WEBVTT - Trump and Canada Bounce Around on Tariffs 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.640 --> 0:00:12.640 This is Bloomberg Business Week Insight from the reporters and 0:00:12.800 --> 0:00:16.800 editors that bring you America's most trusted business magazine, plus 0:00:17.000 --> 0:00:20.799 global business, finance and tech news. The Bloomberg Business Week 0:00:20.840 --> 0:00:25.600 Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio. 0:00:26.560 --> 0:00:29.240 In the meantime, we got some news. Market started off 0:00:29.400 --> 0:00:33.040 this morning kind of mellow after yesterday's selling, and then bam, 0:00:33.040 --> 0:00:34.520 we got a headline out of the White House. 0:00:34.840 --> 0:00:37.960 Yeah, we certainly did check out. Shares of aluminum and 0:00:38.000 --> 0:00:41.120 steel producers Century Aluminum, US Steel, New Core all higher 0:00:41.400 --> 0:00:43.600 this after President Trump said he would increase steel and 0:00:43.640 --> 0:00:47.520 aluminum tariffs on Canada to fifty percent to retaliate against 0:00:47.560 --> 0:00:50.720 Ontario's move raising taxes on electricity sent to the US, 0:00:50.800 --> 0:00:53.479 ramping up his fight with the US's largest trading partner. 0:00:53.720 --> 0:00:56.520 We got Joe Doe with us. He's Bloomberg News Metals 0:00:56.560 --> 0:00:59.160 and mining reporter and heavy machinery reporter. He joined us 0:00:59.160 --> 0:01:02.680 here in Bloomberg internat Active at Brokers Studio. Joe, how 0:01:02.800 --> 0:01:05.280 much steal and aluminum do we get from Canada? 0:01:06.480 --> 0:01:10.880 About sixty percent of our imports in aluminum or from Canada, 0:01:11.000 --> 0:01:14.160 and something like twenty three percent of our steel imports 0:01:14.720 --> 0:01:18.120 are from Canada. I think the steel numbers over five million. 0:01:18.560 --> 0:01:22.120 Okay, yeah, so these tariffs are certainly material, no question. 0:01:22.200 --> 0:01:26.280 Yeah, absolutely they are. I mean they're they're deeply material 0:01:26.280 --> 0:01:29.720 on aluminum, and they are significant on the steel front. 0:01:29.760 --> 0:01:33.000 Do we have the capacity in the United States to 0:01:34.680 --> 0:01:37.440 provide and produce all the steel and aluminum that we 0:01:37.480 --> 0:01:40.840 need without importing any. 0:01:40.200 --> 0:01:43.720 There is capacity still available in the domestic supply chain 0:01:44.040 --> 0:01:47.119 by the US mills for steel. We're running at about 0:01:47.160 --> 0:01:50.200 seventy five percent right now. Earlier one of our bi 0:01:50.280 --> 0:01:53.520 analysts was saying we could go, you know, eighty five percent, 0:01:53.560 --> 0:01:55.840 which I think if you're hitting eighty five percent, that's 0:01:55.880 --> 0:01:57.720 what the mills tell you is when they're really making 0:01:57.760 --> 0:01:59.840 a lot of money and they can do. They can't 0:01:59.880 --> 0:02:01.920 go over ninety percent because it just doesn't make sense. 0:02:01.920 --> 0:02:04.960 You'd be running them too hard and you could break things. Aluminum, 0:02:05.000 --> 0:02:08.000 there's absolutely no way, bottom line. 0:02:07.720 --> 0:02:09.840 So okay, so what do we do. We just have 0:02:09.880 --> 0:02:10.440 to pay for it. 0:02:11.240 --> 0:02:12.799 Right now, it seems like you're going to have to 0:02:12.880 --> 0:02:15.679 pay a lot for aluminum coming from Canada and you'll 0:02:15.720 --> 0:02:18.720 be paying if you're buying from Canada, you'll be paying 0:02:18.720 --> 0:02:22.799 a lot for steel as well. But the Algoma CEO, 0:02:23.080 --> 0:02:26.080 who's one of the three major steelmakers in Canada, was 0:02:26.120 --> 0:02:29.400 on our sister network in Canada earlier today and said, 0:02:29.840 --> 0:02:32.080 we're calling up all of our customers in Canada and 0:02:32.120 --> 0:02:34.440 asking them to buy from US. And a large part 0:02:34.480 --> 0:02:38.480 of that is because there's worries of retaliatory terrafs and 0:02:38.480 --> 0:02:40.480 everything else. But I can tell you I had a 0:02:41.680 --> 0:02:44.520 at a meeting earlier today with someone who's very familiar 0:02:44.520 --> 0:02:46.760 with the Canadian steel market and said, you know, if 0:02:46.760 --> 0:02:48.560 things get really hairy, that's what you're going to see 0:02:48.560 --> 0:02:51.639 the Canadian steelmakers do. They're just going to sell to 0:02:51.840 --> 0:02:54.560 Canadians and then the US market's going to figure out 0:02:54.600 --> 0:02:55.800 how to fill that need. 0:02:56.240 --> 0:02:58.680 Well, we're already seeing the effects of these announced tariffs, 0:02:58.680 --> 0:02:59.240 says Carol. 0:02:59.280 --> 0:02:59.640 Mentioned. 0:03:00.000 --> 0:03:02.200 Just a few minutes ago, Ontario announced it was suspend 0:03:02.240 --> 0:03:04.880 a twenty five percent surcharge on electricity sent to the 0:03:04.960 --> 0:03:08.480 US after President Trump announced he'd double steal in aluminum 0:03:08.520 --> 0:03:11.480 tariffs on Canada fifty percent. This in an escalating trade 0:03:11.480 --> 0:03:14.200 war between the neighbors. So are we going to see 0:03:14.240 --> 0:03:18.679 these tariffs removed, because Canada's responded. 0:03:18.800 --> 0:03:22.160 This is a hard thing to figure out. We I 0:03:22.160 --> 0:03:23.840 had a few phone calls this morning that we were 0:03:23.960 --> 0:03:26.840 able to add in to our main bar story that 0:03:27.000 --> 0:03:29.720 was first announcing that the President had made this point. 0:03:29.800 --> 0:03:33.040 And what we found out through sources who are experts 0:03:33.360 --> 0:03:35.920 helping out on the steel and aluminum terrafs. Right these 0:03:35.960 --> 0:03:38.560 are people who have effectively been saying we should have 0:03:38.600 --> 0:03:41.800 these tarffs were admitting to us that they were unaware 0:03:42.080 --> 0:03:45.400 that the President was going to do this today. I 0:03:45.520 --> 0:03:49.600 think that's significant that even when the industries that are 0:03:49.640 --> 0:03:55.440 supposedly getting the benefit weren't looped into something. It just 0:03:55.560 --> 0:03:59.840 shows the mayhem. It just shows how so much of 0:04:00.040 --> 0:04:03.360 this is coming together in a snap out of nowhere. 0:04:03.800 --> 0:04:06.440 And I think the trouble is and you hear this. 0:04:06.520 --> 0:04:09.000 I mean, in the past two weeks, I've sat down 0:04:09.040 --> 0:04:12.040 with so many traders who are in the physical markets 0:04:12.360 --> 0:04:15.400 for stealing aluminum, and I've said, it's impossible to put 0:04:15.440 --> 0:04:18.240 a bet on right now. We can't do anything. We 0:04:18.400 --> 0:04:22.120 don't know if the example that I was given by 0:04:22.160 --> 0:04:25.599 one person was they had made a bet on copper 0:04:26.240 --> 0:04:28.520 right there was an expectation that on some level the 0:04:28.520 --> 0:04:30.560 President would do something on copper. And then at the end, 0:04:30.680 --> 0:04:32.560 at the beginning of February, he came in and said, yes, 0:04:32.600 --> 0:04:34.720 we are going to do something on copper, and it 0:04:34.800 --> 0:04:36.800 looked like that trade was great. But then a few 0:04:36.880 --> 0:04:39.919 days later he came back and said, well, copper's not 0:04:39.960 --> 0:04:41.960 going to be a part of this initial round of terrace, 0:04:42.720 --> 0:04:46.159 and so that trade is completely wound right there. I 0:04:46.200 --> 0:04:48.920 think that's just an anecdote of what we're talking about 0:04:48.960 --> 0:04:52.359 here as to why it's so difficult even for traders, 0:04:52.440 --> 0:04:54.159 right who make money on the way up or on 0:04:54.200 --> 0:04:56.600 the way down, are just saying we're staying away from 0:04:56.600 --> 0:04:57.200 this for the moment. 0:04:57.279 --> 0:04:59.240 That is pretty amazing, right to just say hands off 0:04:59.320 --> 0:05:02.000 right as you say that they like to play the volatility. 0:05:02.320 --> 0:05:05.440 I mean, help me out here. Maybe stupid question, I'm 0:05:05.480 --> 0:05:07.320 okay with that, but I mean in terms of the 0:05:07.440 --> 0:05:10.520 US steel and aluminum industry, or I guess it's really 0:05:10.760 --> 0:05:12.640 they do they want higher tariffs. 0:05:13.640 --> 0:05:16.640 Listen the domestic steel producers and the which. 0:05:16.400 --> 0:05:18.880 Have been decimated over the decade. 0:05:18.960 --> 0:05:22.240 Well yeah, I mean, listen, these the steelmakers have been 0:05:22.240 --> 0:05:26.159 mostly okay, Like if it's such a long breakdown, and 0:05:26.200 --> 0:05:27.560 we don't have to get into it. But New Core 0:05:27.560 --> 0:05:30.200 Corporation makes a lot of money their A plus bond ratings. 0:05:30.360 --> 0:05:33.960 Same with Steel Dynamics, Right, these guys do very well 0:05:34.000 --> 0:05:36.560 and they sell a lot of steel. But the issue 0:05:36.680 --> 0:05:40.080 is they want to make better profits. And that was 0:05:40.120 --> 0:05:42.839 the whole point in twenty eighteen when we implemented the 0:05:42.880 --> 0:05:45.200 Section two thirty two terrafs on steel. It was not 0:05:45.279 --> 0:05:48.600 about jobs. We talked about this, right, It wasn't about jobs. 0:05:48.640 --> 0:05:52.839 It was about making capacity utilization go up. So if 0:05:52.880 --> 0:05:55.880 you're running at eighty five percent, you are maximizing your 0:05:55.880 --> 0:05:57.000 profits as a steel mill. 0:05:57.240 --> 0:06:00.720 Right, Joe, this is going to be news to you 0:06:00.760 --> 0:06:03.120 because you're not looking at your terminal right now. But 0:06:03.320 --> 0:06:06.760 the President making comments he says on Canada will probably 0:06:06.760 --> 0:06:09.320 make a different tariff decision. He said he's looking at 0:06:09.320 --> 0:06:12.440 backing down on the fifty percent duties on Canada. Just 0:06:12.520 --> 0:06:15.000 your instant reaction to that, there. 0:06:14.920 --> 0:06:19.120 You go, like you know, I mean, here we are 0:06:19.160 --> 0:06:21.440 in this moment, right, I cannot imagining sitting on a 0:06:21.440 --> 0:06:24.039 trading desk right now just seeing that and actually probably 0:06:24.120 --> 0:06:26.640 laughing about it like that. That's probably what you're seeing 0:06:26.720 --> 0:06:29.080 from a lot of folks around these markets, and I'm 0:06:29.120 --> 0:06:31.359 not just saying it who are just kind of chuckling 0:06:31.400 --> 0:06:33.400 to themselves. And it's not because it's funny. 0:06:33.720 --> 0:06:38.400 No, right, that's right, that's right. I mean right, because 0:06:38.400 --> 0:06:40.719 if anything you need, it's one thing. If it's a 0:06:40.720 --> 0:06:42.960 policy you don't like, but it needs to be clear, 0:06:43.320 --> 0:06:46.000 correct and not necessarily change from hour to hour, day 0:06:46.040 --> 0:06:46.320 to day. 0:06:46.360 --> 0:06:50.080 Correct. And remember we heard this from the steelmakers in 0:06:50.160 --> 0:06:54.919 twenty eighteen, twenty nineteen. They were the beneficiaries of the 0:06:54.920 --> 0:06:57.480 steel tears. But even they were saying to us back 0:06:57.520 --> 0:06:59.440 then because Trump was saying, well, we're going to give 0:06:59.560 --> 0:07:02.359 exemption to these countries in those countries, but maybe not 0:07:02.480 --> 0:07:05.240 those countries, in these countries. Finally, they just started saying, 0:07:05.440 --> 0:07:07.280 tell us what it is you want to do. If 0:07:07.320 --> 0:07:10.080 it's nothing, then that's fine. If it's something that's great too. 0:07:10.200 --> 0:07:12.520 At least we can start telling our customers to book. 0:07:13.480 --> 0:07:15.440 If we find ourselves in a situation here in the 0:07:15.520 --> 0:07:20.040 United States where people who build things and make stuff 0:07:20.080 --> 0:07:25.480 are using US produced steel and they're using perhaps imported 0:07:25.520 --> 0:07:28.800 aluminum because we can't make enough aluminum and paying more 0:07:28.840 --> 0:07:33.360 for that imported aluminum. Do we see inflationary effects on goods? 0:07:34.640 --> 0:07:39.240 Yeah, it'll depend on the good I think aluminum. A 0:07:39.280 --> 0:07:43.280 place where we immediately saw inflationary effects was like window frames, 0:07:43.560 --> 0:07:46.400 because window frames are aluminum and actually bought by a 0:07:46.440 --> 0:07:49.760 lot of regular people in America. And you saw those 0:07:49.760 --> 0:07:51.560 prices shoot up. I mean it's not like they were 0:07:51.560 --> 0:07:54.960 on an index, but we saw anecdotally it was like, 0:07:55.000 --> 0:07:57.920 you know, people just seeing you know, twenty thirty forty 0:07:57.960 --> 0:08:01.440 percent higher prices on window frames. I mean, listen, the 0:08:01.480 --> 0:08:04.880 Ford CEO did say, if all of these tariffs, right, 0:08:04.920 --> 0:08:07.360 like the Canada Mexico terrafs that haven't gone on, the 0:08:07.440 --> 0:08:11.120 aluminum terras steel terrors go on and they stack, it's 0:08:11.160 --> 0:08:13.600 going to blow a hole through the industry. And you 0:08:13.640 --> 0:08:16.720 had Coca Cola say last month as well, like, well 0:08:16.720 --> 0:08:20.840 we might consider moving back, you know, substitution, right instead 0:08:20.880 --> 0:08:23.720 of cans will go to plastic. Well the problem with 0:08:23.840 --> 0:08:25.960 that is like, yeah, you think the consumer is going 0:08:26.040 --> 0:08:28.120 to be okay with you Coca Cola suddenly going to 0:08:28.120 --> 0:08:31.360 plastic bottles instead of aluminum. I mean this has been 0:08:31.520 --> 0:08:34.760 a trend that consumers have been asking for, right, Hey, 0:08:34.800 --> 0:08:37.600 we don't want to be ruining the environment, right, So wait, 0:08:37.640 --> 0:08:40.120 suddenly you're just throwing that out the window and going 0:08:40.120 --> 0:08:42.160 back to a cost saving Oh and good luck changing 0:08:42.160 --> 0:08:43.160 the supply chain on that. 0:08:43.520 --> 0:08:48.200 So in terms of building out additional capacity, is that 0:08:48.280 --> 0:08:51.840 even likely if there are tariffs? I mean at the expense, 0:08:51.920 --> 0:08:53.079 the commitment the long. 0:08:53.000 --> 0:08:55.680 Term like it could happen. It could happen in steel. 0:08:56.160 --> 0:08:57.800 I think we talked about that a few weeks ago, 0:08:57.800 --> 0:09:00.120 which is like, you know, if there is a long 0:09:00.200 --> 0:09:02.280 term feeling that these terriffs are going to stay on, 0:09:02.960 --> 0:09:06.640 the steel companies could start investing more into building out 0:09:06.640 --> 0:09:09.520 more capacity. Right now, they still have space to use 0:09:09.559 --> 0:09:13.000 current capacity that's not online, and if they see longer 0:09:13.080 --> 0:09:15.559 term they might invest in that. I think the question 0:09:15.640 --> 0:09:18.640 is will we actually see capacity invested in in the 0:09:18.679 --> 0:09:21.480 aluminum space, because the aluminum space is much more of 0:09:21.520 --> 0:09:24.599 an electricity play, right, Like the Hawesville smelter that was 0:09:24.640 --> 0:09:29.200 in Kentucky that is currently idled used as much energy 0:09:29.360 --> 0:09:32.079 in one day as the entire city of Louisville, which 0:09:32.120 --> 0:09:32.959 is the nearest city. 0:09:34.120 --> 0:09:40.560 So you got AI and you got making metals using electricity. 0:09:40.720 --> 0:09:44.000 And remember a lot of those power contracts in say 0:09:44.040 --> 0:09:46.840 like the Northwest that used to be used by Alcoa. 0:09:48.120 --> 0:09:51.320 When Alcoa shut down all of their mills, a lot 0:09:51.320 --> 0:09:56.760 of that energy went towards data centers. Well, it's just 0:09:57.240 --> 0:10:00.760 it's so expensive, and that's why Quebec remains the aluminum 0:10:00.760 --> 0:10:04.200 producing region of North America. It's a bunch of hydropower. 0:10:04.280 --> 0:10:07.440 It's cheap. They supply a lot of energy to to 0:10:07.559 --> 0:10:09.320 some of the northern states here in the US, as 0:10:09.480 --> 0:10:11.280 many people have found out in the past week. So 0:10:12.160 --> 0:10:16.439 it's just it's it's real. Mayhem. 0:10:16.040 --> 0:10:18.360 Uh okay, sorry, I'm looking at the Trump. 0:10:18.640 --> 0:10:20.000 Yeah, I'm a little speechless. 0:10:20.080 --> 0:10:22.440 President say, I don't see your recession at all. And again, 0:10:22.480 --> 0:10:25.240 as you said, the energy all right, So so are 0:10:25.280 --> 0:10:27.040 you just going to wait for the next headline or wait, 0:10:27.160 --> 0:10:29.400 how do you know things are going to finally calm down? 0:10:30.520 --> 0:10:31.600 Traders start to make trades. 0:10:31.720 --> 0:10:35.559 Listen at twelve and one am whatever whatever the tariff 0:10:35.920 --> 0:10:38.480 number that is in place, that will be real and 0:10:38.520 --> 0:10:42.760 that will be actionable because they'll the the customs will 0:10:42.800 --> 0:10:45.200 actually be adding on to the register. Okay, this is 0:10:45.240 --> 0:10:48.160 what you owe for these incoming products. That's at least 0:10:48.160 --> 0:10:51.480 something people can start to hang their hats on other 0:10:51.559 --> 0:10:56.360 than that. Uh, it's it's like one industry person told 0:10:56.400 --> 0:10:58.200 me a few weeks ago and when I asked, well, hey, 0:10:58.240 --> 0:11:01.160 are these Canadian and Mexican tariffs actually going into place? 0:11:01.559 --> 0:11:04.200 And they said, I'll let you know at twelve oh 0:11:04.280 --> 0:11:05.000 one Wednesday. 0:11:05.360 --> 0:11:07.760 Not wild, but that's the reality of it, right because 0:11:07.760 --> 0:11:10.640 it goes into fact. Listen, you're super busy. You're the 0:11:10.679 --> 0:11:12.320 person we always want to talk to when we have 0:11:12.360 --> 0:11:14.000 got a story like this because you know it like 0:11:14.080 --> 0:11:16.280 nobody else. It just blows us away every time. So 0:11:16.559 --> 0:11:17.920 thank you, thank you. We know you've got to run, 0:11:17.960 --> 0:11:21.040 but Jodo, you just totally rock. Bloomberg News Medals and 0:11:21.080 --> 0:11:23.840 Mining and Heavy Machinery reporter. Thank you so much, really 0:11:23.840 --> 0:11:24.439 appreciate it. 0:11:24.920 --> 0:11:28.480 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:28.559 --> 0:11:32.000 Live weekday afternoons from two to five pm Eastern. Listen 0:11:32.040 --> 0:11:35.559 on Applecarplay and Android Auto with the Bloomberg Business app, 0:11:35.760 --> 0:11:38.360 or watch US live on YouTube. 0:11:38.640 --> 0:11:41.120 Airline stocks are taking a hit today. Two of the 0:11:41.160 --> 0:11:45.439 biggest US airlines slash their financial forecast. The carriers, along 0:11:45.480 --> 0:11:49.160 with Arrival Southwest Airlines, are raining expectations in the face 0:11:49.160 --> 0:11:52.080 of a broad and rapid reversal of demand trends that 0:11:52.120 --> 0:11:54.839 had buoyed the industry heading into twenty twenty five. Carol, 0:11:54.880 --> 0:11:57.720 we're talking about Delta Airlines and American Airlines. 0:11:57.800 --> 0:11:59.480 Yeah, the group overall though down about two and a 0:11:59.520 --> 0:12:01.920 quarter percent, but we're down more than four percent earlier 0:12:01.920 --> 0:12:04.000 in the session. Let's get to what it all means, 0:12:04.320 --> 0:12:06.199 what you need to know about the outlook for the industry. 0:12:06.200 --> 0:12:08.880 Back with us is Bloomberg Intelligence Senior Aerospace, Defense and 0:12:08.920 --> 0:12:12.240 Airlines analyst George Ferguson. He is in our Bloomberg News 0:12:12.240 --> 0:12:15.160 bureau in Washington, DC. So, George, I have to say 0:12:15.200 --> 0:12:18.520 that when the Delta headlines cross yesterday and we saw 0:12:18.559 --> 0:12:22.400 the stock immediate reaction, it just tanked. We all got 0:12:22.440 --> 0:12:25.280 a little bit of a jolt started there. American followed 0:12:25.320 --> 0:12:27.760 Southwest too to some extent. Is it all the same 0:12:27.840 --> 0:12:29.840 story about consumer demand? 0:12:30.920 --> 0:12:33.000 Yeah, it feels to me to be very similar. 0:12:33.080 --> 0:12:33.240 Right. 0:12:33.280 --> 0:12:35.720 So we also had Jeff Blue come in today, and 0:12:35.800 --> 0:12:39.760 I think the core story here is that demand is softening, 0:12:40.280 --> 0:12:42.760 so they're all lowering their revenue expectations. 0:12:43.400 --> 0:12:44.240 I think what we're. 0:12:44.040 --> 0:12:46.520 Seeing as well is that for some of them, fuel 0:12:47.160 --> 0:12:50.440 is helping to prop up earnings to some degree for 0:12:50.480 --> 0:12:54.200 the lower cost carriers, but for Delta, lower fuel prices 0:12:54.280 --> 0:12:57.240 wasn't enough and so they I think showed one of 0:12:57.280 --> 0:12:59.839 the bigger decreases in expectations for one que. 0:13:00.160 --> 0:13:04.840 Did we get any specific commentary about details as to 0:13:04.960 --> 0:13:07.880 why the guidance cut here, George? Is it based at 0:13:07.920 --> 0:13:10.040 the front of the plane the back of the plane? 0:13:10.120 --> 0:13:12.920 Is it consumers? Is it business who's not spending money 0:13:13.000 --> 0:13:15.000 right now like these carriers thought they would. 0:13:15.720 --> 0:13:18.319 Yeah, So, working off the details that Delta gave us, 0:13:19.280 --> 0:13:22.240 they said that premium was still holding up well, and 0:13:22.360 --> 0:13:27.560 international was still holding up well, right, so Pacific and Transatlantic. 0:13:28.360 --> 0:13:31.679 So it made it sound like economy was having difficulties. 0:13:32.040 --> 0:13:34.520 Latin America was already in difficult shape. Sounds like it's 0:13:34.520 --> 0:13:39.040 still in difficult shape from probably an oversupply perspective. And 0:13:39.080 --> 0:13:44.599 they also said close in bookings were weaker. We typically 0:13:44.640 --> 0:13:48.600 associate that with business travel, So it feels like maybe 0:13:48.640 --> 0:13:52.199 there's some concern in the business community, maybe with all 0:13:52.240 --> 0:13:54.520 the you know, sort of all the changes in government 0:13:54.520 --> 0:13:56.400 we've seen in the first couple of days of the 0:13:56.440 --> 0:13:58.439 Trump administration, but seemed like there could be a bit 0:13:58.760 --> 0:14:00.240 of a business confidence problem. 0:14:00.400 --> 0:14:03.560 You said close in bookings, meaning flights that are booked 0:14:03.559 --> 0:14:05.000 within a certain time period. 0:14:05.679 --> 0:14:09.280 Yeah, tickets, you know, tickets booked within less than a month. 0:14:09.360 --> 0:14:12.520 Usually it's a couple of weeks before travel. Traditionally, that's 0:14:12.640 --> 0:14:14.640 you know, been the realm of business travelers. 0:14:14.720 --> 0:14:17.839 Okay, why is jet Blue up? It's up four point 0:14:17.880 --> 0:14:20.560 three percent? Help me hear. Yeah. 0:14:20.600 --> 0:14:24.200 So, I mean when we looked at Jet Blue's revision again, 0:14:24.320 --> 0:14:27.200 you know, the revenues off a bit, but they saved it. 0:14:27.680 --> 0:14:33.880 They are they they save their profit expectations on fuel prices, 0:14:34.680 --> 0:14:37.080 and it didn't look you know, it didn't look that bad. 0:14:37.160 --> 0:14:39.760 So I think Jet Blue has been one that's been 0:14:39.800 --> 0:14:43.280 cutting capacity. I think the more you're cutting capacity and 0:14:43.320 --> 0:14:47.240 not trying to grow your network right now, you know, 0:14:47.280 --> 0:14:49.680 the more able you are to hold out for some 0:14:49.720 --> 0:14:52.400 better fares. And so Jet Blue looked better than some 0:14:52.480 --> 0:14:54.080 of the other competitors we saw. 0:14:54.440 --> 0:14:58.000 George, can we extrapolate the way that these airlines are 0:14:58.320 --> 0:15:02.520 talking about demand into other parts of the economy or 0:15:02.520 --> 0:15:05.440 in an economic cycle? What is the signal? I guess 0:15:05.480 --> 0:15:08.280 is a better way to ask this question that airlines 0:15:08.600 --> 0:15:11.080 send to us about what's happening in the economy. 0:15:11.720 --> 0:15:15.840 Yeah, I think you absolutely can extrapolate, right, So I 0:15:15.840 --> 0:15:18.840 think you know, travel demand is, you know, for the 0:15:19.120 --> 0:15:23.840 leisure traveler, very discretionary. I think when you get concerned 0:15:23.840 --> 0:15:28.440 about your pocketbook, you probably pull back there first. I 0:15:28.440 --> 0:15:31.560 think in the US, especially domestic, which Delta called out 0:15:31.880 --> 0:15:34.480 as one of the weaker markets, we have the ability 0:15:34.480 --> 0:15:37.560 to drive a lot of places rather than fly. It's 0:15:37.640 --> 0:15:39.960 usually a bit cheaper, it takes longer, Right, We've all 0:15:40.280 --> 0:15:42.600 loaded the family into the car in New Jersey and 0:15:42.680 --> 0:15:46.560 driven them to Orlando. It can be cheaper, but it 0:15:46.560 --> 0:15:49.240 can be a little taxing on your nerves. So I think, yeah, 0:15:49.280 --> 0:15:53.040 I think it's a good indicator of the consumers. 0:15:53.400 --> 0:15:56.080 George just speaking from experience here or is this sources 0:15:56.160 --> 0:15:56.840 say yeah? 0:15:57.960 --> 0:15:59.800 Sources say all right. 0:16:01.240 --> 0:16:02.760 So can this change? 0:16:02.880 --> 0:16:04.920 I mean, of course anything can change, But I mean 0:16:05.000 --> 0:16:08.680 so is it potentially or could be a first quarter thing? 0:16:08.720 --> 0:16:10.560 And then depending what goes on in the economy. I 0:16:10.600 --> 0:16:14.840 mean there's a lot coming at consumers, business travelers the 0:16:14.960 --> 0:16:17.480 US economy right now. But could it change be it 0:16:17.600 --> 0:16:19.000 second quarter or second half? 0:16:20.040 --> 0:16:23.320 An airline world things can always change very quickly, so 0:16:23.400 --> 0:16:26.080 can it change? Yes, there is a bit of a 0:16:26.120 --> 0:16:29.440 dynamic and airline world going on this year too, and 0:16:29.480 --> 0:16:32.000 that is that Easter has been moved into the second 0:16:32.080 --> 0:16:35.240 quarter from the first quarter, so we expected a little 0:16:35.240 --> 0:16:39.560 bit of softness in the first quarter. But I still 0:16:39.600 --> 0:16:44.680 think this feels like the you know, the basic economy 0:16:44.760 --> 0:16:49.000 customer is a little more concerned about their finances and 0:16:49.080 --> 0:16:52.960 not traveling. Who cares what the cost is. And again, 0:16:52.960 --> 0:16:55.960 I think you need to see signals coming from the 0:16:55.960 --> 0:16:58.760 economy to make them feel more secure. I think to 0:16:58.760 --> 0:17:00.680 see demand pick up for second quarter. 0:17:01.760 --> 0:17:04.000 Hey, George, well we have you in Washington, d C. 0:17:04.080 --> 0:17:05.360 I don't know if you've got a chance to even 0:17:05.400 --> 0:17:08.000 see this because it just broke in the last fifteen 0:17:08.040 --> 0:17:12.240 minutes or so. But NTSB Chairman Jennifer Homandy was speaking 0:17:12.240 --> 0:17:16.520 at a newser the NTSB making two emergency recommendations after 0:17:16.560 --> 0:17:21.800 that DCA crash. The NTSB recommending permanent helicopter restrictions near DCA. 0:17:22.240 --> 0:17:26.600 The NTSB also recommending an alternative helicopter route near DCA. 0:17:27.280 --> 0:17:29.800 Just way in on the aftermath of this crash in 0:17:29.840 --> 0:17:32.280 the earlier part of this year, and the recommendations that 0:17:32.320 --> 0:17:34.280 the NTSB is making, what happens now. 0:17:34.720 --> 0:17:38.119 Yeah, that sounds totally appropriate. I'm surprised it took this long. 0:17:39.000 --> 0:17:43.119 It's DCA's too busy of an airport to be running 0:17:43.160 --> 0:17:47.800 training flights around with the pilots under flight vision sorry 0:17:47.880 --> 0:17:51.600 night vision goggles. Sounds like exactly the right decision. 0:17:52.000 --> 0:17:55.240 Hey, just real quickly thirty seconds left. Southwest Airlines ditching 0:17:55.280 --> 0:17:59.040 free check bags, the end of an era. I'm terrified 0:17:59.040 --> 0:18:01.200 to see what comes next from the industry. I mean, 0:18:01.240 --> 0:18:04.040 that's a big deal, right, but maybe good for them 0:18:04.440 --> 0:18:04.720 it is. 0:18:04.760 --> 0:18:07.560 I mean Southwest is just becoming more and more like 0:18:07.920 --> 0:18:11.399 a full service carrier. Like everyone, They're looking for different 0:18:11.400 --> 0:18:15.120 ways to generate revenue from their customers. I think it'll 0:18:15.119 --> 0:18:19.240 help the premium program out as well. Right, the loyalty program, 0:18:19.240 --> 0:18:23.040 I should say, you know, if you're a loyalty member, 0:18:23.440 --> 0:18:25.880 you are going to get I think one free check bag. 0:18:25.920 --> 0:18:28.240 I think you get an assigned seat. It's all about 0:18:28.280 --> 0:18:32.159 trying to drive people, not loyalty program generate revenue from it, 0:18:32.320 --> 0:18:35.240 something Delta does so well as one of your additional 0:18:35.280 --> 0:18:37.640 streams of income for the airline. 0:18:37.680 --> 0:18:40.160 As someone who never packs lately, I know what it's 0:18:40.200 --> 0:18:41.879 like to pay some baggage fees. 0:18:41.600 --> 0:18:44.240 And literally it's not even like it's like you exceed 0:18:44.240 --> 0:18:47.800 the fifty pounds limit when we travel, like you're going 0:18:47.840 --> 0:18:49.120 for a day, Carol. 0:18:49.600 --> 0:18:52.879 George Ferguson, Thank you so much. Bloomerintelligence, Senior, Aerospace, Defense 0:18:52.920 --> 0:18:55.520 and Airlines Alice, by the way, Southwest up eight and 0:18:55.520 --> 0:18:56.119 a half percent. 0:18:58.760 --> 0:19:02.520 This is the Bloomberg Business Week Podcast. Listen live each 0:19:02.560 --> 0:19:05.520 weekday starting at two pm Eastern on Apple car Play 0:19:05.640 --> 0:19:08.280 and the Android Auto with the Bloomberg Business App. You 0:19:08.280 --> 0:19:11.480 can also listen live on Amazon Alexa from our flagship 0:19:11.560 --> 0:19:15.320 New York station, Just Say Alexa played Bloomberg eleven thirty 0:19:16.720 --> 0:19:17.480 All right, everybody. 0:19:17.560 --> 0:19:22.760 Volatility persisting in US assets following yesterday's wrenching session definitely 0:19:22.920 --> 0:19:25.560 was a different one, that's for sure. We've seen an 0:19:25.560 --> 0:19:29.359 early rebound in stocks, erase gains that we've seen it 0:19:29.840 --> 0:19:32.920 rally again on those headlines of Ukraine ready to accept 0:19:32.920 --> 0:19:35.439 a US proposal for our thirty day truth. So we 0:19:35.480 --> 0:19:38.280 continue to see a lot of bouncing around the VIX. 0:19:38.320 --> 0:19:41.240 We've seen it hovering just below thirty. It's a level 0:19:41.240 --> 0:19:44.640 that we talked about yesterday that our Market Live blog 0:19:44.880 --> 0:19:46.800 notes that when it goes above thirty, we have then 0:19:47.080 --> 0:19:49.800 tend to see stocks bounce up. So there's a lot 0:19:49.840 --> 0:19:51.520 going on and trying to make sense of what comes next. 0:19:51.520 --> 0:19:53.240 And we've got a great guest to get into it all. 0:19:53.320 --> 0:19:55.760 Yeah, here in the studio, Jennifer Grancio is back with us. 0:19:55.760 --> 0:19:58.160 She's head of ETFs at TCW. She's a former CEO 0:19:58.200 --> 0:20:01.040 of Engine Number one. It was that little known hedge 0:20:01.080 --> 0:20:04.600 fund that successfully waged an activist battle against the integrated 0:20:04.720 --> 0:20:08.480 energy Giant, snagging three board seats and promising to push 0:20:08.480 --> 0:20:11.360 a low carbon future. Engine number one was bought by 0:20:11.560 --> 0:20:12.240 tc W. 0:20:12.560 --> 0:20:13.760 Could be part of your bio forever. 0:20:13.840 --> 0:20:14.439 You do know that. 0:20:15.040 --> 0:20:17.960 I think she took on big oil and I got 0:20:17.960 --> 0:20:20.360