WEBVTT - Bloomberg Daybreak Weekend: Aviation, Debate, China's Economy 0:00:02.360 --> 0:00:04.960 This is Bloomberg Daybreak Weekend, our global look at the 0:00:04.960 --> 0:00:07.640 top stories in the coming week from our Daybreak anchors 0:00:07.680 --> 0:00:10.200 all around the world, and straight ahead on the program. 0:00:10.320 --> 0:00:13.880 This week, a ton of economic reports for investors to consider. 0:00:14.040 --> 0:00:15.320 I'm Tom Busby. 0:00:14.960 --> 0:00:15.480 In New York. 0:00:15.520 --> 0:00:18.159 I'm Caroline Hedger in London, where we're looking ahead to 0:00:18.200 --> 0:00:22.080 what comes next for the Global Aviation Industry meeting in Lisbon. 0:00:22.200 --> 0:00:24.360 I'm Ran Curtis in Hong Kong. We look at the 0:00:24.400 --> 0:00:28.320 types of fiscal stimulus that Chinese policymakers might add to 0:00:28.480 --> 0:00:29.960 recent monetary measures. 0:00:30.080 --> 0:00:32.519 I'm Kaylee Lyones in Washington, where we're gearing up for 0:00:32.600 --> 0:00:35.159 the second GOP presidential debate. 0:00:35.479 --> 0:00:39.440 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:39.479 --> 0:00:43.280 Eleve Them three own New York, Bloomberg ninety nine to one, Washington, DC, 0:00:43.600 --> 0:00:47.600 Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 0:00:47.880 --> 0:00:52.080 DAB Digital Radio, London, Sirius XM one nineteen and around 0:00:52.159 --> 0:00:54.800 the world on Bloomberg Radio dot Com and via the 0:00:54.840 --> 0:00:56.040 Bloomberg Business App. 0:00:59.440 --> 0:01:02.040 Well, good dat you. I'm Tom Busby. Last week, the 0:01:02.120 --> 0:01:05.319 Fed hitting pause again on interest rate hikes, but signaled 0:01:05.360 --> 0:01:09.040 that rates will remain higher for longer and at another 0:01:09.120 --> 0:01:11.760 rate hike will likely be needed this year if appropriate. 0:01:12.319 --> 0:01:14.360 This week, the Fed and investors get a host of 0:01:14.400 --> 0:01:17.559 economic reports offering insight into how the economy is holding 0:01:17.640 --> 0:01:20.000 up as we head toward the fourth quarter, against the 0:01:20.040 --> 0:01:23.119 backdrop of oil approaching one hundred dollars a barrel again, 0:01:23.319 --> 0:01:27.440 the restart of federal student loan repayments, and some labor strife. 0:01:27.520 --> 0:01:29.720 A lot happening in one week, and to try to 0:01:29.760 --> 0:01:32.000 sort out what it means. We're pleased to welcome Anawong, 0:01:32.120 --> 0:01:35.959 Chief US Economists with Bloomberg Economics and Michael McKee, Bloomberg 0:01:36.040 --> 0:01:39.600 International Economics and Policy correspondent. Thank you both for being here. 0:01:39.720 --> 0:01:41.840 We're glad to have the opportunity. 0:01:42.880 --> 0:01:46.080 Well, Anna, let's start with what we saw last week 0:01:46.120 --> 0:01:49.600 from the Fed. What changed in the Fed's outlook on jobs, 0:01:49.680 --> 0:01:53.520 inflation GDP, and of course, how that affects its dot 0:01:53.560 --> 0:01:55.880 plot as we look ahead to twenty twenty four. 0:01:56.720 --> 0:01:56.920 Yeah. 0:01:56.920 --> 0:02:00.640 I think the most notable changes in the summary of 0:02:00.840 --> 0:02:05.200 economic projections is that the Fed has completely embraced the 0:02:05.200 --> 0:02:10.880 soft landing outlook, so they revised down or really slashed 0:02:11.040 --> 0:02:14.799 the unemployment rate for this year and unemployment projections for 0:02:15.320 --> 0:02:18.440 the next two years. They now think that unemployment rate 0:02:18.840 --> 0:02:20.399 at the end of this year would be on three 0:02:20.440 --> 0:02:23.720 point eight percent, and what that means is that it 0:02:23.800 --> 0:02:28.720 would not satisfy the psalm's rules identification of recession. So 0:02:29.160 --> 0:02:34.079 whereas in the previous dot plot and SEP, the unemployment 0:02:34.080 --> 0:02:38.000 forecast basically imply that the Fed sees a recession happening 0:02:38.040 --> 0:02:42.080 this year, and looking further out, it also suggests that 0:02:42.120 --> 0:02:45.880 they see that unemployment rate does not necessarily need to 0:02:45.919 --> 0:02:49.040 go up in order to quell inflation. They now see 0:02:49.040 --> 0:02:52.480 the peak unemployment rate at four point one percent next year. 0:02:52.680 --> 0:02:56.919 So correspondingly, this is why they see that uh that 0:02:56.919 --> 0:02:59.680 that that rate should be held higher for longer. So 0:02:59.720 --> 0:03:02.280 in the plot, they still see one more hike for 0:03:02.600 --> 0:03:05.919 this year, and they see that rates would stay at 0:03:05.960 --> 0:03:09.320 five point one percent in twenty twenty four and on 0:03:09.360 --> 0:03:12.400 the upper threes in twenty twenty five. And so that 0:03:12.560 --> 0:03:17.799 is entirely consistent and driven by the improved unemployment outlook. 0:03:17.639 --> 0:03:22.120 And Michael inflation. They've also seen a little change in 0:03:22.160 --> 0:03:24.040 their target for inflation over the next year. 0:03:24.120 --> 0:03:26.799 Well, this is the part that's a little inconsistent. They 0:03:27.120 --> 0:03:31.440 did raise their growth forecasts and lowered their unemployment forecasts, 0:03:31.480 --> 0:03:35.000 but they also predict that inflation is going to go down, 0:03:35.920 --> 0:03:39.440 which implies that this soft landing in this stronger than 0:03:39.480 --> 0:03:44.880 expected economy isn't going to be particularly inflationary, which is 0:03:44.920 --> 0:03:48.040 fine if if that's what happens, But then it raises 0:03:48.080 --> 0:03:52.120 the question of rates. Why are you still holding in 0:03:52.320 --> 0:03:55.040 reserve the opportunity to raise rates if you think that 0:03:56.480 --> 0:03:59.200 you're not going to need it. Obviously they want to 0:03:59.280 --> 0:04:02.800 keep their options open. Nobody wants to be backed into 0:04:02.840 --> 0:04:05.920 a corner and suddenly have to apologize for coming back 0:04:05.920 --> 0:04:09.360 in and raising rates when nobody expected it. But it 0:04:09.400 --> 0:04:12.720 does suggest that they see a kind of new regime here. 0:04:12.960 --> 0:04:16.880 And certainly the Phillips curve at least appears to be 0:04:16.960 --> 0:04:20.279 dead at this point as far as the Fed is concerned. 0:04:20.360 --> 0:04:25.000 Unemployment going down and no inflation at all, which is 0:04:25.160 --> 0:04:27.960 kind of a major turn in their thinking. 0:04:28.720 --> 0:04:31.360 And how about economic growth, because we get a GDP 0:04:31.560 --> 0:04:35.520 read for the Springs second quarter for this year, but 0:04:35.640 --> 0:04:37.839 what's their projection change on growth? 0:04:39.040 --> 0:04:43.480 Well, they raised their growth forecasts significantly, more than doubled 0:04:43.480 --> 0:04:46.640 it for this year and then raised it by four 0:04:46.720 --> 0:04:49.320 tenths for next year to one and a half percent. 0:04:50.400 --> 0:04:53.680 That seems reasonable given what we are seeing in the 0:04:53.720 --> 0:04:58.800 economy right now, although, as Jim Bullard cautioned me this week, 0:04:58.839 --> 0:05:03.360 there's always recency by in your forecast and you're looking 0:05:03.440 --> 0:05:06.320 at the most recent numbers, so something could go wrong. 0:05:06.360 --> 0:05:08.400 And that's where I turn it over to Anna, because 0:05:08.400 --> 0:05:10.760 Anna has been predicting something is going to go wrong 0:05:10.800 --> 0:05:11.559 in the fourth quarter. 0:05:11.760 --> 0:05:15.240 Yeah, Mike, I thought what Mike's One of the most 0:05:15.279 --> 0:05:17.960 interesting things that Mike just said is that there seems 0:05:18.000 --> 0:05:22.200 to be a regime change in thinking within the FOMC, 0:05:23.160 --> 0:05:28.720 really embracing this immaculate disinflation idea. But the thing is, 0:05:29.120 --> 0:05:32.640 the outlook in the next couple of weeks is highly uncertain. 0:05:33.080 --> 0:05:37.880 We have the potential widening escalation in the UAW strikes, 0:05:38.040 --> 0:05:41.039 oil price going up to one hundred dollars per barrel, 0:05:41.120 --> 0:05:45.880 and also potential government shutdown. Yet in the FOMC forecast, 0:05:45.960 --> 0:05:49.680 there's a section that asked participants about their uncertainty over 0:05:49.720 --> 0:05:53.880 the forecast, and interestingly, across all the economic variables they 0:05:53.880 --> 0:05:58.280 indicate that there's less uncertainty. So basically Not only is 0:05:58.480 --> 0:06:03.880 the FOMC projecting a regime shift and this immaculate disinflation, 0:06:03.920 --> 0:06:08.600 they're really certain about it, with more confidence over this outlook, 0:06:08.800 --> 0:06:14.080 even as the economic environment we're facing is actually extremely uncertain. 0:06:14.120 --> 0:06:15.560 In the next couple of weeks. 0:06:15.400 --> 0:06:17.800 Wow, And in this next week, we're going to see 0:06:17.800 --> 0:06:20.839 something that could change things. It's the Fed's preferred measure 0:06:20.880 --> 0:06:25.160 of inflation, the personal consumption Core price Index. Mike, I 0:06:25.200 --> 0:06:27.600 know this is closely watched by you as well. What 0:06:27.640 --> 0:06:30.000 are we looking at because now we'll shift from what 0:06:30.080 --> 0:06:32.400 happened to what we're going to see ahead this week. 0:06:32.839 --> 0:06:36.520 Well, there's two reports next Friday. One is on a PCEE, 0:06:36.880 --> 0:06:39.239 which a lot of people will be watching. Of course 0:06:39.240 --> 0:06:41.680 at the FED, the expectation is we're going to see 0:06:41.720 --> 0:06:44.480 a rise in the headline number brought about by rising 0:06:44.600 --> 0:06:47.560 energy prices. It's the core that the FED is going 0:06:47.600 --> 0:06:50.920 to be focused on, and there economists see no change 0:06:50.920 --> 0:06:53.719 in the rate of inflation on a month over month basis, 0:06:53.760 --> 0:06:56.679 just two tenths of eight percent, but that would push 0:06:56.720 --> 0:06:59.880 the year over year down to three point nine percent, 0:07:00.360 --> 0:07:05.320 which is a significant drop going forward. For the FED. 0:07:05.520 --> 0:07:08.480 To get the forecast, it has for the end of 0:07:08.480 --> 0:07:10.440 the year. It probably means inflation needs to come in 0:07:10.440 --> 0:07:13.720 a little bit even stronger. But the Fed is going 0:07:13.760 --> 0:07:17.160 to look past oil prices they always do. They're going 0:07:17.240 --> 0:07:20.160 to relate that to the economy by looking at the 0:07:20.720 --> 0:07:26.160 later release on Friday, the University of Michigan's Expectations Index 0:07:26.240 --> 0:07:29.000 Sentiment Index, and they'll be looking at what people think 0:07:29.400 --> 0:07:32.720 inflation is going to be like, because if oil prices 0:07:32.800 --> 0:07:35.280 keep going up and gasoline prices keep going up, then 0:07:35.320 --> 0:07:40.240 what you have is a question about inflation expectations becoming unanchored. 0:07:40.360 --> 0:07:42.840 So they'll want to make sure that people aren't starting 0:07:42.840 --> 0:07:46.120 to think inflation's getting embedded in the economy. So two 0:07:46.160 --> 0:07:50.520 important reports next Friday. Also as part of that PC report, 0:07:50.560 --> 0:07:55.480 we get personal spending numbers, and that'll be interesting because 0:07:56.200 --> 0:07:59.640 we saw a little bit of weakness in the retail 0:07:59.680 --> 0:08:02.600 sales numbers, but those don't include services, so we'll see 0:08:02.640 --> 0:08:05.800 if people are still outspending or if they're starting to 0:08:06.000 --> 0:08:06.480 pull back. 0:08:06.800 --> 0:08:09.920 Speaking of pulling back, because I mentioned earlier, is the 0:08:09.960 --> 0:08:14.080 federal student loan repayments which will start this coming week 0:08:14.280 --> 0:08:17.520 by October first their due, and that may change spending 0:08:17.600 --> 0:08:21.800 habits for millions of Americans who owe billions of dollars. Anna, 0:08:22.320 --> 0:08:23.120 what's your take on that? 0:08:23.800 --> 0:08:28.040 Yeah, actually, we have already as the student loans borrowers 0:08:28.320 --> 0:08:31.960 repaying a lot of that loan starting already in August, 0:08:33.320 --> 0:08:38.520 and so we estimate that that would mean possibly one 0:08:38.600 --> 0:08:43.880 hundred billion per year less less in consumption but put 0:08:43.920 --> 0:08:48.360 toward repaying student loans. So that could shave off as 0:08:48.480 --> 0:08:55.079 much as zero point six percent from consumption annually. And 0:08:55.240 --> 0:09:01.080 if this change happened is concentrated with it and a quarter, 0:09:01.440 --> 0:09:05.360 it could have a pretty significant close to one percentage 0:09:05.400 --> 0:09:07.360 point drag on consumption. 0:09:07.679 --> 0:09:10.880 Well, now, there's also a ton of housing data coming up, 0:09:11.040 --> 0:09:13.640 including two reads on home prices in July. We have 0:09:13.720 --> 0:09:17.480 new home sales, pending home sales for August, interest rates 0:09:17.520 --> 0:09:21.800 solidly above seven percent, home prices just after all time highs. Michael, 0:09:21.840 --> 0:09:23.959 what do you expect to see and is there any 0:09:24.000 --> 0:09:24.920 good news in housing? 0:09:26.200 --> 0:09:29.360 Well, there has been good news for home builders because 0:09:29.920 --> 0:09:33.680 people can't buy existing homes at this point. There isn't 0:09:33.760 --> 0:09:37.800 much inventory, so they're buying new homes. So we will 0:09:37.800 --> 0:09:40.880 get a report on new homes next week and it 0:09:40.960 --> 0:09:43.679 is expected to go down a little bit some of 0:09:43.679 --> 0:09:47.640 that may be weather related. We shall see housing starts 0:09:48.280 --> 0:09:51.480 were off a bit, but likely weather related. We did 0:09:51.520 --> 0:09:55.280 see last week the existing home sales numbers fall by 0:09:55.320 --> 0:09:59.760 another seven tenths to just over four million, the weakest 0:10:00.080 --> 0:10:04.400 basically this year. But prices are going up, which just 0:10:04.480 --> 0:10:08.080 makes it even harder to get the whole industry going, 0:10:08.320 --> 0:10:11.000 and it is going to take a while. One of 0:10:11.040 --> 0:10:15.160 the things we don't know is how low do mortgage 0:10:15.200 --> 0:10:17.240 rates have to go. In other words, how much does 0:10:17.240 --> 0:10:20.360 the FED have to cut before you reach a level 0:10:20.400 --> 0:10:22.920 at which people will go back into the mortgage market. 0:10:23.120 --> 0:10:27.120 Right now is certainly the existing home side is frozen. 0:10:27.520 --> 0:10:29.800 Yeah. Oh, it's terrible out there. 0:10:30.400 --> 0:10:34.800 And Anna Wong, Chief US Economists with Bloomberg Economics, Michael McKee, 0:10:34.800 --> 0:10:38.319 Bloomberg International Economics and Policy correspondent, A lot to look 0:10:38.360 --> 0:10:40.360 forward to. I want to thank you both for joining 0:10:40.440 --> 0:10:43.720 us this week. Coming up on Bloomberg Daybreak weekend, we 0:10:43.760 --> 0:10:46.440 take you to Europe and preview the World Aviation Festival 0:10:46.559 --> 0:11:00.800 in Lisbon. I'm Tom Busby and this is Bloomberg. This 0:11:00.880 --> 0:11:03.480 is Bloomberg Daybreak Weekend, our global look ahead at the 0:11:03.480 --> 0:11:06.120 top stories for investors in the coming week, I'm Tom 0:11:06.160 --> 0:11:09.200 Busby in New York. Up later in our program we 0:11:09.280 --> 0:11:14.040 preview the second Republican presidential debate minus Donald Trump. But first, 0:11:14.320 --> 0:11:16.880 the World Aviation Festival is builled as one of the 0:11:16.880 --> 0:11:19.839 biggest annual events for the industry, and it's taking place 0:11:19.880 --> 0:11:22.800 this week in Lisbon. For more, let's head to London 0:11:22.840 --> 0:11:26.360 and bring in Bloomberg Daybreak europe banker Caroline Hepgar Tom. 0:11:26.440 --> 0:11:30.439 Global aviation faces quite a few challenges, sawing crude all 0:11:30.520 --> 0:11:34.319 prices at a time when airfares are already high, labour costs, 0:11:34.360 --> 0:11:39.319 squeezing profit margins, a sluggish supply chain, and growing emphasis 0:11:39.360 --> 0:11:43.320 on the environmental impact of the industry. Now. I discussed 0:11:43.320 --> 0:11:46.880 some of these with Bloomberg's aerospace reporter Kate Duffy. She 0:11:47.040 --> 0:11:49.560 has the lucky job of reporting from Lisbon in the 0:11:49.559 --> 0:11:53.600 next few days on the plans from commercial airlines, airports, 0:11:53.600 --> 0:11:56.680 and all the other businesses that supply and support them, 0:11:56.679 --> 0:12:00.320 including more than one hundred startups. I began by asking 0:12:00.400 --> 0:12:02.480 her who she thinks is going to be attending the 0:12:02.520 --> 0:12:04.040 World Aviation Festival. 0:12:04.240 --> 0:12:06.840 There'll be a whole host of attendees at the World 0:12:06.920 --> 0:12:12.240 Aviation Festival this year, from major airlines, airports, suppliers and 0:12:12.440 --> 0:12:16.320 other aviation groups. Really so the biggest names from airlines 0:12:16.400 --> 0:12:21.400 are Emert CEO, Tim Clark, IAG CEO, Louis Galago and 0:12:21.480 --> 0:12:24.440 Ryan az Eddie Wilson, but a range of other airlines 0:12:24.440 --> 0:12:29.120 are also attending, well known names including easy Jet, British Airways, 0:12:29.280 --> 0:12:32.880 TAP and the new read Air. I've also counted around 0:12:33.040 --> 0:12:35.840 thirty airports across the world or on the list speaking 0:12:35.840 --> 0:12:40.120 on panels and roundtables. And then there are the suppliers, 0:12:40.200 --> 0:12:44.200 the data providers, travel agents there and other aviation groups 0:12:44.280 --> 0:12:47.680 speaking and attending. So I'm expecting some good debates to 0:12:47.720 --> 0:12:49.440 come up over the two days on there. 0:12:49.559 --> 0:12:51.480 There's a lot moving for the industry. What do you 0:12:51.520 --> 0:12:53.319 think the focus is going to be this year? 0:12:53.640 --> 0:12:57.000 So looking at the agenda, many airlines will be discussing 0:12:57.040 --> 0:12:59.800 the hurdles they've faced over the past year and also 0:12:59.840 --> 0:13:03.520 how they're looking to overcome those future challenges. For example, 0:13:03.880 --> 0:13:07.640 TAP CEO Rodriguez has an interview with Bloomberg Sky Johnson 0:13:07.760 --> 0:13:11.360 about difficulties and re emerging stronger. And there's also a 0:13:11.360 --> 0:13:16.280 panel oneable for seeable headwinds for aviation in twenty twenty four, 0:13:16.640 --> 0:13:19.320 and it's worth mentioning also that it's not long before 0:13:19.360 --> 0:13:22.880 the Dubai Air Show kicks off and exects like Tim 0:13:22.960 --> 0:13:25.840 Clark may give an insight into what we can expect 0:13:26.120 --> 0:13:29.760 further down the line. Of course, sustainability and the environment 0:13:30.000 --> 0:13:33.360 with the scaling up of sustainable aviation fuel will play 0:13:33.400 --> 0:13:38.080 a part, as well as supply chain challenges post COVID 0:13:38.160 --> 0:13:41.600 recovery demand now we're heading into the winter, and of 0:13:41.640 --> 0:13:44.760 course air traffic control disruption, which we've seen a lot 0:13:44.800 --> 0:13:45.600 of this summer. 0:13:45.760 --> 0:13:45.960 Yeah. 0:13:45.960 --> 0:13:50.319 Absolutely. What do you think the biggest issues though, are 0:13:50.360 --> 0:13:52.640 going to be when it comes to the discussions. You know, 0:13:52.880 --> 0:13:55.200 you mentioned a few of them that have really rattled 0:13:55.200 --> 0:13:58.400 the industry and we haven't even touched on the supply 0:13:58.600 --> 0:14:01.480 chain overhang. Yeah. 0:14:01.520 --> 0:14:05.440 For many airlines the air traffic control disruption and strikes 0:14:05.480 --> 0:14:10.720 in Europe were a massive frustration as they caused cancellations 0:14:10.760 --> 0:14:13.480 and delays and not a good look when you're stranding 0:14:14.000 --> 0:14:17.480 passengers around the world too, and the recent technical failure 0:14:17.559 --> 0:14:21.200 at NATS in the UK sent airlines into turmoil and 0:14:21.280 --> 0:14:24.000 it took them days to recover, which some bosses like 0:14:24.080 --> 0:14:29.400 Ryanair's Michael O'Leary and EasyJet CEO have really criticized. So 0:14:29.880 --> 0:14:32.160 I think some of the discussions will be on how 0:14:32.200 --> 0:14:35.520 the industry can and should avoid these problems in the 0:14:35.560 --> 0:14:41.000 future and whether that ramping up hiring or installing better 0:14:41.120 --> 0:14:45.000 tech systems is the way forward. And as you mentioned, 0:14:45.040 --> 0:14:48.400 another issue which is widespread across the aviation industry at 0:14:48.440 --> 0:14:52.080 the moment is this sluggish supply chain backlog. You know, 0:14:52.200 --> 0:14:56.440 manufacturers are lacking spare parts for aircraft and therefore airlines 0:14:56.440 --> 0:14:58.800 are having to wait much longer to fill up their 0:14:58.800 --> 0:15:02.440 fleets and it's frustrating for those airlines which are now 0:15:02.480 --> 0:15:05.480 having to deal with some of the recently discovered engine 0:15:05.520 --> 0:15:09.720 issues that require some engines to be removed and those 0:15:09.760 --> 0:15:13.320 are the Pratt and Whitney engines over the next three years. 0:15:13.600 --> 0:15:16.440 So there will be concern about the demand as well 0:15:16.520 --> 0:15:20.720 for the next travel season. You know, summer was a 0:15:20.800 --> 0:15:25.200 blowout for airlines with many reporting better than expected results, 0:15:25.240 --> 0:15:27.960 but that the next focus is on how they can 0:15:28.000 --> 0:15:31.400 sustain the demand in this winter in this winter season. 0:15:31.200 --> 0:15:33.840 Yeah, especially as oil prices are going up, and obviously 0:15:33.840 --> 0:15:35.720 that has a huge impact on the industry. 0:15:36.000 --> 0:15:40.240 Yeah, oil is the singlest biggest, single biggest expense for 0:15:40.280 --> 0:15:43.280 an airline, so many have struggled to cope with the 0:15:43.360 --> 0:15:47.680 high oil prices. Recently. You know, some air US carriers 0:15:47.720 --> 0:15:51.360 slashed their profit outlooks for the third quarter. They blamed 0:15:51.440 --> 0:15:54.440 one of the factors on being a jump in oil prices. 0:15:55.160 --> 0:15:59.000 But when oil prices jump, SODA's inflation, and this means 0:15:59.040 --> 0:16:01.720 that the costs can be passed on to the customers. 0:16:02.080 --> 0:16:04.840 And at a time of the cost of living crisis, 0:16:05.240 --> 0:16:08.080 you know, it's taking a toll with mortgages, groceries and 0:16:08.200 --> 0:16:12.720 energy prices jumping and more price conscious passengers might be 0:16:12.760 --> 0:16:16.440 thinking twice about spending on a lavish holiday or a 0:16:16.480 --> 0:16:20.200 plane ticket abroad. So it's clear oil volatility is a 0:16:20.200 --> 0:16:22.880 big pressure point in aviation at the moment, as the 0:16:22.920 --> 0:16:26.480 outlook for travel post summer remains quite uncertain. 0:16:26.880 --> 0:16:29.960 Yeah, what is the passenger experience then? 0:16:30.000 --> 0:16:30.880 How all of this? 0:16:31.120 --> 0:16:33.600 What has it been like for travelers recently? Is it 0:16:33.680 --> 0:16:35.960 the end of kind of revenge travel that we saw 0:16:36.040 --> 0:16:37.080 post the pandemic. 0:16:37.680 --> 0:16:41.000 Yeah, so COVID nineteen posted a huge challenge for airlines 0:16:41.120 --> 0:16:45.880 and of course passengers were severely disrupted by this, and 0:16:46.040 --> 0:16:49.880 this year has been probably just as bad with the 0:16:49.960 --> 0:16:53.280 air traffic control disruption and strikes that we've seen. In 0:16:53.360 --> 0:16:56.720 terms of revenge travel, there is this sense that passengers 0:16:56.760 --> 0:17:00.800 are spending you know, maybe more on onto some passengers 0:17:00.840 --> 0:17:04.600 spending more on luxury tickets. But there is a concern 0:17:04.680 --> 0:17:09.800 about whether price hikes will happen further and whether this 0:17:09.840 --> 0:17:13.600 will put customers off in the future from buying plane tickets. 0:17:13.880 --> 0:17:18.119 Yeah. Technology wise, then this event has all the suppliers. 0:17:18.160 --> 0:17:20.560 So what sort of things do you think they're going 0:17:20.640 --> 0:17:24.399 to be demonstrating or discussing as the kind of solutions 0:17:24.440 --> 0:17:25.879 for the industry. 0:17:26.119 --> 0:17:30.840 There's lots on airport technology, how to make the passenger 0:17:30.920 --> 0:17:38.200 experience more seamless, lots on customer experience AI, just making 0:17:38.240 --> 0:17:42.080 the process for passengers more smooth when flying and cutting 0:17:42.080 --> 0:17:46.240 out the old fashioned manual ways of doing things. Sometimes 0:17:46.280 --> 0:17:48.720 we've seen this go wrong in the past. Some airlines 0:17:48.760 --> 0:17:51.240 have trouble with their apps. You know, passengers off to 0:17:51.240 --> 0:17:55.480 complain on social media about the accessibility of an airline's app. 0:17:55.520 --> 0:17:59.320 So there seems like there will be panels on how 0:17:59.359 --> 0:18:02.960 the industry can make the digital side more comfortable for 0:18:03.000 --> 0:18:04.520 the passengers. 0:18:04.400 --> 0:18:07.080 And there'll be lots of airport leaders there as well. 0:18:07.119 --> 0:18:10.560 I mean about sixty percent of the festival is made 0:18:10.640 --> 0:18:13.520 up of sort of European players, but also quite a 0:18:13.560 --> 0:18:16.080 lot from the Middle East and the rest of the world. 0:18:16.480 --> 0:18:21.040 There will be airports represented Dubai, Hong Kong, Winnipeg. They're 0:18:21.080 --> 0:18:23.800 all speaking at the event. What sorts of things do 0:18:23.800 --> 0:18:25.400 you think they're going to be thinking about? 0:18:25.600 --> 0:18:28.960 So from what the agenda says, airports will be discussing 0:18:29.040 --> 0:18:33.240 how to make their operations more digital, how to improve 0:18:33.280 --> 0:18:37.919 the airport experience for passengers through tech and sustainability. Some 0:18:38.080 --> 0:18:40.720 airports have had a rough ride this summer, whether having 0:18:40.760 --> 0:18:45.800 to cater for passengers who've experienced delays and cancelations, or 0:18:45.840 --> 0:18:51.639 having to deal with natural flooding disasters extreme weather events. Others, 0:18:51.640 --> 0:18:55.800 such as Amsterdam's ship On airport, have struggled with handling 0:18:55.880 --> 0:18:58.480 luggage and that's led to a lot of passengers not 0:18:58.520 --> 0:19:02.160 getting their bags on time. So I think how airports 0:19:02.200 --> 0:19:05.800 are going to go forward with the tech and help 0:19:05.880 --> 0:19:10.040 passengers make their travel more smooth is what is going. 0:19:10.000 --> 0:19:13.040 To be discussed at the festival. Yeah, that was Bloomberg's 0:19:13.040 --> 0:19:15.760 aerospace reporter Kate Duffy talking to me ahead of the 0:19:15.760 --> 0:19:18.919 World Aviation Festival in Lisbon. She'll be there along with 0:19:18.920 --> 0:19:22.320 Bloomberg TV's Guy Johnson. I'm Caroline Hepger here in London. 0:19:22.359 --> 0:19:25.879 You can catch us every weekday morning for Bloomberg Daybreak Europe, 0:19:25.920 --> 0:19:28.800 beginning at six am in London. That's one am on 0:19:28.920 --> 0:19:29.440 Wall Street. 0:19:29.760 --> 0:19:33.080 Tom Our thanks to Bloomberg day Break Europe. Ankor Caroline 0:19:33.080 --> 0:19:36.840 Hepgar and coming up on Bloomberg Daybreak weekend, the second 0:19:36.920 --> 0:19:40.520 Republican presidential candidate's debate takes place at the Ronald Reagan 0:19:40.560 --> 0:19:44.160 Presidential Library in California, and we will get a preview 0:19:44.320 --> 0:19:48.480 with Bloomberg's Kaylee Lines. I'm Tom Busby and this is. 0:19:48.400 --> 0:20:02.800 Bloomberg Badcast live from the Bloomberg it a active Brokers 0:20:02.800 --> 0:20:06.199 studio in New York. Bloomberg e Lemon free oh to Washington, 0:20:06.320 --> 0:20:09.640 d C, Bloomberg ninety nine one to Boston, Bloomberg one 0:20:09.640 --> 0:20:12.919 oh six one to San Francisco, Bloomberg nine sixty to 0:20:12.960 --> 0:20:16.160 the country, Sirius XM channel one to nineteen to London, 0:20:16.280 --> 0:20:20.040 DAB Digital Radio and around the globe the Bloomberg Business 0:20:20.080 --> 0:20:24.600 app in Bloomberg Radio dot Com. This is Bloomberg Daybreak weekend. 0:20:30.880 --> 0:20:32.920 I'm Tom Busby in New York with your global look 0:20:32.920 --> 0:20:35.320 ahead at the top stories for investors in the coming week. 0:20:35.640 --> 0:20:39.560 Republican presidential candidates are gearing up for round two, preparing 0:20:39.600 --> 0:20:42.960 for the second primary debate in SeeMe Valley, California, but 0:20:43.040 --> 0:20:46.920 once again, the front runner won't be on stage for more. 0:20:47.000 --> 0:20:49.080 Let's head to our Bloomberg ninety nine one news from 0:20:49.119 --> 0:20:53.120 in Washington and Bloomberg Sound On co host Kaylee Lines. 0:20:53.560 --> 0:20:56.639 Yeah, that's right. This coming Wednesday, candidates will take the 0:20:56.680 --> 0:21:00.080 stage once again, although there will probably be fewer of 0:21:00.160 --> 0:21:03.000 them this time around than there were at the first debate. 0:21:03.040 --> 0:21:06.320 The threshold to qualify is higher. One thing we know 0:21:06.400 --> 0:21:09.080 for sure, though, is that former President Donald Trump, who 0:21:09.119 --> 0:21:11.960 remains the front runner in this GOP race, will not 0:21:12.040 --> 0:21:14.720 be there. He's going to counter program again. Here to 0:21:14.760 --> 0:21:16.359 talk about all of it with us are two of 0:21:16.400 --> 0:21:20.600 our all star national politics reporters, Gregory Cordy and Ryan 0:21:20.680 --> 0:21:24.600 Teague Beckweth, who are here with me in Washington. So, Ryan, 0:21:24.640 --> 0:21:27.520 if I could just begin with you, who has the 0:21:27.560 --> 0:21:31.040 most to gain or lose at this point in the 0:21:31.080 --> 0:21:34.720 election cycle, given what we're seeing and polling lately. How 0:21:34.800 --> 0:21:38.080 polls have changed since the first debate. Who needs this 0:21:38.160 --> 0:21:39.560 to work out in round two? 0:21:40.400 --> 0:21:43.600 I mean, this is a shot for Ron DeSantis to 0:21:43.680 --> 0:21:47.280 try to kind of revitalize his campaign. At this point, 0:21:47.320 --> 0:21:51.320 he is polling about as far behind Donald Trump as 0:21:51.800 --> 0:21:55.440 Robert F. Kennedy Junior is polling behind Joe Biden in 0:21:55.520 --> 0:22:00.159 the Democratic primaries, So he needs any sort of thing 0:22:00.200 --> 0:22:04.440 he can get to juice that campaign. I think it's 0:22:04.640 --> 0:22:08.240 probably more of an opportunity for Nikki Haley or Tim Scott, 0:22:08.560 --> 0:22:10.399 some of the people who are running as kind of 0:22:10.440 --> 0:22:14.600 the backup plan in case the Santus falters to try 0:22:14.640 --> 0:22:19.720 to assert themselves, get some kind of moment that people 0:22:19.760 --> 0:22:24.320 will recall. Haley I think had a brief moment at 0:22:24.320 --> 0:22:27.280 the last debate when she was talking about abortion. But 0:22:27.640 --> 0:22:30.840 I don't know. I don't know if they'll it's still 0:22:30.880 --> 0:22:33.200 a crowded field. I don't know if they'll have that chance. 0:22:34.000 --> 0:22:35.399 Gregory, what do you think about this? 0:22:36.080 --> 0:22:36.199 Well? 0:22:36.280 --> 0:22:39.280 I think it's an important debate for everyone on that stage, obviously, 0:22:39.520 --> 0:22:44.000 but especially for the ones actually at the lower end 0:22:44.000 --> 0:22:48.359 of the pulling range where the Republican Party has designed 0:22:48.400 --> 0:22:52.000 this debate season to start to weed out some of 0:22:52.000 --> 0:22:55.080 these lower pulling candidates, and so for the first debate, 0:22:55.160 --> 0:22:57.680 you had to pull with just one percent in three 0:22:57.960 --> 0:23:00.320 national poles to get on the stage. Now that threshld's 0:23:00.320 --> 0:23:02.280 moving up to three percent, we don't know what the 0:23:02.320 --> 0:23:03.840 threshold is going to be for the third debate, but 0:23:03.880 --> 0:23:07.159 it's going to be even higher. So for candidates like 0:23:08.200 --> 0:23:10.760 Tim Scott who we haven't mentioned yet, or Chris Christy, 0:23:11.600 --> 0:23:16.120 certainly Doug Bergham and Asa Hutchinson, if they even make 0:23:16.160 --> 0:23:17.920 the second debate stage, are going to be under a 0:23:17.960 --> 0:23:20.480 lot of pressure to really have a turnaround moment, because 0:23:20.640 --> 0:23:22.680 as soon as they drop off the stage, it's hard 0:23:22.760 --> 0:23:25.359 to imagine them coming back. And then of course Ron 0:23:25.400 --> 0:23:28.439 de Santis, of course he has his polls have been 0:23:28.480 --> 0:23:30.480 moving in the wrong direction. He needs to turn that 0:23:30.520 --> 0:23:34.000 around and so needs to have a breakout performance. But look, 0:23:34.080 --> 0:23:38.119