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Speaker 1: Those are numbers I don't think I've ever seen, so
Speaker 1: I need to talk to professional about this. R J Gallows,
Speaker 1: Senior portfolio manager Federated Hermes Joins US. R J talked
Speaker 1: to us about this year today performance we've seen in
Speaker 1: the US corporate bond market really really noteworthy declines. Well,
Speaker 1: good morning. Noteworthy might be an understatement. Yeah, I think
Speaker 1: you me, most of your listeners have not seen this
Speaker 1: kind of performance in fixed income. You know, nine four
Speaker 1: used to be an infamous year for bond returns. This
Speaker 1: dwarfs that, um it. It spans across really all the
Speaker 1: major sectors of fixed income. Uh, you were mentioning, I
Speaker 1: believe the Bloomberg Investment Grade Corporate Index down thirteen point four.
Speaker 1: You know, overall the agg of which that's a component,
Speaker 1: it's down nine seven. Treasuries are down just about nine.
Speaker 1: Munies are also down comparable amount. Ten percent means a
Speaker 1: terrible month of May. By the way, I think that
Speaker 1: the key concern now from an asset manager standpoint is
Speaker 1: trying to call when do we hit some stability on
Speaker 1: rates number one UH and number two dealing with what
Speaker 1: has been and outside redemptions as investors are sort of
Speaker 1: fleeing the losses they've already taken. And I highlight that
Speaker 1: just because they've already taken these losses, we are probably
Speaker 1: closer to the end of the sell off them. We
Speaker 1: are at the beginning for sure. When you consider that
Speaker 1: the treasury yields have risen, you know, all across the
Speaker 1: curve hundred fifty almost hundred eighty basis points UM. We
Speaker 1: still are short. We think there's another like to go
Speaker 1: up and yield, but the worst blosses that we've sustained
Speaker 1: are already probably behind us UM, and we're getting a
Speaker 1: little bit more optimistic as we start to look forward
Speaker 1: at this point. First of all, shout out to the
Speaker 1: i n GO function on the Bloomberg Journal. I end
Speaker 1: go is so helpful when talking fixed income. It just
Speaker 1: shows you all the indexes um that you can get.
Speaker 1: Thank you another well, R. J. Just rattled them all
Speaker 1: off as well. Um Uh. There was a great story
Speaker 1: r J by Liz Cappel McCormick and Alice Gledhill. Bonds
Speaker 1: suddenly looked like a smart hedge again. Um is the headline,
Speaker 1: and you're saying you expect another leg up in yields.
Speaker 1: But in a way, I find this so exciting because
Speaker 1: you know, for so long in my adult life, UM,
Speaker 1: I couldn't get that much yield from bonds, and now
Speaker 1: I'm starting to see levels that I would be comfortable with.
Speaker 1: You know, I'm perfectly happy buying UH bond with a
Speaker 1: five coupon. I mean, that sounds great to me right now.
Speaker 1: It's a great point. For much of the last ten years,
Speaker 1: which in a sense we're book ended by the global
Speaker 1: financial crisis and the pandemic, we had extraordinary economic shocks
Speaker 1: that were met with extraordinary monetary policy measures that drove
Speaker 1: yields down and caused price for short and intermedium periods
Speaker 1: of time to be your source of return. Uh. The
Speaker 1: direct implication of that is that yields got very low uh,
Speaker 1: and and they muted the perspective long term return and
Speaker 1: fixed income. As a result of the measures that were
Speaker 1: put in place by the central bank facing the economic
Speaker 1: crisis that I just mentioned. At this point, you know,
Speaker 1: fortunately the economy is growing. There are many challenges globally,
Speaker 1: and uh, the inflation story is a very very troubling
Speaker 1: one to fixed income returns. But now the bonds have
Speaker 1: repriced higher and yield to incorporate the very hawk ash
Speaker 1: central bank. Uh, we were getting closer to a period
Speaker 1: where there might be some symmetry and returns again. You
Speaker 1: get some income that historically has always boosted your fixed
Speaker 1: income total return income as a component of your return
Speaker 1: after all, um, and going forward, I think that the
Speaker 1: fact that we've seen bonds start to behave somewhat more
Speaker 1: normally where on a risk off day stocks are down, uh,
Speaker 1: bonds can actually be up again. For a while, They're
Speaker 1: everything was falling, which was a very adversarial investment climate
Speaker 1: for traditional diversification, you know, diversified bonds of the stocks.
Speaker 1: It wasn't working. You know, sixty portfolios weren't working. Um.
Speaker 1: So now that you've reset yields sharply higher, you're getting
Speaker 1: that income cushion, You're getting better perspective prospective returns. Excuse me,
Speaker 1: I would argue we still think that the tenure Treasury
Speaker 1: is going to end a good bit above three UH
Speaker 1: in this calendar year. UM. You know, right now you've
Speaker 1: had a bit of a retracement lower. By the way,
Speaker 1: what does that mean, r J, What does that mean
Speaker 1: for what's the spread usually like to UM investment grade corporate? Well,
Speaker 1: I g um. You know, we've actually recently gone more
Speaker 1: cautious on I g um investment grade even though the
Speaker 1: economy is pretty good. You know, the sad fact of
Speaker 1: the matter is, but the inflation being so hot and
Speaker 1: the FED having to be so hawkish, the prospects of
Speaker 1: recession UM in you know, next year or UH certainly
Speaker 1: have grown. UH. I think that what the volatility or
Speaker 1: the underperformance is probably a better way of saying it,
Speaker 1: that we've seen now in investment grade corporates are starting
Speaker 1: to price in that that sort of shift in the
Speaker 1: fundamental macro outlook. For a while there, we were recovering
Speaker 1: from the depths of the pandemic economic shock. The FED
Speaker 1: was pouring on its demand for bonds. You know, investment
Speaker 1: grade corporates had a really nice total rate of return UH,
Speaker 1: And now we're living to the flip side of that point.
Speaker 1: If you look at the last five years the OS
Speaker 1: on the Bloomberg Corporate Index, and when we were talking
Speaker 1: about down thirteen percent year today, you know, the five
Speaker 1: year averages around one fifteen UH. Currently as a Friday's close,
Speaker 1: it's now at a one UH and the spread has
Speaker 1: been widening quite a bit really for much of the year. UM.
Speaker 1: We still think that that could get a little higher
Speaker 1: as we price in the risk of procession UH and
Speaker 1: as rates continue to drive somewhat higher and cause flows out.
Speaker 1: All right, r J, thank you so much. We appreciate r. J. Gallas,
Speaker 1: Senior portfolio Manager, Federated at Hermes. What we've all become
Speaker 1: a fairly smart at during this pandemic is this whole
Speaker 1: concept of the global supply chain and logistics and all
Speaker 1: that stuff, because boy, every company out there blames the
Speaker 1: supply chain one way or another during this pandemic for UH.
Speaker 1: You know, some challenges out there, and there's no better
Speaker 1: place to get the latest UH than with Gene Shiroka,
Speaker 1: Executive director of the Port of Los Angeles wife, because
Speaker 1: the Port of Los Angeles is the busiest container port
Speaker 1: in North America. Gene, thanks so much for joining us
Speaker 1: once again. We'd love to get an update, and let's
Speaker 1: just start with your port. Give us a sense of
Speaker 1: how many ships are waiting to get into your port
Speaker 1: now versus maybe six months ago. UM, maybe some other
Speaker 1: metrics that you look at in terms of getting stuff
Speaker 1: out of your port and into the economy. Gives us
Speaker 1: just an update. Good morning, man and pauled a couple
Speaker 1: of things. First number one, first quarter busiest on record
Speaker 1: at the Port of Los Angeles. Month of April, second
Speaker 1: busiest April in our hundred and fifteen year history. The
Speaker 1: number of ships is about thirty right now waiting outside
Speaker 1: the one and fifty mile marker on their way into
Speaker 1: the ports of Long Beach in Los Angeles. That's down
Speaker 1: from a hundred and nine vessels on the ninth of January.
Speaker 1: We continue to work that backlog and have record throughput
Speaker 1: at the port. The most interesting number to me is
Speaker 1: two hundred thousand, and that's the number of containers on
Speaker 1: a rolling thirty day average we're pushing out of the
Speaker 1: port to the interior of the country. That's at about
Speaker 1: recorded highs right now. We've got to keep pushing that
Speaker 1: efficiency and getting the cargo into the domestic economy. So
Speaker 1: you're doing more than ever and demand is still probably
Speaker 1: stronger than supply, and you know logistics terms, And I
Speaker 1: wonder about the morale of the industry, Gene, because you know,
Speaker 1: as Paul pointed out, we all now know more about
Speaker 1: the supply chain, more about logistics, and more about just
Speaker 1: how important it is for the American economy and for
Speaker 1: the global economy. Do you think that, you know, people
Speaker 1: working in this industry feel a lot more respect, you know,
Speaker 1: a lot more pride to what they're doing. Well. I
Speaker 1: think across the board there's been a spotlight shined on
Speaker 1: this industry and it can never be too bright for us.
Speaker 1: You've got dock workers who have been averaging six days
Speaker 1: a week on the job since the pandemic began, chassis providers,
Speaker 1: liner shipping companies, marine terminal operators working around the clock
Speaker 1: as well, with this deluge of cargo coming in and
Speaker 1: no shortage of areas that need to be fixed, improved
Speaker 1: or smoothed out to help this portion of the supply chain. Remember,
Speaker 1: the American economy is seventy you and me buying goods,
Speaker 1: and we haven't shown any reason to stop just yet.
Speaker 1: Jane talked to us about what you're seeing in China.
Speaker 1: You know, there's reports of various levels of shutting down, reopening,
Speaker 1: and how does that manifest itself into kind of what
Speaker 1: you're seeing in terms of exports. Well, a lot has
Speaker 1: been written on this, but so far we've seen the
Speaker 1: number of ships leaving Asia and Central China at about
Speaker 1: the levels that we had anticipated. No real slow down
Speaker 1: because of the lockdowns in Shanghai. And I'll give you
Speaker 1: a couple of reasons. One, I had work there in
Speaker 1: the early part of the two thousands for a number
Speaker 1: of years. Keep up my contacts on the ground and
Speaker 1: those relationships. I'm talking to these folks every night. We're
Speaker 1: seeing very good productivity out of the Young Shaan Deep
Speaker 1: Seaport in Shanghai. And for those manufacturers who are based
Speaker 1: west of town, the Hong Chow area, Hung Joe, Su Joe,
Speaker 1: even into Junk sup province locations like Nanjing. They're almost
Speaker 1: equidistant between the port of Shanghai and the port of Ningbo.
Speaker 1: Ningbo over these last eight weeks, that's how long the
Speaker 1: lockdown has been in effect. Is up about picking up
Speaker 1: the slack where transport companies can't navigate in their normal lanes.
Speaker 1: So we're seeing about the amount of cargo that we
Speaker 1: did before the lockdowns went into effect. No precipitates, no
Speaker 1: precipitous drop off at some had a pint early on.
Speaker 1: What about the US restraints that UM we've been seeing
Speaker 1: over the past year, for example, labor constraints, how how
Speaker 1: have those UH faired UM going into the second quarter.
Speaker 1: Three segments of labor, as we've talked about guys. One,
Speaker 1: the dock workers, they're out there six days a week,
Speaker 1: full employment of the fifteen thousand women and men that
Speaker 1: have been on the job for the past two years,
Speaker 1: with this heightened volume coming through. Second, of the truck drivers.
Speaker 1: And as we've said, I don't know that we've got
Speaker 1: a shortage of drivers because the state of California has
Speaker 1: issued more than six and forty thousand commercial drivers licenses,
Speaker 1: and of the nine thousand port dra age drivers that
Speaker 1: called the port at least once a week, we could
Speaker 1: probably use a few more, but they've gone into other sectors,
Speaker 1: whether it's parcel delivery, working in other segments of the
Speaker 1: transportation network. What we have right now, though, guys, and
Speaker 1: the thing that I look at, most fifty three percent
Speaker 1: of our truck gates go unused every day. We've got
Speaker 1: latent capacity to haul more containers out. We've got to
Speaker 1: take advantage of that. The third segment is the warehouse
Speaker 1: US workers. With two billion square feet of warehousing under
Speaker 1: roof from the Pacific Ocean to the desert region of
Speaker 1: southern California, there's still about ten thousand job openings for
Speaker 1: the folks that handle all this product, and with less
Speaker 1: than one percent vacancy rate, that warehousing complex needs considered attention. Hey, Jean,
Speaker 1: A lot of folks, just you know, economists in general
Speaker 1: have been saying, what this supply chain issue that we've
Speaker 1: all been experiencing over the past couple year is, what
Speaker 1: it may suggest is we need to maybe rethink this
Speaker 1: global just in time inventory strategy. Any customers that you
Speaker 1: talked to, uh, say that they're reevaluating that or maybe
Speaker 1: trying to tweak it going forward. Yes, and a number
Speaker 1: of conversations taking place. A lot of folks what we've
Speaker 1: witnessed over the past couple of years have been ordering
Speaker 1: just in case, not just in time. They didn't want
Speaker 1: to be known as the paper goods company of two.
Speaker 1: So we see a lot of product flowing through quarter two,
Speaker 1: as I've shared with your audience before, or was designated
Speaker 1: to be the inventory replenishment time period. This is normally
Speaker 1: our slack season, so folks wanted to build up those
Speaker 1: safety stocks. The inventory sales ratio nationwide had been as
Speaker 1: low as two thousand eleven. A lot of focus on that,
Speaker 1: and then thirdly, trying to segment these products from the
Speaker 1: parts and components which make up twenty percent of our
Speaker 1: imports that need to get the factory floors, goods that
Speaker 1: need to get out in the market versus those that
Speaker 1: can continue this inventory replenishment are the segments that we've
Speaker 1: got to monitor very closely now and push them into
Speaker 1: the market place on the time basis that are needed. Gene,
Speaker 1: always great to get your insight. Thanks so much for
Speaker 1: joining us today. Jean Siroka there is the executive director
Speaker 1: at the Port of Los Angeles, North America's busiest container report. Boy,
Speaker 1: we know from past experience that lockdowns are not good
Speaker 1: for economic activity, and just take a look at some
Speaker 1: of the recent data out of China. Industrial output unexpectedly
Speaker 1: felt two point nine percent in April from a year ago,
Speaker 1: while retail sales contracted eleven point one percent. In the period.
Speaker 1: That's weaker than it projected six point six percent and drop.
Speaker 1: Let's get to the bottom of this and see what
Speaker 1: is really going on underneath the numbers in China. Chia
Speaker 1: Kazi joins US managing director China Basebook International ches tough
Speaker 1: numbers coming out of China. UM, give us your lay
Speaker 1: of the land about the Chinese economy. Yeah, thanks for
Speaker 1: having me on look over night. Numbers were incredibly disappointing,
Speaker 1: But if you're watching China closely the way we are,
Speaker 1: this should have come as no surprise whatsoever. When we
Speaker 1: put out our note in April based on our brand
Speaker 1: new numbers, the sentence up top red these are the
Speaker 1: worst economic data out of China that we've seen since
Speaker 1: the initial COVID downturn. At that point, every major sector
Speaker 1: was hurting, Every major economic indicator was turning down UM,
Speaker 1: and it was becoming very clear that the pain that
Speaker 1: began in March at the beginning of the lockdowns had
Speaker 1: made its way into April. Has lockdowns got more severe.
Speaker 1: Businesses were starting to pause activity, and consumers were being
Speaker 1: forced to stay home. Why is she UM sticking to this? Um?
Speaker 1: You know, even amidst pushbacks I mean, it's clear what
Speaker 1: this does to the economy, and I'm not sure how
Speaker 1: it works out for the health of the nation after Yeah,
Speaker 1: that's right. Look, I mean, right now, the problem that
Speaker 1: the that that she and others are facing is that
Speaker 1: they don't have access to vaccines that with high efficacy rates.
Speaker 1: They have a real problem getting their adult senior citizens,
Speaker 1: serious citizens vaccinated. Their health infrastructure cannot simply handle if
Speaker 1: they were to see the type of outbreaks and and
Speaker 1: and and cases the way that we saw them here
Speaker 1: in the United States, specifically how we suffered here in
Speaker 1: New York a couple of years ago. So, uh, if
Speaker 1: that were to happen, I think you would see just
Speaker 1: a breakdown of the health care system there, and he
Speaker 1: would also see the white uh you know, divide between
Speaker 1: the half and the have not take place. It would
Speaker 1: be pretty brutal. I think avoiding that as priority number one,
Speaker 1: if it means taking a hit to the economy right now,
Speaker 1: then that's clearly a cost of the party is willing
Speaker 1: to suffer, despite the fact that they keeps saying that
Speaker 1: maintaining solid economic momentum is a priority of theirs this year,
Speaker 1: She's give us a just an update on kind of
Speaker 1: where the discussions are or are not between maybe some
Speaker 1: of the Western pharmaceutical companies and the Chinese government about
Speaker 1: maybe getting some higher, uh some better vaccines into the country.
Speaker 1: But we've heard some stuff about you know, Fizer Pills,
Speaker 1: et cetera getting approval. There's a domestic MR and a
Speaker 1: vaccine that has now gotten approval. But even if this
Speaker 1: stuff were to happen today, uh, this the rollout would
Speaker 1: not take place uh for for months and months to come.
Speaker 1: You know, we can safely say that as far as
Speaker 1: zero COVID is concerned, which by the way, it's a
Speaker 1: lot more flexible today than it used to be back
Speaker 1: a couple of years ago. But even in its current form,
Speaker 1: it's going anywhere before the Party Congress. It is an
Speaker 1: all important time. That is where all eyes are when
Speaker 1: when President she gets his third term, um and so.
Speaker 1: And just continue to assume as if you're an investor
Speaker 1: that these types of lockdowns uh and and especially the
Speaker 1: reversion back to lockdown, even if there is some opening up,
Speaker 1: is going to be part for the course of the
Speaker 1: rest of this year, probably getting into early next year.
Speaker 1: What do you think we should the market should be
Speaker 1: thinking about when this Party Congress convenes later in the year,
Speaker 1: what what do you expect to come out of this
Speaker 1: the look I mean politically speaking, I don't buy some
Speaker 1: of the noise sets out there about opposition to the
Speaker 1: too too she and and so forth. I think that
Speaker 1: it seems quite likely that that their term is very
Speaker 1: much guaranteed. The real question is what happens in the
Speaker 1: applemath of that, what moves are done around the Party
Speaker 1: Congress is stabilized. Big stimulus is not happening in China.
Speaker 1: We know this. It's clear and Shana age data, it's
Speaker 1: clear and official numbers. What amounts of fiscal stimulus perhaps
Speaker 1: takes place in the second half of the year to
Speaker 1: help energize the economy. Does the you know, do they
Speaker 1: move a little to do the ease up on the
Speaker 1: property market? Is a property market? Get it some additional
Speaker 1: breathing room, Um, that's possible. What's the nature of the
Speaker 1: tech wrapdowns? Are they done for good? Highly doubted? What
Speaker 1: form do they take next? So I think continuity of
Speaker 1: policy is going to be there. We just have to
Speaker 1: watch it very very closely on the ground. How is
Speaker 1: it being implemented rather than just coming up with theories,
Speaker 1: as sometimes China watchers often do. Alright, great great stuff
Speaker 1: was really taught me to get you on the phone.
Speaker 1: Cha Kazi, managing director, trying to bage book Internet for
Speaker 1: getting the latest from continuing challenging economic ayor coming out
Speaker 1: of trying to amid the lockdown. Fascinating news going on.
Speaker 1: One of the coolest stories is the Jet Blue hostile
Speaker 1: takeover for Spirit. And it's not just uh, the US
Speaker 1: airlines that I find interesting because we had an interview
Speaker 1: with Michael O'Leary Ryan their earlier UM and he was
Speaker 1: also saying, like, you know what, there's going to be
Speaker 1: a recession. People are going to go towards the lowest
Speaker 1: costs and that's us. UM. That's that's at least his
Speaker 1: bet there. And I'm not sure exactly what's going on
Speaker 1: with yet Blue and Spirit, but Bloomberg News reporter Mary
Speaker 1: Schlangenstein is going to tell us exactly what's going on.
Speaker 1: Mary joined Bloomberg News in right and and she and Mary,
Speaker 1: since you're in Dallas, I'm gonna guess your name isn't
Speaker 1: pronounced Schlangenstein. But since I just came back from Berlin
Speaker 1: for me, that's what it is right right, Yeah, that's
Speaker 1: that's not how we pronounced it here in the US,
Speaker 1: but you're right on the German pronouncing. How So how
Speaker 1: what do we say? What do you say when you're
Speaker 1: introducing yourself? I wasn't that far off. Um. In any case,
Speaker 1: that's not what we brought you on to talk about. Mary.
Speaker 1: What's the deal with this Jet Blue offer? I mean,
Speaker 1: is this kind of um, you know, we better get
Speaker 1: this asset before somebody else does kind of deal. Well,
Speaker 1: I think that's part of it, because you know, for many,
Speaker 1: many years, Jet Blue has tried to grow and they've
Speaker 1: always said they want to grow organically, but they lost
Speaker 1: out several years back when they tried to buy Virgin
Speaker 1: America that ended up being acquired by Alaska. So now
Speaker 1: when Frontier came out and made an offer for Spirit,
Speaker 1: jet Blue looks at that and says, you know, this
Speaker 1: may be one of our last chances to really have
Speaker 1: a turbo charge to our growth, so we're gonna go
Speaker 1: for it. Um. They were spurned by the Spirit Airlines
Speaker 1: board and so now they're making this hostile bid, uh
Speaker 1: to get Spirit to take a closer look at all
Speaker 1: the details of their offer. So do we have any sense, Mary,
Speaker 1: is there any regulatory challenges to either of these acquires,
Speaker 1: jet Blue or Frontier. Does anybody have an upper hand
Speaker 1: supper regulatory perspective? Well, right now, the Jet Blue, I
Speaker 1: mean the Spirit Frontier merger proposals getting some review from
Speaker 1: regulators because they've already asked for more information. Um, so
Speaker 1: they are. That's already happening. But Jet Blue would have
Speaker 1: to go under the same scrutiny. If it reaches an
Speaker 1: agreement to merge with Spirit or to take over Spirit,
Speaker 1: then that would go have to go through a regulatory review,
Speaker 1: and there has come some concern that's one of the
Speaker 1: big issues that Spirit raised and rejecting rejecting jet Blue
Speaker 1: would say, look, we don't think that this deal has
Speaker 1: a good chance of being consummated, and because we don't
Speaker 1: think that, we're not even going to look at your offer,
Speaker 1: you know, we're not going to evaluate the financial side
Speaker 1: of it or anything like that because we don't think
Speaker 1: it can be done. And of course Jet Blue is
Speaker 1: arguing against that. Mary, I have indeed just moved back
Speaker 1: from six years living in Germany, and one of the
Speaker 1: coolest things about living in Europe is you can travel everywhere,
Speaker 1: and you do because it's just so cheap. I mean,
Speaker 1: you go from one end to the continent to the
Speaker 1: other and you can do it for less than a
Speaker 1: hundred bucks round trip um pretty much guaranteed all the time,
Speaker 1: not just like once in a while when there's a sale.
Speaker 1: Is there any chance of that kind of super low
Speaker 1: cost model coming to the US? What? What's what's the
Speaker 1: differentiator of you? If you did see Frontier and Spirit combined,
Speaker 1: they are the two largest ultra discounters already. Those are
Speaker 1: the people that charge you a very low fair price,
Speaker 1: but then they charge you for everything else, Like if
Speaker 1: you want to print your boarding path, if you want
Speaker 1: to get a bottle of water on board, they charge
Speaker 1: you for every We call that nickel and diming. Yeah,
Speaker 1: that's a lot of people do call it Nicolin diming um.
Speaker 1: And so this would make them a very large airline, um,
Speaker 1: you know. And and there's the expectation that there would
Speaker 1: be lots of growth beyond that, simply because the resurgence
Speaker 1: and travel post pandemic has primarily been domestic leisure and
Speaker 1: and people really don't see that slowing down anytime soon.
Speaker 1: So you know, they would have the ability to grow
Speaker 1: likely quite a bit in the future, and they would
Speaker 1: be the largest carrier in that space. But do we
Speaker 1: I mean, there's no Jet, there's no easy Jet over here,
Speaker 1: there's no Ryanair, there's no whizz Air. Is that just um,
Speaker 1: you know, lobbying by Delta and United, UM and the
Speaker 1: US Congress keeping that kind of competition out of this market. Well,
Speaker 1: you've got you've got Spirit, You've got Frontier, you've got Allegiance,
Speaker 1: you have the New Breeze, you have the New Develope.
Speaker 1: Those are all in that category of the discounters where
Speaker 1: they're they're trying to win your business by really cutting
Speaker 1: their fairs. The issue is none of those guys have
Speaker 1: international operations, so they have very small near international like
Speaker 1: to the Caribbean or down into Mexico. So they aren't
Speaker 1: ever going to have the scale of a United or
Speaker 1: an American Airlines or Delta Airlines or even the Southwest
Speaker 1: Airlines which has some international operations as well. UM. So
Speaker 1: I don't think you're gonna see, you know, any of
Speaker 1: those big carriers face a big threat in terms of
Speaker 1: network dominance. But there are we are seeing more and
Speaker 1: more people you know, into the industry with this lower
Speaker 1: cost model, uh marriage about thirty seconds. How do you
Speaker 1: think Frontier response to this jet Blue in hostile Um, Well,
Speaker 1: we will see a response from Frontier. I don't think
Speaker 1: we'll see a response from Spirit. Um. I think what
Speaker 1: you are likely to see a spirit will come out
Speaker 1: and say we're standing by our agreement with Jet Blue.
Speaker 1: I mean, I'm sorry, we're standing by with Frontier. But
Speaker 1: they may say will reconsider jet Blue, or they may
Speaker 1: either offer or their decision and not do anything. All right, good,
Speaker 1: good stuff, Thanks for taking time, Mary, really appreciate that.
Speaker 1: Mary Schlangenstein Airlines reporter for Bloomberg News and assistant Scout
Speaker 1: master for the Boy Scouts of America, which is huge
Speaker 1: for me because I was the Scout master for some
Speaker 1: of New really many years back in the day. Cool. Yeah,
Speaker 1: that's good stuff. Now. I always I always admire people.
Speaker 1: I think I put them on a pedestal if they
Speaker 1: made to the Eagle Scouts. Oh yeah, I feel like
Speaker 1: that's a huge achievement. We have a certain someone here
Speaker 1: at Bloomberg that was Eagle Scout. Yeah, Michael R. Bloomberg.
Speaker 1: Really that shouldn't come as any He's an achiever, of course,
Speaker 1: of course, Michael Bloomberg, the owner of this Bloomberg radio
Speaker 1: and TV situation here and chairman founder Bloomberg LP. Thanks
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
Speaker 1: Matt Miller three. On False Sweeney, I'm on Twitter at
Speaker 1: pt Sweeney before the podcast. You can always catch us
Speaker 1: worldwide at Bloomberg Radio