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Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 2: my co host Matt Miller.

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Speaker 1: Every business day we bring you interviews from CEOs, market pros,

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Speaker 1: and Bloomberg experts, along with essential market movin news.

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Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 2: you listen to podcasts, and at Bloomberg dot Com slash podcasts.

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Speaker 2: All right, he's back, folks. He said he'd be back,

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Speaker 2: and he's back. Brad Jacobs, Executive Chairman of XPO You

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Speaker 2: know what in Lovin on the New York Sock Exchange XBO.

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Speaker 2: He's got a new company, which he's been talking. I

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Speaker 2: guess he kind of hinted at the last time he

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Speaker 2: ses to tease. Thank you very much, Brad, Thanks so

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Speaker 2: much for joining us. We really appreciate you coming back.

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Speaker 2: Talk to us about the new opportunity you've seen. I mean,

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Speaker 2: you've done roll ups of the waste management business, the

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Speaker 2: rental business, the logistics business.

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Speaker 3: Now what building products distribution?

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Speaker 2: Building products distribution? Okay, so if you can.

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Speaker 4: Think about any house or a commercial facility, or a

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Speaker 4: hospital or a school or a church, all the stuff

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Speaker 4: that goes into making that building, so that could be

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Speaker 4: the roof, the flooring, the windows, the tiles, the doors,

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Speaker 4: the fire hydrant, the infrastructure, the.

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Speaker 3: Pipes, HVAC. All that stuff has to go through the

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Speaker 3: supply chain and its huge, huge markets eight hundred billion

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Speaker 3: dollars in size between here and Western Europe, and it's

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Speaker 3: been growing about seven percent.

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Speaker 5: All right, So what what do you bring to it

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Speaker 5: that that's new.

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Speaker 3: We'll bring a lot that's new. First of all, we're

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Speaker 3: going to create a very large company and get all

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Speaker 3: the advantages of scale and size that come with that.

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Speaker 3: Second of all, we're going to apply technology We're going

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Speaker 3: to apply technology, especially AI, for dynamic pricing, for managing

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Speaker 3: the warehouses better, making them more automated, to do route optimization,

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Speaker 3: for the delivery trucks, to do interactions with the customer.

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Speaker 3: E commerce right now is mid single digits percent. It

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Speaker 3: should be the majority.

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Speaker 5: And in building materials, Paul, all I want is a

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Speaker 5: straight tube by five. I know that's can you make

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Speaker 5: that happen. It's a big deal. It's a big deal

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Speaker 5: where you source your materials because even though it's commoditized,

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Speaker 5: I just find as the end user, it's not always

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Speaker 5: the same product.

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Speaker 3: Well, I'm glad to hear that there's a problem to

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Speaker 3: solve in this chain, and we will solve that.

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Speaker 2: Talk to us about kind of the I guess in

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Speaker 2: the past, part of your strategy has been rolling up well,

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Speaker 2: rolling up a fragment in industry. Is that in fact

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Speaker 2: the case here? Talk to us about kind of the

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Speaker 2: fragmentation and kind of how you plan to deal with that.

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Speaker 3: So there's about thirteen thousand distributors here in the United States,

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Speaker 3: excuse me, seven thousand here the United States. It's about

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Speaker 3: thirteen thousand in Europe. So there's twenty thousand distributors between

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Speaker 3: here and Western Europe. So it's very, very very fragmented.

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Speaker 3: The largest company would be Fergusing. It's about thirty billion dollars.

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Speaker 3: Great company, done very good, very well. But I plan

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Speaker 3: to make a company even bigger than that.

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Speaker 2: Boy, how do I invest in this on? I'm not

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Speaker 2: going to miss this one.

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Speaker 5: Well, as Paulman, it's not your first rodeo. What is

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Speaker 5: the experience that you picked up at the other companies

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Speaker 5: with which you were involved and how does it apply

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Speaker 5: to this.

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Speaker 3: Well, it's a similar business plan in the sense that

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Speaker 3: it's going to be primarily based on consolidation acquisitions, So

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Speaker 3: acquiring companies at a relatively good price, a price that's

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Speaker 3: a lower multiple demo we're trading app and then improving

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Speaker 3: those companies. So if you look at XPO Logistics, for example,

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Speaker 3: we bought eighteen companies. They were doing roughly a billion

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Speaker 3: dollars in EBITDA between all of them, and after a

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Speaker 3: few years they were doing over two billion dollars VIVI do.

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Speaker 3: So we improved the companies that we bought. That's the

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Speaker 3: same thing we're going to do here.

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Speaker 5: Do you become then a friend or enemy or a

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Speaker 5: frindemy of a home depot or Lows home.

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Speaker 3: Depot and a lesser extent. Low's plays in a specific

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Speaker 3: niche of this market, mostly the pro contractor, and they'll

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Speaker 3: be one of many competitors twenty thousands of precise all.

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Speaker 2: Right, So I know we're talked to you the last

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Speaker 2: time management teams. Assembling a management team is one of

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Speaker 2: your primary responsibilities jobs, the most important thing, most important things.

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Speaker 2: Talk to us about how you're going to kind of

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Speaker 2: do that here.

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Speaker 6: So I wrote a book, as you know, yep, and

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Speaker 6: it's called how to Make a few billion dollars. And

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Speaker 6: the key thing if you read that book is the

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Speaker 6: quality of the people. Make sure you have people who

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Speaker 6: are really smart, really hard working, very good at what

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Speaker 6: they do, collaborative, good team members, people are really sharp

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Speaker 6: and focused. And if you can get that quality of

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Speaker 6: world class management hired, and if you can create a

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Speaker 6: culture where everyone values the relationships between each other and

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Speaker 6: treats each other with respect and transparency, you can accomplish

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Speaker 6: a real lot. I'm going to have that same exact

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Speaker 6: principle here. That's one of the most important principles.

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Speaker 3: For success in my opinion. And by the way, we

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Speaker 3: named it QXO qx quality. Yep, we kept the X

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Speaker 3: and O because we're going to use some of the

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Speaker 3: same winning principles that made XPO and g XO and

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Speaker 3: RXO successful.

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Speaker 5: How far behind is the buildings supply industry in terms

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Speaker 5: of adapting and using technology.

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Speaker 3: As an as an industry as a whole, it's behind.

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Speaker 3: Maybe it's in like the second inning. There are a

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Speaker 3: handful of companies doing pretty well. So last week Builders

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Speaker 3: First Source had an investor day. I read the transcript

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Speaker 3: and sought on webcast. Heard it on the webcast. I

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Speaker 3: like what they said about what they're doing in technology.

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Speaker 3: But they're the exception.

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Speaker 7: They're the anomaly.

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Speaker 3: Most companies are not using technology in any big way.

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Speaker 3: In the warehouses. Most of them are not using technology

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Speaker 3: enough on the route optimization. Most of the building products

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Speaker 3: distributors are not using technology enough for pricing decisions, for

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Speaker 3: pricing optimization. And these are big, big variables that can

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Speaker 3: enhance the customer experience dramatically and take out lots of

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Speaker 3: unnecessary cost.

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Speaker 5: Well, does this mean you pass the costs on to

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Speaker 5: the end users?

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Speaker 3: To the contrary, I hope we save money for the

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Speaker 3: end user because we're going to take out waste, takeout

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Speaker 3: inefficiency in the whole supply chain, and we'll share that.

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Speaker 3: We'll share that with the customer. We'll have better margins,

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Speaker 3: but we could share some of that improve margin with

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Speaker 3: the customer.

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Speaker 5: What kind of revenues are you predicting at this point?

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Speaker 3: By the end of the first year, we should be

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Speaker 3: on a revenue run rate of at least a billion dollars.

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Speaker 3: At the end of the second year, we should be

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Speaker 3: on a revenue run rate of at least five billion dollars.

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Speaker 3: And over the next decade, we expect to get this

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Speaker 3: into the tens of billions of dollars in revenue size.

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Speaker 2: So where are we with QXO now, you just press

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Speaker 2: release comes out today. Where do you start? Where's your

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Speaker 2: capital come from? How do you go from here? How

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Speaker 2: do you build this company?

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Speaker 3: Well, it was on your show last week and we

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Speaker 3: talked about how we're putting a billion dollars of equity

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Speaker 3: into a very small cap company called silver Soun. That's right,

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Speaker 3: and we're going to wait till that deal closed is

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Speaker 3: in a few months, and then we're going to spin

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Speaker 3: that company back to the original legacy shareholders. We're going

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Speaker 3: to give them a little dividend two and a half

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Speaker 3: million dollars. We're gonna give them a less than half

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Speaker 3: percent share in our new company. We we'll have our

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Speaker 3: new company, we'll own ninety nine percent of it, and

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Speaker 3: we will use that money to go out and do

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Speaker 3: some acquisitions and start building the business, and over time

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Speaker 3: we'll tap the capital markets as we've done over the decades.

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Speaker 2: How do you typically fund your deals equity versus debt,

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Speaker 2: given now that the debt is so much more expensive

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Speaker 2: than it was over the last ten to fifteen years.

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Speaker 3: More equity than debt than in the past. In the past,

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Speaker 3: I've been comfortable going up to two to four times

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Speaker 3: of leverage. Here, I'm thinking more roughly half of that.

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Speaker 3: And the reasons are two full One, as you said,

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Speaker 3: interest rates are higher, although twenty years going to straight

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Speaker 3: for right here, Yeah, just recently. It was in the

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Speaker 3: last ten years they got almost nothing. Secondly, is the

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Speaker 3: world has a lot of macro issues going on, wars

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Speaker 3: and geopolitical tension, and it's more prudent to have less

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Speaker 3: leverage in my opinion.

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Speaker 5: What's your title going to be, what's your role in

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Speaker 5: all this? And are you giving up your business, your

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Speaker 5: other businesses.

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Speaker 3: I'm certainly not going to give up my other businesses.

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Speaker 3: I'm executive chairman of XPO and I planned to keep

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Speaker 3: doing that, And I'm non executive chairman of RXO and

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Speaker 3: of GXO, and I love all fear of those companies dearly,

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Speaker 3: and I think I help them in the roles that

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Speaker 3: I play there. In terms of what my title and

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Speaker 3: position is going to be here, it's going to be

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Speaker 3: the same time I've had since I've been twenty three.

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Speaker 3: I'm going to be chairman and CEO, and I'm going

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Speaker 3: to run the company. I'm going to leave the management team.

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Speaker 5: And what makes you target this industry specifically? You've got

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Speaker 5: about thirty seconds or so left.

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Speaker 3: I looked at over five hundred opportunities and many many

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Speaker 3: different industries, and this is the one that checked every

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Speaker 3: single box of what I was looking for. Something that

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Speaker 3: was large, something that was act position rich, something that

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Speaker 3: was up my alley in terms of my skill set.

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Speaker 3: Something with it was growth seven percent organic growth, and

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Speaker 3: an industry and a customer set that is familiar to me.

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Speaker 3: United Rentals is a big overlap with the construction customers.

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Speaker 2: For example, fascinating Brad thanks so much for joining us again.

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Speaker 2: We appreciate you coming back and bringing us up to

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Speaker 2: date on your new opportunity. Brad Jacobsy's executive chairman of XPO.

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Speaker 7: You're listening to the Team Ken's are Live program Bloomberg

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Speaker 7: Markets weekdays at ten am Eastern on Bloomberg dot Com,

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Speaker 7: the iHeartRadio app and the Bloomberg Business app, or listen

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Speaker 7: on demand wherever you get your podcasts.

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Speaker 2: The Business of Sports, John, it's scarlettfou and a couple

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Speaker 2: other slugs. I think Michael Barr and some guy who's

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Speaker 2: an emerging markets guy. How he gets a Damien c

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Speaker 2: does it all? He does it all. But they talk

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Speaker 2: about the business of sports. I've got a lot of

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Speaker 2: business of sports questions. I'm a golfer. I'm a fan

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Speaker 2: of the game of golf, fan of the business of

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Speaker 2: the golf. I don't understand what's going on with this

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Speaker 2: live golf thing. I thought the PGA and the Live

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Speaker 2: we're merging. Everybody's gonna be happy altogether. And then John

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Speaker 2: Rahm says he's going to go and take three hundred

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Speaker 2: large from live golf. Can you, Scarlet Fiel, you cover

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Speaker 2: all this for us? Can you tell us what's happening here.

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Speaker 8: Well, he's a reigning Master's champ, the number three player

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Speaker 8: in the world, so he ads this legitimacy to going

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Speaker 8: over to Live and he's the biggest signing by far

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Speaker 8: yet And you're right. Live Golf and PGA Tour are

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Speaker 8: working towards a deal, but nothing's happened yet. They have

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Speaker 8: to give an update by December thirty first, and it's

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Speaker 8: not clear what shape this deal will take, although we

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Speaker 8: do know that PGA has been talking with other investors,

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Speaker 8: including a report this morning from Jillian Tan that a

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Speaker 8: Fenway Sports Group led consortium has been chosen to enter

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Speaker 8: into final talks to be a co investor, a US

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Speaker 8: co investor in this Live Golf PGA Tour entity.

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Speaker 5: Every one of these sports stories as of late, the

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Speaker 5: common denominator is money, and with it this specific case

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Speaker 5: golfers signing with Live. Something in me tells me that

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Speaker 5: this is some sort of Faustian bargain that these golfers

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Speaker 5: are made. Am I being too cynical or fausia not realistic?

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Speaker 8: If the PGA Tour is in active negotiations with Live

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Speaker 8: Golf to merge whatever obstacles they threw up there, and

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Speaker 8: whatever concerns they cited has kind of gone by the wayside.

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Speaker 8: They opened the door to golfers negotiating with Live Golf directly.

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Speaker 8: We know that John Rahm had said in the past

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Speaker 8: that he was not interested in the money. He said

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Speaker 8: he and his wife were not concerned about the money,

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Speaker 8: you know, that Live could offer them. He's always been

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Speaker 8: very interested in history and legacy, and he said back

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Speaker 8: in twenty twenty two. Right now, the PGA Tour has that. Now,

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Speaker 8: once it became apparent that the PGA Tour was negotiating

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Speaker 8: with Live Golf, maybe it doesn't have that history and

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Speaker 8: legacy anymore because it's open season it is.

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Speaker 2: I mean, if the PGA is going to merge with Live,

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Speaker 2: they're going to take a direct investment from the set

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Speaker 2: Investment Fund. So you've already lost that The fundamental argument

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Speaker 2: that the PGA had against Live is now, by the way, say,

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Speaker 2: because you're in fact taking that money. So now if

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Speaker 2: I'm John Rahm, I'm like, why do I wait?

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Speaker 5: Where the regulators and all this? What's there?

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Speaker 8: The DOJ is looking into this, and you know, again

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Speaker 8: they have that December thirty first deadline with which to

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Speaker 8: update the government. We do know that Jaymonahan and the

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Speaker 8: PIF governor, yasir Al Ramayan Our scheduled to meet this

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Speaker 8: week for negotiations, so maybe there'll be some reporting out

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Speaker 8: of that.

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Speaker 5: Here's the independent of each other. Can they possibly Could

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Speaker 5: the PGA possibly survive on its own against an entity

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Speaker 5: like Live?

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Speaker 2: I don't know.

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Speaker 8: They don't have bottomless pockets like Live. Live is backed

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Speaker 8: by the Saudi government.

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Speaker 2: But I'll tell you what the PGA has that Live

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Speaker 2: doesn't have, which is a network television contract. I mean,

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Speaker 2: if you want to watch Live, you got to go

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Speaker 2: find it on the CW with's your a bunch of

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Speaker 2: hotstruct stations around. They have no and so it is.

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Speaker 2: I mean, I'm an avid golf fan. I will watch

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Speaker 2: the round of some tournament in Poughkeepsie if it's the

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Speaker 2: PGA Tour. I didn't haven't seen one shot of You could,

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Speaker 2: but you just don't want to. It's a combination. I

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Speaker 2: don't really care to. The PJS takes care of it

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Speaker 2: for me, and you know, I don't know so, but

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Speaker 2: there's enough people that are following Live. I think that

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Speaker 2: it's a thing and it doesn't matter what the TV

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Speaker 2: contract is as long as you have I guess that's

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Speaker 2: Saudi money behind you.

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Speaker 9: Yeah.

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Speaker 8: Well, I mean they can always disrupt that at some point,

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Speaker 8: and technology is moving the direction of people are not

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Speaker 8: necessarily going to be signing up for the cable bundles

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Speaker 8: and signing up for CW streaming will become more and

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Speaker 8: more attractive over time.

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Speaker 5: Yep. All right, So what next for the Saudi government

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Speaker 5: in its investments?

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Speaker 8: Maybe the Saudi government should look into Shoho Tani.

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Speaker 2: Yes, so now again, money money, It's all about a

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Speaker 2: lot of money in this case, seven hundred million dollars.

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Speaker 8: Over ten years. This is the largest contract of any

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Speaker 8: in any US professional sports league. It tops Aaron Judge

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Speaker 8: his contract as a free agent nine year, three hundred

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Speaker 8: and sixty million, Mike Trout who got an extension twelve year,

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Speaker 8: or four hundred twenty six and a half million, even

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Speaker 8: Patrick Mahomes ten year, four hundred and fifty million, Lionel

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Speaker 8: Messi when he resigned with Barcelona. So this is a

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Speaker 8: you know, ball Well no, I didn't want to use

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Speaker 8: that word. Well, I mean, it's a racket busting contract

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Speaker 8: about that.

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Speaker 2: It's amazing. I mean, I mean, did they what's the

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Speaker 2: money behind the Dodgers, and I think about the Yankees.

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Speaker 2: I think about the YES Network, and they make a

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Speaker 2: ton of a.

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Speaker 8: Very lucrative sports TV CONTRACTIA contract. But I mean, this

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Speaker 8: is also the second biggest media market in the nation,

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Speaker 8: right after New York. And on top of that, unlike

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Speaker 8: the Yankees, they've done very very well on the field.

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Speaker 8: They won the World Series in twenty twenty. They haven't

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Speaker 8: missed a season since twenty two.

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Speaker 2: Well, that's amazing. That's kind of like the Yankees of

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Speaker 2: the nineties in their early two thousand day.

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Speaker 5: Is he worth it is?

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Speaker 8: Yeah, he's worth it.

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Speaker 5: Okay, give me some stats, so the comparation's with me.

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Speaker 2: But how about this.

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Speaker 8: He won the MVP twice. He is an incredible hitter

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Speaker 8: and he's an incredible pitcher. If he just became one

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Speaker 8: a hitter or one a pitcher, he would be an

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Speaker 8: All Star in either, except that he could make.

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Speaker 2: People are saying, I mean he is as good or

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Speaker 2: better than Babe Ruth. That's how far those are.

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Speaker 8: Those are the comparisons. And this summer when he was

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Speaker 8: playing around the league, everywhere he went there were fans

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Speaker 8: showing up and it was like showtime. You know, and

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Speaker 8: they're just like tons of fans everywhere, and it was

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Speaker 8: it was basically a tour to see, like how can

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Speaker 8: we uh appeal to him and show him that like

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Speaker 8: he should come play for the Mets, or he should

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Speaker 8: come play for Detroit or whatever city you want to mention?

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Speaker 5: Is there any chance he'll start dating Taylor Swift exactly?

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Speaker 8: Kelsey is not giving up on his situation at all.

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Speaker 2: Ok, All right, what else he has for the business

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Speaker 2: of sports? Coming out for the businesses? Now you have,

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Speaker 2: I mean our listeners and our viewers on YouTube. Scarlet's

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Speaker 2: watching wearing a New York Rangers jacket. So is that

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Speaker 2: the team number one for you?

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Speaker 8: Team number one?

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Speaker 2: You got to Cornell? So does that mean you're you're

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Speaker 2: just a die hard hockey fan.

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Speaker 8: I've always been a hockey fan, Okay. And when I

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Speaker 8: went to school, I actually didn't go to any of

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Speaker 8: the games because, yeah, because it was really hard to

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Speaker 8: get a ticket.

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Speaker 2: You had to hard to get a hockey ticket.

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Speaker 8: Yeah, you had to sleep outside and to get the ticket. Yeah,

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Speaker 8: I mean back in the day, this is what it entailed.

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Speaker 2: And I didn't do that. Yeah. Wow.

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Speaker 8: But then they started playing all the hockey games or

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Speaker 8: the big game Red Hot Hockey in Madison Square Garden

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Speaker 8: on Thanksgiving weekend and it became a bigger thing. Okay,

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Speaker 8: so that's been going on for a couple of years,

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Speaker 8: and I know I came on to talk about that.

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Speaker 8: That's really fun.

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Speaker 2: That's a fun all right. So you're a Ranger fan.

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Speaker 2: Unbelievable years so far.

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Speaker 8: For this so far, but seasons early, I mean seasons young,

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Speaker 8: and anything could happen.

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Speaker 5: Who's your team?

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Speaker 2: Well, I don't know. I mean the Rangers, I mean

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Speaker 2: I mean Yankees, guy, Giants.

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Speaker 5: You're from New Jersey. You've had a root for your Devils.

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Speaker 2: Yeah, you know, I've been to. I took the kids

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Speaker 2: to a lot of game. It's actually a great thing

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Speaker 2: to take kids with. Point's expensive.

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Speaker 8: Yeah, the Devils are very exciting though. Yes, young players,

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Speaker 8: they're really they're doing a lot.

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Speaker 2: Yeah, but I mean Madison Square Garden going to the

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Speaker 2: protection Duke Blue Devil's next Wednesday at the Garden against Baylor. Oh,

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Speaker 2: next time, and that'll be fine.

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Speaker 5: Longtime listener called Wright sin Googenheim money behind the LA Dodgers.

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Speaker 5: There you go, that's right, that's from mister.

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Speaker 2: Cinch Ye thank you. Yep, that's I remember that deal

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Speaker 2: getting done. All right, Scarlet Food, thank you so much.

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Speaker 2: We appreciate Scarlet Fush. She's a host of Bloomberg Television

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Speaker 2: and Bloomberg Radio's Business of Sports. Michael Barr Damien Sassaur

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Speaker 2: take a backseat to Scarletfoodle's let let's let let's let's

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Speaker 2: be honest.

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Speaker 8: You're like the other way around.

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Speaker 7: You're listening to the tape. Can's are live program Bloomberg

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Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, tune

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Speaker 7: in app, Bloomberg dot Com, and the Bloomberg Business App.

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Speaker 7: You can also listen live on Amazon Alexa from our

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Speaker 7: flagship New York station just say Alexa playing Bloomberg eleven.

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Speaker 2: All right, let's switch gears, go a little bit political.

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Speaker 2: Get President Zelensky coming to the States, coming to d C.

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Speaker 2: Meeting with lawmakers to try to unlock some of that

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Speaker 2: aid for Ukraine. Let's bring in Wendy Schuler. She's a

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Speaker 2: professor at Brown University. Wendy, I mean give us a

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Speaker 2: sense of in Washington, d C. Where Ukraine fits in

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Speaker 2: with all the other news, whether it's from the Middle

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Speaker 2: East or just the coming election, it seems like the

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Speaker 2: Ukraine and the support of Ukraine has kind of lost

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Speaker 2: a little bit of the limelight here Where are we?

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Speaker 10: Yeah, man, I.

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Speaker 11: Think the momentum, I wouldn't say collapsed, but I think

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Speaker 11: the momentum has slowed considerably. And rather than have a

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Speaker 11: sort of a singular conflict that we've been very involved

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Speaker 11: in and very supporter of Ukraine against Russia, now another

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Speaker 11: conflict has opened up that has really soaked up all

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Speaker 11: the attention, all the emotion and passion, and that of

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Speaker 11: course the Middle East Israeli Gaza conflict.

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Speaker 10: So that has really become a problem for the.

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Speaker 11: Biden administration and the tendency in the Republican Party, particularly

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Speaker 11: with the Alistair McCarthy and the replacement with someone who's

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Speaker 11: more conservative.

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Speaker 10: And more insular in their.

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Speaker 11: View about the United States role globally in terms of

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Speaker 11: military conflict and support.

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Speaker 10: That has happened at the same time, and so you.

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Speaker 11: Know that Caucus is not particularly persuaded that we should

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Speaker 11: be spending billions of dollars to continue to support Ukraine.

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Speaker 11: And notice that they have not yet, although they want

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Speaker 11: to separate the Israeli eight out, they haven't passed the

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Speaker 11: Israeli aid.

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Speaker 5: Either let's jump ahead to election day and when a

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Speaker 5: voter walks into the poll and pulls the lever of

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Speaker 5: the switch or whatever it is, now, are they thinking

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Speaker 5: about Ukraine? Are they thinking about funding for israel? I?

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Speaker 11: Think a small group of people in particularly the Gaza conflict,

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Speaker 11: a small group relative to the United States voting population.

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Speaker 11: A small group will have intense preferences and they will

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Speaker 11: remember either favorably or unfavorably, what the Biden administration has done,

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Speaker 11: and then they will now listen potentially to Trump or

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Speaker 11: Nikki Hanley Rondo Santis on what the government should do

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Speaker 11: so that. I don't think those people swing an election nationally,

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Speaker 11: but there are some communities in swing states where they

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Speaker 11: could really make a difference in their voting Ukraine. I

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Speaker 11: don't think has ever been an issue that as at

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Speaker 11: the forefront or top of mind that swings electoral decision making.

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Speaker 2: Kind of on that front, Wendy, there's a couple of

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Speaker 2: polls that one from CBS News, one from the Wall

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Speaker 2: Street Journal. Biden's support of Israel alienates more Democrats in

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Speaker 2: the new poll. What kind of calculus is the president,

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Speaker 2: you know, kind of working on here? As it relates

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Speaker 2: to his support for Israel.

438
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Speaker 11: Well, I think here we really see as we watch,

439
00:20:56,840 --> 00:20:59,800
Speaker 11: you know, for the next months before the US pop

440
00:20:59,880 --> 00:21:03,640
Speaker 11: up has had a daily dose of Donald Trump. I mean,

441
00:21:03,640 --> 00:21:06,760
Speaker 11: we just haven't been exposed to the daily dose yet.

442
00:21:07,480 --> 00:21:11,240
Speaker 11: If he wins Iowa, as we now sort of expect

443
00:21:11,280 --> 00:21:13,640
Speaker 11: him to, and if he wins New Hampshire, we are

444
00:21:13,640 --> 00:21:16,800
Speaker 11: going to get multiple daily doses of Donald Trump, and

445
00:21:16,840 --> 00:21:20,119
Speaker 11: I think the polls will probably reflect a shift a

446
00:21:20,160 --> 00:21:21,800
Speaker 11: couple of months down the line.

447
00:21:21,800 --> 00:21:23,360
Speaker 10: All on that comparison.

448
00:21:23,680 --> 00:21:25,960
Speaker 11: But right now, the Democrats face a real problem because

449
00:21:25,960 --> 00:21:29,879
Speaker 11: at the congressional level they are divided on Israel and Gaza,

450
00:21:29,960 --> 00:21:31,960
Speaker 11: and that division is obviously very public.

451
00:21:32,280 --> 00:21:34,680
Speaker 10: So going into the twenty twenty four races.

452
00:21:34,320 --> 00:21:36,199
Speaker 11: You've got house races, you've got a chance to take

453
00:21:36,240 --> 00:21:39,280
Speaker 11: the House back, you've got Senate seats you're desperate to preserve,

454
00:21:39,720 --> 00:21:42,679
Speaker 11: and you've got the Biden reelection all converging. And you

455
00:21:42,760 --> 00:21:45,679
Speaker 11: don't have consensus within the Democratic Party on each of

456
00:21:45,720 --> 00:21:48,920
Speaker 11: those levels on what the best policy path for is.

457
00:21:49,080 --> 00:21:54,160
Speaker 11: And that's a considerable problem. Donations, endorsements, and again, people

458
00:21:54,160 --> 00:21:56,600
Speaker 11: who are intense about this, those preferences are going to

459
00:21:56,680 --> 00:21:59,040
Speaker 11: harden in the next couple of months, and you're not

460
00:21:59,080 --> 00:22:00,680
Speaker 11: going to be able to shake them once they do.

461
00:22:01,359 --> 00:22:05,280
Speaker 5: That Daily does said you're speaking of is the implication

462
00:22:05,359 --> 00:22:09,440
Speaker 5: that his supporter or maybe not the core, but people

463
00:22:09,480 --> 00:22:10,840
Speaker 5: are going to get a little tired of this.

464
00:22:11,840 --> 00:22:13,560
Speaker 11: Well, so this is the you know, we look at

465
00:22:13,560 --> 00:22:16,320
Speaker 11: independent voting, especially in swing states, and we say, what

466
00:22:16,359 --> 00:22:19,760
Speaker 11: has the pattern been twenty eighteen, twenty twenty, twenty twenty two,

467
00:22:20,040 --> 00:22:23,040
Speaker 11: they did not vote for either Trump or Trump endorsed

468
00:22:23,080 --> 00:22:26,520
Speaker 11: candidates in big numbers. The Democrats had the advantage among

469
00:22:26,560 --> 00:22:30,400
Speaker 11: independent voters. Right now, the polling shows that advantage has eroded,

470
00:22:30,720 --> 00:22:32,320
Speaker 11: not disappeared, but eroted.

471
00:22:32,680 --> 00:22:34,879
Speaker 10: You know, as he comes back into the limelight and

472
00:22:34,960 --> 00:22:36,119
Speaker 10: independence are.

473
00:22:36,040 --> 00:22:38,919
Speaker 11: Reminded of why they have not voted for Trump or

474
00:22:38,960 --> 00:22:42,800
Speaker 11: Trump surrogates in the last three elections. That's where I

475
00:22:42,840 --> 00:22:46,080
Speaker 11: think the polling becomes more favorable, if you can put

476
00:22:46,080 --> 00:22:48,520
Speaker 11: it that way, for Biden, in the sense that he's

477
00:22:48,560 --> 00:22:51,760
Speaker 11: a chance to win those voters back into the Democratic

478
00:22:51,800 --> 00:22:53,639
Speaker 11: camp at least at the presidential alone.

479
00:22:54,160 --> 00:22:58,000
Speaker 2: How do you think this Republican I don't know. Competitive

480
00:22:58,080 --> 00:23:00,399
Speaker 2: landscape is going to shake out here is going to

481
00:23:00,400 --> 00:23:03,400
Speaker 2: be you know, if and when former President Trump comes

482
00:23:03,400 --> 00:23:06,600
Speaker 2: back and wins in Iowa and or New Hampshire's you

483
00:23:06,640 --> 00:23:10,040
Speaker 2: suggest that'll just everybody will kind of bow out at

484
00:23:10,040 --> 00:23:12,240
Speaker 2: that point because he will take all the oxygen out

485
00:23:12,240 --> 00:23:12,600
Speaker 2: of the air.

486
00:23:13,160 --> 00:23:14,240
Speaker 10: Yeah, you know, that's a great question.

487
00:23:14,280 --> 00:23:17,160
Speaker 11: It really depends on South Carolina obviously, and they've got

488
00:23:17,200 --> 00:23:20,840
Speaker 11: proportional delegation allocation in the Republican Party and winner take

489
00:23:20,920 --> 00:23:22,720
Speaker 11: all as you move further down the line in the

490
00:23:22,720 --> 00:23:23,480
Speaker 11: primary season.

491
00:23:23,760 --> 00:23:24,960
Speaker 10: So that's how Trump.

492
00:23:24,640 --> 00:23:26,960
Speaker 11: Stayed alive in twenty sixteen. He didn't do all that

493
00:23:26,960 --> 00:23:29,320
Speaker 11: while in the early primaries, but he stayed alive and

494
00:23:29,359 --> 00:23:32,720
Speaker 11: then managed to win many more delegates. So the question is,

495
00:23:32,760 --> 00:23:34,920
Speaker 11: not only does he soak up all the oxygen per se,

496
00:23:34,920 --> 00:23:37,320
Speaker 11: but he sets the agenda for the Republican Party. He

497
00:23:37,359 --> 00:23:41,160
Speaker 11: becomes the symbolics postperson for all Republicans running in twenty

498
00:23:41,160 --> 00:23:44,159
Speaker 11: twenty four, And now they're slowly going down to like

499
00:23:44,160 --> 00:23:46,600
Speaker 11: a four seat margin or a six seat margin. Their

500
00:23:46,640 --> 00:23:50,280
Speaker 11: margin has shrunk and where they won seats California and

501
00:23:50,400 --> 00:23:52,960
Speaker 11: New York are not likely to be as favorable to

502
00:23:53,000 --> 00:23:55,920
Speaker 11: them in twenty twenty four presidential election. More voters get

503
00:23:55,960 --> 00:23:57,959
Speaker 11: out the door on both sides, and if you have

504
00:23:58,000 --> 00:24:01,600
Speaker 11: a competitive, slightly leaning Democratic district that flipped, that's very

505
00:24:01,600 --> 00:24:03,960
Speaker 11: tough to maintain. So I think it looks bad for

506
00:24:04,040 --> 00:24:06,000
Speaker 11: the Republicans on the House side. Also, I'm not sure

507
00:24:06,040 --> 00:24:08,480
Speaker 11: they can govern. Will we shut the government down in

508
00:24:08,600 --> 00:24:11,560
Speaker 11: early spring or late winter? Will they pass the death

509
00:24:11,560 --> 00:24:14,400
Speaker 11: ceiling or filibuster that They've got all the same challenges

510
00:24:14,440 --> 00:24:15,960
Speaker 11: going forward in leadership, and I.

511
00:24:15,960 --> 00:24:17,679
Speaker 10: Think it's going to be a very tough landscape.

512
00:24:17,760 --> 00:24:20,959
Speaker 11: On the other hand, the Democrats are defending twenty seats,

513
00:24:21,160 --> 00:24:23,719
Speaker 11: the Republicans are defending ten in the United States Senate,

514
00:24:23,960 --> 00:24:26,919
Speaker 11: So the odds look very good for the Republicans on

515
00:24:26,960 --> 00:24:29,680
Speaker 11: the Senate side, and the Senate Republicans have really stayed

516
00:24:29,680 --> 00:24:33,120
Speaker 11: as far away as they possibly could from the House Republicans.

517
00:24:33,240 --> 00:24:35,040
Speaker 10: Whether you can do that with Trump at the.

518
00:24:34,960 --> 00:24:37,520
Speaker 11: Top of the ticket, that is the big political puzzle

519
00:24:37,680 --> 00:24:39,840
Speaker 11: I think facing the Republican Party going to twenty twenty.

520
00:24:39,680 --> 00:24:41,600
Speaker 5: Four, this might be a little at a left field.

521
00:24:41,600 --> 00:24:44,960
Speaker 5: But is there any doubt that Kamala Harris is the

522
00:24:45,040 --> 00:24:46,159
Speaker 5: running mate for Joe Biden?

523
00:24:47,400 --> 00:24:50,600
Speaker 11: So I have said on Bloomberg that I think Joe

524
00:24:50,680 --> 00:24:53,640
Speaker 11: Biden is running as long as he's walking, talking, and breathing,

525
00:24:54,080 --> 00:24:56,000
Speaker 11: I still think he's running.

526
00:24:56,440 --> 00:24:58,200
Speaker 10: Maybe there's a little bit more doubt there.

527
00:24:58,240 --> 00:25:00,800
Speaker 11: But Kamala Harris is a big quest question mark, not

528
00:25:00,800 --> 00:25:03,479
Speaker 11: from her perspective but from the Biden team. You know,

529
00:25:03,560 --> 00:25:06,080
Speaker 11: if you really need a Hail Mary and Biden's still

530
00:25:06,119 --> 00:25:08,480
Speaker 11: the head of the ticket, do you find a way

531
00:25:08,800 --> 00:25:11,520
Speaker 11: to have something else for her to do and she

532
00:25:11,560 --> 00:25:15,280
Speaker 11: stays vice president until next year, but find a different

533
00:25:15,280 --> 00:25:18,080
Speaker 11: candidate to be VP. So the hail Mary might be

534
00:25:18,200 --> 00:25:22,160
Speaker 11: Raphael Warnock of Georgia. There is no race of note

535
00:25:22,200 --> 00:25:24,959
Speaker 11: in Georgia in twenty twenty four, and certainly no African

536
00:25:24,960 --> 00:25:27,840
Speaker 11: American candidate at the top of the ticket statewide. That's

537
00:25:27,880 --> 00:25:30,800
Speaker 11: a big difference between twenty and twenty twenty two for

538
00:25:30,840 --> 00:25:31,480
Speaker 11: the Democrats.

539
00:25:31,720 --> 00:25:34,240
Speaker 10: So I think Jordan slips, Georgia slips away. But if

540
00:25:34,240 --> 00:25:37,159
Speaker 10: you have Ralphael Warnock, who's won statewide twice.

541
00:25:36,880 --> 00:25:40,040
Speaker 11: In Georgia at on the ticket instead of Kamala Harris,

542
00:25:40,400 --> 00:25:43,120
Speaker 11: I think that changes that ticket's odds. So I think

543
00:25:43,160 --> 00:25:46,960
Speaker 11: the team will have to creative because right now it

544
00:25:47,040 --> 00:25:49,760
Speaker 11: doesn't look like it's a compelling enough team to make

545
00:25:49,760 --> 00:25:52,119
Speaker 11: sure the same people got out the door in twenty

546
00:25:52,200 --> 00:25:54,399
Speaker 11: twenty and make sure they'll get out the door in

547
00:25:54,400 --> 00:25:55,640
Speaker 11: twenty twenty four.

548
00:25:55,880 --> 00:25:58,280
Speaker 2: All right, just thirty seconds left, I mean, is what

549
00:25:58,400 --> 00:26:00,159
Speaker 2: kind of campaign do you think the president by and

550
00:26:00,160 --> 00:26:00,680
Speaker 2: we'll run.

551
00:26:02,160 --> 00:26:03,000
Speaker 10: You know, we used to call.

552
00:26:02,920 --> 00:26:05,399
Speaker 11: It the Rose Garden strategy, where the presidents didn't leave

553
00:26:05,400 --> 00:26:06,920
Speaker 11: the White House they said they were too busy.

554
00:26:07,119 --> 00:26:10,320
Speaker 10: Obama did that in twenty twelve in thirty seconds.

555
00:26:10,359 --> 00:26:11,960
Speaker 11: Let's see how I can do this, And then he

556
00:26:11,960 --> 00:26:14,320
Speaker 11: didn't get out the door really until late September October

557
00:26:14,320 --> 00:26:16,080
Speaker 11: when Romney was tied with him in the polls.

558
00:26:16,400 --> 00:26:17,920
Speaker 10: So I think they're going to do the same thing.

559
00:26:18,040 --> 00:26:20,040
Speaker 11: I think Biden is not going to travel that much

560
00:26:20,240 --> 00:26:22,119
Speaker 11: and only get out the door late in the game,

561
00:26:22,200 --> 00:26:24,359
Speaker 11: and we'll see how he does on the campaign trail

562
00:26:24,760 --> 00:26:28,200
Speaker 11: versus the quote unquote vitality that we're seeing from Donald

563
00:26:28,200 --> 00:26:28,880
Speaker 11: Trump right now.

564
00:26:28,920 --> 00:26:30,880
Speaker 2: All right, Wendy Schilder, thank you so much. We appreciate

565
00:26:30,920 --> 00:26:35,480
Speaker 2: it as always, Wendy Schiller, professor at Brown University, kind

566
00:26:35,480 --> 00:26:37,480
Speaker 2: of giving us kind of the political lay of the land.

567
00:26:38,480 --> 00:26:40,800
Speaker 2: Twenty twenty four. John's gonna be here in a matter

568
00:26:40,800 --> 00:26:44,360
Speaker 2: of days, and that's just election year.

569
00:26:44,480 --> 00:26:48,680
Speaker 5: Momentum, and the lead that the former president has over

570
00:26:48,720 --> 00:26:51,760
Speaker 5: his Republican rivals is really astounding at this point.

571
00:26:51,840 --> 00:26:55,080
Speaker 2: Yeah, it's just extraordinary. So it looks like that will

572
00:26:55,119 --> 00:26:59,000
Speaker 2: be former President Trump, at least at this stage, looks

573
00:26:59,040 --> 00:27:01,280
Speaker 2: to be the nominee. We'll see how it plays out

574
00:27:01,280 --> 00:27:03,760
Speaker 2: over the coming months, and there's some primaries and all

575
00:27:03,760 --> 00:27:06,359
Speaker 2: that kind of stuff that the politicos like to focus on.

576
00:27:07,400 --> 00:27:10,520
Speaker 7: You're listening to the tape. Can's our live program Bloomberg

577
00:27:10,600 --> 00:27:14,199
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the

578
00:27:14,240 --> 00:27:17,480
Speaker 7: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

579
00:27:17,520 --> 00:27:20,320
Speaker 7: You can also listen live on Amazon Alexa from our

580
00:27:20,359 --> 00:27:24,760
Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.

581
00:27:26,720 --> 00:27:29,240
Speaker 2: We want to get to our C suite discussion, Big

582
00:27:29,359 --> 00:27:32,760
Speaker 2: M and a trade in the airline business Alaska Airlines

583
00:27:33,240 --> 00:27:37,800
Speaker 2: and Hawaiian Airlines. Alaska said that it will be buying

584
00:27:37,840 --> 00:27:41,920
Speaker 2: Hawaiian for one point nine a billion dollars eighteen dollars

585
00:27:41,960 --> 00:27:44,840
Speaker 2: a share plus nine hundred million dollars of Hawaiian's debt.

586
00:27:45,280 --> 00:27:48,879
Speaker 2: Joining us right now to talk about this transaction. Peter Ingram,

587
00:27:49,000 --> 00:27:53,679
Speaker 2: the CEO of Hawaiian Airlines joining us via zoom from Hawaii.

588
00:27:53,760 --> 00:27:58,359
Speaker 2: Good for you, my friend. So let's talk about this, Peter,

589
00:27:58,480 --> 00:28:01,840
Speaker 2: talk to us about this transaction. The market's unsure whether

590
00:28:01,920 --> 00:28:04,480
Speaker 2: this deal is going to go through. What's the message

591
00:28:04,840 --> 00:28:08,040
Speaker 2: you're giving to the market today about why this deal

592
00:28:08,080 --> 00:28:09,120
Speaker 2: should be done.

593
00:28:09,359 --> 00:28:12,960
Speaker 9: Well, we feel very good about the deal that was announced.

594
00:28:13,000 --> 00:28:16,919
Speaker 9: I think it's a good deal for Hawaiian Airlines Hawaiian

595
00:28:16,920 --> 00:28:20,800
Speaker 9: Holding shareholders. It's also positive for Alaska. I think it

596
00:28:20,880 --> 00:28:23,879
Speaker 9: sets the company out, the combined company up very well

597
00:28:24,760 --> 00:28:29,320
Speaker 9: to compete effectively in a very dynamic airline market. And

598
00:28:29,920 --> 00:28:33,760
Speaker 9: obviously we're going to work through the regulatory process over

599
00:28:33,800 --> 00:28:36,639
Speaker 9: the next twelve to eighteen months, but we expect this

600
00:28:36,720 --> 00:28:37,800
Speaker 9: transaction to close.

601
00:28:38,320 --> 00:28:39,840
Speaker 12: I want to pick up on that a little bit,

602
00:28:39,880 --> 00:28:43,600
Speaker 12: because of course, the Alaska Airlines investors were really spotted

603
00:28:43,640 --> 00:28:46,480
Speaker 12: that right away. This issue about getting this past the regulators,

604
00:28:46,480 --> 00:28:49,520
Speaker 12: and this is not an administration that's very friendly to

605
00:28:49,560 --> 00:28:53,360
Speaker 12: these big mergers. So what's the main point that investors

606
00:28:53,360 --> 00:28:56,040
Speaker 12: should be thinking about, you know, to put some meat

607
00:28:56,080 --> 00:28:59,080
Speaker 12: on this idea that the regulatory process will go through.

608
00:28:59,120 --> 00:29:02,479
Speaker 9: Okay, Well, I think the regulators will look at this,

609
00:29:02,880 --> 00:29:06,440
Speaker 9: you know, as an individual transaction, and look at it

610
00:29:06,520 --> 00:29:08,800
Speaker 9: on its own merits, and what they're going to see

611
00:29:08,960 --> 00:29:14,400
Speaker 9: is that you've got two airlines that have very complementary networks.

612
00:29:14,520 --> 00:29:17,120
Speaker 9: We have, you know, big areas of our network where

613
00:29:17,160 --> 00:29:22,040
Speaker 9: we don't currently compete with Alaska. They also have huge

614
00:29:22,240 --> 00:29:25,840
Speaker 9: parts of their network where we don't overlap at all.

615
00:29:26,200 --> 00:29:28,880
Speaker 9: The amount of overlap is very limited, and I think

616
00:29:28,960 --> 00:29:31,400
Speaker 9: when people look in into that and dig into it,

617
00:29:31,520 --> 00:29:32,800
Speaker 9: that's what they're going to see.

618
00:29:32,880 --> 00:29:36,320
Speaker 2: Alaska Airlines, some of their shareholders are skepule of this transaction,

619
00:29:36,920 --> 00:29:41,920
Speaker 2: suggesting that Hawaiian will not return to twenty nineteen cash

620
00:29:41,920 --> 00:29:45,080
Speaker 2: flow levels. We've got Southwest coming into the market. Talk

621
00:29:45,080 --> 00:29:48,400
Speaker 2: to us about kind of, you know, the profitability of

622
00:29:48,440 --> 00:29:50,760
Speaker 2: your company in today's market.

623
00:29:51,160 --> 00:29:55,440
Speaker 9: Well, we feel very good about our standalone business plan.

624
00:29:55,560 --> 00:29:58,840
Speaker 9: This was a deal that came along and provided us

625
00:29:58,920 --> 00:30:02,120
Speaker 9: a new alternative, but we were working very aggressively to

626
00:30:03,280 --> 00:30:08,640
Speaker 9: better our own standalone prospects. Demand remains very strong in

627
00:30:08,720 --> 00:30:12,560
Speaker 9: our core markets between the US mainland and Hawaii. We've

628
00:30:12,560 --> 00:30:16,520
Speaker 9: seen good recovery in the Japan part of our business,

629
00:30:16,600 --> 00:30:20,840
Speaker 9: which is a key piece that had lagged recovery during

630
00:30:21,520 --> 00:30:24,480
Speaker 9: the pandemic, but really started to come on since May

631
00:30:24,520 --> 00:30:28,400
Speaker 9: of this past year. Continue to be the market leader

632
00:30:28,400 --> 00:30:34,360
Speaker 9: in our neighbor island business, which represents roughly twenty percent

633
00:30:34,680 --> 00:30:38,000
Speaker 9: of our revenue pre pandemic. So as long as we

634
00:30:38,160 --> 00:30:41,840
Speaker 9: compete effectively, I think there's a good market position for

635
00:30:42,200 --> 00:30:43,200
Speaker 9: Hawaiian airlines.

636
00:30:43,480 --> 00:30:46,000
Speaker 12: I mean, you mentioned Japan. I'm wondering if you can

637
00:30:46,040 --> 00:30:49,280
Speaker 12: talk a little bit more about flights coming in from Asia,

638
00:30:49,320 --> 00:30:51,600
Speaker 12: because with this strong dollar, it might be something that

639
00:30:52,080 --> 00:30:53,480
Speaker 12: is putting a bit of pressure on you there.

640
00:30:54,120 --> 00:30:57,800
Speaker 9: I think that will hold the demand back a little bit. Obviously,

641
00:30:58,600 --> 00:31:02,320
Speaker 9: you know, when we were pre pandemic, the end was

642
00:31:02,360 --> 00:31:04,320
Speaker 9: trading one hundred and five one hundred and ten to

643
00:31:04,400 --> 00:31:07,600
Speaker 9: the dollar. Now it's in the mid one forties, so

644
00:31:07,640 --> 00:31:12,560
Speaker 9: that's a considerable amount of inflation that a Japanese visitor

645
00:31:12,720 --> 00:31:15,640
Speaker 9: looks at when they're coming to Hawaii. But we saw

646
00:31:15,720 --> 00:31:21,840
Speaker 9: strong recoveries in Australia from South Korea and now even

647
00:31:22,400 --> 00:31:25,479
Speaker 9: you know, Japan has come back over the course of

648
00:31:25,600 --> 00:31:28,240
Speaker 9: this year, and we think that'll that'll prove to be

649
00:31:28,840 --> 00:31:33,600
Speaker 9: a steady recovery going into next year. The affinity of

650
00:31:35,600 --> 00:31:39,840
Speaker 9: the Japanese travelers have more Hawaii is really unparalleled. There

651
00:31:39,840 --> 00:31:42,240
Speaker 9: were about a million and a half visitors each year

652
00:31:43,080 --> 00:31:46,080
Speaker 9: before the pandemic, and it may take a little time

653
00:31:46,120 --> 00:31:48,600
Speaker 9: to climb back to those levels, but we think demand

654
00:31:48,760 --> 00:31:50,719
Speaker 9: is going to be very strong over the long term.

655
00:31:51,280 --> 00:31:52,760
Speaker 2: Peter, I'm taking a look at your balance sheet and

656
00:31:52,760 --> 00:31:54,720
Speaker 2: I see you've got about one point three billion dollars

657
00:31:54,720 --> 00:31:57,360
Speaker 2: of debt maturing in twenty twenty six, A big bullet.

658
00:31:57,400 --> 00:32:01,520
Speaker 2: There's the what's the plan for that assuming this transaction

659
00:32:01,560 --> 00:32:04,080
Speaker 2: does not go through? And how much of your balance

660
00:32:04,080 --> 00:32:06,440
Speaker 2: sheet kind of brought you to the table to sit

661
00:32:06,480 --> 00:32:07,640
Speaker 2: down with the last Airlines.

662
00:32:08,280 --> 00:32:12,200
Speaker 9: Again, we were really confident and remain confident in our

663
00:32:12,600 --> 00:32:17,960
Speaker 9: standalone plan. We've got considerable fleet assets that are unencumbered.

664
00:32:18,040 --> 00:32:20,800
Speaker 9: We've got new seven eight sevens coming on against which

665
00:32:20,840 --> 00:32:25,120
Speaker 9: we can borrow, and that one point two billion dollars

666
00:32:25,160 --> 00:32:28,960
Speaker 9: of that maturity in twenty twenty six is represented by

667
00:32:29,160 --> 00:32:34,800
Speaker 9: a loyalty bond of financing that was raised against our

668
00:32:34,880 --> 00:32:39,880
Speaker 9: brand and our loyalty program, and so with that coming due,

669
00:32:40,360 --> 00:32:43,680
Speaker 9: we would have those cash flows to be able to

670
00:32:43,720 --> 00:32:46,680
Speaker 9: do a financing, and it was under collateralized as it was,

671
00:32:46,760 --> 00:32:49,880
Speaker 9: so I think the prospects for us continuing to be

672
00:32:49,920 --> 00:32:52,000
Speaker 9: able to fund the business are very very strong.

673
00:32:52,640 --> 00:32:54,040
Speaker 12: One thing I wanted to ask you a little bit

674
00:32:54,040 --> 00:32:56,840
Speaker 12: about is your costs, particularly your fuel costs. I mean,

675
00:32:57,000 --> 00:32:59,520
Speaker 12: regardless of whether or not this deal goes through, this

676
00:32:59,560 --> 00:33:02,080
Speaker 12: is something that's been plaguing a lot of people in

677
00:33:02,120 --> 00:33:03,640
Speaker 12: your space, and so can you talk to me a

678
00:33:03,680 --> 00:33:06,000
Speaker 12: little bit about what your expectations are there and how

679
00:33:06,040 --> 00:33:06,840
Speaker 12: you're going to manage it.

680
00:33:07,120 --> 00:33:09,040
Speaker 9: Well, I don't have a crystal ball and where fuel

681
00:33:09,080 --> 00:33:11,640
Speaker 9: prices are going, but I do know that if we

682
00:33:11,680 --> 00:33:14,160
Speaker 9: look back over the last couple of weeks, we've actually

683
00:33:14,160 --> 00:33:16,520
Speaker 9: seen some relief in the fuel price numbers, and that

684
00:33:17,360 --> 00:33:20,720
Speaker 9: you know, as we forecast, we just use a forward

685
00:33:20,800 --> 00:33:25,320
Speaker 9: curve going forward, So right now the outlook is a

686
00:33:25,320 --> 00:33:29,360
Speaker 9: little bit better than it used to be. But you know,

687
00:33:29,560 --> 00:33:33,080
Speaker 9: fuel prices are a part of our industry have been

688
00:33:33,120 --> 00:33:36,360
Speaker 9: for a very very long time. For most airlines. It

689
00:33:36,400 --> 00:33:39,640
Speaker 9: is either the largest cost item or the second largest

690
00:33:39,640 --> 00:33:44,000
Speaker 9: cost behind salaries and wages. So we will do what

691
00:33:44,040 --> 00:33:47,880
Speaker 9: we can to conserve. We have a hedging program that

692
00:33:47,920 --> 00:33:50,560
Speaker 9: helps us smooth out some of the volatility, but we

693
00:33:50,600 --> 00:33:54,680
Speaker 9: aren't making bets on where the fuel prices go. I

694
00:33:54,680 --> 00:33:57,120
Speaker 9: don't think that's what our investors want us to be doing.

695
00:33:58,040 --> 00:34:01,200
Speaker 2: Peter, as you and Alaska Air execs sit down with

696
00:34:01,280 --> 00:34:05,360
Speaker 2: the regulators, what are you prepared to do to get

697
00:34:05,400 --> 00:34:08,759
Speaker 2: this deal approved in terms of maybe routes that may

698
00:34:08,880 --> 00:34:11,800
Speaker 2: need to be divested or how flexible can you guys.

699
00:34:11,719 --> 00:34:14,480
Speaker 9: Be I'm not going to get into any of the

700
00:34:14,680 --> 00:34:17,360
Speaker 9: specifics on that, and some of that, you know, obviously

701
00:34:17,480 --> 00:34:22,560
Speaker 9: would would be up to the Alaska team to comment on.

702
00:34:23,400 --> 00:34:26,880
Speaker 9: But the fact of the matter is that these are

703
00:34:26,880 --> 00:34:30,000
Speaker 9: two networks that are very complementary. There is a very

704
00:34:30,040 --> 00:34:35,759
Speaker 9: limited amount of overlap. We think the market is incredibly competitive,

705
00:34:35,840 --> 00:34:39,840
Speaker 9: lots of airlines serving Hawaii, and we expect it to

706
00:34:39,840 --> 00:34:42,880
Speaker 9: be very competitive going forward. That's the nature of our business.

707
00:34:43,800 --> 00:34:47,600
Speaker 12: Last year, the holiday travel season produced a lot of delays,

708
00:34:47,719 --> 00:34:49,759
Speaker 12: a lot of difficulties, and in the airline that came

709
00:34:49,840 --> 00:34:52,800
Speaker 12: under pressure for that was Southwest. How do you feel

710
00:34:52,840 --> 00:34:55,200
Speaker 12: like the industry is fixed up this year to meet

711
00:34:55,480 --> 00:34:57,799
Speaker 12: any difficulties in weather patterns and do you feel like

712
00:34:58,280 --> 00:35:00,960
Speaker 12: Southwest is still on the back foot here? Is this

713
00:35:01,000 --> 00:35:02,279
Speaker 12: something you can take advantage of?

714
00:35:02,719 --> 00:35:06,520
Speaker 9: Well, just comment on our airline. You know, we're very prepared.

715
00:35:06,680 --> 00:35:11,000
Speaker 9: We you know, make sure that we schedule within what

716
00:35:11,040 --> 00:35:15,239
Speaker 9: the capabilities of our fleet and our staffing levels are,

717
00:35:15,280 --> 00:35:18,799
Speaker 9: and we feel very good about how we're positioned in

718
00:35:18,800 --> 00:35:23,640
Speaker 9: that regard. Our reliability has been very strong historically, and

719
00:35:23,680 --> 00:35:27,840
Speaker 9: particularly over the last couple of months as we've recovered

720
00:35:27,880 --> 00:35:33,319
Speaker 9: from some infrastructure challenges that played Tontolulu Airport earlier in

721
00:35:33,360 --> 00:35:36,360
Speaker 9: the year. We've been number one and on time performance

722
00:35:36,400 --> 00:35:39,880
Speaker 9: with a very low level of cancelations, and we expect

723
00:35:39,880 --> 00:35:41,560
Speaker 9: to execute well in the months ahead.

724
00:35:41,920 --> 00:35:44,640
Speaker 2: Peter, just thirty seconds, just remind us what's the timing

725
00:35:44,719 --> 00:35:46,640
Speaker 2: of this transactional last air.

726
00:35:48,719 --> 00:35:48,879
Speaker 7: Well.

727
00:35:49,160 --> 00:35:53,520
Speaker 9: The next step is for us to file a proxy

728
00:35:53,560 --> 00:35:57,000
Speaker 9: statement and complete our shareholder vote, which we expect to

729
00:35:57,040 --> 00:36:01,600
Speaker 9: happen in the first quarter of next year, and then

730
00:36:01,640 --> 00:36:05,520
Speaker 9: after that is really up to the regulatory process and

731
00:36:05,560 --> 00:36:09,279
Speaker 9: the Department of Justice to review. We'll be working on

732
00:36:10,200 --> 00:36:13,759
Speaker 9: filing the information with them and responding to whatever requests.

733
00:36:14,000 --> 00:36:18,000
Speaker 9: We think given the current regulatory environment in the country,

734
00:36:18,239 --> 00:36:21,719
Speaker 9: it could take twelve to eighteen months to complete the

735
00:36:21,880 --> 00:36:24,200
Speaker 9: entire process, but we think it could also go quicker

736
00:36:24,200 --> 00:36:24,440
Speaker 9: than that.

737
00:36:24,840 --> 00:36:26,640
Speaker 2: Peter, thank you so much. For joining us. We really

738
00:36:26,680 --> 00:36:29,320
Speaker 2: appreciate getting a few minutes of your time. Peter ingram

739
00:36:29,400 --> 00:36:32,719
Speaker 2: He is the see of Hawaiian Airlines, recently announced that

740
00:36:32,800 --> 00:36:38,400
Speaker 2: Alaska Airline will be acquiring the folks at Hawaiian Airline

741
00:36:38,400 --> 00:36:41,080
Speaker 2: and probably the highlight for Peter ingram As. He is

742
00:36:41,080 --> 00:36:44,040
Speaker 2: an NBA from Duke University's Fucal School of Business.

743
00:36:44,160 --> 00:36:47,680
Speaker 1: This is thanks for listening to the Bloomberg Markets podcast.

744
00:36:48,080 --> 00:36:51,280
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

745
00:36:51,400 --> 00:36:52,520
Speaker 1: or whatever.

746
00:36:52,200 --> 00:36:53,680
Speaker 5: Podcast platform you prefer.

747
00:36:54,080 --> 00:36:57,320
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller nineteen

748
00:36:57,400 --> 00:36:59,360
Speaker 1: seventy three and on bal Sweeney.

749
00:36:59,400 --> 00:37:02,160
Speaker 2: I'm on Twitter pt Sweeney Before the podcast. You can

750
00:37:02,239 --> 00:37:05,439
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