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Speaker 1: Good morning.

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Speaker 2: I'm Brian Curtiz and I'm Doug Krisner. Here are the

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Speaker 2: stories we're following today.

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Speaker 1: The United Airlines says it has found loose bolts in

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Speaker 1: multiple Boeing seven thirty seven Max nine jets during inspections.

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Speaker 1: This comes in the wake of a door plug getting

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Speaker 1: blown out of an Alaska Airlines plane over the weekend.

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Speaker 1: As a result, US aviation safety regulators grounded and ordered

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Speaker 1: inspections on some one hundred and seventy one Max nine jets. Today,

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Speaker 1: Boeing issued guidelines to airlines on how to conduct these inspections.

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Speaker 1: It's an initial step that is required before the US

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Speaker 1: Federal Aviation Administration could approve a return to flight for

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Speaker 1: the planes. Boeing shares, by the way, closed down eight

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Speaker 1: percent in New York. They are a little changed in

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Speaker 1: after hours, which is interesting because it came after we

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Speaker 1: heard as comments from United Airlines. But that eight percent

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Speaker 1: dropping the stock is the biggest decline we've seen in

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Speaker 1: Boeing since October of twenty twenty two.

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Speaker 2: Will the CEO of Jet Blue Airways, Robin Hayes, He's

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Speaker 2: going to be stepping down next month. We are told

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Speaker 2: his decision came at the urging of his doctor, although

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Speaker 2: no specific health issue is involved. Here's more from Bloomberg's

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Speaker 2: Charlie Pellett. The company says Hayes will be replaced on

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Speaker 2: February twelfth by Joanna Garrity, a nearly twenty year Jet

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Speaker 2: Blue veteran who is currently serving as president. The fifty

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Speaker 2: seven year old Hayes has been CEO since February of

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Speaker 2: twenty fifteen, and Jet Blue shares have declined by about

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Speaker 2: two thirds since then. The transition comes at a critical

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Speaker 2: time for Jet Blue, as it awaits a federal judge's

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Speaker 2: ruling on whether it's pending three point eight billion dollar

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Speaker 2: takeover of Spirit Airlines violates antitrust laws and should be

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Speaker 2: blocked in New York Charlie Pellett.

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Speaker 1: Bloomberg Radio shares closed at a record an up six

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Speaker 1: point four percent in the latest session after the company

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Speaker 1: unveiled three new desktop graphics chips. These extra components will

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Speaker 1: let gamers, designers, and others computer makers and users get

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Speaker 1: better use of AI in their personal machines. We heard

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Speaker 1: earlier from Bloomberg Z and King.

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Speaker 3: AI has been an enormous benefit for this company already.

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Speaker 3: It's proved materially that this is real, that this is

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Speaker 3: about actual sales and actual deployment. Again in video comes

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Speaker 3: out here and says, hey, don't forget about us. This AIPC,

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Speaker 3: that Intel, that AMD has been talking about. We can

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Speaker 3: do this too, and actually we think we're better than IAS.

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Speaker 3: So again that's likely to press the right kind of

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Speaker 3: button with investors and with saying that reaction.

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Speaker 1: Bloomberg Z and King separately in video said the capabilities

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Speaker 1: of its new products will not trigger rules put in

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Speaker 1: place by the US government to limit the export of

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Speaker 1: AI related chips to China. And again and video shares

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Speaker 1: a very good session of six point four percent.

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Speaker 2: We go to China next, where the central Bank is

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Speaker 2: hinting at further monetary easing with a possible cut in

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Speaker 2: banks reserve ratios. The story from Bloomberg zivon men in

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Speaker 2: Hong Kong.

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Speaker 4: The PBOC may use a sortied monetary policy tools to

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Speaker 4: provide more support. The central Bank's head of monetary Policy,

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Speaker 4: Joe Lahn, said these tools include money market operations, medium

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Speaker 4: term lending facilities, and reserve requirements. The comments come after

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Speaker 4: the Central Bank already provided a massive amount of liquidity

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Speaker 4: in recent weeks. Back in July, Zoe made similar comments

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Speaker 4: in public before the Central Bank made a triple r

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Speaker 4: cut in September. Much of this may already be priced

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Speaker 4: into markets. Last month, economists pulled by Bloomberg forecast a

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Speaker 4: twenty five basis point cut in the first quarter of

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Speaker 4: this year. In Hong Kong I'm Yvon Mann Bloomberg Radio.

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Speaker 1: Meantime, Chinese President Shijin Ping is pledging to deepen the

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Speaker 1: country's crackdown on corruption. Bloomberg's Juan Wong has that story.

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Speaker 2: From Hong Kong.

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Speaker 5: President, she said he would increase punishment for people who

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Speaker 5: offer bribes. CCTV says she urged tighter monitoring to prevent

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Speaker 5: the spread of graft to news sectors. He highlighted finance, energy,

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Speaker 5: infrat structure, pharmaceutical and state owned firms as the main

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Speaker 5: areas of focus. She has repeatedly foiled a zero tolerance

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Speaker 5: on corruption since he took office in twenty twelve. Just

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Speaker 5: last year, China investigated a number of high profile bankers.

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Speaker 5: These include former Bank of China chairman Liul Janga and

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Speaker 5: former China Development Bank Vice president Jo ching Yu. In

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Speaker 5: Hong Kong, joined Wan Bloomberg Radio.

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Speaker 2: Sony is planning to call off the ten billion dollar

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Speaker 2: merger agreement of its Indian unit with Z Entertainment. We

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Speaker 2: are told it's due to a standoff over leadership. Seems

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Speaker 2: as though there were questions surrounding whether Z CEO punit Goenca,

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Speaker 2: who is also incidentally the founder's son, would lead this

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Speaker 2: new merged entity. Back in twenty twenty one, in agreement

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Speaker 2: was signed for go Inca to lead the new company. However,

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Speaker 2: Sony no longer wants him to be in the role.

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Speaker 2: Sony seems to be a little wary about a regulatory

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Speaker 2: probe against him, and now Sony is working on sending

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Speaker 2: a termination Noticed by January twentieth for World.

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Speaker 1: News, Donald Trump is looking to have one of his

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Speaker 1: court cases thrown out. We get more on this from

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Speaker 1: Bloomberg's Dan Schwartzman, Dan, that's correct, Brian.

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Speaker 6: In a filing today in Atlanta, Georgia, Trump has asked

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Speaker 6: a judge to throughout the state's criminal case against him.

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Speaker 6: The former president has been accused of leading a conspiracy

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Speaker 6: to overturn the twenty twenty election. Now, Trump argues he

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Speaker 6: should be immune from prosecution due to having been acquitted

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Speaker 6: by the Senate after being impeached for the same conduct.

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Speaker 6: Trump will also use the same argument on Tuesday during

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Speaker 6: an appeals court hearing in Washington after a district judge

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Speaker 6: struck down his immunity defense. President Biden speaking in Charleston,

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Speaker 6: South Carolina, today as he tries to make his case

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Speaker 6: to black voters as to why they should support him

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Speaker 6: like they did in twenty twenty. The president's favorability amongst

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Speaker 6: black voters felt to sixty one percent in December. That's

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Speaker 6: down seven percent from October. Donald Trump holding steady a

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Speaker 6: twenty five percent. Biden was interrupted by pro Palestinian protesters

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Speaker 6: during his speech. He says he's working to get Israel

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Speaker 6: out of Gaza.

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Speaker 7: I understand their passion, and I've been quietly working. I've

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Speaker 7: been quietly working with the Israeli government to get them

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Speaker 7: to reduce and significantly get out from Gaza. I'm using

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Speaker 7: all I can to do.

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Speaker 6: As President Biden speaking in South Carolina. Secretary of State

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Speaker 6: Anthony Blincoln continuing his fourth tour the Middle East since

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Speaker 6: Hamas's October seventh attack on Israel with a meeting with

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Speaker 6: Saudi Arabia's Crown Prince Mohammed bin Salman. Blincoln is attempting

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Speaker 6: to calm the region while also urging Israel to do

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Speaker 6: more to protect civilians in Gaza. The Secretary also took

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Speaker 6: the time to warn the Iranian Baktruthy militants that there

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Speaker 6: will be consequences for attacking commercial ships in the Red Sea.

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Speaker 6: Hes BLA says that a senior commander we sum Taweel

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Speaker 6: was killed in an Israeli airstrike on a car in

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Speaker 6: southern Lebanon. The terror organization and Israel have been trading

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Speaker 6: fire daily since Hamasa's attack on Israel. Senior Israeli officials

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Speaker 6: have warned that they are prepared to militarily moves law

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Speaker 6: from the northern border if a diplomatic solution is not achieved,

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Speaker 6: with time for a resolution running out. The first US

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Speaker 6: moon landing in fifty years seemingly is doomed, as the

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Speaker 6: Pittsburgh based Astrobotic Technology says the spacecraft developed a quote

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Speaker 6: critical fuel leak hours after takeoff. The company says they

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Speaker 6: had managed to point the lander toward the sun to

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Speaker 6: allow for the solar panel to collect enough sunlight to

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Speaker 6: charge its battery. While determining the next steps Astrobotic is

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Speaker 6: aiming to be the first private company to land on

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Speaker 6: the Moon, with NASA having giving them and a Houston

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Speaker 6: based company millions of dollars to build and fly lunar landers.

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Speaker 6: The second company is scheduled to make an attempt on

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Speaker 6: the Moon next month. Global News twenty four hours a

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Speaker 6: day and whenever you want it with Bloomberg News Now.

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Speaker 6: I'm Dan Schwarzman, and this is Bloomberg.

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Speaker 1: I'm Brand Curtis in Hong Kong. This is Bloomberg Daybreak, Gajia.

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Speaker 1: Paul Allen joins us now from Sydney, and our guest

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Speaker 1: is George Ferguson, Bloomberg Intelligence senior Aerospace and Airlines analyst,

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Speaker 1: to look closer at this Boeing story in all the latest,

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Speaker 1: so George, this latest disclosure by United Airlines would seem

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Speaker 1: to be quite troubling as it involves multiple jets being

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Speaker 1: affected by this, although the testing apparently was confined to

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Speaker 1: the Max Dash nine jets. And we'll get into maybe

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Speaker 1: later whether or not this could spread, but in the

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Speaker 1: short term, could this set back hopes now that the

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Speaker 1: FAA might clear these planes anytime soon?

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Speaker 8: You know, first, thanks for having me on. I just

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Speaker 8: think that I think given the problems with the Alaska airflight,

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Speaker 8: I think the FAA would have wanted inspection of all

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Speaker 8: the airplanes of the fleet anyways, And so my senses

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Speaker 8: it doesn't necessarily slow things down or change the inspection program.

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Speaker 8: I do think that, you know, this plug is typically

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Speaker 8: used on the longer version of the seven three seven,

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Speaker 8: so I think that the risk that it spreads to

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Speaker 8: the rest of the MAX fleet is lower. And this

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Speaker 8: is not even a plug in the smaller of the

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Speaker 8: airplane as near as we can tell, and so I

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Speaker 8: think that it probably does stay limited to the DASH nine.

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Speaker 9: Yeah, another small development that we heard of that is

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Speaker 9: kind of curious. The cockpit flight recorder got overridden. First off,

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Speaker 9: since when was that a thing? And secondly, what are

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Speaker 9: the implications?

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Speaker 8: Yeah, i'd heard this as well, and so you know,

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Speaker 8: it's like one of those hard drives that probably overwrites

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Speaker 8: itself every so many hours. And my guess is though,

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Speaker 8: that there's wasn't a lot to learn necessarily from the cockpit,

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Speaker 8: right the pilots got the airplane back intact, thankfully, you know,

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Speaker 8: to the airport. I'm sure there's a bunch of stress

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Speaker 8: in the cockpit. But I really think that the majority

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Speaker 8: of what we're going to learn about this flight is

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Speaker 8: going to be back at the door plug and the

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Speaker 8: piece they found on the ground.

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Speaker 1: It seems like what we've learned so far is that

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Speaker 1: this is more of a manufacturing issue rather than a

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Speaker 1: design issue. Is that correct? And is that somewhat less

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Speaker 1: troubling then? To clean up the manufacturing side rather than design,

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Speaker 1: I think.

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Speaker 8: It is less troubling. I think it would be a

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Speaker 8: silver lining for Boeing. You hate to have this happen

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Speaker 8: under any circumstances. But when you look at the the

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Speaker 8: you know, the way that the plug, You look at

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Speaker 8: these sort of the shots later on, and you see

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Speaker 8: where the plug was in the airplane and how clean

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Speaker 8: the plug seemed to have left the airplane, it does

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Speaker 8: seem to indicate that either fasteners failed or someone didn't

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Speaker 8: apply the fasteners correctly. And I think the United News

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Speaker 8: kind of confirms that maybe somebody on the manufacturing line

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Speaker 8: didn't understand the right procedure for, you know, for applying

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Speaker 8: this plug.

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Speaker 9: Are we potentially seeing a bit of a blame game

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Speaker 9: starting to emerge here as well as to whether it's

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Speaker 9: Boeing's process is at fault, perhaps Spirit that makes the fuselage,

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Speaker 9: or even this other company when hearing about AI which

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Speaker 9: should installed Wi Fi during a maintenance period.

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Speaker 8: Yeah, so the ar is a sort of a late

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Speaker 8: breaking story. And I guess I'd have to hear that

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Speaker 8: they had done the dome on both Alaska and United

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Speaker 8: and a bunch of airplanes. I think we'd have to

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Speaker 8: find sort of more evidence that would tie them together.

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Speaker 8: I would think that there, you know, there's always a

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Speaker 8: potential for blame game here. But at the end of

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Speaker 8: the day, Boeing manufactures the airplane and warrants to be

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Speaker 8: warrants it to be air worthy as it leaves their factory.

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Speaker 8: And so I think, as much as they might have

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Speaker 8: a supplier problem with Spirit not doing the work right,

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Speaker 8: it's their job to make sure the airplane leaves the

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Speaker 8: factory ready to go. And so I think that you

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Speaker 8: can't get away with too much of that, And I

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Speaker 8: would just, you know, I sort of follow that up

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Speaker 8: a bit with Boeing can't make the seven thirty seven,

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Speaker 8: any version of it without Spirit Aerosystems. And so as

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Speaker 8: much as they may want to say, hey, look, our

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Speaker 8: supplier did this, is not our fault. They you know,

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Speaker 8: they need spirit to survive and they need spirit to thrive,

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Speaker 8: and so again they can only get away with so

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Speaker 8: much of that. They really need to get down there

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Speaker 8: if the problems is spirit, and help Spirit fix the problem,

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Speaker 8: because that's the way forward for both Spirit and for Boeing.

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Speaker 1: Just asking this from a pure layman standpoint, you know,

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Speaker 1: getting back to the question of these plugs. You know,

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Speaker 1: these these areas of the plane which might have a door,

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Speaker 1: but in this case was had a plug block in

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Speaker 1: there and that's what blew off and caused this. Since this,

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Speaker 1: if it ultimately is a manufacturing issue, wouldn't this kind

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Speaker 1: of raise questions about many other planes no matter what,

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Speaker 1: because you know a lot of these manufacturing processes, you know,

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Speaker 1: these people are working on multiple types of planes.

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Speaker 7: Yeah.

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Speaker 8: So Spirit though, has you know, a heavy amount of

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Speaker 8: work on the seven thirty seven. So I think that

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Speaker 8: you're you know, if it's a problem it's spirit, Does

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Speaker 8: it mean that it's a problem on a lot of

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Speaker 8: different narrow bodies? Not necessarily. Plugs are used on a

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Speaker 8: lot of different airplanes that have been used effectively for many,

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Speaker 8: many many years, right, And you know, I think as well, you.

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Speaker 8: If there's a problem with a plug, significant enough problem

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Speaker 8: that it's not going to be able to maintain pressure,

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Speaker 8: you're going to know it, I think pretty soon when

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Speaker 8: you get into service. And this particular airplane have been

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Speaker 8: in service less than three months, so I don't think

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Speaker 8: I don't think it's something that we all have need

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Speaker 8: to be overly concerned about. But again I think on

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Speaker 8: the on the dash nine you do, and we need

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Speaker 8: to make an inspection on everything in the fleet to

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Speaker 8: feel safe.

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Speaker 9: Can you give us a bit of a saints of

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Speaker 9: the task. I hate NAFA Boeing in terms of restoring trust,

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Speaker 9: restoring its reputation. Is there anything comparable in your experience?

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Speaker 8: No, the I mean, I think these last four or

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Speaker 8: five years of Boeing have been I would I would

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Speaker 8: say perhaps unprecedented, and starting from the mcast debacle, with

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Speaker 8: the with the crashes and getting to hear I think

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Speaker 8: we can see how this occurred. Right the airplane was

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Speaker 8: grounded prior to the pandemic. I think you know that

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Speaker 8: led the stress on the workforce. People may decide to leave.

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Speaker 8: There were reductions in workforce. Then you hit a pandemic

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Speaker 8: where travel goes to almost zero. And you can understand

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Speaker 8: why other people might say that would be their time

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Speaker 8: to leave the business. So I think the way forward

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Speaker 8: is really about training the workforce extremely well, and they

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Speaker 8: may have to overdo that here.

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Speaker 1: Yeah, all right, George, thank you very good information. George Ferguson,

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