Catherine O’Brien: Got it. And then maybe, if I could just dig in a little more with you, Vasu, on how you expect the different regions to perform underlying that 1Q unit revenue guide of down 3.5% to 5.5%. Understand, what you already told us about short haul and domestic turning positive by the end of the quarter, but would love to just kind of run through Transatlantic, LatAm, Asia-Pac, domestic with whatever details you can provide. Thanks so much.
Vasu Raja: Yeah. Sure, happy to. Look, for us, we anticipate that the domestic system will turn positive by the end of the quarter. Maybe I should start by saying this. So much of our capacity is weighted to the short-haul market. In Q1, we will be over 75% of our ASMs in domestic and short-haul Caribbean. So that very much influences things. But we end Q1 with RASM across those regions turning positive. In long haul, we see a lot of — effectively, flat Transatlantic performance year-over-year, Transpacific and long-haul Latin flat to slightly down year-over-year. But all of those entities are seeing improving trends. And certainly, as we see more capacity changes coming into schedules for March and beyond, those numbers will yet move again. And we’re probably more encouraged by what we see in short haul than in maybe any other region at this point.
Operator: Thank you. Our next question comes from the line of Jamie Baker of J.P. Morgan Securities. Please go ahead, Jamie.
Jamie Baker: Hey. Good morning, everybody. A couple for Vasu. First, the dead horse question. I know you’re not going to give specific guides on geographic profitability. But as we think about the Northeast Alliance unwind and considering demand, seasonality, what quarter do you anticipate the maximum pain from the unwind being experienced and perhaps that’s behind us in you models. At what point are New York and Boston the largest drag or the least contributing, however, you want to think about it?
Vasu Raja: Well, Jamie, the worst is behind us. That happened in Q3. In fact, New York — and I’d refer you and others to prior commentary that I made on this either in press or on these calls. The New York marketplace, the New York customer base has changed in the post-pandemic world. It now is the thing, which our slot portfolio serves a whole lot better. Our New York performance is doing better. And unlike what led to the partnerships we’ve had there, we see continued growth in originations share. New York is our largest market for enrolling new customers, both in AAdvantage and in the credit card and it had never been that prior to the NEA. So, we’re certainly open. We’re open to any partnership that is better for our customers, period, full stop. But for where we are right now, the worst is certainly behind us.
Jamie Baker: Perfect. And then on corporate recovery. In the past, you and I, I mean, we’ve all spoken about blended travel and the network and pricing changes that you’ve made to take advantage of that phenomenon. When we think about what you are seeing today in terms of corporate recovery, though, is it robust enough that you need to make further adjustments or is it simply incremental yield without any cost or effort?
Vasu Raja: Hey, Jamie. It’s a great question and maybe one that speaks at large our distribution strategy. And so let me speak at large to that first and I’ll hit that. First, all of our changes whether it’s with corporate travel management or travel agencies, what have you, are this simple, we sell our product through the Internet. That’s what our customers demand. That’s how we can give them the best content at the lowest expenses to them and the best servicing and we see that. We see that we’re producing revenue more efficiently, more strategically more to the liking of our customers. I’ll echo what Robert said. We’re up 15% in revenue. We are down 8% to 9% in selling expenses. Our likelihood to recommend scores are higher.
But as we look at it, what has really been a change is 65% of our revenue comes from AAdvantage customers, but we continue to see a lot more (ph). About 45% of our revenue is coming from AAdvantage customers who are buying premium content, a better seat, more refundability, more flexibility for miles. And that’s up 3 points year-over-year. So that’s all to say that — in any which way we double click on that, it’s meaningful, right? We too exit Q4 with a 90% business recovery. Within that unmanaged business versus managed businesses, almost a 3:1 ratio, with unmanaged business 100% plus recovered, managed business down further. The impact on managed business is really flat from traffic on higher yields. So as we go forward, actually, we’re going to lean further into this.
What we have realized through this is first and foremost, we need to make it easy for our customers to consume our content through the Internet. So, we’re going to offer more mileage for customers who shop through the Internet. We’re going to roll out better servicing capabilities for Internet distribution, and we are going to start restricting the amount of selling and servicing that we do through non-Internet based channels. And we invite all the travel managers and all the travel agencies of the world to join us in this because this is great for customers and it should be great for them too. All of our financial incentives targeted to that audience are really around helping them shift. So, we’ve actually been very encouraged by what we’ve seen.
I think, clearly, our relative RASM performance is similar to what it was in the exit pandemic period. And now in the year ahead, we have the opportunity to optimize.
Operator: Thank you. Our next question comes from the line of David Vernon of Bernstein.
David Vernon: Hey. Good morning, guys. So on the topic of sort of premium and how the buy-ops are affecting the business right now. Can you give us some sort of color around how premium product sales or movements up and down the fare ladder happening, growth in basic, growth in premium? Just give us some sense of kind of where you are in that process of tapping into what is a more lucrative segment of revenue?
Vasu Raja: Hey. Thanks, David. This is Vasu, and I’ll pick it up right where I left it off. I think I can probably give you a fact point that makes it easier to understand just why we are so focused around selling, creating more content for AAdvantage customers. So if you look at our system right now, about 7% of what we sell is basic economy. And indeed, that is up 20% year-over-year, but that’s up 20% year-over-year because we changed its product. Last year we included in commission dealings and corporate travel management programs. We just took it out last year. We reintroduced it this year, [Technical Difficulty] that’s actually not the critical thing. What’s been more interesting to us is 10% of our revenue is coming from customers who actually shop basic, but then buy something higher.
And within that — that number is up 25% year-over-year. And almost all of its growth is coming through dot-com and app. And we see more and more ways where customers actually who are coming for a basic product want more than that, and we can go and deliver that to them, which is why so many of our distribution strategies, far from being risky, we see as a great opportunity.
