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Speaker 1: This is the Bloomberg Surveillance Podcast.

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Speaker 2: I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz.

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Speaker 2: Join us each day for insight from the best and economics, geopolitics,

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Speaker 2: finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple,

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Speaker 2: Spotify and anywhere you get your podcasts, and always on

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Speaker 2: Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App.

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Speaker 3: Peter Sheer talking about similarly November as an incredible year

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Speaker 3: head of macrostrategy at Academy Security, is an incredible year

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Speaker 3: that may or may not be repeatable in the coming year,

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Speaker 3: that is December. How much do you lean against some

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Speaker 3: of the moves that we saw last week, Pete so one.

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Speaker 4: I'm starting to lean against tragedies a little bit. I

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Speaker 4: think four twenty is a little bit too low given

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Speaker 4: the data. I don't like the fact that either ten

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Speaker 4: year real yields are right around two percent or five

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Speaker 4: year five year break evens are back to right around

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Speaker 4: two percent and its Last month's FED meeting was really

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Speaker 4: about marketed done the work for the FAD. This month's

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Speaker 4: meeting is going to be about well the market undid

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Speaker 4: all that work, so I think rates have got ahead

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Speaker 4: of themselves. On the equity side of things, I think

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Speaker 4: we've seen for the last couple of weeks this move

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Speaker 4: where the Russell two thousand disruptive stocks have outperformed from

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Speaker 4: the broad indices, and I think that actually continues into

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Speaker 4: you're at.

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Speaker 2: Peter, you're so good at use of cash, and I

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Speaker 2: want to go to the use of cash right now

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Speaker 2: of one mister and missus Zuckerberg Bloomberg reporting on the

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Speaker 2: sale of the Zuckerbergs of a very large amount of

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Speaker 2: Facebook shares. It's a little bit smaller than what Peter

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Speaker 2: share has in Meta if you will, but they are

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Speaker 2: out right now with some news on that, and Peter,

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Speaker 2: I think this does get the use of cash. It

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Speaker 2: gets to dive, it an increase, it gets to share

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Speaker 2: buyback and maybe executives unloading their stock after in this

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Speaker 2: case one hundred and seventy two percent surge.

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Speaker 1: Peter helped me here with where we are in use

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Speaker 1: of cash.

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Speaker 2: If we see people like the zucker Berg's selling shares.

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Speaker 4: Listen, I think we've had this phenomenal run in the

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Speaker 4: Magnificent seven. The leadership has been very narrow all year.

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Speaker 4: People have been talking about that and since November ninth,

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Speaker 4: and we brought up I think last week and video

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Speaker 4: earnings were very telling as well, and video earnings were

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Speaker 4: probably five. Stock went down, but markets rallied and I'm

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Speaker 4: really looking the disruptive stocks are doing well. You see

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Speaker 4: Spotify up there today for various reasons. I think you're

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Speaker 4: going to see regional banks continue to do well, commercial

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Speaker 4: real estate Russell two thousand, all the small caps, all

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Speaker 4: the things that people have left behind. Is people are

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Speaker 4: trying to think out where do I put my cash

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Speaker 4: right now, especially if you missed five percent on the

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Speaker 4: ten uere. Those kind of look interesting. I think have

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Speaker 4: some momentum coming at a year end.

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Speaker 2: I'm absolutely fascinating, Peter, let's meld the two together. I mean,

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Speaker 2: are we going to see bond issuance to support equity ownership.

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Speaker 2: I mean, whether it's the miracle of Zuckerberg's and Facebook up,

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Speaker 2: Meta up is well, I mean, I think it's almost

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Speaker 2: a jumble into next year.

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Speaker 4: Yeah, I think we are going to see more bond issuance.

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Speaker 4: If you know, we've been certainly talking to some of

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Speaker 4: our corporate issuers recommending that they get out ahead of

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Speaker 4: this right we are at ten percent or sorry, five percent.

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Speaker 4: On ten years, we're at four point two percent. You

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Speaker 4: can save some money there. Credit spreads have actually done

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Speaker 4: very well. We're at the lowest spreads all year. So

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Speaker 4: issue some bonds support your equity. Also, I think we

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Speaker 4: could see some M and A activity finally start picking up.

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Speaker 4: It's been look at. At the end of the summer,

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Speaker 4: you might get a bit of that. But now you've

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Speaker 4: had this stability reasonably long enough, I think you get

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Speaker 4: some interesting transactions done coming into the new year.

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Speaker 2: The phrase from twelve months ago and Lisa, I give

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Speaker 2: you you coined this. It's almost a toxic brew of

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Speaker 2: risk on is where we are.

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Speaker 3: Which is the reason why a lot of people might

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Speaker 3: say it might have gone too fast. But it's hard

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Speaker 3: to lean against Peter. Just to Tom's point, the news

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Speaker 3: is that Mark Zuckerberg is selling MetaStock for the first

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Speaker 3: time in two years, and this comes after the incredible

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Speaker 3: run up, and you're seeing the shares in pre market

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Speaker 3: trading down about one and a half percent on Meta.

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Speaker 3: It raises this larger question of what do you lean against.

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Speaker 3: You said you think treasury is at rates have gone

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Speaker 3: too far. A lot of people, I think are starting

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Speaker 3: to pick that up, which is maybe why you're seeing

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Speaker 3: a bit of a retracement today on the equity side.

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Speaker 3: Are you hearing anyone lean against some of the tech

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Speaker 3: names that have gone incredibly far so far this year

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Speaker 3: and frankly the year that was November.

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Speaker 4: I'm not sure if many people are actually leaning against them.

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Speaker 4: I think it's still a fairly crowded trade to be

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Speaker 4: long those, but I would be very comfortable being short QQQ,

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Speaker 4: so the Nasdaq one hundred versus long IWM, the Russell

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Speaker 4: two thousand. I think trades like that are actually well

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Speaker 4: positioned for the next few weeks, and at some point

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Speaker 4: I do think we probably want to turn barish on

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Speaker 4: this market. Maybe we get to forty six fifty on

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Speaker 4: the S and P, maybe the Russell two thousand can

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Speaker 4: run another five percent. But if the economic date it

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Speaker 4: starts coming in as week as probably needs to be

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Speaker 4: to support for twenty ten years, then I think equities

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Speaker 4: are going to roll over a little bit. But that's

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Speaker 4: probably not this week, next week. That's probably closer to

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Speaker 4: the end of year, early January.

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Speaker 3: So how would Russell two thousand outperform Nasdaq in that scenario, right,

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Speaker 3: because at this point, if you start thinking about weaker

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Speaker 3: economic growth that supports the on call Why then with

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Speaker 3: some of the most leveraged to the economy companies, the

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Speaker 3: smaller companies do the best.

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Speaker 4: Because I think people have been avoiding those stocks all

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Speaker 4: year long and crowded into the other stocks. So it's

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Speaker 4: all going to be about what's crowded, right, And if

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Speaker 4: you start getting nervous about the economy, people are going

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Speaker 4: to turn around and say, oh, we've got to cut

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Speaker 4: our wrist. Well, guess what if you don't own a

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Speaker 4: lot of Rustle two thousand, you can't sell the Russell

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Speaker 4: two thousand, So you're gonna wind up selling what you have.

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Speaker 4: And I think that's just the nature of this market

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Speaker 4: right now. That's the crowded trade. That's where people piled into.

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Speaker 4: So if we get nervous about the economy, that's actually

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Speaker 4: going to sell off harder because that's where people are overweight.

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Speaker 2: Peter, we're's sixty forty twelve months from now.

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Speaker 4: No, probably where it's always been. That's kind of has

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Speaker 4: this attraction. That's one of the things that kind of

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Speaker 4: just keeps on going along with covered call writing people

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Speaker 4: like those strategies. I think you want to be probably

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Speaker 4: underweight treasuries right now in that sixty forty. You want

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Speaker 4: to be more towards the front end because I think

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Speaker 4: the next move should be slightly higher and yields back

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Speaker 4: to four forty maybe on tenure, but you still want

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Speaker 4: to play around that. You want these balanced portfolios, and

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Speaker 4: you want to also see what can we do outside.

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Speaker 4: Actually for the first time in multiple years, for the

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Speaker 4: last two weeks and hasn't been working yet. I like

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Speaker 4: Chinese stocks more on a trade. I think long term

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Speaker 4: I don't want to invest in China, but for a

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Speaker 4: trade they're fair.

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Speaker 2: Peter, thank you so much for the comments, particularly they're

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Speaker 2: on Meta as a Zuckerberg's unload stock as well.

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Speaker 1: We're in good company right now.

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Speaker 2: An FX George, Sarah Bellos's global head of FX research

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Speaker 2: at Deutsche Bank. George, throughout your note, there's this speed

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Speaker 2: towards very weak inflation, in abrupt disinflation. How do we

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Speaker 2: play that in foreign exchange?

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Speaker 5: So I think tom next year is still going to

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Speaker 5: be about these policy gaps. Which central bank is going

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Speaker 5: to cut first and which one is going to lag

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Speaker 5: or is it all going to be symmetric.

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Speaker 6: And the way I think we're being.

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Speaker 5: Set up for next year is that the DC is

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Speaker 5: most likely to go first. If we look at the

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Speaker 5: most recent inflation data, I would argue that ECB should

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Speaker 5: actually be cutting next week.

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Speaker 6: Inflation. Core inflation over the last three.

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Speaker 5: Months is running below one percent, so we're not that

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Speaker 5: far away from having to start thinking about deflation risks

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Speaker 5: when we're discussing Europe, and of course the economy is

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Speaker 5: also at best instagnation, so I would argue the market

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Speaker 5: is right to price more ECB easing, but perhaps versus

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Speaker 5: the US is getting quite ahead of itself.

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Speaker 7: It's George, you've got some aggressive calls on both central banks. Now,

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Speaker 7: then you've got a call on the Federal Reserve. You

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Speaker 7: and a team I think one hundred and seventy basis

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Speaker 7: points one hundred and seventy five basis points of cuts

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Speaker 7: starting in June next year. Now, George, is a range

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Speaker 7: of forecasts, as you know, for next year, but that's

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Speaker 7: certainly not consensus. Can you explain to us all why

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Speaker 7: you think we start in June but go a whole

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Speaker 7: lot deeper than a lot of people think.

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Speaker 5: Well, I think John Back goes back to the recession

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Speaker 5: versus as a soft landing debate. And now, if you

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Speaker 5: look at what the market's pricing at the moment, we

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Speaker 5: have FET funds going to around reasonable elements of neutral,

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Speaker 5: slightly above three percent. So the market is perfectly priced for.

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Speaker 6: A soft landing, so to speak.

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Speaker 5: So I think if we're looking at next year, the

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Speaker 5: strongest wee I'd probably have is this bond equity correlation,

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Speaker 5: which has been very positive. So you've had higher bond

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Speaker 5: prices and higher equities at the same time. That's very

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Speaker 5: unlikely to last because you're either into a soft.

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Speaker 6: Landing and therefore you can't price lower FET funds anymore

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Speaker 6: risk and continue going well.

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Speaker 5: But if you do go into recession, then you'll you

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Speaker 5: can most certainly price more cuts, but it's not.

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Speaker 6: Going to be possible for equities to still value.

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Speaker 5: So the last three four months have been great from

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Speaker 5: an masset perspective because you've had this bond and equities.

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Speaker 6: Going up at the same time.

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Speaker 5: I think that's going to be very difficult to repeat

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Speaker 5: itself for next year.

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Speaker 3: That's on the US side. I want to just get

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Speaker 3: you to elaborate a little bit when you're talking about

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Speaker 3: your belief that the ECB should cut next week. You

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Speaker 3: think that the Eurozone is facing deflation and that that

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Speaker 3: risk is rising. What do you think will be the

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Speaker 3: follow on response if the ECB goes ahead and does that.

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Speaker 3: Do you think that they could then engineer a soft

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Speaker 3: landing or do you think that they could just avoid

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Speaker 3: the depths of a pretty significant downturn that you think

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Speaker 3: hasn't been fully recognized.

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Speaker 5: So I think it's important to distinguish between growth and inflation,

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Speaker 5: and in fact, if I look at Europe, I would

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Speaker 5: say it's the perfect definition of a soft landing, because

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Speaker 5: what you have is growth are slow down and at

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Speaker 5: the moment it's around zero. So we're debating maybe we

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Speaker 5: get one or two quarters of neck to GDP. But

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Speaker 5: as long as the ECB cuts, and I need to

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Speaker 5: be careful of what I say, I think they should

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Speaker 5: be cutting next week, I don't think they will. I

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Speaker 5: think it's more likely precisely because they were late on

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Speaker 5: the way in, so to speak, they'll be late on

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Speaker 5: the way out.

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Speaker 6: But as long as the ECB say.

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Speaker 5: Cuts by March April, I think actually Europe's going to

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Speaker 5: be in a relatively okay place where the economy soft

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Speaker 5: lands and inflation comes back down to two percent or

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Speaker 5: potentially below, But that's actually pretty good outcome. It's also

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Speaker 5: quite a negative outcome for the exchange rate, but given

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Speaker 5: how quick inflation is coming down.

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Speaker 6: Probably a week of euro is not a bad thing

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Speaker 6: for Europe at the moment.

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Speaker 2: Cheorge over the weekend was a lot of zeitgeist hope

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Speaker 2: in prayer of a strong yen, off of some form

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Speaker 2: of policy change in Japan, a way for people to

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Speaker 2: make big, big, big figures fast Do you buy it?

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Speaker 6: So there's two ways to get a strong yen.

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Speaker 5: One is that the back of Japan finally starts a

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Speaker 5: proper hiking cycle. And what I mean by that is

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Speaker 5: they say they're going to start hiking every meeting. That

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Speaker 5: looks pretty unlikely, especially as the rest of the world

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Speaker 5: is moving into an easing cycle.

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Speaker 6: So I'd probably say that's the least likely outcome. But

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Speaker 6: if you are in an environment where the.

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Speaker 5: Other central banks are starting to come because inflation has

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Speaker 5: come down, then you can get yen strength because it

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Speaker 5: will be the outlier, so to speak, on the way

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Speaker 5: out as it was on the way in. So I've

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Speaker 5: been much more inclined to think about your strength from

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Speaker 5: the global perspective rather than the domestic Japanese perspective.

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Speaker 7: Dear Christaine, George thinks you will count next week. What

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Speaker 7: do you think, George? And I don't worry it's not

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Speaker 7: being the headline. George sara Velos at Deutsche Bank. George,

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Speaker 7: thank you.

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Speaker 2: Right now we are going to look at the climate

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Speaker 2: affairs of Dubai and this was the World Bank in

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Speaker 2: transition from David malpass over.

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Speaker 1: To mister Rogan.

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Speaker 2: What's so important here is his corporate work with Neslie

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Speaker 2: And I'm Domestercard and the general elector with a conversation

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Speaker 2: with a president of the World Bank, are Jen Zabajaja

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Speaker 2: in Dubai?

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Speaker 8: Jen?

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Speaker 9: Yeah, thanks so much, Tom a Jay. They were just

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Speaker 9: Tom was just giving you a really great intro there

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Speaker 9: about how your previous career. Now you're at the World Bank,

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Speaker 9: and let's just talk. In the first few months of

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Speaker 9: your role, you've made climate finance a priority. I mean,

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Speaker 9: can you talk to us about where you've seen progress

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Speaker 9: and whether you think this is really a turning point

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Speaker 9: for this discussion.

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Speaker 10: You know, I think it's very important because the reality

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Speaker 10: is that you've had the hottest year on record, we're

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Speaker 10: aiming for another hot year.

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Speaker 8: Clearly this has to change.

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Speaker 10: And you can't make climate and fight the climate issue

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Speaker 10: without money coming to work on it.

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Speaker 8: So it's one of the most important things.

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Speaker 10: When I traveled around the world, I picked up the

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Speaker 10: impression that dealing with poverty cannot be by itself. You

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Speaker 10: have to deal with climate, pandemics, fragility. These are all

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Speaker 10: intertwining crisis. That's why we change our mission to include

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Speaker 10: livable planet in addition to eradicating poverty. So this is

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Speaker 10: what we're on and what I'm trying to do here

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Speaker 10: to show you the progress, is to make a commitment

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Speaker 10: that we will get to forty five percent of our

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Speaker 10: financing annually. We'll go to climate by twenty twenty five,

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Speaker 10: two years from now, not ten years from today. That's

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Speaker 10: forty billion dollars a year working on climate finance.

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Speaker 9: How do you do that? How do you adjust your

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Speaker 9: balance sheet to ensure that?

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Speaker 10: Yeah, the good news is there's also raising capital along

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Speaker 10: the way thanks to this whole capital adequacy framework with

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Speaker 10: the G twenty Goddess going with and we're also doing

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Speaker 10: things like looking at whether we can securitize parts of

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Speaker 10: our baran sheet, existing balance sheet, free up some capital,

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Speaker 10: and then partnerships so you don't really do all that

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Speaker 10: financing yourself. You can also get partnerships going. You know,

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Speaker 10: I have great partners with the other multilateral banks, AI,

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Speaker 10: eib EBRD, these are all people who work with us.

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Speaker 10: So there's multiple ways to go at this. But at

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Speaker 10: the end of the day, the much bigger issue here is,

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Speaker 10: even if I do all that, even if the other

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Speaker 10: multilateral banks do what they can, even if governments do

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Speaker 10: all they can.

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Speaker 8: You do need the private sector.

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Speaker 10: You're going to need their ingenuity and technology and numbers, right.

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Speaker 9: And that's what you've been spending the past few days

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Speaker 9: talking a lot with the private sector. This is your

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Speaker 9: first Cough, can you talk to us about I mean,

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Speaker 9: give us a sense of what it's like in the

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Speaker 9: room where there's consensus and where there's still gaps within

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Speaker 9: the private sector in the collaboration.

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Speaker 8: That's a great question.

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Speaker 10: So the private sector issue is the private sector now

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Speaker 10: knows that's solar and wind power per unit is cheaper

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Speaker 10: than fossil fuel. That's proven with scale and technology. They

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Speaker 10: know that it takes longer sometimes as a gestation period,

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Speaker 10: and they know, they may have some higher capexet front

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Speaker 10: because they've got to build grids and you can't just

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Speaker 10: build the installed capacity, right, So they understand that. So

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Speaker 10: why is it then that they aren't burning down the

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Speaker 10: doors of countries to go do this?

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Speaker 8: For two or three reasons.

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Speaker 10: One is does the country have the capacity to absorb

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Speaker 10: this kind of projects coming in?

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Speaker 8: Can they connect the grids up? Can they do all that?

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Speaker 10: But second, much more critical is the two kinds of

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Speaker 10: risks that private sector investors don't like because they don't understand.

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Speaker 10: They don't understand political risk and they don't understand foreign

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Speaker 10: exchange risk in the emerging markets.

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Speaker 8: Now, political risk we can help it.

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Speaker 10: We have this this institution called MEGA our Interviews or

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Speaker 10: our Guarantee Agency. We've now got approval to use that

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Speaker 10: for every multilateral development bank. They can use our back

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Speaker 10: office to issue guarantees. This does political risk guarantees and

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Speaker 10: then lays them off in the reinsurance market.

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Speaker 8: We need to scale them. It's the FX risk that's

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Speaker 8: the much harder.

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Speaker 9: Well, how do you get around that? I mean, because

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Speaker 9: that's not going away in a lot of them right now.

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Speaker 10: So in fact, people keep talking about local currency markets

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Speaker 10: is the way to do it. The reality is developing

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Speaker 10: a local currency market. The right depth and width to

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Speaker 10: be able to do this well can take five ten years.

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Speaker 8: We don't really have five or ten years.

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Speaker 10: So I think we have to find instruments like could

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Speaker 10: we do some local currency bond issuance that we subsidize

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Speaker 10: the difference in costs through our balance sheet or our

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Speaker 10: concessual financing. Can we do things with others where there's

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Speaker 10: an institution called TCX which is created to help take

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Speaker 10: some of the FX risk in these markets. Can we

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Speaker 10: scale them up and so on and so forth. Can

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Speaker 10: we do creative swaps where using our rating we are

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Speaker 10: at a lower price and of the country world.

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Speaker 8: Hard FX risk is the hardest one. Yeah.

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Speaker 9: I mean, so then a Jay, when we talk about

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Speaker 9: the progress, then at the end of COP twenty eight,

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Speaker 9: your first COP, I mean, what does that look like

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Speaker 9: for you? What is it that you're shooting for? Because

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Speaker 9: there have been a number of initiatives and pledges, of

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Speaker 9: course the World Bank has been a part of some

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Speaker 9: of those. I mean, what then does progress look like

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Speaker 9: in the next few days.

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Speaker 10: So I've got five very clear things I'm measuring on

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Speaker 10: what we are doing. And the first one was getting

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Speaker 10: that forty five percent of financing that we talked about

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Speaker 10: in that fifty percent for mitigation, fifty percent for adaptation,

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Speaker 10: So we don't only do emission avoidance. We also care

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Speaker 10: about adapting and resilient infrastructure in the global cyll thing

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Speaker 10: that's very important.

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Speaker 8: The second big one is methane.

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Speaker 10: Methane is eighty times more toxic than carbon dioxide, but

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Speaker 10: it only gets two percent of climate financing. So what

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Speaker 10: we are doing is we've got actual projects on the

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Speaker 10: ground on rice tidy cultivation, livestock management and waste management.

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Speaker 10: Is scaling those, is saying we're going to get to

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Speaker 10: fifteen countries in eighteen months and over the course of

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Speaker 10: these projects take out ten million tons of methane from

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Speaker 10: the system.

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Speaker 8: Third one is Africa. Six hundred million.

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Speaker 10: People in Africa don't have access to electricity. We've got

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Speaker 10: a project approved by our board five billion of finance

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Speaker 10: from IDA, our lowest price guarantee kind of the cheapest

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Speaker 10: fund location, ten billion through governments in private sector. We're

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Speaker 10: going to connect one hundred million people in seven years.

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Speaker 10: Two power solar power, including the grids that need to

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Speaker 10: be existing to make this happen at scale. The fourth

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Speaker 10: one is voluntary carbon markets. So I think the only

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Speaker 10: way you transfer resources at scale from the developed world

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Speaker 10: to the developing world for what the developing world deserves

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Speaker 10: to be paid for, which is forests and natural resources,

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Speaker 10: is voluntary carbon markets.

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Speaker 9: So there's a lot of criticism about carbon market.

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Speaker 10: Yes, there is, because people felt that the credits were

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Speaker 10: coming weren't genuine credits. So you just picked on exactly

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Speaker 10: the topic that's really important, verifiable genuine credits of integrity.

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Speaker 10: How what determine whether these markets will work. So what

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Speaker 10: I'm doing is I'm not doing a carbon market where

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Speaker 10: I'm not involved. I'm doing carbon markets with projects for

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Speaker 10: the World Bank is doing a forestry project in a country.

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Speaker 10: So we're starting with four to fifteen by the end

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Speaker 10: of next year. We think these countries will generate twenty

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Speaker 10: four million credits next year itself, in one hundred and

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Speaker 10: twenty five over five or six years. I'm certifying the

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Speaker 10: environmental integrity through a jurisdictional loudic and I'm also certifying

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Speaker 10: the social integrity that most of the money they earn

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Speaker 10: will go to the communities and the indigenous.

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Speaker 8: People in that area. I think if you do things

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Speaker 8: like that, and you.

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Speaker 10: Do them with consistency, you will create the right kind

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Speaker 10: of carbon markets for tomorrow.

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Speaker 8: You're only getting five bucks the.

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Speaker 9: Credit right, so yes, but still a lot to go.

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Speaker 9: But glad to have you here, Bloomberg. Excuse me, A

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Speaker 9: j Bonga with the World Bank, A Ji, thank you

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Speaker 9: so much.

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Speaker 7: For your time, Thanks to join, Thank you, Thanks very

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Speaker 7: John back to you, Hey, Jen, thank you. We've got

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Speaker 7: to go, Jennifer Sabazangi there and at Jack Banker the

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Speaker 7: World Bank President.

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Speaker 2: David Turk joins us now with Secretary Grand Homiees US

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Speaker 2: Deputy Energy Secretary David thank you so much for joining us,

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Speaker 2: and you do so with your service to the nation

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Speaker 2: of six seven and eight jobs in climate. The immovable

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Speaker 2: fact is we're trying to do something about coal. My

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Speaker 2: latest reading is China's really not doing something about coal.

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Speaker 2: What is the Department's timeline in America to diminish coal usage?

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Speaker 11: Well, first of all, Tom at Lisa, thanks for the time,

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Speaker 11: and I really appreciate you being being with you today.

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Speaker 11: So we've got to look across the board. It's not

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Speaker 11: just coal, it's natural gas, it's oil. We've got to

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Speaker 11: look at all the sources of emissions, and we've got

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Speaker 11: to have a plan to build all the new clean energy.

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Speaker 11: And this is what we've got in the US. We've

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Speaker 11: got historic levels of funding through the pieces of legislation,

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Speaker 11: the Bipartisan and Infrastructure legislation, the Inflation Reduction Act. We're

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Speaker 11: building out our clean energy future like never before in

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Speaker 11: our country. It's quite staggering.

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Speaker 1: We're what we're doing.

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Speaker 2: I go with that, and of course, of the ft

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Speaker 2: this morning, a huge difference between a complete, compte, complete

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Speaker 2: climate commitment in Europe to the fractured battle you fight

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Speaker 2: every day in the United States. But to look at

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Speaker 2: coal is one example, particularly with the Chinese just ignoring

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Speaker 2: the debate on coal from everything I read, what is

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Speaker 2: the administration's path to shut down or diminish coal usage

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Speaker 2: across America.

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Speaker 11: So we've seen dramatic declines in coal in our country

440
00:20:26,359 --> 00:20:30,320
Speaker 11: and that's projected to continue going forward. It's because we

441
00:20:30,440 --> 00:20:35,959
Speaker 11: have cheaper, better alternatives solar and wind. On the solar

442
00:20:36,000 --> 00:20:39,200
Speaker 11: penetration we've got in our country, the wind, other clean

443
00:20:39,320 --> 00:20:42,560
Speaker 11: energy technologies, they're just simply cheaper and better, and so

444
00:20:42,600 --> 00:20:45,520
Speaker 11: the market is reacting to those incentives.

445
00:20:46,040 --> 00:20:49,080
Speaker 3: David, I'm looking right now at WTI crew treated on

446
00:20:49,080 --> 00:20:51,280
Speaker 3: the IMAX at seventy three dollars and forty six says

447
00:20:51,320 --> 00:20:53,320
Speaker 3: this is a good time to start refilling the strategic

448
00:20:53,400 --> 00:20:54,200
Speaker 3: petroleum reserve.

449
00:20:54,920 --> 00:20:57,800
Speaker 11: So we have been and we're going to be optortunistic

450
00:20:57,880 --> 00:20:59,760
Speaker 11: and we're going to take every advantage when the price

451
00:20:59,800 --> 00:21:01,720
Speaker 11: is at the right level to make a good deal

452
00:21:01,760 --> 00:21:06,120
Speaker 11: for taxpayers, we're going to refill. So we are refilling

453
00:21:06,160 --> 00:21:07,960
Speaker 11: as much as we can. We've been doing that for

454
00:21:08,000 --> 00:21:10,720
Speaker 11: the last several months, and at this price level, we'll

455
00:21:11,280 --> 00:21:11,920
Speaker 11: keep doing it.

456
00:21:12,119 --> 00:21:15,120
Speaker 3: And it's been about three million barrel a month purchase

457
00:21:15,240 --> 00:21:17,480
Speaker 3: that the Energy Department has been making. Do you plan

458
00:21:17,520 --> 00:21:20,959
Speaker 3: to accelerate that though, as prices do continue to fall.

459
00:21:21,160 --> 00:21:23,520
Speaker 11: So that is the physical limit of how much we

460
00:21:23,600 --> 00:21:26,840
Speaker 11: can buy back. We've got some lifetime extensions in some

461
00:21:26,920 --> 00:21:30,240
Speaker 11: of our caverns. We actually have four separate facilities for

462
00:21:30,400 --> 00:21:33,360
Speaker 11: separate sites for our strategic petroleum reserve, so we will

463
00:21:33,400 --> 00:21:36,240
Speaker 11: be doing at least three million barrels, and we hope

464
00:21:36,240 --> 00:21:39,119
Speaker 11: we can bring more capacity online at these price levels

465
00:21:39,119 --> 00:21:41,520
Speaker 11: to buy as much as we can to refill to

466
00:21:41,560 --> 00:21:44,439
Speaker 11: make sure we've got that available when we need it

467
00:21:44,440 --> 00:21:46,720
Speaker 11: in the future, so we'll buy as much back as

468
00:21:46,720 --> 00:21:50,320
Speaker 11: we possibly can, but there are some physical constraints given

469
00:21:50,320 --> 00:21:51,440
Speaker 11: the way the caverns.

470
00:21:51,040 --> 00:21:51,520
Speaker 5: Are set up.

471
00:21:51,760 --> 00:21:54,080
Speaker 3: We've been talking a lot about some of the consolidation

472
00:21:54,440 --> 00:21:57,359
Speaker 3: in the shale patch, with a number of companies coming

473
00:21:57,359 --> 00:22:00,600
Speaker 3: to the latest coming this morning. Is a thing from

474
00:22:00,640 --> 00:22:02,640
Speaker 3: the Energy Department standpoint or a bad thing.

475
00:22:03,040 --> 00:22:04,719
Speaker 11: So as you know, a lot of decisions that are

476
00:22:04,720 --> 00:22:07,000
Speaker 11: made in the energy sector, certainly in our country, or

477
00:22:07,040 --> 00:22:11,600
Speaker 11: private sector decisions along those lines, and we're certainly seeing

478
00:22:11,640 --> 00:22:14,960
Speaker 11: that happen as well. I think one good thing we've

479
00:22:14,960 --> 00:22:17,480
Speaker 11: certainly seen is a focus from a lot of companies,

480
00:22:17,520 --> 00:22:20,400
Speaker 11: including here at the Climate Conference, on reducing methane emissions.

481
00:22:21,160 --> 00:22:23,320
Speaker 11: This is something we've been after for quite some time.

482
00:22:23,800 --> 00:22:27,480
Speaker 11: Our EPA colleagues recently announced some big news here in

483
00:22:27,560 --> 00:22:31,480
Speaker 11: terms of the new regulatory structure to really do what's

484
00:22:31,520 --> 00:22:34,040
Speaker 11: the biggest no brainer I think in the history of

485
00:22:34,040 --> 00:22:36,399
Speaker 11: no brainers on climate is reduced methane emissions in the

486
00:22:36,440 --> 00:22:38,880
Speaker 11: oil and gas sectors. So we're really stepping up on that,

487
00:22:38,960 --> 00:22:42,080
Speaker 11: and we're seeing some companies step up on that beyond

488
00:22:42,160 --> 00:22:43,920
Speaker 11: what they're required to do in the US.

489
00:22:43,800 --> 00:22:45,679
Speaker 1: I'll take your point on it. There's some real traction

490
00:22:46,160 --> 00:22:48,080
Speaker 1: on that, you know. I want to go back here.

491
00:22:48,119 --> 00:22:51,199
Speaker 2: You are an advisor fresh out of Virginia to Senators Biden,

492
00:22:51,359 --> 00:22:55,080
Speaker 2: Senator Conrad, You've had eighteen jobs and energy. You've arguably,

493
00:22:55,560 --> 00:22:59,280
Speaker 2: David Turk, Republicans and Democrats have more experience than anybody

494
00:22:59,320 --> 00:23:00,000
Speaker 2: breathing today.

495
00:23:00,040 --> 00:23:01,639
Speaker 1: Hey, how did we.

496
00:23:01,600 --> 00:23:06,439
Speaker 2: Get to being an opex sized oil nation all of

497
00:23:06,440 --> 00:23:08,840
Speaker 2: a sudden, We're like as big as a rocker.

498
00:23:08,920 --> 00:23:10,560
Speaker 1: You know, I'll let you decide what it is.

499
00:23:10,960 --> 00:23:16,120
Speaker 2: How did we get to this hydrocarbon success that America

500
00:23:16,280 --> 00:23:16,840
Speaker 2: is today?

501
00:23:17,200 --> 00:23:19,280
Speaker 11: Well, first of all, Tom, thanks for the compliment. I'll

502
00:23:19,320 --> 00:23:23,240
Speaker 11: make sure my mom sees this. And here's such a nice,

503
00:23:23,560 --> 00:23:26,840
Speaker 11: nice compliment. I think the short answer is, we are

504
00:23:26,880 --> 00:23:31,560
Speaker 11: a private sector market. Unless you have federal laws, federal restrictions,

505
00:23:31,560 --> 00:23:34,320
Speaker 11: the private sector will do what the private sector will do.

506
00:23:34,640 --> 00:23:36,840
Speaker 11: And they found a lot of profit and a lot

507
00:23:36,840 --> 00:23:40,040
Speaker 11: of opportunity, including and especially in shale in our country.

508
00:23:40,200 --> 00:23:42,119
Speaker 2: What do you say to the critics of the Biden

509
00:23:42,160 --> 00:23:45,680
Speaker 2: administration that it is not private sector centric?

510
00:23:46,320 --> 00:23:48,480
Speaker 11: So look at the numbers, look at where the production

511
00:23:48,920 --> 00:23:52,080
Speaker 11: levels are at. We also need to of course, focus

512
00:23:52,119 --> 00:23:54,560
Speaker 11: on the emissions coming from all of that oil and gas,

513
00:23:54,600 --> 00:23:56,879
Speaker 11: not only that produce in the US, but around the world.

514
00:23:57,400 --> 00:23:59,280
Speaker 11: And one disappointment I have to say here at the

515
00:23:59,280 --> 00:24:02,480
Speaker 11: Climate Conference is, while we've made some progress on methane emissions,

516
00:24:02,480 --> 00:24:04,880
Speaker 11: that's a big deal, I don't think there's as much

517
00:24:05,320 --> 00:24:07,720
Speaker 11: focus as there needs to be on oil and gas

518
00:24:07,960 --> 00:24:14,000
Speaker 11: Scope three emissions. That is, those emissions produced when that

519
00:24:14,119 --> 00:24:18,760
Speaker 11: oil that gasoline goes into the atmosphere. Scope three emissions

520
00:24:18,760 --> 00:24:21,720
Speaker 11: are actually ten times the amount of Scope one in

521
00:24:21,760 --> 00:24:23,800
Speaker 11: Scope two for many oil and gas companies. So we

522
00:24:23,840 --> 00:24:26,040
Speaker 11: need a lot more focus on Scope three emissions. We

523
00:24:26,080 --> 00:24:28,600
Speaker 11: need a real credible plan for dealing with those emissions.

524
00:24:28,920 --> 00:24:30,840
Speaker 3: David, does it make it kind of awkward for the

525
00:24:30,920 --> 00:24:34,320
Speaker 3: US to have a leadership position in reducing emissions at

526
00:24:34,320 --> 00:24:37,520
Speaker 3: COP twenty eight given the fact that US production has

527
00:24:37,560 --> 00:24:40,600
Speaker 3: increased to a record pace, even as it's cut in

528
00:24:40,640 --> 00:24:42,560
Speaker 3: places like Saudi Arabia and cutter.

529
00:24:43,040 --> 00:24:45,359
Speaker 11: So I feel incredibly proud to be part of this

530
00:24:45,640 --> 00:24:49,320
Speaker 11: historic Biden administration when it comes to climate change. In fact,

531
00:24:49,400 --> 00:24:52,320
Speaker 11: we're actually seeing our emissions decrease in the US three

532
00:24:52,400 --> 00:24:58,440
Speaker 11: percent in twenty twenty three, despite GDP growth healthier than

533
00:24:58,520 --> 00:25:01,000
Speaker 11: just about every other country in the world. And what

534
00:25:01,040 --> 00:25:03,639
Speaker 11: you've seen is with the historic pieces of legislation all

535
00:25:03,680 --> 00:25:07,399
Speaker 11: we're doing in this administration, we're expected already, just in

536
00:25:07,440 --> 00:25:10,719
Speaker 11: these few short years of policy to actually double our

537
00:25:10,720 --> 00:25:18,040
Speaker 11: emission reductions by twenty thirty forty plus reductions just from

538
00:25:18,119 --> 00:25:22,199
Speaker 11: the actions from this administration. That's an impressive record, and

539
00:25:22,240 --> 00:25:24,240
Speaker 11: we need to do more. All countries around the world

540
00:25:24,280 --> 00:25:28,400
Speaker 11: need to do more given the climate challenges that we face,

541
00:25:28,440 --> 00:25:30,000
Speaker 11: and we're already seeing in our world today.

542
00:25:30,400 --> 00:25:31,920
Speaker 1: David Turk, thank you so much.

543
00:25:31,920 --> 00:25:35,080
Speaker 2: She is a deputy US Energy Secretary, of course from Dubai.

544
00:25:45,760 --> 00:25:49,679
Speaker 2: Looking at United Delta and American Airlines is Helene Becker,

545
00:25:50,080 --> 00:25:54,320
Speaker 2: senior research channel is TD Cowen. Why did this happen?

546
00:25:54,560 --> 00:25:58,600
Speaker 2: Is this too many dinosaurs mating? What's the why here

547
00:25:59,040 --> 00:26:02,000
Speaker 2: versus UNI, Delta and American?

548
00:26:03,119 --> 00:26:07,040
Speaker 12: Hi, tom So, I think the why is twofold. First

549
00:26:07,080 --> 00:26:10,800
Speaker 12: of all, this is a continuation of the consolidation we've

550
00:26:10,840 --> 00:26:14,480
Speaker 12: seen in the past for the industry, but also during

551
00:26:14,520 --> 00:26:19,159
Speaker 12: the pandemic, we didn't have the consolidation we probably should

552
00:26:19,200 --> 00:26:22,280
Speaker 12: have had we had the government stepping in to save

553
00:26:22,359 --> 00:26:28,199
Speaker 12: the airline industry, and unfortunately they couldn't save everybody. So

554
00:26:28,280 --> 00:26:32,680
Speaker 12: now you're getting that wash out. And I think for

555
00:26:32,840 --> 00:26:38,119
Speaker 12: Alaska and Hawaiian specifically, it really will help them cross

556
00:26:38,200 --> 00:26:40,600
Speaker 12: the bridge to the other side of the river, so

557
00:26:40,680 --> 00:26:44,800
Speaker 12: to speak, where where they'll be able to survive as

558
00:26:44,840 --> 00:26:45,960
Speaker 12: a consumer.

559
00:26:45,560 --> 00:26:48,200
Speaker 1: Brand away from the financial part.

560
00:26:48,320 --> 00:26:53,199
Speaker 2: Helene Becker, where is the where is the flight that

561
00:26:53,440 --> 00:26:54,680
Speaker 2: really is going to add value?

562
00:26:54,720 --> 00:26:54,880
Speaker 8: Here?

563
00:26:54,920 --> 00:26:59,160
Speaker 2: Is it lax to Hawaii something John's taken a million times?

564
00:26:58,960 --> 00:27:01,480
Speaker 2: What's the fly where you thought, Wow, this is where

565
00:27:01,520 --> 00:27:02,639
Speaker 2: the synergy can happen.

566
00:27:03,440 --> 00:27:07,560
Speaker 12: Yeah, I think it's more Hawaii to the mainland for

567
00:27:08,040 --> 00:27:10,600
Speaker 12: people who come. First of all, Hawaii, as you know,

568
00:27:10,760 --> 00:27:13,439
Speaker 12: is very remote. I think it's the most one of

569
00:27:13,480 --> 00:27:15,439
Speaker 12: the most remote places on Earth and one of the

570
00:27:15,480 --> 00:27:18,640
Speaker 12: hardest to get to. And so for people who live

571
00:27:18,720 --> 00:27:22,440
Speaker 12: in the islands, they do tend to go either inter

572
00:27:22,600 --> 00:27:25,359
Speaker 12: island or to the west coast. They don't really reach

573
00:27:25,440 --> 00:27:28,400
Speaker 12: too much into the mainland, and if they want to,

574
00:27:28,480 --> 00:27:31,720
Speaker 12: it's usually a one it's usually more than a one

575
00:27:31,760 --> 00:27:37,159
Speaker 12: stop flight. For Alaska, it gives them the opportunity to

576
00:27:37,560 --> 00:27:40,680
Speaker 12: be bigger. I think the combined airline will have over

577
00:27:40,760 --> 00:27:45,800
Speaker 12: three hundred aircraft revenue will be about thirteen to fourteen

578
00:27:45,840 --> 00:27:49,400
Speaker 12: billion dollars, So it's not like they're close right your

579
00:27:49,480 --> 00:27:52,720
Speaker 12: comment before about American Delta United, those are fifty billion

580
00:27:52,840 --> 00:27:58,440
Speaker 12: dollar revenue companies. These are small and they serve a purpose.

581
00:27:58,960 --> 00:28:02,320
Speaker 12: People fly them. They fly eighty eighty five percent low factors.

582
00:28:02,359 --> 00:28:05,800
Speaker 12: They both deliver a great product. You're not really changing

583
00:28:05,840 --> 00:28:08,840
Speaker 12: a whole lot, unlike with Jeff Blue and Spirit, where

584
00:28:08,840 --> 00:28:13,240
Speaker 12: you're changing more. Not to say that merger shouldn't occur,

585
00:28:13,400 --> 00:28:17,040
Speaker 12: but we're looking at airlines to your right again, to

586
00:28:17,080 --> 00:28:19,879
Speaker 12: your point, be four Hawaiians up what one hundred and

587
00:28:19,920 --> 00:28:26,840
Speaker 12: eighty percent pre market, and that's primarily because under five dollars,

588
00:28:26,880 --> 00:28:29,679
Speaker 12: the market's telling you these companies can't survive. And we

589
00:28:29,720 --> 00:28:33,280
Speaker 12: have a lot of airlines in that under five dollars

590
00:28:33,920 --> 00:28:39,800
Speaker 12: trading range right now, and so we're seeing that consolidation

591
00:28:39,960 --> 00:28:42,360
Speaker 12: that should have probably already occurred.

592
00:28:42,600 --> 00:28:46,120
Speaker 13: It's a direct Newark Hawaii United.

593
00:28:46,240 --> 00:28:49,200
Speaker 1: No way you can fly directly from it.

594
00:28:49,240 --> 00:28:52,080
Speaker 13: You can fly direct from Newark on United.

595
00:28:52,640 --> 00:28:53,200
Speaker 1: I did not know.

596
00:28:53,280 --> 00:28:54,880
Speaker 13: Yes, it did give me a break.

597
00:28:54,960 --> 00:28:57,080
Speaker 7: Let's get into it a line. Not that the important

598
00:28:57,080 --> 00:29:01,000
Speaker 7: stuff Jet Blue and Spirit. How do the between Jetlu

599
00:29:01,000 --> 00:29:05,200
Speaker 7: and American Airlines crushed? What will they allow? What won't

600
00:29:05,200 --> 00:29:08,840
Speaker 7: they allow? We can see this morning that Alaska are

601
00:29:08,840 --> 00:29:11,160
Speaker 7: making a very clear statement that they don't think this

602
00:29:11,240 --> 00:29:15,000
Speaker 7: is anti competitive. They're complementary businesses. The overlap is only

603
00:29:15,040 --> 00:29:17,480
Speaker 7: twelve routes, three percent of their total seats. Can you

604
00:29:17,520 --> 00:29:19,200
Speaker 7: frame for us what is allowed and what isn't?

605
00:29:20,280 --> 00:29:24,160
Speaker 12: Yeah, I think this Justice Department doesn't like anything big.

606
00:29:24,400 --> 00:29:26,480
Speaker 12: And it's not like these guys were going to be big.

607
00:29:26,560 --> 00:29:29,280
Speaker 12: Jet bluin Spirit isn't big, right? They go to be

608
00:29:29,440 --> 00:29:32,440
Speaker 12: the fifth largest, Jet Blue spiritus to be the fifth largest,

609
00:29:32,480 --> 00:29:35,920
Speaker 12: Alaska Hawaiian is going to be right in there, five six,

610
00:29:36,000 --> 00:29:38,480
Speaker 12: something like that. It's not like we're going to take

611
00:29:38,520 --> 00:29:43,000
Speaker 12: over the fourth largest spot. Jet Blue and Spirit are

612
00:29:43,080 --> 00:29:46,120
Speaker 12: nine percent on a combined basis. This is even smaller.

613
00:29:46,560 --> 00:29:51,040
Speaker 12: So I suspect that if they look at this on

614
00:29:51,840 --> 00:29:56,760
Speaker 12: a I don't know the right word, just the way

615
00:29:56,800 --> 00:30:01,120
Speaker 12: they should on a not with a jaded eye where

616
00:30:01,160 --> 00:30:03,800
Speaker 12: they're just looking at it, does this deal makes sense?

617
00:30:03,920 --> 00:30:06,960
Speaker 12: They should come away with yes, this transaction does make sense.

618
00:30:07,000 --> 00:30:08,840
Speaker 3: Well, Helene, just to put a bow on that, if

619
00:30:08,880 --> 00:30:11,520
Speaker 3: they approve this transaction, do they have to approve Spirit

620
00:30:11,560 --> 00:30:12,280
Speaker 3: and Jet Blue.

621
00:30:13,080 --> 00:30:17,400
Speaker 12: Well Spirit Jeff Blue should have is where it belongs. Right,

622
00:30:17,400 --> 00:30:22,080
Speaker 12: they're in court closing arguments start tomorrow, should take to

623
00:30:22,120 --> 00:30:24,520
Speaker 12: the end of the week, I would think if even

624
00:30:24,600 --> 00:30:27,440
Speaker 12: that long, and then the judge renders his decision. So,

625
00:30:28,760 --> 00:30:30,960
Speaker 12: I mean, the one word answer releases yes, they should

626
00:30:31,000 --> 00:30:33,600
Speaker 12: just move on and go fight other battles.

627
00:30:33,880 --> 00:30:35,719
Speaker 3: How much is this going to be some sort of

628
00:30:35,720 --> 00:30:39,600
Speaker 3: consolidation of aircraft's, consolidation of workers, consolidation of operations, and

629
00:30:39,640 --> 00:30:41,840
Speaker 3: how much is it going to be just the actual

630
00:30:41,880 --> 00:30:44,400
Speaker 3: geography of these places. People go to Hawaii in the

631
00:30:44,400 --> 00:30:47,000
Speaker 3: winter time and people go to Alaska in the summertime,

632
00:30:47,040 --> 00:30:48,120
Speaker 3: and they can offset each.

633
00:30:48,000 --> 00:30:52,560
Speaker 12: Other right exactly. So two things there to think about.

634
00:30:52,640 --> 00:30:56,440
Speaker 12: They're both kind of bucketless trips. Right from the mainland,

635
00:30:56,560 --> 00:30:59,760
Speaker 12: especially the East coast. It's fifteen hours NonStop on the

636
00:31:00,040 --> 00:31:03,600
Speaker 12: United flight out of Newark. Hawaiian flights out of JFK,

637
00:31:04,600 --> 00:31:06,960
Speaker 12: they used to fly out of Boston. That flight I

638
00:31:07,000 --> 00:31:11,440
Speaker 12: think came back post pandemic, so they do fly here

639
00:31:11,480 --> 00:31:13,960
Speaker 12: on a NonStop basis, but those are a fifteen hour flights,

640
00:31:14,000 --> 00:31:16,320
Speaker 12: so those are bucketless strips. If you're coming from the

641
00:31:16,360 --> 00:31:21,440
Speaker 12: East coast. In terms of operations, they said last night

642
00:31:21,480 --> 00:31:26,200
Speaker 12: that they're going to operate the two separately, one operating certificate,

643
00:31:26,240 --> 00:31:29,400
Speaker 12: but two separate brands, sort of the way hotel chains

644
00:31:29,480 --> 00:31:32,520
Speaker 12: do it, right, you have fourteen or fifteen brands under

645
00:31:33,000 --> 00:31:37,240
Speaker 12: one major holding company. Same thing here. They're going to

646
00:31:37,280 --> 00:31:41,280
Speaker 12: just operate Hawaiians separately and Alaska separately because both companies

647
00:31:41,320 --> 00:31:44,480
Speaker 12: really do have great brands and they're well loved by

648
00:31:44,680 --> 00:31:45,960
Speaker 12: the people who fly them a.

649
00:31:45,880 --> 00:31:48,480
Speaker 7: Lot Alane, Just to wrap things up, to get your topic,

650
00:31:48,560 --> 00:31:51,560
Speaker 7: the airlines have bounced recently, but it's still some twenty

651
00:31:51,600 --> 00:31:54,240
Speaker 7: seven percent from the attitude we hit back in the summer.

652
00:31:54,320 --> 00:31:54,760
Speaker 13: Do you like that?

653
00:31:55,480 --> 00:31:55,640
Speaker 2: Yes?

654
00:31:56,360 --> 00:31:59,320
Speaker 13: Like part of that line. What is your topic? At

655
00:31:59,320 --> 00:31:59,720
Speaker 13: the moment?

656
00:31:59,720 --> 00:32:02,480
Speaker 7: We have busiest day on record for US Airport's only

657
00:32:02,480 --> 00:32:04,920
Speaker 7: a couple of Sundays ago and these stalks over the

658
00:32:05,000 --> 00:32:07,320
Speaker 7: last few months. Yes, more recently of rally, but it's

659
00:32:07,320 --> 00:32:09,200
Speaker 7: been difficult since the July peak.

660
00:32:09,880 --> 00:32:13,760
Speaker 12: Yeah, people have been worried about the consumer recession, et cetera.

661
00:32:14,600 --> 00:32:18,360
Speaker 12: So our best idea for twenty twenty three was United

662
00:32:18,360 --> 00:32:20,920
Speaker 12: and our best idea for twenty twenty four is Delta.

663
00:32:21,800 --> 00:32:24,520
Speaker 13: Why the change lane.

664
00:32:24,680 --> 00:32:28,200
Speaker 12: So the change primarily came for two reasons. One, United

665
00:32:28,200 --> 00:32:30,160
Speaker 12: it's been our best idea for the past two years

666
00:32:30,200 --> 00:32:34,240
Speaker 12: and it's mostly worked. But they're embarking on a sixty

667
00:32:34,280 --> 00:32:38,239
Speaker 12: billion dollars ten year capex program, and we don't think

668
00:32:38,360 --> 00:32:40,720
Speaker 12: Delta's is going to be quite as suggressive. We think

669
00:32:40,840 --> 00:32:44,280
Speaker 12: Delta's will be smaller than that. At some point they'll

670
00:32:44,320 --> 00:32:46,560
Speaker 12: have to replace the seven to one sevens. They'll probably

671
00:32:46,560 --> 00:32:48,440
Speaker 12: do that with E T twenties, but it's a much

672
00:32:48,480 --> 00:32:53,000
Speaker 12: smaller capex program. Delta has a similar footprint to United.

673
00:32:53,040 --> 00:32:56,520
Speaker 12: They're just a little bit bigger domestically than United. United's

674
00:32:56,560 --> 00:33:00,720
Speaker 12: fifty to fifty domestic international, while Delta's more like sixty.

675
00:33:01,640 --> 00:33:05,760
Speaker 12: So we just pivoted a little bit to to Delta.

676
00:33:06,120 --> 00:33:08,640
Speaker 12: The balance sheet, the order book, those are a couple

677
00:33:08,640 --> 00:33:09,720
Speaker 12: of the reasons why.

678
00:33:09,960 --> 00:33:12,000
Speaker 13: I appreciate the update. Line A line back for a

679
00:33:12,080 --> 00:33:13,040
Speaker 13: t account.

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00:33:13,240 --> 00:33:17,080
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681
00:33:17,200 --> 00:33:21,440
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682
00:33:21,680 --> 00:33:25,200
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00:33:25,320 --> 00:33:28,000
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00:33:27,960 --> 00:33:29,280
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685
00:33:29,720 --> 00:33:33,480
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00:33:33,760 --> 00:33:35,000
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00:33:35,400 --> 00:33:39,560
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