And this operation we’ve been running has been incredible for the last year, year and a half. Now we have a real opportunity to go ahead and do some optimization work around this operation. So we do have some headwinds on salaries and benefits. We have some real nice tailwinds as well into 2024, and we’ll be able to provide more guidance on what CASM will look like on a January call.
David Vernon: Okay. Thank you for that. And then, Robert or Vasu, maybe — there’s a lot of talk right now in the industry about how segmentation premium products are changing the structure of the industry, maybe to the detriment of domestic oriented or discount carriers. Can you add your thoughts on this topic here and talk a little bit about how you see American playing in this evolving structure? We didn’t hear a lot about premium and any of the prepared remarks today. I’m just wondering how you guys are thinking about, you know, what some people are calling a seismic change in the industry dynamic.
Vasu Raja: Sure, this is Vasu. I can answer that. In fact, I’d be very, very happy to answer it. Look, what we see, and we think that the real causal thing that’s happening in the customer itself as opposed to a their product or cabinet service, what we’ve certainly seen and Robert alluded to it since 2019 advantage — our advantage customers are really driving the revenue production of the company, and that’s manifesting itself in a range of ways. So versus ‘19, our membership is up 50%. Almost two-thirds of our revenue, certainly in this last quarter, came from AAdvantage customers. And what we’re finding with them is that those customers are proving to be a much more resilient pool of demand that indeed are willing to engage in behaviors that aren’t just shopping for the fastest schedule or the cheapest price.
We see that play out in a lot of different ways. One is premium cabin performance, where our premium fair products revenue is up 7% from AAdvantage customers, in keeping with our overall seed growth. Two, we see that remuneration on our credit cards is of about 25% from these customers. And then importantly, we find that these customers disproportionately want to shop with us directly about 85% of all the AAdvantage member revenue in the system is coming through our direct channels. So we see the causal thing, and that’s why it was in our remarks, is what’s really happening is for our AAdvantage members, there’s a real desire to travel, and they’re coming to us because they want a great network and a program that rewards them for using it, delivered reliably over and over and over again.
Robert Isom: Hey, and David, I just want to add one thing to that. It’s look, we’re going to be part of and also a driver of premium revenue growth. So one of the things I think is noteworthy, our premium seeding is going to grow by 43% between now and 2026. And that’s as a result of bringing on the new XLR and reconfiguring our 777 300s and actually taking a look at even some of the domestic fleet as well, where I know that we’ll be adding more first-class product, or at least reconfiguring to that end. And on that same front, we’re really pleased with our regional aircraft. On that front, you take a look at the E175 and they have fantastic cabins that are every bid is nice and appreciated by customers is anything we fly in the mainline side. So I look forward to participating in driving what’s going to be going on in terms of premium products.
David Vernon: All right. Thanks, guys.
Operator: Thank you. Our next question comes from the line of Andrew Didora of Bank of America.
Andrew Didora: Hey, good morning, everyone. Devon, maybe just digging into the 2024 costs a little bit. Given the changes in the pilot contract, I know kind of the new profit sharing now runs through the salaries and wages line. How should we think about wage growth next year in relation to kind of the single-digit capacity?
Devon May: Hey, we’ll give more guidance on 2024 as we [Technical Difficulty] salaries and benefits is an area we’re going to see some pressure there. As I just mentioned, we do have this open agreement with our flight attendants and our passenger service and reservations agents that we hope to get closed and we hope to be able to match industry leading contracts there, which will drive about a point of growth. And as we get into the year, there will be some lumpiness on year-over-year comps. In the first quarter of 2023, we didn’t have an accrual for our pilot agreement. So we’ll see a little more cost pressure in the first quarter. But as we get into the last three quarters of the year, that cost pressure is going to ease.
And then these efficiencies that we’ve been talking about, I think, are going to add some nice tailwinds as we go through the year. So let us get back to you in January with a little bit more detail, but that’s kind of where we’re seeing it right now.
Andrew Didora: Okay. Thank you. And then [Indiscernible] Vasu maybe — can you speak a little bit more in terms of what you’re seeing on the corporate side, particularly as it relates to both kind of large and small corporates, particularly, I know you’ve made some pretty big changes with your corporate sales force just curious if you’ve seen any sort of unexpected share shifts or anything like that as we moved into this more seasonally stronger time period for corporate travel? Thanks.
Vasu Raja: Yes. Hi, thank you Andrew. It’s another question which I don’t know if people might have happy to happy to address and that I’ll do it in this fashion. We have made a number of changes with our selling and distribution strategy, the purpose of which is very simple. Our customers have been telling us for a very long time now that they want it so that anything that we offer them can be shopped, sold, and serviced digitally. And we’ve been seeing that customer sentiment for a really long time. And that’s what we’re out to serve. And our strategy is this simple. In order to go make that happen, we need to distribute our product exclusively through the internet. And that’s what you’re seeing from us. We’re shifting content, bare products, schedules, things like that, out of legacy technology where we can’t provide customers the kind of shopping and service experience they expect, and we’re putting it through technologies that can.
