Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa A. Bramowitz. Each day
Speaker 1: we bring you the most important, noteworthy, and useful interviews
Speaker 1: for you and your money, whether you're at the grocery
Speaker 1: store or the trading floor. Find the Bloomberg p m
Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com.
Speaker 1: There are some out there who are waiting for j.
Speaker 1: Powell to take the podium on Wednesday at the Economic
Speaker 1: Forum in New York and say, you know what, guys,
Speaker 1: We're going to take a little pause. We've seen the
Speaker 1: stock sell off and weren't going to make sure that
Speaker 1: we don't go too quickly. Our next guest says, not
Speaker 1: so fast on author, as a senior editor for Bloomberg Markets,
Speaker 1: we are so lucky that he joins us here in
Speaker 1: our interactive brokers studios in New York. John, you think
Speaker 1: that this is an implausible scenario? Is that right? The
Speaker 1: fit would would to call off change its course just
Speaker 1: because of a sell off in the stock markets just
Speaker 1: the extent we've had so far, or frankly, if it
Speaker 1: fell another from here, Yes, I find very implausible. They've
Speaker 1: learned the lesson from the last two cycles. The FED
Speaker 1: got it wrong by being too easy and allowing very
Speaker 1: big bubbles to inflate. That hurt when they burst tech
Speaker 1: stocks the first time and then credit the second. They
Speaker 1: will at least make a different mistake this time. You know,
Speaker 1: at least themistic love it. They're not going to make
Speaker 1: the same mistake at least. What is your reaction to
Speaker 1: investment professionals who blame the Federal Reserve either because they
Speaker 1: don't raise interest rates enough or because they have raised
Speaker 1: them too much already. When they use the Federal Reserve
Speaker 1: as a whipping post for why the market behaves in
Speaker 1: a certain way, I find it a little rich personally.
Speaker 1: I mean, certainly we all of us way of yes, exactly,
Speaker 1: try to be nice. But those of us around this table,
Speaker 1: we all make a living commenting on markets, which means
Speaker 1: that we spend a lot of time commenting on the FED.
Speaker 1: Because the FED is an incredibly important player. All of
Speaker 1: that is evident generally speaking, However, the FED is not
Speaker 1: just an actor, but it's also a passive recipient of conditions.
Speaker 1: It does have to respond, and while it's I think
Speaker 1: it's fair to say the single most powerful actor in markets.
Speaker 1: It's not omnipotent by any leap of the imagination at
Speaker 1: the moment. It If you really think that the FED
Speaker 1: is already overtightening, that is I think ridiculous given the
Speaker 1: historically how low interest rates still are. And one I
Speaker 1: don't want to comment on any particular politicians you might
Speaker 1: be taking any particular positions to say that the FED
Speaker 1: should be hiking less than it is when we can
Speaker 1: all agree that it's still being very accommodative, means that
Speaker 1: you're saying the economy is a lot weaker than certain
Speaker 1: politicians might be claiming. There is there is no way
Speaker 1: out of that. Either the Fed is doing the right
Speaker 1: thing or if it's going too far, that's because the
Speaker 1: economy is in real trouble if it can't stand interest rates.
Speaker 1: So I do have serious problems with people who say
Speaker 1: that that the Fed is already going too far, and
Speaker 1: that the significant problem we have all right, well, just
Speaker 1: looking to one aspect of the tightening, the balance sheet
Speaker 1: reduction that gets less attention than the raid high exprests
Speaker 1: perhaps shouldn't. And there's still a big question, which is
Speaker 1: at what point will the FEDS say all right enough,
Speaker 1: We've done enough rolling off here, and we're going to
Speaker 1: keep our balance sheet at what two trillion, three trillion?
Speaker 1: I mean, we don't really have a number, right we
Speaker 1: We're gonna get guidance on that this week. Yes, but
Speaker 1: I would I suspect this could be where we get
Speaker 1: quite an ugly surprise. If you look through the volumes
Speaker 1: of FED speak that are out there, and FED governors,
Speaker 1: as they should, are fairly transparent at least in thinking
Speaker 1: out loud, there is almost no thinking out loud about
Speaker 1: the balance sheet. Just none. The implicit, implicit uh conclusion
Speaker 1: you can draw from their public pronouncements is that on
Speaker 1: the balance sheet reduction they are on autopilot. It is
Speaker 1: the ideas of the balance sheet is going to very
Speaker 1: steadily reduced month over month. You don't hear. You hear
Speaker 1: plenty of risks, potential risks on the horizon being listed
Speaker 1: by Powell and the other governors, resource as resource reserve
Speaker 1: reserve scarcity is not among them. You hear plenty of
Speaker 1: people complaining about already about a shortage of dollars in
Speaker 1: the market. You do not hear that reflected by fit speak.
Speaker 1: And just real quick here to give a sense of
Speaker 1: the balance sheet. The balance sheet has been reduced from
Speaker 1: four and a half trillion at its peak in January
Speaker 1: down to four point one trillion dollars, so we have
Speaker 1: seen a bit of a roll off, but there's still
Speaker 1: a lot more to go. If they want to write,
Speaker 1: I mean, this has been you know, yes, a decline,
Speaker 1: but it's completely realistic to think that they will keep
Speaker 1: doing this for more than another year, and the balance
Speaker 1: sheet would still be utterly enormous in historic terms. But
Speaker 1: the change at the margin, which is all important, I suspect,
Speaker 1: is much more what people should be worrying about than
Speaker 1: exactly how many more changes we get in the target
Speaker 1: fit funds rate. This may sound bizarre, but is there
Speaker 1: any value in noting the difference between two thousand and
Speaker 1: eight and twenty eighteen when it comes to the accessibility
Speaker 1: of social media apps and the ability to report crises.
Speaker 1: When the two thousand eight crisis was broadcast mainly via
Speaker 1: television and traditional media, do you think that it means
Speaker 1: something different? Now? Very much so. I mean my farewell piece,
Speaker 1: but when I'm still at the Financial Times, my farewell
Speaker 1: piece was about how I remember it. Yeah, I it's
Speaker 1: blazoned into my mind that that that I went to
Speaker 1: I went to my city branch on possibly the worst
Speaker 1: day of the crisis, and found there were dozens of
Speaker 1: very well dressed Wall Streeters evidently shifting money around to
Speaker 1: make sure they still had to UH insured accounts. And
Speaker 1: we wrote a very, very very negative story that day.
Speaker 1: But I didn't actually do what I might conceivably do
Speaker 1: now and which somebody definitely would do, which is just
Speaker 1: take a photo of a bunch of panicking Wall Streeters
Speaker 1: in their suits trying to get their money out of
Speaker 1: a bank. Such a photo now on on that social
Speaker 1: media could have could have been the spark that lit
Speaker 1: an even worse flame. So yes, I think that's a
Speaker 1: very worrying scenario. I don't think it has a particularly
Speaker 1: big effect, bar you know, the president's focal diplomacy over
Speaker 1: over Twitter, which which the FED seems to be ignoring
Speaker 1: so far. But so far, I don't think it makes
Speaker 1: a great difference. But if things get as nerve wracking
Speaker 1: as they did in two thousand and eight, it could
Speaker 1: be critical. Just real quick, here is your sense that
Speaker 1: if the fired were to indicate that they are ready
Speaker 1: to slow down a little bit, or that they're showing
Speaker 1: more concern. Do you think that that will correspond with
Speaker 1: a substantial pop in US stocks? Quite? No, I I
Speaker 1: suspect not. I mean in the in the very short term,
Speaker 1: if you have your operative word is substantial. No. If
Speaker 1: if we get if we get unusually dovish FED speak
Speaker 1: at some point in the next week, then yes you'll
Speaker 1: get a pop on that day. But ultimately I've got
Speaker 1: enough trust in the FIT that the only reason I believe,
Speaker 1: the only reason they'd be doing that is because the
Speaker 1: underlying data, particularly from China, will be worrying, and therefore
Speaker 1: that would cancel out the effects of the the extra
Speaker 1: devisist from the faith. Thank you very much for spending
Speaker 1: time with us. As always, John Authors is a senior
Speaker 1: editor for Bloomberg Markets, talking about the Federal Reserve potential
Speaker 1: rate increases and what they might do to the US economy.
Speaker 1: Facebook the shares of Facebook. They are higher right now
Speaker 1: by about three and a half dollars a hundred and
Speaker 1: thirty five dollars a share for Facebook joining us as
Speaker 1: David Garretty, chief market strategist for laid Law and Company,
Speaker 1: and you can follow David on Twitter at g v
Speaker 1: A Research David Garritty speak to the issues that surround
Speaker 1: corporate governance at Facebook. This is coming at a time
Speaker 1: time when the report is that Britain's Parliament has actually
Speaker 1: seized some confidential Facebook documents from the developer of what
Speaker 1: is described as a now defunct bikini photos searching app.
Speaker 1: And this has to do with data protection policies. What
Speaker 1: does this have to do with Facebook's corporate governance? In
Speaker 1: terms of looking at Facebook's corporate governance, I mean, it's
Speaker 1: pretty much, very clearly set forth in the prospectives when
Speaker 1: the company went public back in two thousand twelve that
Speaker 1: Mark Zuckerberg would have because of many class dual classes
Speaker 1: of stock, that he would have supervoting rights. And then
Speaker 1: the company since then had introduced another class of stock
Speaker 1: that had no votes at all. So effectively, Zuckerberg, for
Speaker 1: owning about a five percent economic interest in the company,
Speaker 1: has you know, majority voting control. He also has the
Speaker 1: right to be the sole person to select who his
Speaker 1: successor as CEO will be. So from that standpoint, Zuckerberg's
Speaker 1: hold on corporate governance at Facebook is effectively a hammer lock.
Speaker 1: It's impregnable. There's no way that you're going to get
Speaker 1: rid of Mark Zuckerberg anytime soon, unless he chooses to
Speaker 1: step down for some reason. Um. Obviously there's a question
Speaker 1: here does this pierce the corporate veil when it comes
Speaker 1: to looking at some of the liabilities that Facebook may face.
Speaker 1: But going specifically to the case that you mentioned that
Speaker 1: was being examined by Parliament and the invasion of privacy rights,
Speaker 1: it ties into the committee in Parliament that is investigating
Speaker 1: what Facebook had done in terms of providing user information
Speaker 1: to Cambridge Analytica for the purposes of interference or campaigning
Speaker 1: around or targeting advertising around not only the Brexit campaign
Speaker 1: but also the two thousand sixteen elections. And so from
Speaker 1: that standpoint, if we look in the context of Europe
Speaker 1: that's been introduced introduced new privacy regulations, this is separate
Speaker 1: and distinct and is very much focused on bad actors
Speaker 1: such as Cambridge Analytica. Okay, but when you talk about
Speaker 1: regulators kind of stepping in our lawmakers investigating Facebook and
Speaker 1: its role in some recent elections, I just have to
Speaker 1: wonder what could come out of that. How much does
Speaker 1: this sort of threaten Facebook's existence in its current form,
Speaker 1: and how much is this already praised in with Facebook
Speaker 1: shares down more than this year. True. No, I mean
Speaker 1: you certainly have seen the stock come off. You know what,
Speaker 1: it was about two dollars a share back and um
Speaker 1: July and then has since sort of come in to
Speaker 1: a level about one forty, so it's lost about a third.
Speaker 1: UM And yeah, Baron's over the weekend and come up
Speaker 1: with a favorable article saying, here's a company on the
Speaker 1: double sales, but it's cheaper than Walmart. Um. The issue
Speaker 1: here is is that you know, Walmart's business model isn't
Speaker 1: under regulatory scrutiny. Um. You have a situation with Facebook
Speaker 1: where you know the company arguably given how important it's
Speaker 1: become for people getting news. You know, if something barks
Speaker 1: like a dog or walks like a duck, you know
Speaker 1: it's a duck or it's a dog. In Facebook's case,
Speaker 1: we could say it's actually a media company. They distribute news,
Speaker 1: and from this standpoint, they're a media company that's trying
Speaker 1: to say that they're not. And in the event that
Speaker 1: the government would decide to say, look, you're a media company,
Speaker 1: despite whatever your protestations otherwise might be, we're gonna start
Speaker 1: regulating you like a media company. This changes the dynamic
Speaker 1: for Facebook in terms of their internal costs and in
Speaker 1: terms of what they may and may not be allowed
Speaker 1: to do. Because this also that would mean libel laws
Speaker 1: would apply to Facebook precisely and possibly you know, there
Speaker 1: may be scrutiny here given the governance structure. You know,
Speaker 1: what is management's responsibility here? You know, does it does
Speaker 1: the corporate veil actually apply? So just expanding out, I mean,
Speaker 1: we did get the news today that Supreme Court justice
Speaker 1: is a pure ways to allow an antitrust lawsuit to
Speaker 1: go through. It accuses Apple of using its market dominance
Speaker 1: to artificially inflate prices at its app store. Apple shares
Speaker 1: have been falling steadily for the past few weeks, And
Speaker 1: I'm just wondering, I mean, do you view this sort
Speaker 1: of existential threat to the business model to be similar
Speaker 1: at other big tech companies just by virtue of their
Speaker 1: size and the fact that regulators are kind of getting
Speaker 1: more concerned about that. I don't know if I necessarily
Speaker 1: want to go out. I mean, looking at Facebook's problem,
Speaker 1: facebooks problem is a problem with social media and and
Speaker 1: the abuse of social media, and how our regulator is
Speaker 1: going to exercise appropriate and proper oversight in terms of
Speaker 1: social media companies. As we look to other technology companies,
Speaker 1: whether it's an Apple, whether it's a Google, whether it's
Speaker 1: a micro Microsoft, whether it's a Netflix or an Amazon, um.
Speaker 1: You know, certainly we have to look at companies that
Speaker 1: have grown to a fairly substantial size, wield, substantial economic
Speaker 1: influence um and as a result, you know, are they
Speaker 1: introducing anti competitive behaviors. There has been the case being
Speaker 1: made quietly but steadily over the past six to twelve
Speaker 1: months that the next administration ought to be coming back
Speaker 1: in and looking at trust busting. We ought to be
Speaker 1: going back and looking at what happened in earlier economic cycles,
Speaker 1: back in nearly twentieth century. You know, Teddy Roosevelt came
Speaker 1: in basically as a trustbuster. Have these companies gotten to
Speaker 1: be too large? And it's interesting here with this news
Speaker 1: with respect to Apple, is that this is something that's
Speaker 1: actually rising to review by the Supreme Court. David Garty.
Speaker 1: The one name we have yet to mention is Cheryl Sandberg.
Speaker 1: Cheryl Sandberg is responsible, I believe, for the direct scrutiny
Speaker 1: of advertising as well as legal and policy issues at Facebook.
Speaker 1: Who gets thrown under the bus if anyone because of
Speaker 1: the perilous situation that the company faces right now, well
Speaker 1: one certainly has to argue that Sandberg is going to
Speaker 1: be sort of squarely in the crosshairs. And but I
Speaker 1: will give Sandberg credit is that when it has come
Speaker 1: time for this company's management to appear before various government bodies,
Speaker 1: regulatory bodies to testify, it has generally been Sandberg who
Speaker 1: has been the stand up person out of management to
Speaker 1: be held accountable. Zuckerberg has tried to stay in the shadows,
Speaker 1: has tried to dutch dodge duck Bob Weave, but it's
Speaker 1: been Sandberg who really has been the stand up person here.
Speaker 1: And unfortunately, given the way things are set up in
Speaker 1: terms of the governance we discussed earlier, it's most likely
Speaker 1: going to be Sandberg who takes the first fall. David Garritty,
Speaker 1: it's always a pleasure to have you. Thank you so
Speaker 1: much for coming in. David Garritty as chief market strategist
Speaker 1: at laid Law and Company in New York, joining us
Speaker 1: here in our eleven at three oh studios. General Motors
Speaker 1: Shares are searching after they announced it will cut more
Speaker 1: than ten thousands salerate staff and factory workers, closing five
Speaker 1: factories and this comes after surprisingly good results. David Walts
Speaker 1: joining US now Detroit Bureau chief for Bloomberg. He is
Speaker 1: at GM headquarters. David, why are they doing this and
Speaker 1: why is it being so well received by shareholders? There
Speaker 1: are a couple of reasons. One, they see the market
Speaker 1: moving toward electric vehicles autonomous vehicles, and they're still hiring
Speaker 1: people in those areas. But as they cut passenger car
Speaker 1: models that aren't selling, and as they try to develop
Speaker 1: the cars of tomorrow, they just don't need as many
Speaker 1: assemblers and traditional mechanical engineers. Um. You know, electric cars
Speaker 1: have fewer parts, they're easier to engineer, they're easier to build. Uh.
Speaker 1: They see a future there. People are buying more SUVs
Speaker 1: and fewer passenger cars, so they're getting rid of some
Speaker 1: of those nameplates like the Chevy Cruise Compact. They're getting
Speaker 1: the Impalace sedan. You don't need passenger car engineers to
Speaker 1: do that. Um. And you know, I think they're not
Speaker 1: really admitting this part, but I think they the the
Speaker 1: global auto market softening. China is in a downturn this year,
Speaker 1: the US is definitely coming off. It's two thousand sixteen peak.
Speaker 1: It's not going a creator, but when things are getting
Speaker 1: soft during you don't need as many people to engineer
Speaker 1: this myriad of nameplates that they've had for a long time.
Speaker 1: You can make a lot of cuts. The other thing
Speaker 1: that's Mary bars under a lot of pressure because the
Speaker 1: stock prices hasn't been doing great. Add it all together
Speaker 1: and she's got to show some money. David Watch, could
Speaker 1: you just continue on the theme of electric and hybrid
Speaker 1: vehicles and the number of workers that it takes to
Speaker 1: build them compared to what it takes to build a
Speaker 1: fossil fuel power automobile or vehicle. Okay, I don't have
Speaker 1: any numbers for you on that, but imagine this. One
Speaker 1: of the reasons electric cars are so expensive, it's just
Speaker 1: because that one big hunk of battery costs so much.
Speaker 1: But that's coming down so so the cost is getting
Speaker 1: more competitive. What that will replace. And I've seen testa's
Speaker 1: torn down, I've seen a ship both torn down. You
Speaker 1: have this giant battery, and you have one electric motor
Speaker 1: that replaces an internal combustion engine, a transmission on, a
Speaker 1: whole exhaust system, a whole fuel intake and management system,
Speaker 1: a bunch of pumps um. You take all of those
Speaker 1: parts and you toss them, and you've got these two
Speaker 1: big pieces that you know that that battery is basically
Speaker 1: the floor of a car. You kind of bolted in
Speaker 1: and connect everything, and it's like, it's not that simple,
Speaker 1: tim You and I couldn't do it. But it's a
Speaker 1: lot less complex than that whole suite of internal combustion
Speaker 1: parts I just rattled up. So, David, though, I have
Speaker 1: to wonder whether that is going to be an excuse
Speaker 1: for the other point that you mentioned, which is that
Speaker 1: GM probably sees the global auto market slowing substantially and
Speaker 1: they want to make sure that they're the correct size
Speaker 1: to meet waning demand, because honestly, we haven't seen electric
Speaker 1: car sales pick up that much, and frankly, cars and trucks,
Speaker 1: gas guzzling trucks have continued to be the most popular, right,
Speaker 1: So I mean that basically a red herring for the
Speaker 1: real issue, which is the slowdown. It's not a red
Speaker 1: hearing in the sense that they are hiring software related
Speaker 1: people to do autonomous cars and the power, electronics and
Speaker 1: battery engineering you need for e vs, but they're absolutely
Speaker 1: using the cover of that in order to really just
Speaker 1: get leaner. Number one, uh and and number two prepare
Speaker 1: for what is I think it's going to be a
Speaker 1: slowdown in the US, and some other forecasters uh that
Speaker 1: are making that point that they could be we could
Speaker 1: go from selling seventeen million vehicles in the US this
Speaker 1: year to you know, maybe fifteen and a half or
Speaker 1: sixteen in the next couple of years. Um. You know
Speaker 1: that there's a forecast out there like that, and it's
Speaker 1: from someone who's not crazy. So yeah, I think they
Speaker 1: see things softening up a bit, and they're they're allocating
Speaker 1: more in China as well. You know what. The part
Speaker 1: that they're not talking about here is a lot of
Speaker 1: the vehicles they're killing in the US are still going
Speaker 1: to be stold in China. They're probably gonna engineer them
Speaker 1: over there in future slip of hiring engineers there as well.
Speaker 1: So it's kind of all of these factors, and you
Speaker 1: know that they put probably the best and most futuristic
Speaker 1: spin on it. But yeah, they want to get leander
Speaker 1: and they see the markets often David Well should just
Speaker 1: give you a couple of seconds here. Do you think
Speaker 1: that the same issues face the large German automobile makers,
Speaker 1: and they have big labor unions to deal with. Yeah,
Speaker 1: it's going to affect everyone. And to be honest with you,
Speaker 1: I think the US market it's probably a healthier market
Speaker 1: than Europe is. Even though they sell luxury cars over there,
Speaker 1: that's always been a tougher market than the US because
Speaker 1: here you got pick up trucks and big subs that
Speaker 1: had a lot of problems and make a lot of
Speaker 1: money to help you deal with your other problems. Uh,
Speaker 1: they've got luxury cars over there, but that's just a
Speaker 1: tougher place to do business than the US. So absolutely,
Speaker 1: thanks very much for being with us. David Welchard, Detroit
Speaker 1: bureau chief for Bloomberg, talking about GM and its announcement
Speaker 1: that it will cut about fifteen percent of its workforce
Speaker 1: and shutter five manufacturing plants in twenty nineteen. Fernando Camera
Speaker 1: is the co founder and the chief executive of sky hour,
Speaker 1: and he's here to tell us how you can actually
Speaker 1: book and give flights and travel to someone else using hint, hint, right,
Speaker 1: using the website that he is co created called sky
Speaker 1: our dot com. Thanks very much for being here. How
Speaker 1: does sky our work? Thank you? For having me guys,
Speaker 1: So it's SKay our. What we do is we sell
Speaker 1: flight hours for sixty dollars an hour and you can
Speaker 1: use those hours book any flights on the biggest fall
Speaker 1: hunding the airlines in the world. So it all started
Speaker 1: when I was trying to give the flights to one
Speaker 1: of my best friends and and I couldn't find a
Speaker 1: way to do that. So first I was trying to
Speaker 1: book a flight, I had to know the person, details,
Speaker 1: destination dates. I was killing the surprise airlines in telome
Speaker 1: me to book a flight for a because of security reasons.
Speaker 1: Then I try their line Miles. But if I give
Speaker 1: you miles of chet Blue, you cannot travel on Delta.
Speaker 1: There's a lot of like outdates and restrictions and so
Speaker 1: it's almost impossible to use them. And it's exactly exactly
Speaker 1: the same thing with airline gifts cards gives car off
Speaker 1: jet Blue doesn't work on Debta. It's almost impossible to
Speaker 1: use to use them. So there wasn't like a easy,
Speaker 1: smart and inspiring great to give someone a flight as
Speaker 1: a gift. And so at sky Hour you can buy
Speaker 1: as many hours as you want for sixty dollars and
Speaker 1: you can use those hours book any flights on the
Speaker 1: biggest one hundred their lines in less than a minute.
Speaker 1: To be it seems like a cheap price sixty an hour,
Speaker 1: especially when you think about peak travel times to say Florida,
Speaker 1: places that are popular destinations in the United States during
Speaker 1: those times, is it? I mean, how did you get
Speaker 1: the airlines on board here? So you know, people don't know,
Speaker 1: but more than all the flights in the world, they
Speaker 1: cost less than six hours an hour. And so there's
Speaker 1: only around five percent, which is the super last minute
Speaker 1: flights on busy routes. And we a very fair model
Speaker 1: because when you book a fight on SKA our, we
Speaker 1: always give you a rewards back, so we always give
Speaker 1: you hours back they can use to book your next flight.
Speaker 1: And so if you do them at and and you
Speaker 1: see that we are never more expensive. We have a
Speaker 1: very fair model. In looking at just the sort of
Speaker 1: sample trip and itinerary from New York to London, it
Speaker 1: came back and it told me that I needed fourteen
Speaker 1: I needed fourteen hours, right because that's around trip experience,
Speaker 1: So I that would be fourteen hours fourteen times sixty exactly.
Speaker 1: So you know, probably fights from New York to Londy's
Speaker 1: six thurs and thirty minutes and the return flights eight
Speaker 1: hours in ten minutes. So the total is uh fourteen
Speaker 1: hours and fourteen minutes. Okay, So how does that actually work?
Speaker 1: In other words, if someone goes to your site, signs up,
Speaker 1: buys those fourteen hours, gives them to someone else, how
Speaker 1: to is the airline manage their inventory? So we do it.
Speaker 1: Everything happens on scaur. So you got scar dot com
Speaker 1: and can buy hours for yourself and then you can
Speaker 1: use those hours book any flight on any of your line,
Speaker 1: or you can use those urts your friends and so
Speaker 1: you know, if you're subverted tomorrow, I give you ten
Speaker 1: hours and can use those ten hours to go anywhere anytime.
Speaker 1: And if the flatuation, if the booking a total booking
Speaker 1: cost is fourteen hours and you only have ten, you
Speaker 1: can buy another four hours on the checkout. And we
Speaker 1: also allow you to crowd from the flights. So if
Speaker 1: you're a student or your for a charity, you need
Speaker 1: to book a flights, you don't have money, you can
Speaker 1: ask your friends and send me for hours and they
Speaker 1: can give you hours in less than thirty seconds, even
Speaker 1: if they are not members of SCAR. So what's the
Speaker 1: incentive for the airlines to work with you? Because I
Speaker 1: assume that you capture some differential to keep your operations
Speaker 1: going right. I mean, they could just get more if
Speaker 1: they went directly. So airlines they love sky Hour because
Speaker 1: they believe that we can essentially be the most important
Speaker 1: distribution channel for them in a couple of years from
Speaker 1: now because of the gifting industry. So I will give
Speaker 1: you an example. Right now in US Americans, they're spending
Speaker 1: hundred forty billion dollars per year on gift cards and
Speaker 1: less than one percent to spend on air travel because
Speaker 1: you know, before SCAR, that wasn't a way to give
Speaker 1: a flight someone and our generations we want to spend
Speaker 1: our money and experiences. That's where what we want to
Speaker 1: do and the most exciting trips are the ones far away,
Speaker 1: the ones that normally starting to be the flight. So
Speaker 1: you know, by allowing people to give scarts to each other,
Speaker 1: we're gonna essentially, you know, bring a big percentage of
Speaker 1: those hundred forty billions that people spend gifts cards to
Speaker 1: the airline industry. So this ye has, as you know,
Speaker 1: a new distribution channel bringing more money to the industry.
Speaker 1: Now that just included any of the extra fees. Yeah,
Speaker 1: everything is included. Everything, everything is included. Take your bags
Speaker 1: and everything is included. So one thing I'm wondering is
Speaker 1: does it remove pricing power from the airlines? Uh? We
Speaker 1: know it's not not exactly because essentially we sell hours
Speaker 1: for six dollars an hour. But you know, most of
Speaker 1: the times that actually phrase cheap. The fairer of the
Speaker 1: flight is scheper than six dollars, So we give you
Speaker 1: the difference back in minutes. So airline, No one loses money.
Speaker 1: Everyone makes money. No, I'm saying that, you know, especially
Speaker 1: just in general, I've seen Delta raise their prices and
Speaker 1: American people have basically been saying airlines have been saying,
Speaker 1: we need to we need to charge more because of
Speaker 1: the contracts with pilots, etcetera. I mean, does this sort
Speaker 1: of remove their ability to do that because it's sort
Speaker 1: of capping things at six. Now, we are not doing that. Actually,
Speaker 1: we are, you know, airlines they they you know, we
Speaker 1: we make airlines super happy. You know, we are bringing
Speaker 1: our money to the industry, and we respect their business
Speaker 1: models and we support them under percent. We need them
Speaker 1: to operate. Do you travel a lot all the time. Yeah,
Speaker 1: that's your favorite destination. Oh that's a very tough question,
Speaker 1: you know, I um favorite destination. I love skiing. Probably
Speaker 1: you know Whistler, I love it. Always go there for skiing.
Speaker 1: We'll have a great time. It's like getting to that season.
Speaker 1: Fernando Camera is co founder and chief executive of sky
Speaker 1: Hour in New York and Lisbon. Thanks for listening to
Speaker 1: the Bloomberg P and L podcast. You can subscribe and
Speaker 1: listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast
Speaker 1: platform you prefer. I'm Pim Fox. I'm on Twitter at
Speaker 1: pim Fox. I'm on Twitter at Lisa abramowits one before
Speaker 1: the podcast. You can always catch us worldwide on Bloomberg Radio.