Welcome everyone to Allegiant Travel Company’s second quarter 2008 financial results conference call. We have on the call today Maury Gallagher, the company’s President, CEO and Chairman, Andrew Levy, CFO and Managing Director of Planning for the company, and Ponder Harrison, the company’s Managing Director of Marketing & Sales. Today’s comments will begin with Maury Gallagher followed by Ponder Harrison, then Andrew Levy. (Operator Instructions) We wish to remind listeners to this webcast that the company’s comments today will contain forward-looking statements that are only predictions and involve risks and uncertainties. Forward-looking statements made today may include among others references to future performance and any comments about our strategic plans. There are many risk factors that could prevent us from achieving our goals and cause the underlying assumption of these forward-looking statements and our actual results to differ materially from those expressed in or implied by our forward-looking statements. These risk factors and others are more fully discussed in our filings with the Securities and Exchange Commission. Any forward-looking statements are based on information available to us today and 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 users of this presentation not to place undue reliance on forward-looking statements which may be based on assumptions and anticipated events that do not materialize. The earnings release as well as a rebroadcast of this call are available at the company’s Investor Relations website at www.ir.allegiantair.com. At this time it’s my pleasure to turn the call over to Maury Gallagher for opening remarks.

[Audio silence] and Andrew will wrap up with comments on aircraft plans, network activity, expenses and our balance sheet. During the past three, four, five months virtually every comment we’ve seen in written press and many cases verbal have been about companies such as ours with gas guzzling MD-80s and catering to the leisure soft demand environment that seems to be plaguing the US. We in spite of these labels are proud to sit here today and tell you we had a very good quarter. We were profitable again. As we go forward though we should comment on fuel somewhat. Since December, in only six months, we have seen our fuel increase over $1.00 per gallon from an exceptionally high base of $2.64 at the end of last year to over $3.70 through June. That $1.00+ increase has cost us almost $45 million in the past six months. Yet even with this substantial increase we’ve managed a $19 million operating profit through the first six months through June. These results have confirmed our strong belief that we can manage in a high fuel environment; we just need some stability and have time to catch up to the ever-accelerating costs that seem to have been plaguing us the past six months. On the revenue front our revenues increased 48% to $132 million on just 36% increase in departures. Unit revenue growth has been the driver of our profitability in recent years, particularly our ancillary revenues. Our $27.75 per passenger amount is a 32% increase from last year’s second quarter and a $2.00 increase over Q1 from $25.75 per passenger in that first quarter. Ponder will have further comments in a moment on our ancillary activity and revenues overall. Many of the trends talked about in our first quarter call continue to…

Unfortunately revenue gains in the quarter didn’t increase with the same velocity as fuel prices but the durability of our leisure focus business model was once again tested. With something as fundamental and uncontrollable as fuel costs when it grows as much as it did, increasing revenue is the only possible recourse. Fortunately we were able to raise it enough to ensure our 22nd consecutive quarter of profitability. Now let me touch on some of the broader top line numbers and then as Maury mentioned move further into the details. Total revenue for the quarter grew almost 48% year-over-year coming in at just over $131 million. For the six months ended in June total revenue was approximately $265 million growing year-over-year by more than 52%. During the second quarter scheduled service revenue increased year-over-year by 34% generating $87.6 million and contributing 67% of the total revenue for the system. Ancillary revenue which drove just over $29 million was up over 84% year-over-year and contributed again just over 22% of total system revenue. Comprising the bulk of the balance, 10% of system revenue, our fixed D flying generated just over $12 million for an increase of 67% year-over-year. This increase is reflective of the addition of two aircraft in Tunica, Mississippi for our Harrah’s charter program along with increased lift for other charter operators during the quarter like MLT and Associated Ad-Hoc Operations. Continuing the generally positive momentum for the first half of the year scheduled service revenue grew 45% year-over-year while ancillary revenue increased by almost 100% growing at 97% for the first half of the year. Looking deeper at the drivers for these positive revenue results, significant increases in both passenger volume and departures coupled with shorter stage lengths all helped to produce a winning outcome. In the second…

We are proud to report our 22nd consecutive quarter of profits. We’re pleased that our 3.6% operating margin and 3.2% pre-tax margin lead all of our US industry peers that have reported to date. While our 2Q08 profits fall short of our goal of double-digit pre-tax margins, we remain confident we can return to that level of profitability if fuel prices stop increasing or at least increase at a slower more manageable pace. Remember in the last four quarters our average fuel prices increased from $2.32 in 3Q07 to $2.64 in 4Q07 to $2.88 in 1Q08 to now $3.52 in the second quarter of 08. We remain firm in our belief that we can produce strong profit margins at any fuel price as long as we have time to adjust our network routes and capacity, but when fuel prices increase rapidly as they have in each of the last three quarters there’s little ewe can do to impact the short-term results. So for perhaps the fifth time since last October, we have recently adjusted our network and capacity to account for the latest shift in fuel prices. Our network and capacity planning decisions are being made with the assumption that crude will remain at $140 range. This past Monday we extended our schedule from December 15 through the end of January. As part of this process we will be exiting a number of routes to Fort Lauderdale that we do not believe can be profitable at current fuel prices. There are a few other routes we are watching closely and may have to take similar action in the coming weeks. Fortunately the vast majority of our routes are performing well and we believe if we offer the right number of seats for sale at any given time, we can earn…

(Operator Instructions) Our first question comes from Michael Linenberg - Merrill Lynch.

Can you give us a sense of what your daily utilization will be on the airplanes in the third quarter and how that compares to the second quarter and then how that compares to what the utilization was during the third quarter in 2007?

Last year our daily utilization of airplanes in Q3 was six block hours a day with about 2.59 departures per aircraft per day and we have a fleet of 29 airplanes in place. I’d have to dig a little bit if somebody will give me the utilization for our Q2 as well. But as we go forward I think you’ve hit on a key point on the growth side. Q3 for us is our slowest quarter of the year. Last year we certainly cut back more than we did the previous year of 06 and this year given the headwinds of: How much was fuel going to be going up? What is going on in our general markets? All of those aspects suggest that we should be even more conservative in Q3 going into this year. So hence you see the numbers there. Let me also make one other comment. ASMs, I’m not terribly impressed anymore with ASMs from our perspective. Certainly it has bearing on maybe some cost aspects but with the stage length going down as much as 5% to 6% our ASMs are going to decrease disproportionately. Departures are very important to us, passengers per departure, cost per departure; that’s your metrics of making a buck. By the way, Q2 had 6.4 hours of utilization this year and Q1 was 7.5. Andrew I think has some other follow on comments.

I think that your spot on Maury. We have unused capacity in this fleet right now. We’re flying the airplanes fewer hours albeit similar numbers of departures and we think that we have lots of ability to drive that number higher to something that is more closely approaching historical numbers and beyond that if the opportunity presents itself.

You’re certainly I think going to see a fleet reduction Mike. Just do the math on 10% growth. With airplanes you can back yourself into 10% to 12% reduction in block hours per day at a minimum in our fleet as a total going into the third quarter.

In the past, maybe I’m going back a year or a year and a half, the number that I recall being thrown out was something on the order of like 30,000 room nights a month I think was what you would sell and I believe at that point in time it was predominantly Vegas, maybe there was a little bit of Orlando. Can you just give us maybe even just rough numbers where you are now and as you look out over the next couple quarters, and I realize there are some seasonal adjustments here, where you think that could grow? How much that could grow based on the pullbacks or the withdrawals by the other carriers for many of the leisure markets and yet these hotels, they’re fixed assets, they’re not going anywhere and in fact as you indicated I think Ponder Vegas is set to add a significant number of rooms in the coming 12 months?

Yes Mike, let me try to touch on that just in general terms. We feel confident that we can begin to move our overall hotel production up whether it be monthly, quarterly, even with respect to seasonal upturns or downturns. We’re in ongoing negotiations as we’ve stated before with our hotel partners right now to look out not just over the next couple of quarters but really look out over the longer term horizon as they have capacity coming on and try to really work strategically in terms of what benefits them and us best. Really when you look in the quarter at Vegas in particular our traffic, because we pulled a number of our long-haul markets out of Vegas, the markets we served in the previous year that we did not serve. Maury I think had touched on it a little bit, Topeka, Lansing, some of these longer-haul markets. In fact some of the longer-haul markets were real good hotel markets. Kind of length of haul proportionately drives hotel take rates from time to time. But at the end of the day our productions remain fairly flat. Traffic’s fairly flat for Vegas even though the loads are up because ASMs are down. But again our hotel production was fairly flat too. What we’ve seen is we’re seeing a shift though oftentimes with customers moving into higher-end properties because the price points are coming down; we’re able to take our margin up; we’re able to enjoy better rates from the hotels; and what we have seen is that customers can enjoy a better experience by moving into a more premium product. I think as we’ve always mentioned we’re working on web initiatives, distribution initiatives, and again real strategic initiatives with the hotels to increase our percentage of capture. Bear in mind one real strategic asset we believe we have and I think the hotels realize this too is that we are absolutely in control of a very unique distribution group. Our customer base is very discreet, very unique and really the only path to get to them is in fact coming through Allegiant. So again just to reference your question, the 35,000 number; I think our number as probably just slightly north of that in the second quarter, probably around 38,000. Again up slightly and we are real encouraged that we can move that number north going forward.

And the 38,000 that’s all of your hotel rooms; that’s Vegas plus Orlando, Tampa, etc?

Yes. But certainly the vast majority is centered against the Las Vegas market.

Our next question comes from James Parker - Raymond James.

Andrew, a question for you regarding the maintenance and the higher maintenance expenses. You say that it was very abnormal in the second quarter. Can you tell us third and fourth quarters what’s coming up here in terms of shop visits and overhauls that you might have?

Jim, we can’t make forward-looking statements. That’s not allowed is it?

You have it scheduled. I wouldn’t see why you couldn’t reveal that.

No, we’ve been talking about how to provide perhaps better guidance in this area because it is lumpy. But as you noted some of it is predictable. There can be unscheduled engine events which can move the numbers certainly. The third quarter we expect that there will be a slight increase in maintenance expense per ASM. When we get to [inaudible] it’ll be very small we believe compared to last year. And the fourth quarter will be the same we think. So we’re going to see I think more normalized maintenance expenses in the third and fourth quarter this coming year barring any unforeseen rash of unscheduled engine overhauls or anything like that that we just can’t predict.

So in the second quarter there weren’t any unscheduled events?

In the second quarter, there were. I think one or two of the engine overhauls that we did in the second quarter where we had three this year were in fact unscheduled.

Looking at your absolutely terrific load factor 90.5% and your ancillaries were up nicely. Is there a chance that maybe you overdid this a bit on the load side in order to maximize RASM?

No one’s ever told me I overdid my load factor to maximize RASM before. Ponder?

One of the things we’ve looked real hard at is the fact, Are we spilling traffic or aren’t we? And we do not think we are. We’ve looked very hard year-over-year. And one of the interesting things is just when you look at the number of our flights sold out for the quarter seven days prior to departure, I mean it’s a very interesting statistic to observe year-over-year and that is significantly down actually this year even with a higher load factor than it was last year. What that reflects is a real focused and strategic shift in the way we’re pricing our product and the way we’re monitoring overall total revenue demand and more importantly load demand as we move up to and including the departure date. We don’t think we’re spilling. A couple of things I think we mentioned too was the positive momentum in average airfare movement particularly in the month of June and we have seen that continue well into the month of July on a month-to-date basis. We didn’t have Easter in the second quarter so fares will suffer slightly from that also to May being a shoulder month. Your point being if we bought traffic in any month, I’d say that we didn’t but certainly average fares were probably lower in May than they were elsewhere in the quarter. But again we’re starting to see the real fruits of our ability to move pricing upwards and we think that momentum will continue even at the high load factor levels.

Jim, one other thing. We’re entering unique territory here because of the ancillary. You may buy load factor to a point of revenue but each one of those guys in the second quarter was giving us over $27.00, close to $28.00, of incremental revenue that presents a very unique opportunity to move the needle. The other thing too and it’s very, very impressive when you see the ability to spread your fixed costs across these folks because unlike a lot of other people our marginal costs for adding a passenger, for direct costs anyway, certainly may have some indirect slip to stationary activity and the like but it’s marginal because it’s really just credit card fees and perhaps an extra station cost per passenger type of thing. Those are very powerful incentives to both lower costs and improve revenue base.

Our next question comes from Kevin Crissey - UBS Securities.

A question on the ancillary revenue. You spend and I think it’s kind of good IR work to talk a lot about the hotel portion of ancillary, but at least it looks like on the DOT numbers the bulk of the growth and the bulk of the overall ancillary revenues, and correct me if I’m wrong, comes really more from the air side. Can you talk about what’s going to change in the Q3 through the next four quarters or so on the air side to think that this kind of ancillary revenue growth will continue?

One of the changes that we have made that we didn’t reflect on the call is just the continued movement in certain of the overall absolute price points of ancillary products specific to the air side; so say baggage and seat assignments and things of that nature. When the industry went to $15.00 we’ve now moved our web checked bag to $15.00; we’re charging $25.00 for a checked bag at the airport; in fact to the extent its outside our dimensional limits at the gate we’ll charge $35.00 for gate checked bags. So again I think as you know our protracted booking curve to some degree takes a while for these to really ripple through and be realized at the flown level. So what we’re reporting are flown revenue statistics. We are still seeing the momentum in movement of these price increases rolling through. So we do anticipate that ancillary revenues perhaps could be bolstered as a result of these types of changes. And again I would point to bags because those are an obvious and easy category. I think maybe a more subtle category that’s not as easily understood is our seat assignment. Again you point out that a number of the ancillary efforts come against those items related to airfare apart from just third party products. But we’ve made substantial strides in terms of our ability to yield certain components and areas of the airplane, premium seating; we’ve got some initiatives that perhaps would bifurcate priority boarding from advanced seating and seat assignments; we do not yet even have an online check-in aspect for our product and we certainly intend to roll that out. So we have a number of additional items we think attributable just to the airfare side that can continue to move this number even against large passenger volumes on a go-forward basis.

How about on the new aircraft side? It may not be the time to be thinking about it or maybe I’m wrong, maybe it is the time to be thinking about it. What are your thoughts on a second aircraft? I know it’s been bounced around a bit. Where do you stand?

We certainly have tremendous faith in the MD-84. On a go-forward basis this airplane has really done a yeoman’s effort for us and we’ll continue to work strongly with it. Having said that, I think as we grow green initiatives, things like that, perhaps FAA related pronouncements with ADs all those drive you towards potentially looking at newer airplanes. At this point the market place historically has been oversold and it’s been tough to even get attention from those folks. We have been in this environment for years. We continually shop the market looking at Boeing, Airbus, anybody else that may make sense for us. But at this juncture we have nothing specific to report. We probably have to do a new airplane at some point in our future. There’s no doubt about that. [Inaudible] thoughts.

Are you closer to that decision or farther away given what’s happened with fuel?

Well fuel has certainly pushed us up the ladder to look at things. I think if the world slows down here, with our balance sheet and things like that those become incentives if the pricing improves that make it more attractive rather than less. But we have no specific calendar or timeline to do anything at this point.

And it would be new versus used?

Yes. We really don’t have a specific answer on that. We’ve certainly done well with used airplanes but as we grow one of the things we’d also like to see ourselves have is a consistent fleet. Same type of airplane. So fleet types would be important to us as well.

Kevin I’d just add one thing. We think, as you can see from our load factors, we’re pretty confident that we can handle more seats on the airplanes. So as we look to what might be the best airplane going forward, we’d look at larger gauge narrow bodied equipment and also the possibility of adding seats into the MD-80. That’s something we’re studying at the moment. We think that’s the right move for us to get more seats and it’s just a matter of the right economics and moving when the time is right. So it’s something we study continuously and have for several years, and when the stars align we will look to do something. And when that is we’ll see.

Our next question comes from Bob McAdoo - Avondale Partners LLC.

On your P&L you show a $2.2 million other revenue that looks like a new line item. What is that?

That is the lease revenue associated with the airplanes and engines that we purchased at the start of the second quarter.

These are the ones that are leased out to somebody else?

That’s correct. And we’re taking revenue there; we’re also seeing on the expense side in depreciation and amortization and expect to see some on the maintenance and repair line as well in the future. We have some reserves we’re collecting for that but we have the potential to have to pay in excess of that under the agreement.

You talked a lot about some of the things that are going on in ancillaries. The $7.00 incremental piece of ancillary from last year, can you kind of give us more color on what really grew to get this extra $7.00?

A couple of products that we put in over the past 12 months that we obviously didn’t have. Our trip flex product, and we’ve spoken to this on previous calls, that’s why we didn’t really highlight it because the same effect essentially was in place in Q1, but our trip insurance product has matured nicely and it’s a tremendous benefit to the consumer. It allows our customers to change their itinerary essentially for no additional charges on a virtually unlimited basis, the one caveat simply being that we won’t give them their money back on a refund basis. But they can change names, change their flights, change their itinerary, change the number in the party size, and clearly they pay an uplift in fare if the itinerary were more expensive. But that’s been a real driver for us. Furthermore we instituted a product call web loyalty here in the last year-over-year period and what that is it begins to monetize the traffic on our website. Our website continues to be extremely robust. The number of monthly unique visitors continues to escalate at a far greater pace than even our traffic or any other growth metric. We are a household name throughout the heartland of America in the 40 states we serve. And what this particular piece does is it pays us really in our ability to monetize that traffic at the end of our booking flow. So those two were very nicely additive overall on a year-over-year basis. Again we’ve continued to see upward realization in dollars coming to us from baggage charges as well as our seat assignment revenue.

What do you mean the web loyalty thing pays you at the end of the booking process?

It’s not dissimilar from paid advertising for anyone on a banner ad or any other kind of website. If you go through our booking flow, you will see the web loyalty offer that occurs at the end of our flow and in conjunction with our confirmation screen.

Could you give us a little more color on the MLT cancellation? Was that a surprise to you or are there any other things like that that might be popping up down the road where somebody has an option to cancel?

MLT I think was a bit of a surprise I suppose. I’m not surprised that they’re having trouble with fuel at these levels but shortly after we entered into the agreement we got the notice of cancellation. So it was disappointing. We don’t think it’s a big deal quite honestly. It would have been a good piece of revenue. It’s predictable and profitable. But we think also that as long as fuel sits in a stable environment that we can probably generate greater returns putting that airplane into our scheduled service.

So for us to hold out to people that your revenue per airplane, your bottom line per airplane on your own operation even though there’s more risk to it is a higher return than some of the -

Yes. There’s no question about that as long as we have fuel and a stable environment. This past quarter flying which is not at risk for fuel obviously was a better proposition than at-risk flying with what we saw fuel prices moving by just leaps and bounds. That can’t go on forever and hopefully we’ve seen it kind of stabilize. It’s obviously gone down a good amount in the last couple of weeks, which is great. But as long as it kind of sits around the $140 range which is what we’re using, then we think going forward especially as you look into the fourth quarter and beyond where we’ve had sufficient time to adjust our network in terms of capacity and pricing, yes I think that we’d rather put an airplane in our scheduled service than in charter. As far as other, the other agreements we have are primarily with Harrah’s and there are certain abilities for Harrah’s to get out of those agreements. That’s always been in there and I’m sure will continue. Two of those agreements expire at the end of this year and we’re in negotiations at the moment to try and extend that agreement. And we’re optimistic that we’ll be able to do so.

Is there a difference between Harrah’s and the MLT in that Harrah’s is using your airplane to bring people in to gamble where as MLT was actually trying to sell to the public?

I think Harrah’s has the gaming revenues so they’re looking at it obviously as the entire trip proposition; the cost of getting them there as well as the cost of keeping them in their hotels versus the revenue they derive from all the different revenue streams including the gaming. I think MLT and Apple Vacations and many other tour operators do the same thing. They don’t have gaming but they make a great amount of their money by selling hotel rooms in the destinations they serve. So a different model but for whatever reason the MLT is just not able to make it work at the moment and Harrah’s continues to be able to do so.

In your list of markets and whatever that you talk about, you point out that in terms of things that you’ve started you’ve got some Bellingham to destinations other than your major leisure destinations, the San Fran-San Diego. What prompts you to get into connecting two points that are not in your top five big city list like that and what makes something like that attractive? And as you think about other places like that, is that something that’s likely to become a bigger piece of your business?

Yes Bob. I think the answer to your last question is yes. I think it is likely to become a bigger part of our business. What we’re able to do by basing airplanes in Bellingham is to do a lot of experimenting with places like San Diego, like San Francisco, and there are a couple of others we’ll likely add in Bellingham in the coming months. We get a chance to understand not only the economics of that particular route but also whether a place like a San Diego or a San Francisco might be good future new larger destinations where we would in fact base airplanes in five to multiple points. The ability to have the base in Bellingham gives us the opportunity to explore new possible destinations, some that are going to be small but others that could be quite large. And I think we can do the same thing in other parts of the country. There are a few places on the East Coast that as we look into the future we think we will likely base airplanes in and be able to do kind of the same thing, try out some other destinations that could have great potential. We’re pleased with the results by the way we’ve seen so far from Bellingham to San Diego and San Francisco. And we continue to be pleased with Palm Springs which we’ve been flying now for a year and a half, almost two years. In fact we’re now doing Palm Springs on a year-round basis, and our service to Reno which we’ve been doing out of Bellingham for about a year. So all that has worked very well for us and I think we will see more of that to come in other parts of the country.

How long have you been doing the San Diego-San Fran?

We just started that in June Bob. So July is the first full month.

Our next question comes from Stephen O’Hara - Sidoti & Company. Stephen O’Hara - Sidoti & Company: I just wanted to quickly go over the load factors so far this month. Are you saying that they’re on par with what you saw in June or for the June quarter?

I think the comment that we made was that month-to-date load factors for the month of July are on pace with what we saw in the month of June, which arguably would be again in excess of what we saw in the quarter. Stephen O’Hara - Sidoti & Company: In terms of the third quarter, how fast can capacity come back in to your system if the environment improves fuel-wise or anything like that?

We have the airplane time certainly. We have crews perhaps from our [inaudible] that are limited but I don’t believe that’s the case since we were flying much heavier utilization with them in the first half of the year. Crews and airplanes are about it as far as adding things back.

Just one comment on that. I don’t think that at this point we are going to add capacity in the third quarter. We’re just too far into the quarter for that to be very expected. But certainly for the fourth quarter there’s ample time especially when you consider that really Vegas is year-round demand and Phoenix is showing signs to be pretty similar actually. But certainly Florida is very seasonal and even in the fourth quarter it’s a good quarter for Florida. But the peak periods of demand at that time are really centered around the Thanksgiving and Christmas holiday seasons. So that’s a long way away. We think that if we’re in an existing route, 60 days is ample time in most cases to add more capacity if we think the demand is there to warrant it. Stephen O’Hara - Sidoti & Company: You guys have talked a lot about stable prices being very important to your model. My question is why haven’t you guys revisited the hedging?

Steve, everybody needs stable prices. Stephen O’Hara - Sidoti & Company: Right. They’re falling.

The hedging thing from our perspective was something that we just felt we were paying an incredible amount of premium last year. Our timing probably could have been better when we decided to move away from it frankly. But running the business and using our assets to hedge if you will, moving in and out of markets using capacity, expanded, contracted, those types of things are certainly real important to us. We haven’t foreclosed the possibility of doing more hedges. I think one of the things that has been rather eye opening over the last nine months to myself is just the pace and the speed with which fuel can move and the impact it can have on you. So you may have to pay a premium to certainly ensure your top line doesn’t get eaten up instantly the way it has particularly in the last 90 days. Andrew has run that program for us over the last couple of years since 02 but we’re always looking at it and we’ve never foreclosed it.

Our next question comes from Michael Linenberg - Merrill Lynch.

When you look at the small cities that you serve Maury and you look out into the future and the past, you’ve talked about opportunities of upwards of 100 cities. And with the high fuel prices and the cutbacks by the other carriers, I think the ATA is out there saying that maybe 100 cities have already lost service and you could see another 100 cities that lose service. So sort of a two-part question. One, are you looking at a much bigger list now of cities that could utilize your service since it seems like some pretty decent size cities are losing some pretty significant service? And the second piece is, what’s the response from the airports knowing that they look around, they read the papers, they see the cuts by the incumbents, by the bigger carriers and their regional partners. Are they coming to you and looking to strike a deal? Are there opportunities really to reduce your airport costs?

Let me make some overview comments. Andrew deals more day-to-day with these things. Certainly the capacity is coming out of the markets. I made those direct comments in my opening statements. The small cities certainly present opportunities. On kind of the short side though we’ve lost some we think long-haul opportunities here in the near term because of fuel prices and the ability to make long-haul work. But over time I think if this thing stabilizes, those will become available to us again. Certainly the direct competition is down, our ability to increase frequency I think will come back to us in a number of markets, and last but not least just expanding into markets we’ve got 30 to 35 cities on our list at a minimum that we want to continue to look at and move into over time. As far as the airports I’ll let Andrew make some comments. He’s closer to that aspect.

Mike, I’d say that to reduce that line item is certainly tough when you’re talking about existing airports. We think there’s a possibility but we’ll see. They’re certainly very pleased with our service and I think maybe more appreciative of what we bring to the table.

Mike, let me interject. I think practically with the reduction in capacity, the ability for airports to spread their costs is going to get tougher and I would think if we can hold our own on a practical basis that’s probably doing a pretty good job.

I think Maury’s right about that. I think as far as new small cities that we would enter into, new airport deals, I think that first of all these airports have been very aggressively chasing our service for quite some time and it seems like that pace is accelerating and certainly any new airport deals that we would enter into we would look to be even more aggressive than we have in the past. And we think that those opportunities are presenting themselves. So when you average the two together between existing and between new, hopefully we can at least keep that line item constant if not perhaps even maybe get a slight decline over time.

Our next question comes from James Parker - Raymond James.

Bob asked my MLT question. Perhaps on Fort Lauderdale, other than seasonal softness in business to South Florida anything else going on in why you’re taking service out of some of those markets?

Jim, Fort Lauderdale has been maybe the weak link in the network year-to-date. There are some routes that work very, very well and there are others that have just simply performed very poorly. And it’s a combination of obviously very high fuel prices but also the inability to get the fares up to levels that are appropriate particularly when you compare it to Orlando and Tampa with the additional length of haul from our markets to fly a little further south to Fort Lauderdale. We’ve had a tough time in certain cases to get that fare up to the level where you would compensate for the additional stage length. Really our plans for Fort Lauderdale are to basically cut it back likely to one airplane and then build it back up again by adding some new services to small cities that are perhaps too close for air service to Orlando but we think would do very well to Fort Lauderdale. So that’s what we hope to do going forward. But the routes we got out of just simply weren’t working for us and we thought we should reallocate our assets to other parts of the business that are working very well.

Our next question comes from Kevin Crissey - UBS Securities.

My follow up was asked. Thanks.

Our next question comes from Bob McAdoo - Avondale Partners LLC.

Given what we’re seeing with fuel coming down this last week or two, what has to happen for us to see a serious tailwind that kind of looked like the serious headwind we’ve had?

I’m kind of like that fellow that walks on hot coals. You think they’re getting cooler. But until we see some stability Bob, because of the lead times to put stuff in albeit we’ve got capacity now we didn’t have last year that we can turn on I think at a faster pace, we’ll step on the gas. Certainly I think by 09 we’ll see a more stable environment. Personally I believe that. But this third quarter there’s no reason to as Andrew said jump into anything here in the near term and we don’t have to make decisions on Q4 for another 30 to 45 days.

I wasn’t actually thinking so much about additional capacity as much as I was thinking of people who bought tickets when gas was at $140 and it’s not at $125. That kind of a tailwind.

In my personal opinion, we weren’t able to catch up with $140 gas very much so we’re probably at $120 gas through most of the second quarter, although June was starting to get there. We’re certainly more comfortable at $120 or $125 that the loads will come and we’ve not really seen any slowdown yet in our traffic. Perhaps a bit of a compression in the booking curve but our customer base as I said, small cities seem to be missing a lot of the problems that are plaguing others in the country. At this point it’d be nice to kind of have a stable environment $125 and we certainly will see improving margins.

Mr. Gallagher, having no other questions in queue at this time, I’ll turn it over to you for closing remarks.

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