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Speaker 1: Air travel demand is sky high as we head into

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Speaker 1: the summer. Jet Blue is one of many airlines benefiting

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Speaker 1: from the travel spike. For more on the current air

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Speaker 1: travel landscape and what may be ahead, we sit down

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Speaker 1: for an interview with Jet Blue CEO Robin Hayes. He

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Speaker 1: speaks to Bloomberg's Guy Johnson from the sidelines of the

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Speaker 1: International Air Transport Association's Annual General Meeting in Istanbul.

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Speaker 2: Robin redhog demand. Is it sustainable beyond the summer?

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Speaker 3: Yes, things are really busy. We had a great Memorial

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Speaker 3: Day weekend, and Ford bookings for the summer look really

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Speaker 3: really strong.

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Speaker 2: After the summer. What about that?

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Speaker 3: It's early, and of course we're all sitting here wondering

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Speaker 3: if the other shoe is going to drop at some point.

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Speaker 3: But right now, summer looks good, and there's plenty of

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Speaker 3: time to see what four looks like.

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Speaker 2: The fact is trying to slow the economy down. The

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Speaker 2: economy is resisting at the moment, but at some point

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Speaker 2: do you see an effective higher rates?

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Speaker 3: I mean, I would have thought we might have seen

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Speaker 3: that already, but we haven't. You know, the job market

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Speaker 3: in the US is still really robust. Consumer spending, particularly

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Speaker 3: on categories like travel is good, So again we'll see

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Speaker 3: I mean, I think there is definitely a path here

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Speaker 3: for a soft landing rather than some of the sort

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Speaker 3: of stronger recessionary commentary that others have made.

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Speaker 2: Spoken like an aviation CEO, we have to be optimistic. Yeah,

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Speaker 2: soft landings are a good thing. Let's talk about what

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Speaker 2: might put consumers off. Last summer was difficult, There was

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Speaker 2: a lot of disruption. Are we going to see a

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Speaker 2: better summer this year?

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Speaker 3: Well, in the US, the airlines are fully staffed. I mean,

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Speaker 3: if we take Jet Blue for example, we are significant.

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Speaker 3: We have significantly more crew members than we did back

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Speaker 3: in twenty nineteen, so we're ready. The biggest challenge that

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Speaker 3: we face in the United States really is air traffic

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Speaker 3: controller staffing. We're based in New York, and the FAA

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Speaker 3: has said that air traffic controllers in New York are

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Speaker 3: down to fifty four percent of what they need, and

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Speaker 3: as a result of that, we've already had to cut flight.

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Speaker 3: So that is our main concern, and so we're working

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Speaker 3: very closely with the faas we go through the summer

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Speaker 3: to make sure we can get through it with as

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Speaker 3: few delays as possible.

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Speaker 2: So the President says that he feels that the US

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Speaker 2: passengers need need more protection. What you're saying is that

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Speaker 2: if the president wants to protect US passengers, he should

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Speaker 2: staff up at the FAA.

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Speaker 3: The number one thing that the government can focus on

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Speaker 3: for aviation is getting fully staffed air traffic control towers,

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Speaker 3: getting that technology upgraded and invested in. It's something that

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Speaker 3: we've been talking about four years. And by the way,

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Speaker 3: it's all also have a profound, really positive effect on

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Speaker 3: climate change. But we estimate that in the US, if

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Speaker 3: we can have a really efficient air traffic control system,

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Speaker 3: we can reduce emissions by seven to eight percent.

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Speaker 2: Okay, so that there are multiple advantages to doing that.

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Speaker 2: Why is it not happening? I would only have a

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Speaker 2: boss at the FAA, a permanent boss at the FAA

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Speaker 2: at the moment.

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Speaker 3: No, I mean, I think the staffing is is not you.

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Speaker 3: It's been going on for a number of years.

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Speaker 1: You know.

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Speaker 3: During COVID, the FAA did not train and so and

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Speaker 3: we did not train new controllers. We've had more controllers

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Speaker 3: take retirement, and so I'm really concerned. Others in the

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Speaker 3: aviation are really concerned. We have to act and we

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Speaker 3: have to act now to make these improvements.

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Speaker 2: That isn't the only challenge you have with the government

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Speaker 2: at the moments. A federal judge has asked you to

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Speaker 2: unwind your alliance, your Northeast alliance with American. Is it

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Speaker 2: going to come to that? American has said they're going

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Speaker 2: to appeal. You haven't indicated that you're going to yet,

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Speaker 2: are you what?

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Speaker 3: We haven't indicated yet. That's right, go something we're still

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Speaker 3: looking at, you know we are. We're going to focus

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Speaker 3: on what's the right thing for Jet Blue and we'll

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Speaker 3: have more news on that soon.

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Speaker 2: American to have said they're going to appeal, though you haven't,

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Speaker 2: does that imply that there is blue sky between you

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Speaker 2: and American?

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Speaker 3: Who? No, I mean, both of us are going to

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Speaker 3: make an independent decision. We will be looking at some

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Speaker 3: of the things that are the same and some things

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Speaker 3: that are maybe unique to each company. But we'll make

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Speaker 3: a decision very soon. Can you unpick it? How easy

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Speaker 3: would it be to unpick it? Customers have enjoyed a

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Speaker 3: lot more flight, so it could be very challenging to

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Speaker 3: unpick and that's something we're going to have to work

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Speaker 3: through as well.

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Speaker 2: Is there going to be a gravitational effect from this

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Speaker 2: transaction on the Spirit transaction. Do you think there is

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Speaker 2: a connection between the two.

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Speaker 3: No, I don't. I mean, we've said throughout that they're

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Speaker 3: both pro consumer, pro competition deals, but they're doing different things.

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Speaker 3: You know, Spirit is about making Jet Blue a more

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Speaker 3: national low fare challenger to the big four airlines. The

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Speaker 3: NEA was really about making Jet Blue bigger in the

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Speaker 3: northeastern Boston with In fact, Guy offered to divest all

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Speaker 3: of Spirit slots and we announced it an agreement with

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Speaker 3: Frontier last week to divest the LaGuardia slots if we

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Speaker 3: were successful. So no, I don't think there's a gravitational pull.

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Speaker 3: And we're looking each of the transactions set.

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Speaker 2: But the message that seems to be coming through is

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Speaker 2: the consolidation is done. No more consolidation. That is that

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Speaker 2: the correct correct way of reading this. No, not necessarily.

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Speaker 2: I mean, you've got four large airlines with twenty percent,

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Speaker 2: the rest of us have got twenty percent. At the

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Speaker 2: end of the day, it's about what's right for the consumer,

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Speaker 2: what's right about competition, And we feel really good about

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Speaker 2: making a case with our merger with Spirit that as

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Speaker 2: a result of that, American travelers are going to get

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Speaker 2: a better experience, better service, and overall we're going to

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Speaker 2: save them more money. But if you are going to grow,

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Speaker 2: looking at the landscape now, Spirit difficult, Northeastern Alliance difficult,

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Speaker 2: You're going to have to look elsewhere for growth. Where

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Speaker 2: does that growth come? And is it international?

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Speaker 3: Well, growth is very challenging right now. You've got lots

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Speaker 3: of airports that are constrained, you have legacy airlines sitting

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Speaker 3: on a lot of slots, you have supply chain delays

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Speaker 3: with aircraft. So it's not as easy as it used

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Speaker 3: to be to grow organically. And so you know, when

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Speaker 3: I go out and say does people want to see

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Speaker 3: a jet blue that is nearly one hundred percent bigger

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Speaker 3: in the next two or three years or do you

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Speaker 3: want to wait twenty years for that? Everyone's as I

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Speaker 3: want that now. And so that's what the Spirit Agreement,

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Speaker 3: the Spirit merger does.

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Speaker 2: But you are going to be it is going to

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Speaker 2: be a challenge to consolidate. So if you can't, where

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Speaker 2: are the opportunities that are left?

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Speaker 3: It's just going to take It's going to take a

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Speaker 3: lot longer. And you know, I think that are.

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Speaker 2: There more opportunities outside the United States, and there are.

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Speaker 3: But ultimately what happens is that the Big four just

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Speaker 3: get stronger because they have a lot of the access

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Speaker 3: to these airports, They have a lot of access to

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Speaker 3: the slots, and so yes, there's still some growth that

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Speaker 3: we can do, some growth that we will do, but

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Speaker 3: it's nowhere near as profound as it would be if

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Speaker 3: if we were permitted to buy spirit.

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Speaker 2: Do you have all the aircraft you want right now?

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Speaker 3: No, we are significantly behind a lot of delays. Unfortunately,

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Speaker 3: we're keeping older airplanes longer, but we haven't been able

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Speaker 3: to grow as much as we would like because of

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Speaker 3: significant both aircraft and engine constraints.

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Speaker 2: Would you be in sit in a stretch version of

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Speaker 2: an A two twenty.

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Speaker 3: I would love a stretch version of the A two twenty.

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Speaker 3: I think it's a great airplane. I think that's very

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Speaker 3: challenging and right now, and for Airbus and Pratt and Whitney,

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Speaker 3: you know, I think the priority is and should be

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Speaker 3: to focus on the platforms they've got today and catching

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Speaker 3: up with some of the delays that we've seen before

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Speaker 3: we start building stretch versions or other airplanes.

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Speaker 2: So stick stick to what they're doing right now.

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Speaker 3: Absolutely stick to what we're doing right now. Let's get

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Speaker 3: caught up, and then let's look at what other things

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Speaker 3: we can do in the future.

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Speaker 1: That's Jet Blue CEO Robin Hay speaking with Bloomberg's Guy

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Speaker 1: Johnson from the sidelines of the International Air Transport Association's

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Speaker 1: Annual General meeting in Istanbul. For more interviews like this,

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Speaker 1: subscribe to the Bloomberg Talks podcast, available on Apple, Spotify,

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Speaker 1: and anywhere else you get your podcasts.