1 00:00:03,800 --> 00:00:06,400 Speaker 1: It's that time time, time, time. 2 00:00:07,640 --> 00:00:09,239 Speaker 2: Luck and load. 3 00:00:08,920 --> 00:00:13,680 Speaker 3: The Michael Very Show is on the air. 4 00:00:18,760 --> 00:00:22,239 Speaker 1: Shut to take this job. 5 00:00:22,280 --> 00:00:23,119 Speaker 4: And shove it. 6 00:00:23,320 --> 00:00:25,760 Speaker 5: Joy you like movies about gladiators. 7 00:00:25,800 --> 00:00:28,560 Speaker 4: Gets down on thee my yankee, my lanky. 8 00:00:28,800 --> 00:00:32,120 Speaker 3: Well sometimes I get the Vinstrel crabs for your hard This. 9 00:00:32,240 --> 00:00:34,000 Speaker 5: Time you pipe on Tupac. 10 00:00:35,800 --> 00:00:40,360 Speaker 3: To treat for me to get to do things like this. 11 00:00:40,920 --> 00:00:43,599 Speaker 3: I received a book in the mail. You know this 12 00:00:43,680 --> 00:00:46,240 Speaker 3: is this is how book interviews typically go go about. 13 00:00:46,560 --> 00:00:48,639 Speaker 3: And there's a PR firm, and you know they they 14 00:00:48,720 --> 00:00:51,680 Speaker 3: base their pitch based on your show. And we've done 15 00:00:51,680 --> 00:00:55,480 Speaker 3: a number of business interviews over the years, and so 16 00:00:55,520 --> 00:00:58,000 Speaker 3: we show up on the list. And the book is 17 00:00:58,040 --> 00:01:03,680 Speaker 3: called Flying for Peanuts, Tough Deals, Steep Bargains and Revolution 18 00:01:03,920 --> 00:01:07,640 Speaker 3: in the Skies. And I see and I'm thinking, I 19 00:01:07,680 --> 00:01:10,080 Speaker 3: see Frank Lorenzo, and I think, oh, it's a book 20 00:01:10,080 --> 00:01:14,440 Speaker 3: about Frank Lorenzo, says Frank Lorenzo, former CEO of Content Airlines. 21 00:01:15,280 --> 00:01:17,560 Speaker 3: And I opened it up and I said, Chad who 22 00:01:17,600 --> 00:01:20,960 Speaker 3: wrote the book? And Chad Knakanishi and Ched said Frank 23 00:01:21,000 --> 00:01:23,160 Speaker 3: Lorenzo wrote the book. I said, I hadn't heard from 24 00:01:23,160 --> 00:01:25,560 Speaker 3: Frank Lorenzo in years. I didn't know he was still around. 25 00:01:26,040 --> 00:01:32,040 Speaker 3: He's told his story. Well, you know, my mind harkened 26 00:01:32,200 --> 00:01:36,240 Speaker 3: to the longshoreman's strike that was threatened. I mean, people 27 00:01:36,280 --> 00:01:39,560 Speaker 3: remember that wasn't so long ago, and that goon Garrett 28 00:01:39,600 --> 00:01:42,400 Speaker 3: or Barrett or whatever, the mobbed up mafia guy who 29 00:01:42,440 --> 00:01:45,000 Speaker 3: threatened that he was going to cripple every one of 30 00:01:45,080 --> 00:01:47,840 Speaker 3: us if the longshoreman didn't get what they wanted, which 31 00:01:47,920 --> 00:01:49,880 Speaker 3: was to be paid way more than doctors and never 32 00:01:49,920 --> 00:01:52,440 Speaker 3: have to work, and no technology and ruin the ports. 33 00:01:53,120 --> 00:01:55,520 Speaker 3: And all I could think was love him or hate him. 34 00:01:55,720 --> 00:01:59,880 Speaker 3: Lorenzo kind of had some of those same battles with Airline, 35 00:02:00,520 --> 00:02:02,680 Speaker 3: and that's part of why if somebody didn't like him 36 00:02:02,920 --> 00:02:04,640 Speaker 3: for the same reason, for the same reason if somebody 37 00:02:04,680 --> 00:02:08,200 Speaker 3: didn't like Ronald Reagan, it's because of the air traffic controllers. 38 00:02:08,600 --> 00:02:10,800 Speaker 3: It's tough to run a business when you've got a 39 00:02:10,880 --> 00:02:14,240 Speaker 3: union on the other side. So with that being said, 40 00:02:14,600 --> 00:02:16,200 Speaker 3: welcome to the programme, Frank Lorenzo. 41 00:02:17,639 --> 00:02:18,440 Speaker 5: Thank you, Michael. 42 00:02:18,960 --> 00:02:21,600 Speaker 3: So first, first of all, why write the book? I 43 00:02:21,639 --> 00:02:23,960 Speaker 3: find that when someone you've done everything you're going to do, 44 00:02:24,000 --> 00:02:26,120 Speaker 3: you don't need the money. When someone writes a book 45 00:02:26,120 --> 00:02:28,119 Speaker 3: at this point in their life, not just their career, 46 00:02:28,200 --> 00:02:31,360 Speaker 3: their life. It's because they want to make sure that 47 00:02:31,480 --> 00:02:33,960 Speaker 3: the truth gets out there and they don't feel like 48 00:02:34,120 --> 00:02:34,680 Speaker 3: it did. 49 00:02:35,280 --> 00:02:36,360 Speaker 1: Do you qualify for that? 50 00:02:37,760 --> 00:02:40,519 Speaker 5: Oh for sure, for sure. As a matter of fact, 51 00:02:41,480 --> 00:02:48,320 Speaker 5: just to add a point in what you said before, Yes, 52 00:02:48,440 --> 00:02:51,480 Speaker 5: I had a deal with the factors you mentioned of 53 00:02:51,639 --> 00:02:55,600 Speaker 5: costs and that sort of thing. But the other thing 54 00:02:55,639 --> 00:02:58,799 Speaker 5: we had to deal with which was very unusual and 55 00:03:00,120 --> 00:03:05,160 Speaker 5: you know, and airlines had to deal with this. Uh. 56 00:03:05,960 --> 00:03:09,640 Speaker 5: As the years passed after this was airlines the regulation 57 00:03:10,360 --> 00:03:16,799 Speaker 5: where all of a sudden competition, uh. You know, there 58 00:03:16,880 --> 00:03:20,680 Speaker 5: was just total competition. The big guys could come into 59 00:03:20,720 --> 00:03:26,480 Speaker 5: our small routes as the smallest airline, and the Southwest 60 00:03:26,520 --> 00:03:31,160 Speaker 5: airlines could go into our interstate routes. So we were 61 00:03:31,200 --> 00:03:34,440 Speaker 5: the ham and the Sandwich. We were in an totally 62 00:03:35,040 --> 00:03:44,200 Speaker 5: impossible position as the as that period of time came about. 63 00:03:44,400 --> 00:03:49,119 Speaker 5: Uh So that just adds to your point. But why 64 00:03:49,120 --> 00:03:53,000 Speaker 5: did I write the book? Uh? I think you hit 65 00:03:53,640 --> 00:03:58,200 Speaker 5: at it in major part. There were a few reasons. 66 00:03:58,520 --> 00:04:03,520 Speaker 5: One was and most of importantly, I wanted to set 67 00:04:03,600 --> 00:04:07,560 Speaker 5: down in writing what it was really like. Nobody else 68 00:04:07,600 --> 00:04:10,920 Speaker 5: has really written about it from the inside. You know, 69 00:04:10,960 --> 00:04:15,600 Speaker 5: there's been reporters from the outside doing research and this 70 00:04:15,680 --> 00:04:20,280 Speaker 5: and that, but nobody really laid out from the inside 71 00:04:20,680 --> 00:04:24,120 Speaker 5: what it was like dealing with airline to regulation, what 72 00:04:24,240 --> 00:04:27,360 Speaker 5: it was like dealing with the change that we had 73 00:04:27,400 --> 00:04:33,400 Speaker 5: to confront, and learning about the things that we did 74 00:04:34,120 --> 00:04:38,280 Speaker 5: to revolutionize the business. I mean, we have a long 75 00:04:38,400 --> 00:04:43,039 Speaker 5: list of firsts aside from being the first airline to 76 00:04:43,120 --> 00:04:48,040 Speaker 5: offer low fares, which is why we called them peanut fairs, 77 00:04:48,120 --> 00:04:50,640 Speaker 5: and which gave rise to the name of the book, 78 00:04:53,240 --> 00:04:55,560 Speaker 5: but it was just a whole bunch of things. We 79 00:04:55,600 --> 00:04:59,040 Speaker 5: were the first airlines to think, well, wait a minute, 80 00:05:00,000 --> 00:05:02,680 Speaker 5: I'm not able to do a merger with x Y 81 00:05:02,839 --> 00:05:08,080 Speaker 5: z earl and it makes great sense, so I'm going 82 00:05:08,160 --> 00:05:13,799 Speaker 5: to go into the marketplace and buy their stock. Nobody 83 00:05:13,800 --> 00:05:17,520 Speaker 5: has done that before from inside the industry, and nobody 84 00:05:17,600 --> 00:05:20,800 Speaker 5: has done it since from inside the industry. Obviously, we 85 00:05:20,880 --> 00:05:24,120 Speaker 5: have people like Southwest and what they're going through, but 86 00:05:24,200 --> 00:05:29,360 Speaker 5: that's from activists outside the industry, and we were not 87 00:05:29,400 --> 00:05:34,400 Speaker 5: an activist. We wanted to acquire the company in our cases. 88 00:05:34,680 --> 00:05:38,200 Speaker 5: So anyway, I have a long story, and I wanted 89 00:05:38,240 --> 00:05:40,840 Speaker 5: to set the record straight and get it out there. 90 00:05:41,240 --> 00:05:44,120 Speaker 5: But there were also even more other reasons too. You know, 91 00:05:44,200 --> 00:05:49,839 Speaker 5: I had people telling me that this is a great 92 00:05:49,920 --> 00:05:53,720 Speaker 5: story for people starting out without a lot of money, 93 00:05:53,720 --> 00:05:56,840 Speaker 5: because after all, we started out with nothing, and when 94 00:05:56,880 --> 00:06:01,919 Speaker 5: I was twenty six, we had six thousand dollars net worth, 95 00:06:02,920 --> 00:06:06,120 Speaker 5: and that's how we started a little company. Our first 96 00:06:06,200 --> 00:06:11,159 Speaker 5: office was in the was in the public library in 97 00:06:11,240 --> 00:06:16,400 Speaker 5: New York. But then six years later we were able 98 00:06:16,440 --> 00:06:20,640 Speaker 5: to put together and buy a piece of a little 99 00:06:20,640 --> 00:06:25,279 Speaker 5: airline in Texas that everybody hated, was losing a lot 100 00:06:25,320 --> 00:06:28,640 Speaker 5: of money, and it had Southwest saying it was going 101 00:06:28,680 --> 00:06:32,440 Speaker 5: to put them out of business. Yes, they had high, 102 00:06:32,600 --> 00:06:37,440 Speaker 5: high labor costs, and but you know, to us, we 103 00:06:37,440 --> 00:06:41,320 Speaker 5: didn't care about anything. We were so young, we weren't 104 00:06:41,360 --> 00:06:45,960 Speaker 5: smart enough to know how difficult it was. We just 105 00:06:46,000 --> 00:06:47,800 Speaker 5: knew it was an airline and we could get a 106 00:06:47,800 --> 00:06:51,520 Speaker 5: piece of it and control it. And we we were 107 00:06:51,720 --> 00:06:53,000 Speaker 5: just fat, dumb and happy. 108 00:06:53,400 --> 00:06:55,560 Speaker 3: So for people who don't know the story, Frank, I 109 00:06:55,600 --> 00:06:57,520 Speaker 3: want to make sure Frank Lorenzo's our guest. The book 110 00:06:57,560 --> 00:07:00,440 Speaker 3: is flying for peanuts. I want to just do a 111 00:07:00,480 --> 00:07:03,720 Speaker 3: brief catch up so that they understand it, because then 112 00:07:03,880 --> 00:07:05,240 Speaker 3: I want to again, want to get into a lot 113 00:07:05,279 --> 00:07:08,080 Speaker 3: of the issues you dealt with are still issues today. 114 00:07:08,760 --> 00:07:10,640 Speaker 3: Just real quick and correct me if I'm wrong. That 115 00:07:10,960 --> 00:07:14,040 Speaker 3: first entity that y'all kind of took control of was 116 00:07:14,040 --> 00:07:18,960 Speaker 3: was Texas International Airlines TIA, and you're competing with Southwest Airlines. 117 00:07:19,080 --> 00:07:21,000 Speaker 3: Can you take about a minute and talk about where 118 00:07:21,040 --> 00:07:23,200 Speaker 3: the airline industry was, because these are kind of regional 119 00:07:23,320 --> 00:07:25,920 Speaker 3: hub deals and how it was different than today. 120 00:07:27,840 --> 00:07:34,240 Speaker 5: Well, in those days, Michael, the airline industry is completely regulated, 121 00:07:34,720 --> 00:07:39,080 Speaker 5: and we had eighteen airlines, of which nine were the 122 00:07:39,120 --> 00:07:45,400 Speaker 5: trunk so called trunk airlines, the major airlines American, United, Delta, 123 00:07:45,480 --> 00:07:46,680 Speaker 5: that sort of stuff. 124 00:07:48,000 --> 00:07:48,120 Speaker 4: Then. 125 00:07:48,200 --> 00:07:51,960 Speaker 5: But then you had a lot of others continent, a 126 00:07:52,000 --> 00:07:56,360 Speaker 5: little airline on the west coast called Continental Western Airlines, 127 00:07:58,400 --> 00:08:01,640 Speaker 5: us ERA in the east, and then there were the 128 00:08:01,680 --> 00:08:06,880 Speaker 5: so called regional airlines, and Texas International was the smallest 129 00:08:06,920 --> 00:08:11,160 Speaker 5: of the regional airlines. These are companies like Ozark Airlines, 130 00:08:11,520 --> 00:08:17,920 Speaker 5: Southern Airlines, South what was some of the other names, 131 00:08:18,960 --> 00:08:23,800 Speaker 5: But anyway, those are the basically small companies that were 132 00:08:23,840 --> 00:08:30,640 Speaker 5: in the industry that provided just regional service, and that 133 00:08:30,840 --> 00:08:32,760 Speaker 5: was the makeup of the industry at the time. 134 00:08:34,400 --> 00:08:37,559 Speaker 3: Frank Lorenzo's our guest. The book is called Flying for Peanuts. 135 00:08:38,360 --> 00:08:40,160 Speaker 3: I asked Ramon when we were going to be doing 136 00:08:40,160 --> 00:08:42,320 Speaker 3: this interview. I said, Aramonia, who Frank Lorenzo. He says, no, 137 00:08:43,480 --> 00:08:46,680 Speaker 3: We'll look him up. It's a fascinating story. And he 138 00:08:46,720 --> 00:08:47,800 Speaker 3: looked him up and he goes. 139 00:08:48,000 --> 00:08:49,439 Speaker 1: First picture that pops. 140 00:08:49,200 --> 00:08:51,240 Speaker 3: Up is him and Donald Trump. We'll tell you. 141 00:08:51,200 --> 00:08:54,520 Speaker 5: Why we are going to the border. We've been to 142 00:08:54,600 --> 00:08:58,400 Speaker 5: the border with the Michael Y and I haven't been 143 00:08:58,440 --> 00:08:58,839 Speaker 5: to UK. 144 00:09:09,360 --> 00:09:14,840 Speaker 4: All my bags are packed ready to go. I'm standing 145 00:09:14,960 --> 00:09:20,120 Speaker 4: here outside the door. I hate to wake you up 146 00:09:21,040 --> 00:09:28,400 Speaker 4: to say goodbye, but the dawn is breaking. Sir morn, 147 00:09:29,240 --> 00:09:35,600 Speaker 4: the taxis waited. He's blown his horn already. I'm so lord, 148 00:09:36,080 --> 00:09:44,080 Speaker 4: so my couldve souhiss me, I smile for me. 149 00:09:45,240 --> 00:09:51,120 Speaker 3: Tell me Carminal Airlines, Eastern Airlines, TA t w A. 150 00:09:52,240 --> 00:09:54,800 Speaker 3: There was once pan Am Airlines and my wife and 151 00:09:54,840 --> 00:09:58,079 Speaker 3: I flew on. There are lots of airlines over the 152 00:09:58,160 --> 00:10:02,319 Speaker 3: years that have come and gone to legacy airlines, heritage airlines. 153 00:10:02,360 --> 00:10:05,600 Speaker 3: I remember the first time I flew British airways. My wife, 154 00:10:05,640 --> 00:10:09,280 Speaker 3: being the anglophile from India that she is so excited 155 00:10:09,360 --> 00:10:14,000 Speaker 3: our cousin became a piloted air India. I love the 156 00:10:14,040 --> 00:10:19,040 Speaker 3: whole airline thing. You know, you've got airlines that represent nations. 157 00:10:19,679 --> 00:10:23,600 Speaker 3: When we go to India, we often fly golf Air 158 00:10:23,920 --> 00:10:26,880 Speaker 3: or United Arab Emirates and people think we're crazy. It's 159 00:10:26,880 --> 00:10:29,640 Speaker 3: one of the best best carriers I've ever I've ever 160 00:10:29,679 --> 00:10:33,320 Speaker 3: been on. I've had better experiences there than the French airline. 161 00:10:33,880 --> 00:10:36,440 Speaker 3: The Dutch do a good job. But I will tell 162 00:10:36,480 --> 00:10:39,200 Speaker 3: you those folks, if you want a great experience, it's 163 00:10:39,360 --> 00:10:42,000 Speaker 3: it's a great experience. There's no way around that. The 164 00:10:42,040 --> 00:10:47,680 Speaker 3: early days of Frank Lorenzo putting together this fledgling airline, 165 00:10:49,160 --> 00:10:54,400 Speaker 3: they competed against Herb keller Hare's Southwest Airlines, and we 166 00:10:54,480 --> 00:10:56,719 Speaker 3: talked a little bit about that. But your book is 167 00:10:56,760 --> 00:10:59,600 Speaker 3: called Flying for Peanuts, a subject that that Herb Kella 168 00:10:59,640 --> 00:11:02,520 Speaker 3: hair of built into his brand. You know that the 169 00:11:02,720 --> 00:11:05,840 Speaker 3: whole peanut thing that gave you peanuts. When when you 170 00:11:05,880 --> 00:11:08,480 Speaker 3: look back on that battle, looking at what you saw 171 00:11:08,520 --> 00:11:13,800 Speaker 3: then the price point battle of trying to get these 172 00:11:13,800 --> 00:11:17,120 Speaker 3: flights from Houston, Dallas, San Antone primarily, which were the 173 00:11:17,440 --> 00:11:18,120 Speaker 3: big routes. 174 00:11:18,440 --> 00:11:19,280 Speaker 1: What did you do right? 175 00:11:19,320 --> 00:11:21,280 Speaker 3: What did you do wrong? And how was that different? Then? 176 00:11:21,320 --> 00:11:23,760 Speaker 3: How was the traveler different because it was all mostly 177 00:11:23,800 --> 00:11:25,320 Speaker 3: business travel back then, wasn't it. 178 00:11:27,080 --> 00:11:30,959 Speaker 5: Well, No, there was a lot of pleasure pleasure travel too. 179 00:11:31,000 --> 00:11:33,679 Speaker 5: It was a very very good mix, but you had 180 00:11:33,679 --> 00:11:40,240 Speaker 5: a very very different environment. Southwest started because it was 181 00:11:40,280 --> 00:11:46,600 Speaker 5: a no other airlines or created on an interstate basis. 182 00:11:47,520 --> 00:11:52,320 Speaker 5: Southwest started as an intrust state airline because Texas happened 183 00:11:52,360 --> 00:11:57,600 Speaker 5: to be large enough to support its own internal airline. Houston, Dallas, 184 00:11:57,640 --> 00:12:03,920 Speaker 5: San Antonio, and Austin in there too for good measure. 185 00:12:05,320 --> 00:12:09,480 Speaker 5: So those were the cities that supported their own airline 186 00:12:09,600 --> 00:12:13,120 Speaker 5: and that was the origin of Southwest, But it also 187 00:12:13,320 --> 00:12:17,600 Speaker 5: was the heart of Texas International, although we also had 188 00:12:17,640 --> 00:12:24,440 Speaker 5: some non non Texas roots routes that went up to 189 00:12:24,520 --> 00:12:30,040 Speaker 5: Denver and Albuquerque and down into Mexico, but they were 190 00:12:30,360 --> 00:12:35,199 Speaker 5: small potatoes compared to the other ones. So Southwest was 191 00:12:35,240 --> 00:12:38,840 Speaker 5: a major competitor. But it's a funny thing. Peanuts fairs 192 00:12:38,920 --> 00:12:44,520 Speaker 5: for us were the first time that any airline had 193 00:12:44,840 --> 00:12:52,280 Speaker 5: offered cut rate airline tickets on an unrestricted basis, and 194 00:12:52,320 --> 00:12:57,040 Speaker 5: we ended up calling them peanut fairs. And in the eighties, 195 00:12:57,200 --> 00:12:59,560 Speaker 5: one of my A very good friend of mine was 196 00:12:59,559 --> 00:13:03,200 Speaker 5: always of Keller and Herb used to kid me when 197 00:13:03,240 --> 00:13:05,080 Speaker 5: I would see him and he'd say, you know, Frank, 198 00:13:05,920 --> 00:13:10,480 Speaker 5: sometimes it drives me crazy. But one of my reservations, 199 00:13:10,480 --> 00:13:14,480 Speaker 5: people will call me and say we need to have 200 00:13:14,559 --> 00:13:19,199 Speaker 5: Peanuts Ferris because because people are calling up saying they 201 00:13:19,200 --> 00:13:23,520 Speaker 5: want to have Southwest Peanut Faires. And of course that 202 00:13:23,679 --> 00:13:27,760 Speaker 5: was a brand that we had put together. Southwest always 203 00:13:27,760 --> 00:13:32,880 Speaker 5: had good farries, but they didn't have Peanut Ferris, and 204 00:13:32,920 --> 00:13:34,360 Speaker 5: they used to drive them crazy. 205 00:13:34,640 --> 00:13:36,800 Speaker 3: Let me ask you, Frank, Lorenzo's our guest. The book 206 00:13:36,840 --> 00:13:42,319 Speaker 3: is flying for Peanuts. Those airline passengers in those days 207 00:13:42,360 --> 00:13:46,079 Speaker 3: that you're going after. Are those people who might have 208 00:13:46,240 --> 00:13:48,760 Speaker 3: previously driven and now you get them on a plane. 209 00:13:49,280 --> 00:13:53,120 Speaker 3: Are they almost exclusively people that were flying another airline 210 00:13:53,120 --> 00:13:54,920 Speaker 3: but you want them to just go over to your airline. 211 00:13:55,040 --> 00:13:57,559 Speaker 3: Are they people who this weekend, instead of staying at 212 00:13:57,559 --> 00:14:01,640 Speaker 3: home or driving to the lake, they fly somewhere? What 213 00:14:01,760 --> 00:14:04,480 Speaker 3: was the what was the demographic of that consumer? 214 00:14:06,160 --> 00:14:09,240 Speaker 5: Well, it was it was kind of an all above, 215 00:14:09,360 --> 00:14:13,959 Speaker 5: all of the above, Michael. It was it was all 216 00:14:14,000 --> 00:14:19,000 Speaker 5: of those pieces a new market really got created. It 217 00:14:19,040 --> 00:14:22,520 Speaker 5: wasn't just business. And it wasn't just the you know, 218 00:14:22,960 --> 00:14:27,280 Speaker 5: traditional pleasure traveler, but it was people that because of 219 00:14:27,280 --> 00:14:31,840 Speaker 5: the fairs being so much lower, they had changed their 220 00:14:32,600 --> 00:14:36,920 Speaker 5: ideas for vacations, how they traveled, et cetera, et cetera. 221 00:14:39,080 --> 00:14:42,080 Speaker 3: Frank Lorenzo is our guest, former Continent Airlines CEO. The 222 00:14:42,080 --> 00:14:45,840 Speaker 3: book is called Flying for Peanuts. Fortune magazine once named 223 00:14:45,840 --> 00:14:50,240 Speaker 3: you America's toughest boss. You had to deal with a 224 00:14:50,440 --> 00:14:54,880 Speaker 3: union that, from what I understand, a union that wanted 225 00:14:54,960 --> 00:14:58,520 Speaker 3: to pay increase and in terms that you couldn't make 226 00:14:58,560 --> 00:15:00,440 Speaker 3: a business make money on it. I want to put 227 00:15:00,440 --> 00:15:05,960 Speaker 3: words in your in your mouth, the Airline Pilot's Association, 228 00:15:06,280 --> 00:15:10,560 Speaker 3: and you were going at it. Looking back, now, was 229 00:15:10,600 --> 00:15:13,800 Speaker 3: your coverage fair? What were your challenges? Why did you 230 00:15:13,840 --> 00:15:14,560 Speaker 3: do what you did? 231 00:15:17,040 --> 00:15:20,920 Speaker 5: Oh? No, my coverage was never very fair. Just take 232 00:15:20,960 --> 00:15:25,600 Speaker 5: that title America's toughest boss. They didn't focus on the 233 00:15:25,640 --> 00:15:31,800 Speaker 5: fact that I probably had America's toughest job, America's toughest 234 00:15:31,880 --> 00:15:36,120 Speaker 5: job because it was taking the smallest airline in the 235 00:15:36,240 --> 00:15:40,600 Speaker 5: land and trying to deal with Southwest Airlines on the 236 00:15:40,600 --> 00:15:44,480 Speaker 5: one side and the big airlines on the other side, 237 00:15:44,720 --> 00:15:48,480 Speaker 5: where all of a sudden. Now you had startups coming 238 00:15:48,520 --> 00:15:53,360 Speaker 5: in with very low costs and having fair low fares 239 00:15:53,680 --> 00:15:57,960 Speaker 5: based on that. So we had an impossible competitive equation 240 00:15:58,960 --> 00:16:01,400 Speaker 5: and it was good clearly going to put us out 241 00:16:01,440 --> 00:16:04,600 Speaker 5: of business unless we change our strategies. So we came 242 00:16:04,680 --> 00:16:09,360 Speaker 5: up with a strategy to deal with it. And you know, 243 00:16:09,480 --> 00:16:13,280 Speaker 5: so much of that is covered in the book, but 244 00:16:14,400 --> 00:16:18,360 Speaker 5: no question about it, we had a very very very 245 00:16:18,400 --> 00:16:25,200 Speaker 5: different equation than what the press put forward. Naturally, our 246 00:16:25,760 --> 00:16:30,320 Speaker 5: pilot unions were out there all the time trying to 247 00:16:30,360 --> 00:16:32,360 Speaker 5: make us out to be what we weren't. 248 00:16:34,120 --> 00:16:38,880 Speaker 3: You are not originally from Houston. Your parents were Spanish immigrants. 249 00:16:39,800 --> 00:16:43,520 Speaker 3: You end up in Houston on business deals, and yet 250 00:16:43,640 --> 00:16:46,760 Speaker 3: you have remained as a lot of people have what 251 00:16:46,880 --> 00:16:49,960 Speaker 3: about Houston specifically? Did you say you could have lived 252 00:16:50,000 --> 00:16:51,840 Speaker 3: anywhere you wanted In New York would have seemed to 253 00:16:51,880 --> 00:16:53,800 Speaker 3: make more sense. Why stay in Houston? 254 00:16:55,840 --> 00:17:01,520 Speaker 5: We love Houston. We came down fifty two years ago 255 00:17:02,240 --> 00:17:06,959 Speaker 5: when my wife and I got married. We raised our kids, 256 00:17:08,240 --> 00:17:11,760 Speaker 5: We raised all of our children. I like to say 257 00:17:11,760 --> 00:17:19,280 Speaker 5: I had forty nine forty nine tuition years at Kincaid 258 00:17:19,320 --> 00:17:25,040 Speaker 5: School and a couple at Saint John's. Also and we 259 00:17:25,160 --> 00:17:30,200 Speaker 5: have just we love the atmosphere and so forth. Now listen, 260 00:17:30,800 --> 00:17:34,280 Speaker 5: it isn't that Houston's perfect. We have an office in 261 00:17:34,320 --> 00:17:39,080 Speaker 5: New York, which is closer to investments and you know, 262 00:17:39,680 --> 00:17:43,679 Speaker 5: in general and things like that, and we spend a 263 00:17:43,680 --> 00:17:47,679 Speaker 5: fair amount of time. I also have a week a 264 00:17:47,680 --> 00:17:53,879 Speaker 5: summer place in Nantucket and Massachusetts, so we spent time. 265 00:17:54,000 --> 00:17:58,840 Speaker 5: We spent a fair time in the Northeast. But we're 266 00:17:58,960 --> 00:18:02,880 Speaker 5: very fond of Houston and we love our time there. 267 00:18:04,920 --> 00:18:07,120 Speaker 5: When it came time to set up a book talk, 268 00:18:07,480 --> 00:18:09,600 Speaker 5: the first place that popped in my mind was the 269 00:18:09,640 --> 00:18:16,160 Speaker 5: Caronado Club to come down and talk to. So Houston 270 00:18:16,240 --> 00:18:20,720 Speaker 5: is a major part of our life and I don't 271 00:18:20,720 --> 00:18:22,439 Speaker 5: see anything changing in the future. 272 00:18:22,600 --> 00:18:25,360 Speaker 3: Hold out there, Frank Lorenzo one more segment, former Continental 273 00:18:25,359 --> 00:18:30,200 Speaker 3: Airline CEO. The book is Flying for Peanuts, tough Deals, 274 00:18:30,560 --> 00:18:33,120 Speaker 3: Steve bargains, and revolution in the sky. 275 00:18:35,080 --> 00:18:37,520 Speaker 5: Remember the Democrats are the party of disinformation. 276 00:18:37,880 --> 00:18:41,040 Speaker 3: So the economy is up, price inflation is down, reel 277 00:18:41,080 --> 00:18:43,320 Speaker 3: incomes are up, gas prices are down. 278 00:18:43,840 --> 00:19:09,240 Speaker 1: Michael Very Show, Frank Lorenzo is our guest. 279 00:19:10,000 --> 00:19:13,840 Speaker 3: He was a titan of the airline industry. He did 280 00:19:13,840 --> 00:19:17,120 Speaker 3: a major deal with Donald Trump. For many, many years, 281 00:19:17,160 --> 00:19:21,760 Speaker 3: he was a controversial and much talked about leader in 282 00:19:21,840 --> 00:19:27,080 Speaker 3: the aviation industry. Fortune magazine once named him America's toughest boss, 283 00:19:27,480 --> 00:19:29,879 Speaker 3: and I'm not sure they meant that as a compliment. 284 00:19:29,960 --> 00:19:33,359 Speaker 3: Everybody that knows airlines knows the industry. There are some 285 00:19:33,440 --> 00:19:37,240 Speaker 3: major personalities over the years in that industry. Frank Lorenzo 286 00:19:37,400 --> 00:19:39,680 Speaker 3: is certainly one of them. Herb Kellehare of course with 287 00:19:40,240 --> 00:19:43,600 Speaker 3: Southwest Airlines, Gordon Bethune, and I would argue that's the 288 00:19:43,640 --> 00:19:48,760 Speaker 3: triumvirate of the major three airline leaders over the years 289 00:19:49,200 --> 00:19:52,800 Speaker 3: and their battles and how it all shook out to today, 290 00:19:52,920 --> 00:19:56,200 Speaker 3: because I don't think today's airline travel from the consumer 291 00:19:56,280 --> 00:19:59,119 Speaker 3: perspective is so good and it doesn't appear to be 292 00:19:59,160 --> 00:20:01,359 Speaker 3: so good from the that's her perspective either, as many 293 00:20:01,359 --> 00:20:04,080 Speaker 3: bailouts as they need to have. Frank Lorenzo, the book 294 00:20:04,480 --> 00:20:07,600 Speaker 3: Flying for Peanuts. Uh, let me ask you to kind 295 00:20:07,600 --> 00:20:10,320 Speaker 3: of catch us up to Continental Airlines and how you 296 00:20:10,359 --> 00:20:11,800 Speaker 3: take control of that, and then I want to get 297 00:20:11,840 --> 00:20:15,200 Speaker 3: into some of the management and operations issues you had 298 00:20:15,200 --> 00:20:15,800 Speaker 3: to deal with. 299 00:20:17,760 --> 00:20:20,159 Speaker 5: But before I do that, I do want to correct 300 00:20:20,200 --> 00:20:24,399 Speaker 5: you on one thing. On your list of major people 301 00:20:24,440 --> 00:20:29,879 Speaker 5: in the industry, you can't leave out Bob crandall. Bob 302 00:20:29,920 --> 00:20:34,919 Speaker 5: crandall that American was bigger than and really, uh, he 303 00:20:35,080 --> 00:20:37,399 Speaker 5: was one of the most important guys in the business. 304 00:20:37,760 --> 00:20:41,879 Speaker 5: He revolutionized a lot of stuff, uh, in the in 305 00:20:42,000 --> 00:20:47,040 Speaker 5: the business. But anyway, I just wanted to to. 306 00:20:47,520 --> 00:20:49,320 Speaker 3: No, I think that's fair, that's absolutely fair. 307 00:20:50,720 --> 00:20:56,920 Speaker 5: Yet to get that on the record, but uh, your 308 00:20:57,040 --> 00:20:59,640 Speaker 5: your you want to know a little bit more about 309 00:20:59,680 --> 00:21:06,000 Speaker 5: the book or about Trump. Did you want to hear 310 00:21:06,000 --> 00:21:06,880 Speaker 5: about the Trump part. 311 00:21:07,359 --> 00:21:09,560 Speaker 3: Yeah, let's go to that first, because I want people 312 00:21:09,600 --> 00:21:13,159 Speaker 3: who don't know who you are or didn't and weren't around, 313 00:21:13,359 --> 00:21:16,240 Speaker 3: to understand why these stories are so interesting in how 314 00:21:16,240 --> 00:21:17,520 Speaker 3: there's nothing new in the world. 315 00:21:18,840 --> 00:21:22,600 Speaker 5: Well, I have a whole chapter in my book on 316 00:21:22,720 --> 00:21:31,600 Speaker 5: my dealings with Trump. It started off when we in 317 00:21:31,800 --> 00:21:39,520 Speaker 5: eighty six, in nineteen eighty six bought Eastern Airlines and 318 00:21:39,640 --> 00:21:41,720 Speaker 5: Eastern did not turn out to be a good deal 319 00:21:41,760 --> 00:21:45,120 Speaker 5: at all for us. But along the way, in order 320 00:21:45,160 --> 00:21:51,479 Speaker 5: to raise cash, we sold the Eastern shuttle to Donald Trump. 321 00:21:52,400 --> 00:21:58,040 Speaker 5: And Donald wouldn't wouldn't negotiate with anybody else, but he 322 00:21:58,119 --> 00:22:01,359 Speaker 5: wanted to talk to the top man. So he and 323 00:22:01,400 --> 00:22:04,880 Speaker 5: I did all the negotiations, and the negotiations were at 324 00:22:04,920 --> 00:22:11,440 Speaker 5: the at the Plaza Hotel, or they were on his boat, 325 00:22:11,680 --> 00:22:15,919 Speaker 5: the Trump Princess. We had our family out to dinner 326 00:22:15,960 --> 00:22:20,159 Speaker 5: one night. It's all in the book. It's a fascinating chapter. 327 00:22:20,640 --> 00:22:24,280 Speaker 5: And I also have a lot of photos of all 328 00:22:24,320 --> 00:22:31,200 Speaker 5: the various times that I spent with the former president. 329 00:22:33,760 --> 00:22:37,600 Speaker 3: When you sold off that piece of Eastern and you 330 00:22:37,800 --> 00:22:42,720 Speaker 3: end up taking control of Continental and that develops into 331 00:22:43,840 --> 00:22:47,320 Speaker 3: a major airline across the country and now a legacy carrier. 332 00:22:47,359 --> 00:22:50,600 Speaker 3: Of course that ends up with United. How was the 333 00:22:50,680 --> 00:22:54,160 Speaker 3: industry different at that time as a business and as 334 00:22:54,160 --> 00:22:56,399 Speaker 3: a consumer. How would it have been different for me 335 00:22:56,960 --> 00:22:59,160 Speaker 3: getting on the plane, booking flights that sort of thing. 336 00:23:00,440 --> 00:23:06,119 Speaker 5: Oh, Michael, the changes have been massive. You can start 337 00:23:06,119 --> 00:23:11,840 Speaker 5: off with technology. Uh, you know, people people, When I 338 00:23:11,920 --> 00:23:14,480 Speaker 5: tell this to people, they don't they find it hard 339 00:23:14,520 --> 00:23:19,119 Speaker 5: to believe. But when I left, when I left Continental, 340 00:23:19,200 --> 00:23:21,240 Speaker 5: I did not have a computer on my desk. 341 00:23:23,760 --> 00:23:23,879 Speaker 2: Uh. 342 00:23:25,240 --> 00:23:27,800 Speaker 5: We had a lot of computers in our reservation center, 343 00:23:28,240 --> 00:23:34,479 Speaker 5: but not on my desk. The industry was it was 344 00:23:34,640 --> 00:23:38,440 Speaker 5: so different than it is today in ways of how 345 00:23:38,440 --> 00:23:43,480 Speaker 5: you're borded an airplane, how you booked the flight, how 346 00:23:43,520 --> 00:23:47,560 Speaker 5: you where you would find a flight listed. You could 347 00:23:47,560 --> 00:23:51,240 Speaker 5: call up an airline and make a booking and not 348 00:23:51,400 --> 00:23:54,840 Speaker 5: show up. I mean, that was one of the problems 349 00:23:54,840 --> 00:23:57,600 Speaker 5: we used to have, is is so many people not 350 00:23:57,680 --> 00:24:01,280 Speaker 5: showing up for flights because we were have we would 351 00:24:01,320 --> 00:24:07,280 Speaker 5: have to allow about fifteen percent on average for people 352 00:24:07,400 --> 00:24:11,680 Speaker 5: not showing up for flights. Today, of course that's all 353 00:24:11,760 --> 00:24:15,959 Speaker 5: changed because you don't make a reservation, you buy a 354 00:24:15,960 --> 00:24:24,960 Speaker 5: ticket with rare exceptions, and so as a consequence, airlines 355 00:24:25,320 --> 00:24:29,040 Speaker 5: have much much higher load factors than they did in 356 00:24:29,080 --> 00:24:33,560 Speaker 5: those days, which affects prices. Affects prices in a big way. 357 00:24:35,520 --> 00:24:40,080 Speaker 5: But you know, on the other hand, in terms of technology, 358 00:24:40,200 --> 00:24:44,919 Speaker 5: while there have been a lot of changes, you know, 359 00:24:45,000 --> 00:24:48,399 Speaker 5: the airplane, as you can see on the cover, you 360 00:24:48,480 --> 00:24:52,639 Speaker 5: have airplanes on the cover that span thirty years, and 361 00:24:52,760 --> 00:24:59,960 Speaker 5: yet they all have wings because you need wings for 362 00:25:00,280 --> 00:25:04,440 Speaker 5: for lift. They have a body to carry your payload, 363 00:25:04,960 --> 00:25:08,359 Speaker 5: they have engines to propel the machine, and you have 364 00:25:08,400 --> 00:25:12,879 Speaker 5: a tail to balance it and steer it. So you know, 365 00:25:13,000 --> 00:25:17,840 Speaker 5: and that basic that doesn't go back to airline to regulation, 366 00:25:18,000 --> 00:25:22,360 Speaker 5: that goes back to orable right, and we haven't changed it. 367 00:25:23,040 --> 00:25:26,639 Speaker 5: And as you go forward, Yes, we may have supersonic flight. 368 00:25:27,320 --> 00:25:29,760 Speaker 5: I really think we will, and I think it's going 369 00:25:29,800 --> 00:25:34,200 Speaker 5: to be wonderful, but it's still going to be a 370 00:25:35,680 --> 00:25:39,240 Speaker 5: flying machine, and it's going to have to have those 371 00:25:39,440 --> 00:25:46,280 Speaker 5: basic factors together. I can mention one other thing too, 372 00:25:46,320 --> 00:25:50,080 Speaker 5: and that is that there's so much more entrepreneurial management 373 00:25:50,119 --> 00:25:53,480 Speaker 5: today than there were in those days, thanks to the 374 00:25:53,520 --> 00:25:56,720 Speaker 5: fact that we now have the government out of the business. 375 00:25:57,280 --> 00:26:03,120 Speaker 5: And today the government regulates safety, but it doesn't get 376 00:26:03,160 --> 00:26:07,400 Speaker 5: involved in the economics, or shouldn't get involved in the economics. 377 00:26:07,840 --> 00:26:11,480 Speaker 5: Of course, this administration has been a little different. Yes, 378 00:26:12,040 --> 00:26:15,880 Speaker 5: they have stuck their nose in. And I wrote an 379 00:26:15,880 --> 00:26:18,200 Speaker 5: op ed piece for the Wall Street Journal, in fact 380 00:26:18,840 --> 00:26:21,920 Speaker 5: that appeared two months ago on this exact subject. 381 00:26:23,400 --> 00:26:24,680 Speaker 1: Frank Lorenzo is our guest. 382 00:26:24,800 --> 00:26:29,440 Speaker 3: The book is flying for peanuts, tough deals, steep bargains, 383 00:26:29,840 --> 00:26:33,320 Speaker 3: and revolution in the skies. We will continue our conversation 384 00:26:33,400 --> 00:26:33,800 Speaker 3: with him. 385 00:26:34,440 --> 00:26:37,080 Speaker 5: The biggest problem is from within, no ability for the 386 00:26:37,160 --> 00:26:40,760 Speaker 5: oil industry to continue to drill period. Michael, Yes, the 387 00:26:40,920 --> 00:26:43,119 Speaker 5: sick radical people from within. 388 00:27:00,840 --> 00:27:03,840 Speaker 2: He was, I said, Don cloudy and thence with the 389 00:27:03,920 --> 00:27:08,320 Speaker 2: Prima Isles line at gotta get down my hand and 390 00:27:08,440 --> 00:27:11,880 Speaker 2: the westin Oil can under my living chair. 391 00:27:14,280 --> 00:27:18,280 Speaker 3: Frank Lorenzo started many years ago. He's eighty four, started 392 00:27:18,280 --> 00:27:21,879 Speaker 3: many years ago putting deals together and ended up with 393 00:27:22,119 --> 00:27:30,360 Speaker 3: a small regional airline in more of a fledgling airline industry. 394 00:27:30,400 --> 00:27:32,480 Speaker 3: It's changed a lot since then, and then managed to 395 00:27:32,480 --> 00:27:34,360 Speaker 3: do some things that it hadn't been done an airline, 396 00:27:34,440 --> 00:27:39,440 Speaker 3: basically by another airline and gobbling those up and going. 397 00:27:39,160 --> 00:27:41,960 Speaker 1: Through the deregulation process. 398 00:27:42,880 --> 00:27:49,480 Speaker 3: I asked our listeners for their Frank Lorenzo moments, thoughts, anecdotes, criticisms, compliments, 399 00:27:50,240 --> 00:27:54,560 Speaker 3: and todd in the Woodlands, wrote Czar. The amazing thing 400 00:27:54,640 --> 00:27:59,399 Speaker 3: about Frank Lorenzo was that he guided Texas International slash 401 00:27:59,440 --> 00:28:05,240 Speaker 3: Continental through deregulation greater than in state rival Branif. Well, 402 00:28:05,240 --> 00:28:07,080 Speaker 3: that's the name that most people hadn't heard in a 403 00:28:07,160 --> 00:28:11,400 Speaker 3: long time. Harding Lawrence, who once worked for Continental ran 404 00:28:11,560 --> 00:28:15,320 Speaker 3: Branif and was the polar opposite of Frank Lorenzo. Frank 405 00:28:15,359 --> 00:28:19,880 Speaker 3: Lorenzo deserves enormous credit for making Continental a survivor and 406 00:28:19,960 --> 00:28:23,320 Speaker 3: having something left for your friend Gordon bethoone to build 407 00:28:23,400 --> 00:28:26,879 Speaker 3: upon years later. Well, that's a nice thing to have 408 00:28:26,920 --> 00:28:28,480 Speaker 3: somebody to say about you, Frank Lorenzo. 409 00:28:30,080 --> 00:28:35,400 Speaker 5: That happens to be really spot on truth. I mean, 410 00:28:35,760 --> 00:28:39,520 Speaker 5: I hate to say it, it's sort of immodest of me, 411 00:28:39,640 --> 00:28:44,280 Speaker 5: but the writer of that letter really understood what was 412 00:28:44,320 --> 00:28:48,920 Speaker 5: going on. I look, I knew Harding Lawrence. Well, I 413 00:28:48,960 --> 00:28:51,520 Speaker 5: have some Harding Lawrence stories. I slept with him in 414 00:28:51,560 --> 00:28:55,360 Speaker 5: his apartment one time, so I can go on and 415 00:28:55,400 --> 00:28:59,000 Speaker 5: on about Harding Lawrence. But Harding just didn't understand what 416 00:28:59,160 --> 00:29:04,360 Speaker 5: was going on. He went the regulation hit. Instead of 417 00:29:04,400 --> 00:29:08,720 Speaker 5: focusing on his costs and focusing on his internal business, 418 00:29:09,000 --> 00:29:13,000 Speaker 5: he was out there expanding. He was acquiring roots into 419 00:29:13,040 --> 00:29:17,320 Speaker 5: the Pacific and so forth, which was nuts, and that's 420 00:29:17,320 --> 00:29:20,200 Speaker 5: what put him out of business. He wanted to acquire 421 00:29:20,320 --> 00:29:26,480 Speaker 5: us in nineteen seventy nine because we had a lot 422 00:29:26,480 --> 00:29:31,720 Speaker 5: of cash nineteen eighty and of course we weren't interested. 423 00:29:31,800 --> 00:29:35,120 Speaker 5: We were possibly interested in merging the airlines. And the 424 00:29:35,160 --> 00:29:37,240 Speaker 5: funny part about it is that he didn't want to 425 00:29:37,320 --> 00:29:39,920 Speaker 5: merge the airlines. He just wanted to merge with Texas Era, 426 00:29:40,000 --> 00:29:41,200 Speaker 5: where all the cash was. 427 00:29:41,960 --> 00:29:44,640 Speaker 3: Let me ask you this, Frank Lorenzo, is our guest. 428 00:29:45,520 --> 00:29:48,080 Speaker 3: The book is called Flying for Peanuts. I'm going to 429 00:29:48,160 --> 00:29:50,480 Speaker 3: ask the two different Frank Lorenzo's. I'm going to ask 430 00:29:50,520 --> 00:29:53,080 Speaker 3: twenty year old Frank Lorenzo and then eighty four year 431 00:29:53,080 --> 00:29:55,360 Speaker 3: old Frank Lorenzo. If I had asked twenty year old 432 00:29:55,360 --> 00:29:58,360 Speaker 3: Frank Lorenzo, if I said, look, you've been banned from aviation, 433 00:29:58,600 --> 00:30:02,120 Speaker 3: put that out of your mind. Find another industry to 434 00:30:02,120 --> 00:30:03,880 Speaker 3: to go chart your course? What would that have been? 435 00:30:05,200 --> 00:30:08,440 Speaker 5: Well, let me just say, by the way, the Unions 436 00:30:08,440 --> 00:30:12,880 Speaker 5: has always peddled this business banned from the industry. I 437 00:30:13,000 --> 00:30:18,560 Speaker 5: was never banned from the industry. That was total. It 438 00:30:18,600 --> 00:30:21,360 Speaker 5: was an out and out lie. It isn't just in 439 00:30:21,400 --> 00:30:24,360 Speaker 5: the current political elections that there's out and out lies. 440 00:30:24,920 --> 00:30:29,560 Speaker 5: That was a total, total lie. I signed a contract 441 00:30:29,560 --> 00:30:34,720 Speaker 5: with SAS to sell our control position and continental and 442 00:30:34,800 --> 00:30:38,320 Speaker 5: as a standard in deals with this type, I had 443 00:30:38,320 --> 00:30:41,800 Speaker 5: a no compete clause for some number of years. I 444 00:30:41,800 --> 00:30:44,440 Speaker 5: think it was five or I think it was five years, 445 00:30:45,280 --> 00:30:49,040 Speaker 5: and that was it. I was never banned from the industry. 446 00:30:52,320 --> 00:30:57,240 Speaker 5: The DOT turned down an application under pressure from the 447 00:30:57,400 --> 00:31:01,920 Speaker 5: Unions when we were trying to start airline in nineteen 448 00:31:02,920 --> 00:31:05,920 Speaker 5: ninety three. After I left the small airline on the 449 00:31:06,360 --> 00:31:10,680 Speaker 5: East coast, and we got turned down because again it's 450 00:31:10,680 --> 00:31:13,800 Speaker 5: a whole political thing, which I can explain with more time. 451 00:31:14,560 --> 00:31:18,960 Speaker 5: But that was hardly of being banned from the industry. 452 00:31:19,360 --> 00:31:20,680 Speaker 3: And I didn't mean to say that. But if you 453 00:31:20,760 --> 00:31:23,560 Speaker 3: had chosen at that age, what I meant to say is, 454 00:31:23,680 --> 00:31:26,440 Speaker 3: at that age i'd said you can't go into aviation, 455 00:31:26,520 --> 00:31:27,880 Speaker 3: what would you instead have gone into? 456 00:31:28,440 --> 00:31:30,720 Speaker 5: Well? I looked at a number of other industries, by 457 00:31:30,760 --> 00:31:34,480 Speaker 5: the way, which is covered nicely in the book, including 458 00:31:34,560 --> 00:31:39,720 Speaker 5: the beer and banjo business, including other corporations. But I 459 00:31:39,840 --> 00:31:44,400 Speaker 5: had this love of aviation, of airlines. Even more than 460 00:31:44,480 --> 00:31:48,160 Speaker 5: just aviation was airlines. I just had this thing from 461 00:31:48,160 --> 00:31:50,920 Speaker 5: when I was fifteen and I took my first flight. 462 00:31:51,640 --> 00:31:55,680 Speaker 5: I just loved them. TWA was my favorite. In my book, 463 00:31:56,280 --> 00:31:59,720 Speaker 5: I show copies of letters that I got from TWA 464 00:32:00,360 --> 00:32:03,080 Speaker 5: where when I was sixteen and eighteen, i'd been applying 465 00:32:03,920 --> 00:32:08,960 Speaker 5: for jobs at TWA. When I was eighteen, they asked 466 00:32:08,960 --> 00:32:12,640 Speaker 5: me to come in for an interview, and then, of course, 467 00:32:13,200 --> 00:32:18,080 Speaker 5: by actually by coincidence, I end up working for t WA. 468 00:32:18,880 --> 00:32:25,080 Speaker 5: When I first came out of Harvard Business School, i'd 469 00:32:25,120 --> 00:32:28,320 Speaker 5: worked there for a couple a couple of a couple 470 00:32:28,360 --> 00:32:31,080 Speaker 5: of years. So I just I had I always had 471 00:32:31,080 --> 00:32:36,080 Speaker 5: this thing for airlines, and even today at eighty four, 472 00:32:36,920 --> 00:32:40,200 Speaker 5: I have to admit that, even though I've always said, 473 00:32:40,240 --> 00:32:42,040 Speaker 5: you know, I'm not going to do anything with aviation, 474 00:32:42,640 --> 00:32:45,760 Speaker 5: I'm going to stay away from airline stocks, that's actually 475 00:32:45,840 --> 00:32:51,080 Speaker 5: been both because I have. We took a major position 476 00:32:51,160 --> 00:32:54,240 Speaker 5: in United Airlines, in fact, because we really like the 477 00:32:54,280 --> 00:32:57,720 Speaker 5: way the company is being built. Bat Stock's done nicely. 478 00:33:00,200 --> 00:33:03,400 Speaker 5: We made an investment in a startup airline, So we 479 00:33:03,520 --> 00:33:07,360 Speaker 5: have done stuff in the aviation even these days. And 480 00:33:07,440 --> 00:33:10,920 Speaker 5: I keep my eye on what's going on, even at 481 00:33:10,960 --> 00:33:11,480 Speaker 5: eighty four. 482 00:33:12,320 --> 00:33:13,800 Speaker 3: And let me ask you, I've got about a minute 483 00:33:13,800 --> 00:33:16,840 Speaker 3: and a half looking back now over your career, if 484 00:33:16,880 --> 00:33:21,040 Speaker 3: you say, what's an industry that now I realized maybe 485 00:33:21,080 --> 00:33:22,840 Speaker 3: I should have invested in, Maybe I would have liked 486 00:33:22,840 --> 00:33:24,840 Speaker 3: to have led that has turned out to be really 487 00:33:24,880 --> 00:33:26,520 Speaker 3: impressive that I didn't see coming. 488 00:33:27,320 --> 00:33:30,440 Speaker 5: Well, it wasn't even that we didn't see it coming, 489 00:33:30,480 --> 00:33:34,240 Speaker 5: but you didn't want to take the risk. Obviously we 490 00:33:34,280 --> 00:33:37,800 Speaker 5: would have done better had we just invested five years 491 00:33:37,800 --> 00:33:42,960 Speaker 5: ago in AI and anything related to it. And it 492 00:33:43,120 --> 00:33:47,720 Speaker 5: became a frenzy. You can't even come close to the 493 00:33:47,760 --> 00:33:51,200 Speaker 5: returns that have come to the companies that are there. 494 00:33:52,680 --> 00:33:55,640 Speaker 5: But as far as it, as far as the time 495 00:33:55,760 --> 00:34:00,840 Speaker 5: and true industry, airline investing has always been treacherous because 496 00:34:00,880 --> 00:34:04,600 Speaker 5: airlines do well and they don't do well. They're very 497 00:34:04,680 --> 00:34:11,640 Speaker 5: sensitive to fuel prices, They're very sensitive to the economy. Uh. 498 00:34:12,200 --> 00:34:15,520 Speaker 5: We used to we used to say that, uh, airlines 499 00:34:15,600 --> 00:34:21,560 Speaker 5: have all the all these sensitivities capital uh and so forth. 500 00:34:22,320 --> 00:34:29,560 Speaker 3: Frank Lorenzo, the book is Flying for Peanuts, tough Deals, 501 00:34:29,600 --> 00:34:34,560 Speaker 3: Steve bargains, and revolution in the Skies. I know there 502 00:34:34,600 --> 00:34:36,640 Speaker 3: are a lot of folks based on the emails I 503 00:34:36,680 --> 00:34:42,560 Speaker 3: have received, who lived through the transformative moments of how 504 00:34:42,600 --> 00:34:46,400 Speaker 3: we travel. You know, you think about airline travel and 505 00:34:46,440 --> 00:34:49,040 Speaker 3: how important it is to our lives today. That's why 506 00:34:49,120 --> 00:34:54,200 Speaker 3: nine to eleven use the airline as the tool. Because 507 00:34:54,560 --> 00:34:58,120 Speaker 3: terrorism is about a mental war, and when you can 508 00:34:58,200 --> 00:35:01,799 Speaker 3: shut people's airline in this down by pure fear, you 509 00:35:01,880 --> 00:35:04,719 Speaker 3: can shut down their economy now more than ever. How 510 00:35:04,719 --> 00:35:06,880 Speaker 3: many people do you know that Chris crossed the country 511 00:35:06,920 --> 00:35:09,759 Speaker 3: to see their kids because they're divorced, or to visit 512 00:35:09,800 --> 00:35:13,160 Speaker 3: their various offices It's incredible in such a short period 513 00:35:13,239 --> 00:35:18,160 Speaker 3: of time, how the world has shrunk, our world has shrunk. 514 00:35:18,440 --> 00:35:21,879 Speaker 3: How we're closer than ever because we can move around 515 00:35:22,120 --> 00:35:26,080 Speaker 3: so easily and so freely. The book again, Flying for 516 00:35:26,160 --> 00:35:29,760 Speaker 3: Peanuts by Frank Lorenzo, former Continental Airlines CEO.