Speaker 1: If you look at the IR for data, what it'll
Speaker 1: tell you is that a lot of the profitability in
Speaker 1: this sector is coming from the United States, and within
Speaker 1: the United States, it's coming from the big carriers. As
Speaker 1: you say, we're joined by one of those now, the
Speaker 1: CEO of United Scott Kirby. Nice Cae, sir, thanks for eving.
Speaker 1: We saw a little hiccup a few days back. American
Speaker 1: comes out, it changes its guidance, the industry reacts, share
Speaker 1: prices go down. You're very quick, very quick to come
Speaker 1: out and reconfirm your guidance on the back of that.
Speaker 1: But are you seeing any indication that the consumer is
Speaker 1: softening at the moment?
Speaker 2: You know, it's demand for us is steady as she
Speaker 2: goes in a way kind of boring over the last
Speaker 2: couple of years. I think boring is good, but it
Speaker 2: really is not getting a lot stronger, but not getting weaker.
Speaker 3: It really is pretty steady.
Speaker 1: And what changes that? Does anything change that? Does the
Speaker 1: fact that the labor market maybe started to show a
Speaker 1: few little cracks, the fact that maybe rates stay higher
Speaker 1: for longer. Do any of these factors impact that strong
Speaker 1: consumer that we're saying to you.
Speaker 2: It could, but we spent the last two years talking
Speaker 2: about the risk of recession, and the consumer just keeps
Speaker 2: plowing ahead and keeps going, and so I think that's
Speaker 2: likely going to continue. The bigger thing, the more likely
Speaker 2: change for aviation, I think, is on the supply side.
Speaker 2: We're at a peak and where the number of seats
Speaker 2: is growing a whole lot faster than the demand in
Speaker 2: the United States. But as we move into the third
Speaker 2: and fourth quarter, those numbers are scheduled to come.
Speaker 3: Back down life.
Speaker 2: So I think the supply balance will counteract even if
Speaker 2: there was.
Speaker 1: It's going through because is it with you guys at
Speaker 1: the upper end, the full service carriositing really.
Speaker 2: Across the board, right, you know, Southwest is probably the
Speaker 2: biggest thrower of seats, but it's really it really is
Speaker 2: across the board. We're growing, others will growing kind of
Speaker 2: across the board.
Speaker 3: Just the peak.
Speaker 2: This is a lot of still recovery from COVID, and
Speaker 2: this was the time that people were getting all their
Speaker 2: ability to grow back in place.
Speaker 3: So second quarter's peak.
Speaker 1: I can see that capacity in some ways making sense
Speaker 1: that you're end of the market. Does it make sense
Speaker 1: of the bottom end of the market. Do you think
Speaker 1: all of those low cost carriers survive.
Speaker 3: No, it doesn't make sense.
Speaker 2: And we can look, we do do the route p
Speaker 2: and ls really accurately for everyone, and you know everyone
Speaker 2: that's you know, as Margins Lord of us as a
Speaker 2: big chunk of their route network that loses money. The
Speaker 2: low cost and ultra low cost carriage in particular lose.
Speaker 3: An awful lot of money. It's just it's a fatally
Speaker 3: flawed business model.
Speaker 1: So some of them are going to go.
Speaker 3: I think that they're going to struggle to survive.
Speaker 1: Okay, that's about as far as I think I'm going
Speaker 1: to get used to say. That just makes the American issue.
Speaker 1: They pushed the corporate market very hard. Did you benefit
Speaker 1: from them?
Speaker 2: You know, there's a probably a small benefit in market
Speaker 2: share that we watched the data pretty closely, and while
Speaker 2: they we got a little bit of market share from them,
Speaker 2: we thought that they were making up close to one
Speaker 2: hundred percent of their revenue change in terms of distribution expenses.
Speaker 2: And so I think it's gotten a lot of press,
Speaker 2: but we certainly thought it was a marginal issue both
Speaker 2: for them and for US.
Speaker 1: Util supply side, the industry though, is supply constrained right now.
Speaker 1: You've got an issue with the prime, with the enginestead
Speaker 1: of going on three twenties, you've always the issues with
Speaker 1: the Max and the White of Boeing issues right now
Speaker 1: is your sense that we are past the worst of
Speaker 1: that there's worse still to come. Come and just give
Speaker 1: us to say.
Speaker 2: To something, you know, I think we are past the worst.
Speaker 2: I think we've acknowledged the problems by and large. You know,
Speaker 2: you talked about two of the big manufacturers that are issues,
Speaker 2: Pratt and Boeing. I think that we're we're probably moving
Speaker 2: up from here. It's not going to be overnight. They're
Speaker 2: not going to get back to one hundred percent, you
Speaker 2: know quickly. But that's okay, Like you know, particular when
Speaker 2: I took them Boeing, you know, like I'm not worried
Speaker 2: about the next twelve to eighteen months. I want to
Speaker 2: get structural the structure and they want to also, and
Speaker 2: then get them back to delivering high quality, delivering on time,
Speaker 2: delivering on schedule, and that's the path that's most important,
Speaker 2: tim clock.
Speaker 1: So when you thought that would be five years a Boeing, yeah,
Speaker 1: I think that's a realistic number.
Speaker 3: I think it'll be faster than five years.
Speaker 2: But it depends on them really making the kinds of
Speaker 2: cultural changes that they need to make. If they make
Speaker 2: the cultural changes, I think Boeing gets fixed or gets back,
Speaker 2: gets their mojo back quicker. If they don't make cultural changes,
Speaker 2: they're not going to get their mojo back.
Speaker 1: If you were to give advice to the chair on
Speaker 1: what kind of a person needs to sit in that
Speaker 1: cease of CEO, what kind of advice would you give?
Speaker 2: So you know, what I hope they do is somebody
Speaker 2: that focuses on the culture of Boeing and letting the
Speaker 2: one hundred and forty thousand only has one hundred and
Speaker 2: forty thousand great people, engineers, mechanics. Let them go build,
Speaker 2: design great products, build great technology, and focus on that
Speaker 2: and not focus on the short term financials.
Speaker 3: That's the biggest issue. Focus on the upfront.
Speaker 2: Build great airplanes, great products, and the financials will take
Speaker 2: care of themselves.
Speaker 3: Don't try to manage the back end. Manage it upfront.
Speaker 1: Start from that. Let's stay with the FAA. You've been
Speaker 1: under review by the FA. Any indication kind of how
Speaker 1: on that process is going to last? Where are we?
Speaker 2: Yeah, everything in that process is as has gone well,
Speaker 2: so far, no major findings.
Speaker 3: I think the FA would tell you that. I know
Speaker 3: the FA would tell you the same thing if the
Speaker 3: answer the question, you know, we forgot we think it.
Speaker 3: Actually we've taken this as an opportunity.
Speaker 2: Really we had a great safety foundation, but we did
Speaker 2: have a number of events that happened. But take that
Speaker 2: as an opportunity to make not just safety number one,
Speaker 2: but top of mind awareness all the time. And you know,
Speaker 2: I for the rest of my career, for example, every
Speaker 2: time I talk to employees, you know, I'm going to
Speaker 2: talk about keeping safety top of mind. We've all believe
Speaker 2: it's number one in aviation, but keeping it top of
Speaker 2: mind when everything is going great, you know, still focus
Speaker 2: on that all the little things, because all the little
Speaker 2: things matter.
Speaker 1: What do you want to see from the next administration,
Speaker 1: What do you want to see from the next incomings
Speaker 1: of the White House?
Speaker 3: What helps this industry?
Speaker 1: What helps America?
Speaker 2: Well, it's more about help America and help the world.
Speaker 2: You know, I think the United States is I think
Speaker 2: it's it's the greatest country in the history of the planet.
Speaker 2: But what makes great is positivity, optimism, vision for the future.
Speaker 3: And I want us to get back to.
Speaker 2: Being positive, being optimistic, looking to the future and how
Speaker 2: to make things better and focusing on that. And I
Speaker 2: think we need that in the United States. I think
Speaker 2: people would respond positively to that. The world needs it,
Speaker 2: and we can make the country in the world a
Speaker 2: better place.
Speaker 1: You are, by far and away the most international of
Speaker 1: the US major carriers. Do you think a Trump administration
Speaker 1: makes your job harder being an international carrier? Do you
Speaker 1: think we're going to see more fragmentation? I guess the
Speaker 1: question that I'm really.
Speaker 2: Asking you know, I don't think it really affects demand
Speaker 2: or our ability to fly around the world in any
Speaker 2: measurable way, one way or another.
Speaker 1: Great to see you, Thanks very much to see Thank you, Scott,
Speaker 1: Thank you very much. Indeed, Scott Kirby, the CEO of
Speaker 1: United here at the IFFA AGM in Divine