing what's best for customers and making sure that it's as seamless as possible for customers and that no one has booked a Star itinerary. Anyone that has booked a Star itinerary has everything go smoothly and their flights taken care of before we transition to oneworld. And so we don't have the details yet to announce because there's a lot of work that has to go on with all the airlines of Star and us to make sure we're doing it in a seamless way for customers. But we hope, probably between the next month or so, to have details on that, that we can tell everyone.

We'll go next to Glenn Engel.

A question going back on the FAA. Does this get worse before it gets better because we're going to get more peak season? Or does it get better because they get used to it? And we're hearing just air traffic controllers. Are we seeing problems with the security lines and customs as well?

We've had some customs issues. TSA actually has figured out ways, it appears, to get their budget reduction without impacting the flying public, which is what we'd like to see the FAA do. It does -- again, I mean, look, it's early on, and again -- and we've seen some impact. It's been mitigated by a lot of hard work and it -- but again, I think it gives -- I believe, if that continues, it gets worse, not better. We haven't had any bad weather in the United States for the last couple days, and that would certainly -- weather would make this much worse, bad weather would make this much worse. But look, we're -- I just can't imagine this stays in place for an extended period of time. It's just such terrible policy. And I think there are well-meaning people in Congress and in the administration that don't want to see this happen and won't let it continue. I hope that's right. I can't tell you for certain exactly what's going to happen and how it's going to happen, but this is -- this doesn't make sense for anybody, and everyone knows it doesn't make sense. And there are right-headed people who are working hard to figure out how to make it stop. But it needs to stop. This will absolutely get worse before it gets better. We can handle it for a little while, but this can't continue.

And on the fourth quarter capacity unit cost, how much of that is just distorted by Sandy last year? If I'd normalize for Sandy, what would be the growth of both those things?

How much did Sandy increase our CASM, x fuel, last year.

And I guess it's what's making the capacity numbers look high.

Maybe 1 point. Probably...

I don't -- Glenn, we'll have to get back to you on the exact number. I think we actually disclosed, I just don't remember. Derek is saying about 1 point. And I think it was about 1.5 of capacity, but I just don't remember for sure.

And on the Atlantic, is it still European-driven? Or are you seeing a better balance in terms of the strength in the PRASM gains?

It was very balanced this quarter on PRASM gains for point-of-sale Europe and U.S.

[Operator Instructions] We will go next to Savanthi Syth. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Just on the cargo side. Cargo was up after being down quite a bit for the last several quarters. What drove that? Was that yield driven?

Derek or Robert?

Robert's got it.

Yes. No, so from a cargo perspective, we've seen a little bit of boost on the international front. So it's largely been the return of some of that business. And we don't know if it's a long-term trend or not, but the good news is that we're seeing some strength going forward. Savanthi Syth - Raymond James & Associates, Inc., Research Division: Got it. And then also curious, on the S-4 filing, you had some forecast in there, 2013 out for 5 years. Just wondering what some of the key assumptions were on capacity and in fuel that went into that forecast.

This is Steve. I'll take that one, if you don't mind. The -- just as background, I think everyone knows that there were projections included in American's disclosure statement filing and a summary of those projections are included in the SEC filings that American and we made last week. It's unusual in a stock-for-stock merger, in particular, for there to be projections like that. But as everyone's, I think, figured out by now, there's nothing particularly usual about this deal. It's customary that a debtor in bankruptcy include 5-year financial projections in their disclosure statement traditionally as a way of demonstrating the viability of the reorganized company after it emerges from bankruptcy. And those projections were included in American's disclosure statement that it filed with the bankruptcy court last -- actually, 8 days ago at the same time we filed the S-4. Because that disclosure statement was public and available to the public, we decided that the same information should be provided to the US Airways shareholders, so the projections were included in those SEC filings, and that's why you see the unusual financial information there. In any event, as you know, it's our practice to not elaborate on our SEC filings in any way after they've been filed, and we're going to continue that practice with these filings as well. Savanthi Syth - Raymond James & Associates, Inc., Research Division: All right, understood. Maybe just one last question then. Just on ancillary revenue, what was it in the quarter, the ancillary portion of the...

Did you understand that, Derek?

What was the ancillary revenue in the quarter? Hold up. I've got that, just one second. It was $153 million, and we're projecting for the year to be around $600 million.

We'll go next to Dan McKenzie.

Doug, if I could go back to your government comments, I'm wondering if you can provide a little more perspective. And I guess and wondering -- I guess, in particular, I'm wondering what your political experts in Washington might be telling you about the timing of a potential resolution? And I guess what I'm trying to get at, is it your sense that we might have to wait until we bump up against a debt ceiling again before Congress might act?

Yes, again, I was -- well, Dan, look, I don't have any knowledge -- we're working very hard. All the airlines, A4A is, working very hard to try and get resolution to this. There are a number of different vehicles, the best of which would be legislation. We're encouraged today to see a letter come from Senators Rockefeller and Thune to the FAA, so bipartisan head to the commerce committee asking the FAA to respond to some direct-in-point question. So that's encouraging. Those -- but again, I don't -- I can't tell you for certain, Dan, when it ends. What I can tell you is what we've seen already is gotten, I think, the attention of a lot of people who don't think this is the right thing to happen. And it doesn't take -- and I think anyone who takes the time to look at the facts and understands -- and starts to understand what's going on here understands this isn't what government's supposed to do. And our government is not serving us well on this issue. And there are enough people, I think, in government that, when they see things like that, that it will get remedied. So that's an optimistic thought on my part. I don't have a plan to tell you how it's going to happen. It's just what I hope is the case and what generally is the case in circumstances like this. I know it's not always the case. But that when we have situations like this where the wrong thing's being done and the general public is getting harmed over political issues generally, those political issues go by the wayside, and that's what I hope happens here. I mean, look, to put some numbers on this, the FAA's budget is $16 billion, and they need to get $485 million out of their ops budget and they're getting $160 million out of ATC. $160 million out of $16 billion is causing all this pain. There is definitely -- there are definitely ways the FAA can find that $160 million without causing this much pain to the flying public. And we all know it, and I think -- I'm hopeful we'll get there. So that's all I got, Dan, is the -- nothing concrete, other than to tell you a lot of people are working really hard on it because no one thinks it makes sense.

Yes, I appreciate that. It is a black box. And I guess, Scott, if I can...

Yes, not so much a black box. I mean, there's a lot going on, just it's unclear which box is going to be the one that works.

Yes. Well, good luck, of course. And Scott, I guess, if I could go back to the capacity lever that US Airways has. If I'm thinking about how long it takes for you to potentially pull the capacity lever, to pull capacity down, is that something that you need sort of a 3-month lead to begin responding? Or is it 5 months? Or I guess, at some point, US Airways will have to make a decision about how it wants to respond to capacity. I'm just wondering if you can just help provide some perspective about how we should think about the timing on that.

Generally, we're going to try to have capacity changed 2 to 3 months in advance of the flown schedule. So inside that window, we're much less likely to change capacity than outside.

We'll go next to John Godyn.

Scott, I wanted to ask about the asymmetry in fuel pass-through that we're seeing in the numbers here. If fuel prices had gone up, say, 15% instead of down, like they have recently, given the state of the economy, I guess that we'd be hearing that fuel pass-through would be less than one-for-one and that it would be netting negative for future earnings. But now as we look forward, it seems like you'll be able to hold onto all of the decline in fuel and then some. Can you just elaborate on the market dynamics that are sort of driving this asymmetry?

Sure. There historically has been a little bit of a lag between fuel prices and the revenue environment. We've -- the industry's gotten to where it's more proactive at raising prices when fuel price goes up and so passing through increases more quickly than in the opposite. So I think that probably is the asymmetry; we're better at raising prices when fuel price goes up. When fuel prices go down, if they're going down because of economic, some kind of economic weakness, then it's less likely fuel prices -- or that revenues will go up as a result. But if they're going down because of more supply for fuel or something that's happening with China's economy, then -- meaning that the U.S. economy is staying strong, we're much better prepared to hold onto that because, as long as the supply-demand dynamics for airline revenues in the U.S. are good, it's a lot easier to keep pricing firm.

Well, if we imagined a world where fuel prices sort of declined a bit every year each year for the next few years and sort of all the potential implications for competition, as opposed to one where fuel prices sort of stay elevated and volatile but generally flattish from here, I mean, which one do you prefer? In other words, which one would -- in which one would US Airways generate higher long-term margins and returns?

Well, I'm going to always prefer lower fuel prices to higher fuel prices. I know sometimes the analysts write about the silver lining effects of high and volatile fuel prices leading to capacity discipline across the industry, in particular. I think that capacity discipline would stay there, anyway. Even if you had a couple of years of moderating fuel prices with lower volatility, buying an airplane, a 20-year asset, it's hard for anyone who lived through 2008, 2009 to think of fuel prices as going to be flat and not volatile for the next 20 years. And so I think lower fuel prices are good and would always root for lower fuel prices. That said, as an industry, we have gotten much better at passing on fuel prices. So higher fuel prices are less of a concern than they would have been 4 or 5 years ago because we're better at dealing with it. But again, I'd rather see oil prices lower than high. I'd also add a bit of my own commentary that I think one of the underappreciated impacts of low fuel prices is on the economy. And if you look at the income that people have, especially disposable income, fuel is a huge component of that. And when gasoline prices are low, it -- for me, there's very few things that we can do that are good for the U.S. economy -- more good for the U.S. economy than keeping fuel prices low. And low fuel prices -- high fuel prices are just a tax, they're a regressive tax on consumers and hurt the economy. So low fuel prices, I think, are overall good for the economy and good for airlines.

That's really helpful. And if I can ask just one clarification: You've been pretty clear about what assumptions are in your PRASM guidance for the next few months, but I'm trying to figure out if there's sort of a natural lag impact from everything we've been hit with, sequestration, macro, falling fuel. Or when we think about your June -- or May and June PRASM guidance, you've done your best to incorporate that lag in your projections already. If you could just help me think about that.

So to be clear, I think we've incorporated the initial effects of sequester into our guidance, and we think that's right. What we haven't incorporated is, is there going to be some incremental effect on RASM from the FAA furloughs and delays that consumers will experience. And we're assuming it gets resolved before any of that happens or that we will manage to work proactively, both ourselves and the FAA to manage through that. So there's nothing in it for that, but there is for just the existing sequester. The reduced government travel is built into it moving forward.

We'll go next to Jeff Kauffman. Jeffrey A. Kauffman - Sterne Agee & Leach Inc., Research Division: Just a quick question. Kind of out-of-the-box, but I missed the first comments, I was coming off another conference call: Is this almost kind of a silver lining opportunity here maybe to get caught up on maintenance or out-of-cycle maintenance or maybe get creative with, say, retiring certain aircraft or reallocating the fleet? Or is it just too unpredictable day to day?

What, this -- what, the FAA furlough? Jeffrey A. Kauffman - Sterne Agee & Leach Inc., Research Division: The FAA -- yes, the FAA issues.

Yes, I'll let Robert -- I'll let -- Robert will do a better job than I can, but the answer is no. We're headed into the peak season, we want to have all the airplanes flying we can. We want to get people where they want to get to when they want to get there. We don't want to take capacity out. And furthermore, even if we did, the way they're running this, we can't figure out from day to day which area is going to be impacted the most, so we can't even figure out where to take capacity away from. But Robert, any more?

Well, I was just going to add, in fact, it has the opposite effect because you don't know where it's going to happen or when it's going to happen, and as a result, you can't plan for it. We have a really good planning system for where our planes are going to be and when they're going to get their regularly scheduled maintenance. And if you throw that schedule off, now all of a sudden you're also now canceling a flight or delaying a flight or changing a flight schedule because the airplane is not in the right place. So it has the -- unfortunately, it has the opposite effect.

And with no further analyst questions, we will now take questions from members of the media. [Operator Instructions] And we'll go to Mary Schlangenstein.

I'm sorry, because you've talked about this numerous times, but can you please just once more talk about the $250 million and where that number originally came from and what it includes? And I apologize for asking that after you've already talked about it.

That's okay. Let me try, and then you guys can chime in again. We were asked to go put together what we thought the -- if this stayed -- if in fact this stayed in place throughout the year, what would be the cost, just the cost of the delays to the airline? So that was our estimate of what the delays would cost us. It doesn't have anything about passengers. If in fact, over time, customers say, "I'm not going to fly now because these delays have gotten so bad," it's simply the cost of delaying the airline, as much as the FAA has estimated it's going to cost. They have similar numbers, by the way, they're as big. Is that -- Robert, did I say that right?

No, you're right, Doug. It's just -- and even that, as -- and even the cost that we've given for those delays is probably understated because we're -- most of the costs that we deal with on a realtime basis are point-in-time. They're not for extended, comprehensive, a very broad range type issues. And that's just on the cost side. And Doug mentioned that we certainly haven't taken into account any aspect of customer behavior from a revenue perspective.

And we'll go next to Josh Freed.

Is it reasonable to think that maybe this sequester impacts you guys a little bit more because of how extensive your operations are at Reagan? Or do you want to disabuse me of that idea?

It still is not much. I mean, I just -- I've said our government revenues are 3% of total revenues, so maybe they're 2.5% for another airline or something. But I don't think it is hugely disproportionate but probably is a little more for us with our DC operations and East Coast, which the Northeast tends to have more government-related business.

All right. And forgive me if you said this and I missed it, but did you give a figure for any kind of, like, pre-cancellations to try to get ahead of the air traffic control furlough impacts, that kind of thing?

We did not. And it's really difficult to do because we don't know where the issues are going to be until the issues are there, typically.

Okay. Well -- sure, sure. Did you -- so did you end up doing any cancellations like that at all yesterday? Or did the number end up being 0, or...

Our main impact yesterday and the day before were lengthy delays.

And there are no further questions in the queue at this time.

Great. Okay, well, thank you all very much for your time and attention. Any further questions, either give investor relations or corporate communications a call. We'll be happy to answer any questions you have. Thanks again. Goodbye.

Again, that does conclude today's presentation. We thank you for your participation.