Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNAF podcast, and on today's show, we have a
Speaker 1: special episode for you because we're going to bring you
Speaker 1: an interview from the BNAF Forum in Houston from the
Speaker 1: fifth of March. The theme of this event was the
Speaker 1: Barrel of Tomorrow, where the agenda highlighted the parts of
Speaker 1: the economy that are transforming in many respects, from hydrocarbons
Speaker 1: to electrons. One of the topics we touched upon was
Speaker 1: how aviation is changing. The aviation industry's pathway to net
Speaker 1: zero is far from certain. Operational improvements and technologies such
Speaker 1: as sustainable aviation fuels and zero mission aircraft could offer
Speaker 1: substantial emissions reductions, but questions revolve around timing, scalability, and
Speaker 1: customer willingness to pay. Airlines will play a pivotal role
Speaker 1: in implementing these solutions as the aviation industry looks to
Speaker 1: reach its decarbonization goals. So on stage we were joined
Speaker 1: by United Airlines Chief Sustainability Officer Lauren Riley and she
Speaker 1: was interviewed by Jade Patterson from bn EF's Renewable Fuels team.
Speaker 1: She shares United strategy and how their recent ad campaign
Speaker 1: with Oscar the Grouch plays into it. She also gets
Speaker 1: into the role of policy as well as venture capital
Speaker 1: in reducing aviation emissions. To find out where BNF's forums
Speaker 1: and summits are taking place around the world, you can
Speaker 1: find links in our show notes. Now to Jade's conversation
Speaker 1: on stage at the BNA Forum in Houston with United
Speaker 1: Airlines Chief Sustainability Officer Lauren Riley.
Speaker 2: Lauren, thank you so much for joining us.
Speaker 3: I was definitely talking to some people beforehand, a lot
Speaker 3: of United fans in the crowd, and I got to say,
Speaker 3: we're a little disappointed you didn't bring a chief trash
Speaker 3: officer Oscar, but you know, we're excited you're here, so,
Speaker 3: you know, just to kick things off. You know, United
Speaker 3: has been super involved in aviation decarbonization. You guys are
Speaker 3: very active in the soft space and and really pushing
Speaker 3: the envelope there. Can you just start off with a
Speaker 3: little bit of an overview of your roadmap to net
Speaker 3: zero and reducing your missions.
Speaker 4: Sure, and it's great to be here. Thank you to
Speaker 4: the Bloomberg team for having me. I think it's a
Speaker 4: little bit of a different discussion with me. This afternoon
Speaker 4: as a customer, because I'm hearing all about the supply
Speaker 4: and how we get to pay for it and who
Speaker 4: wants what. But there are absolutely constraints on the customer side,
Speaker 4: and I look forward to sort of exploring that today.
Speaker 4: So as a heartwobate industry, we're kind of in a pickle.
Speaker 4: We need to transition, but we don't have the marketplace
Speaker 4: and the solutions at scale to really make a difference yet.
Speaker 4: But yet we have these commitments to net zero by
Speaker 4: twenty fifty. United has a commitment to reduce our carbon
Speaker 4: intensity fifty percent by twenty thirty five compared to twenty nineteen.
Speaker 4: Sour most recent normal year of flying before the pandemic,
Speaker 4: that is SBTi certified, and we can talk about sort
Speaker 4: of the value of third party credibility and validation. But
Speaker 4: we need a plan to get there, and so we
Speaker 4: started publishing about two years ago our transition plan, our
Speaker 4: roadmap to net zero, and effectively you can think of
Speaker 4: it in sort of two categories. First and foremost is
Speaker 4: how do we simply just use less? So how do
Speaker 4: we burn less fuel? And we hear a lot about
Speaker 4: fuel in the context of aviation, because when you look
Speaker 4: at United's greenhouse gas inventory. Ninety eight percent of my
Speaker 4: inventory across the entire global operation is from jet fuel.
Speaker 4: So when you talk about climate leadership and transitioning to
Speaker 4: low carbon, you can't really have any integrity and sincerity
Speaker 4: in the discussion unless you're talking about replacing that jet fuel.
Speaker 4: So let's start by using less. And we're really trying
Speaker 4: to figure out how do we look at the value
Speaker 4: of fleet modernization. So United has invested in more than
Speaker 4: eight hundred new aircraft that are going to be coming
Speaker 4: online in the next decade. Each one of those aircraft
Speaker 4: that we introduce into our fleet twenty five percent more
Speaker 4: fuel efficient than the aircraft are replacing. So when you
Speaker 4: talk about a decarbonization plan, at least for this decade,
Speaker 4: fleet modernization is really crucial. I mean that is really
Speaker 4: actually a climate strategy. We also talk about next generation aircraft.
Speaker 4: How do you look at the new engine design? How
Speaker 4: do you look at new aircraft design? With some of
Speaker 4: the blended wing stuff you're seeing out there that super cool,
Speaker 4: but actually very very important when I'm looking at what
Speaker 4: happens when we hit twenty thirty, what kind of aircraft
Speaker 4: can we actually bring into our operation that can not
Speaker 4: just hit that twenty five percent reduction, but actually go further.
Speaker 4: And then of course there's operational efficiencies, so single engine taxing.
Speaker 4: You see those super tugs that pull the aircraft off
Speaker 4: the gate, those are important, they're electric, they're charged, they
Speaker 4: cause us not to have to burn fuel. Those all
Speaker 4: make a difference when you have the number of flights
Speaker 4: that we have in any given day. And then of
Speaker 4: course there's the alternative propulsion, so electric hydrogen that all
Speaker 4: of those are going to be i'll call them customer enhancement,
Speaker 4: So an opportunity for us to think a little bit
Speaker 4: differently about the services that we give to our customers,
Speaker 4: but we do it in a way that's low carbon
Speaker 4: and so that's a ton of fun and so that
Speaker 4: allows us to actually reduce the emissions from flight just
Speaker 4: use less. But then we get to saf and SAFF
Speaker 4: is the other fifty percent of our decarbonization plan. So
Speaker 4: when you think about twenty fifty, what is our portfolio
Speaker 4: going to look like? Well, I think you heard the
Speaker 4: panel before us and throughout the day that with alternative fuels,
Speaker 4: not every alternative fuels the same. There's many different technologies
Speaker 4: and conversion technologies out there. There's many different feedstocks out
Speaker 4: there and they all create alternative fuels in different ways,
Speaker 4: and so we took the time to actually break down
Speaker 4: for you and you can find it on United dot
Speaker 4: Com what we think will be sort of the contribution
Speaker 4: of these sort of generations of SAFF towards our net
Speaker 4: zero targets. So you hear a lot about half of
Speaker 4: that's renewable diesel converted to sustainable aviation fuel. Good stuff
Speaker 4: that's going to be important to us. We do have
Speaker 4: to solve for feedstock, So that was really interesting to
Speaker 4: hear Diarling and some of the other folks talking before me.
Speaker 4: But that's going to be about, you know, another twenty
Speaker 4: twenty five percent of our reduction. And then we talk
Speaker 4: about advanced biofuels. So think about ethanol. If you go
Speaker 4: fill up your tank and your car, you've got an
Speaker 4: ethanol blend and the gas that you put in there.
Speaker 4: Why are we not doing that for jets? Could we should?
Speaker 4: We've got a lot of ethanol in the United States.
Speaker 4: You talked about cover crops. I also heard that talked
Speaker 4: about this third season for farmers. That's also an opportunity
Speaker 4: for us to think about converting advanced biofuels into sustainable
Speaker 4: aviation fuel. And then there's the fuel of the future,
Speaker 4: which is power to liquid. So this is let's pull
Speaker 4: CO two out of the atmosphere, let's blend it with
Speaker 4: some a lot of renewable power right now and some
Speaker 4: green hydrogen, and poof, you've got a really beautiful sustainable
Speaker 4: aviation fuel. Doesn't work yet at scale, the economics are terrible.
Speaker 4: We're going to figure out a way to get there,
Speaker 4: but give me fifteen years. So there's different ways that
Speaker 4: we're actually going to realize our path to net zero,
Speaker 4: and we need all of them. We have asolutely need
Speaker 4: all of them. And frankly, as a customer that uses fuel,
Speaker 4: we can't do it alone. So having this conversation in
Speaker 4: a group like this around really truly what is the
Speaker 4: fuel of tomorrow? This is really important dialogue to have
Speaker 4: because we've got to do this together.
Speaker 3: Yeah, and I think, yeah, I really want to drill
Speaker 3: in on SAFF a little bit given the audience and
Speaker 3: what we've been talking about today, And I think it's
Speaker 3: probably safe to say that it's still early days for SAF,
Speaker 3: very low volume. So from an airline's perspective, what do you
Speaker 3: think is needed to see scale.
Speaker 4: So let me give you some context. Today United and
Speaker 4: I will caveat we have a massive growth plan. But
Speaker 4: today we use about four and a quarter billion gallons
Speaker 4: of fuel in a given year, So four and a
Speaker 4: billion gallons for one year for one operator. So keep
Speaker 4: that in mind. The equivalent of that in emissions forty
Speaker 4: two million metric tons of carbon emissions in the atmosphere.
Speaker 4: If we grow and I do not change the way
Speaker 4: I fly, I do not do the FLEA modernization, I
Speaker 4: do not in bed sustainably aviation fuels, I will more
Speaker 4: than double my emissions by twenty fifty. I should be
Speaker 4: going down to that zero, but I'm actually going to
Speaker 4: go up to more than ninety million metric tons. That's
Speaker 4: not okay, And so we do need to figure out
Speaker 4: a way to really draw that down, and that's really crucial.
Speaker 4: In twenty twenty, United used just a million gallons of
Speaker 4: sustainable aviation fuel just one last year we used seven
Speaker 4: million gallons. Doesn't sound like a ton, but it is
Speaker 4: a sevenfold increase. In the United States, twenty five million
Speaker 4: gallons of staff were available, so either produced here or imported,
Speaker 4: got roughly a third two quarter of that good but
Speaker 4: not great. But if you think about seven million gallons
Speaker 4: against a four and a quarter billion bogie, we really
Speaker 4: don't have a marketplace yet, and so this is all
Speaker 4: about how do you create a marketplace for these alternative fuels?
Speaker 4: How do you make it economically viable for an industry
Speaker 4: like ours to prefer to purchase that over a commodity
Speaker 4: product like Jeta. And that's what we're trying to solve for.
Speaker 3: And that's yeah, that's kind of a question that I
Speaker 3: think we get a lot these days is around kind
Speaker 3: of willingness to pay. So we'd love to hear your
Speaker 3: thoughts a little bit around you know, I think it's
Speaker 3: no secret STAFFA is more expensive than traditional jet fuel.
Speaker 3: Do you have an idea of kind of what's the
Speaker 3: demand elasticity when it comes to burning cleaner fuels? Like
Speaker 3: our customer is willing to pay for this? You know,
Speaker 3: who's going to put the bill here?
Speaker 4: Yeah? You know, it's actually been really interesting. We've had
Speaker 4: a long standing program at United it's called the Ecosky's Alliance,
Speaker 4: and we effectively partner with our corporate customers and that
Speaker 4: includes cargo, so you know, similar to maritime the ability
Speaker 4: to ship your your product low carbon is something that
Speaker 4: a lot of folks are very interested in supporting right now,
Speaker 4: and they can monetize that, which is really exciting. But
Speaker 4: we've been working with corporates for some time now to
Speaker 4: help pay that premium. And it's two to four times
Speaker 4: the cost of conventional jet fuel. An industry like aviation
Speaker 4: has maybe a four percent margin, so high revenue, low margin,
Speaker 4: we cannot carry that kind of exposure and stay competitive.
Speaker 4: It is a super sensitive industry. When it comes to pricing.
Speaker 4: You all go buy your ticket, You look for the
Speaker 4: lowest one, see if it works, and you buy it.
Speaker 4: And so when you introduce some of these two to
Speaker 4: four times costs for a commodity product, you suddenly create
Speaker 4: uncertainty and it could really impact your revenue and create
Speaker 4: these competitive distortions. We can't have that. So we've been
Speaker 4: working with some of these climate leading corporations to really
Speaker 4: help us finance that transition. And there's a great willingness
Speaker 4: to do it. I mean, I give them a tremendous
Speaker 4: amount of credit. They've been out there working with us
Speaker 4: to really put their money where their mouths are, and
Speaker 4: they want to reduce their scope through emissions and their
Speaker 4: greenhouse gas inventories, and they want to do and feel
Speaker 4: proud and confident around the solutions they're backing, and so
Speaker 4: they're willing to put dollars into things like sustainable aviation fuels.
Speaker 4: The challenge for them right now is that it's a
Speaker 4: bit of a fragment to market and they're kind of
Speaker 4: trying to figure out how they can streamline those things.
Speaker 4: But the willingness is there. The other example I'll give
Speaker 4: you is that just last year, United introduced for our
Speaker 4: leisure travelers, so takeout corporates, average traveler, you're going on vacation,
Speaker 4: when you go through the booking path, you have the
Speaker 4: ability now to contribute to sustainable aviation fuels that United
Speaker 4: invests in. I was super dubious because you know, carbon offsets.
Speaker 4: We had a program for a while, it didn't really work.
Speaker 4: Nobody really cared, and I get it because there's a
Speaker 4: lot of skepticism out there. But then we introduced this
Speaker 4: capacity around investing in staff supporting insect or reduction. We
Speaker 4: had a whole host of communication activity with Oscar the Grouch,
Speaker 4: our chief trash officer, explaining what is going on, why
Speaker 4: are we talking about staff. Why is it important? And
Speaker 4: I'll tell you. So, we've had this opportunity now for
Speaker 4: customers about twelve months, one hundred and fifty thousand customers
Speaker 4: and about a half million dollars. Doesn't sound like a
Speaker 4: live It's not really about the numbers themselves. It's about
Speaker 4: the engagement of customers and trying to educate them about
Speaker 4: the right solutions. It's working, and so I don't know
Speaker 4: if that converts long term into sort of tacking stuff
Speaker 4: onto tickets. I assure you my CFO wants nothing to
Speaker 4: do with that, but it does show there's a more
Speaker 4: there's a greater sophistication and appreciation for doing the right thing,
Speaker 4: in particular for these hard to abate industries like aviation.
Speaker 4: And that's really exciting.
Speaker 2: That's super cool.
Speaker 3: And I'm kind of curious your thoughts on that. Sounds
Speaker 3: like the carbon Offsets program maybe wasn't as successful. But
Speaker 3: why do you think customers are more willing to opt
Speaker 3: into this sustainbleviation fund or feels fund?
Speaker 2: Then?
Speaker 4: Yeah, so United launched a sustainable flight fund last year.
Speaker 4: And let me just explain that for a minute, because
Speaker 4: this is a bit of an un orthodox role that
Speaker 4: United has played in financing our transition. We stood up
Speaker 4: a venture fund maybe two three years ago, but last
Speaker 4: year we kind of did a focus in unsustainable aviation fields.
Speaker 4: We were seeing that nobody, nobody was really put money
Speaker 4: into and it was frustrating, so we went out and
Speaker 4: created a fund and opened it up to other investors.
Speaker 4: Today we have about twenty two investors, including United in
Speaker 4: this fund. It's two hundred and thirty million dollars and
Speaker 4: the fund reason just closed about two weeks ago. I
Speaker 4: think what's interesting about that is on the twenty two investors,
Speaker 4: we have the whole value chain, so it's anything from
Speaker 4: Ge and Boeing and Saffran all the way to on
Speaker 4: the other hand, corporates like BCG, Bank of America, Google
Speaker 4: and are Peers. We have four airlines that basically raise
Speaker 4: their hands and we want to be a part of
Speaker 4: the United train and really figure out how to do
Speaker 4: this right. So we have Air Canada, Air New Zealand,
Speaker 4: Jet Blue and Hawaiian and we're working together to identify
Speaker 4: what we believe are the technologies that are not only
Speaker 4: novel and interesting in decarbonization, but as an operator, we
Speaker 4: can uniquely look at and say can this scale, can
Speaker 4: bed this and how we actually run the airline? And
Speaker 4: if the answer is yes, we go ahead and invest
Speaker 4: in it. And so that's been a really amazing opportunity.
Speaker 4: You heard earlier today from Moji, who's the CEO of
Speaker 4: some Vita that's one of our investment companies. They essentially
Speaker 4: take a microbe and synthetically bioengineer it and crack it
Speaker 4: open with some crisper. I don't know. It's fascinating, but
Speaker 4: it's a feedstock play that allows us to actually address
Speaker 4: a constraint in the market today. High integrity feedstock, low
Speaker 4: CI everyone benefits, no land use issues. And so these
Speaker 4: kinds of innovations are coming forward now, thanks in great
Speaker 4: part to the Inflation Reduction Act, and it's really exciting.
Speaker 4: And so we've really stepped in not just purchasing the fuel,
Speaker 4: but working upstream to help finance some of these companies
Speaker 4: that are innovating around producing the fuel or a component
Speaker 4: of the fuel.
Speaker 2: Yeah, that's super cool.
Speaker 3: I mean it's also great to hear that other airlines
Speaker 3: are joining you. I think that's a testament to know
Speaker 3: the direction you guys are had, and that's that's really awesome.
Speaker 2: Do you mind.
Speaker 3: You kind of touched on it a little bit on
Speaker 3: kind of some of the barriers are trying to overcome,
Speaker 3: but really, can you explain a little bit more of
Speaker 3: what's the objective of this fund, what you guys are
Speaker 3: trying to achieve, and maybe are there any companies you're
Speaker 3: super excited about.
Speaker 4: Oh, there's tons of companies I'm super excited about. So
Speaker 4: I think there's maybe eight or ten investments currently in
Speaker 4: the fund. Some of them are what I talked about before,
Speaker 4: the power to liquid, so capturing CO two and converting
Speaker 4: it into a jet fuel of the future. Some of
Speaker 4: them are like Sivita, where they're really focused on that
Speaker 4: feedstock and creating a high integrity lipid. Just the other week,
Speaker 4: I tried butter created from one of these you know,
Speaker 4: created genetically created lipids. That was so fascinating. But you know,
Speaker 4: Butter's a lipid lipids we need for fuels. It's complementary
Speaker 4: upstream product. You know, how do we look at the
Speaker 4: ecosystem to enable the transition for sustainable aviation fuels? And
Speaker 4: so what's been interesting about it and hearing the dialogue today,
Speaker 4: you know, for us to succeed in aviation we're sort
Speaker 4: of this niche, smaller market, lots of planes, but not
Speaker 4: a super big industry. But for us to succeed, we
Speaker 4: need abundant renewable power that's cost effective. We need green
Speaker 4: hydrogen everywhere, we need some of these technologies like electrolyizers
Speaker 4: to really really work, and not like these little intibity ones,
Speaker 4: but like big and so we're thinking about how do
Speaker 4: we put all those component parts together to eventually allow
Speaker 4: us to be successful downstream when the market's mature to
Speaker 4: go to aviation. And so it's really again going back
Speaker 4: to this whole theme of ecosystem, how do we work
Speaker 4: the ecosystem to allow us to do decarbonize aviation once
Speaker 4: we get the right formula to incentivize investment in our space.
Speaker 3: Yeah, I'm really glad you've brought in the investment piece
Speaker 3: of it, because I think you guys have been really
Speaker 3: crucial to kind of coming up with more creative ways
Speaker 3: around investing in newer technologies. So, I mean, from your
Speaker 3: point of view, like, how do we need to change
Speaker 3: our way of thinking around investing in these projects in
Speaker 3: order to I guess see this industry scale. Do you
Speaker 3: think we need to kind of readdress the model here
Speaker 3: or what needs to change.
Speaker 4: I mean, if you can answer that question, please, that's
Speaker 4: the question. So what we're seeing right now and this
Speaker 4: is these are just my observations. There's a lot of
Speaker 4: interest in new climate tech. There's so much going on
Speaker 4: in sort of finding different ways to solution for industries
Speaker 4: like ours and all the other industries that need to transition,
Speaker 4: super interesting, lots of venture capital out there. Money is flowing,
Speaker 4: But what is not happening is going from that demonstration
Speaker 4: in the lab let me show you a cool project
Speaker 4: to the ten million gallon plant that I need to
Speaker 4: actually prove to Wall Street that they should put their
Speaker 4: billions in to make me the foreign quarter billion that
Speaker 4: I need a fuel. So there's kind of like this
Speaker 4: stalling that's happening in the sort of the moving from
Speaker 4: pilot to demonstration. And I get it because it's super expensive.
Speaker 4: I mean, that ten million gallon plant isn't cheap anywhere
Speaker 4: from five hundred million to a billion dollars. You don't
Speaker 4: want to put that kind of capital for that little
Speaker 4: product that comes out, and by the way, it's competing
Speaker 4: with the commodity product. So that to me really fundamentally
Speaker 4: goes back to policy I mentioned before. The Inflation Reduction
Speaker 4: Act really changed the whole paradigm around innovation. It's really
Speaker 4: not though, addressing sort of driving capital for long term
Speaker 4: sustainable shifts in aviation, unlike some of these other credits.
Speaker 4: You know, we talked about hydrogen sustainable aviation fuel had
Speaker 4: a tax credit for two years, not ten, And now
Speaker 4: we move to this next clean fuels production credit for
Speaker 4: I think it's three years, not ten. And so in
Speaker 4: terms of creating curiosity around aviation, it's there. But in
Speaker 4: terms of de risking and making our industry more bankable
Speaker 4: and making the financial institutions come to the table and say, yeah,
Speaker 4: I have confidence and I feel like I can really
Speaker 4: make a return in this mark it, it's not there.
Speaker 4: And so that's really fundamentally what I spend my day
Speaker 4: solving for is talking to policymakers, talking to banks, talking
Speaker 4: to investors, and saying, how do we put this puzzle
Speaker 4: together in a way that it allows us to all succeed.
Speaker 3: Yeah, that's super helpful, And I'm glad you mentioned the
Speaker 3: IRA and the policy piece there, And I think it's
Speaker 3: a lot of times we kind of compare and contrast
Speaker 3: the EU to the US on you know, they're going
Speaker 3: more demand side, and I'm curious, from the airline's point
Speaker 3: of view, what do you think is the best model
Speaker 3: in terms of growing and incentivizing demand and kind of
Speaker 3: creating that certainty for the market. Is it more kind
Speaker 3: of the production tax credit type model or is it
Speaker 3: having more mandates to really ensure airlines buy that.
Speaker 2: Yeah.
Speaker 4: I texted my friends in Europe and they have IRA envy,
Speaker 4: which is kind of fun. But they're also buying up
Speaker 4: all the SAFF. So in terms of who's getting the
Speaker 4: SAFF now, it's the people with the mandate. So that's
Speaker 4: a conundrum that we've got to figure out. My point
Speaker 4: of view is market based incentives do work right now.
Speaker 4: We need a space to allow the smart people to
Speaker 4: innovate because we didn't have the solutions before, or at
Speaker 4: least the diversity of solutions that are really going to
Speaker 4: make a difference for aviation, and that's happening now. I
Speaker 4: do think we can sort of shift the policy suite
Speaker 4: to allow that durability, that long term confidence that's missing
Speaker 4: for real capital and I'm talking like project finance type stuff,
Speaker 4: infra stuff to come to sustainable aviation fuels. But while
Speaker 4: we're waiting for that to happen, all of these component parts,
Speaker 4: the hydrogen, the greening of the grid, and all these
Speaker 4: transition component that is happening, and so we are dependent
Speaker 4: on all of that, as I mentioned before, and so
Speaker 4: until that happens, there's not really a play for sustainable
Speaker 4: aviation fuels quite yet. What I like to see and
Speaker 4: where United sits in terms of policy advocacy is that
Speaker 4: we are performance based in our advocacy, meaning if you
Speaker 4: can allow the policy incentives to encourage greater reductions over time,
Speaker 4: so the lower CI, the lower the reduction, the better
Speaker 4: the incentive you get. Then you allow the market to
Speaker 4: sort of solve what innovations, what technologies are actually going
Speaker 4: to thrive and can be economical. You know, you hear
Speaker 4: a lot about some of these other pathways that maybe
Speaker 4: maybe are sort of smaller conversion technologies. You hear about
Speaker 4: coprocessing and whatnot. Those are fine, but they shouldn't get
Speaker 4: the same incentive as maybe, you know, the power to
Speaker 4: liquid that is actually a true sustainable aviation fuel of
Speaker 4: the future, and that's going to transform the way we fly.
Speaker 4: So if there's a way that we can actually build
Speaker 4: a policy suite that allows sort of this graduated performance
Speaker 4: based approach to incentivize the higher integrity solutions but then
Speaker 4: also enable more pragmatic entrance. That's great. That's that's where
Speaker 4: we sit. So that's our view on what I'd love
Speaker 4: to see happen with policy, but we're certainly not there yet.
Speaker 3: I'd love to kind of zoom out a little bit
Speaker 3: and not just talk about SAF because, as you mentioned
Speaker 3: in your intro, SAF is a piece of the puzzle,
Speaker 3: but there's a whole suite of other opportunities out there,
Speaker 3: freet modernization, net zero aircraft, operational efficiencies. So can you
Speaker 3: talk a little bit about I know United has made
Speaker 3: some purchases and investment in like hybrid aircraft. I'd love
Speaker 3: to hear thoughts around zero aircraft? Is that under hyped, overhyped?
Speaker 3: Where are we going with that? Is that something you
Speaker 3: guys are actively.
Speaker 4: I mean, is there anything cooler than electric vertical takeoff
Speaker 4: and landing?
Speaker 2: Sounds pretty fun to me.
Speaker 4: I would love to go get in an EV call
Speaker 4: after this and go to the airport to avoid all
Speaker 4: that traffic in Houston because it's gnarly. But what's cool
Speaker 4: about some of these new technologies that are coming on
Speaker 4: with alternative propulsion is that it is allowing industries like
Speaker 4: ours to provide a different service. And I kind of
Speaker 4: hinted to that in the beginning. Suddenly we're extending our
Speaker 4: experience with the customer. And if there was a helipad
Speaker 4: outside and I could get on an EV tall and
Speaker 4: I could fly to the IH for the same price
Speaker 4: as an uber XL low CA one hundred percent, I
Speaker 4: would do that. And that's sort of the vision of
Speaker 4: the future. There's a lot of uncertainty around how we're
Speaker 4: going to get there, but it's not insurmountable. And what
Speaker 4: I mean by uncertainty, you know, you've got to be
Speaker 4: certified by the FA to operate, and the safety issues
Speaker 4: there you need to negotiate again the ecosystem of the airspace.
Speaker 4: We need to figure out where we're going to build
Speaker 4: the infrastructure. And I'm not just talking about the helipad
Speaker 4: or vertiport. I'm actually talking about the electrical infrastructure where
Speaker 4: you're going to charge these things. That's a big, big deal.
Speaker 4: I mean, part of my portfolio is the ground equipment
Speaker 4: at the airports and converting those from diesel to electric.
Speaker 4: I can't even get enough charge to convert our fleet
Speaker 4: of ground equipment, so talk to me about electric aircraft.
Speaker 4: So there's some of these really really practical hurdles that
Speaker 4: we need to overcome, and all of those things are
Speaker 4: being negotiated with the States and the airport authorities to
Speaker 4: make sure that we're considering and building toward. But it's
Speaker 4: going to take some time.
Speaker 3: It sounds like it's kind of the inverse problem with
Speaker 3: SAFA is dropped in you don't need a lot of
Speaker 3: infrastructure change, but feedstock limited with high ydrogen electricity, it's
Speaker 3: a matter of infrastructure, can you get the fuel there?
Speaker 3: Do you have the ability to fill up?
Speaker 4: That is true. There is some infrastructure required for staff too,
Speaker 4: but it's not nearly as complicated. It's more like blending
Speaker 4: tanks and whatever, and so those are those are lesser
Speaker 4: of a hurdle, but still one super cool.
Speaker 3: We're getting close to times. I want to I want
Speaker 3: to ask one or two more questions. But in general,
Speaker 3: when you think about your zero trajectory, what keeps you
Speaker 3: up at night in terms of not meeting that goal?
Speaker 2: What are you what are you most concerned about?
Speaker 4: Well, that's a bit of a loaded question. I am
Speaker 4: concerned about perfect being the enemy of the good. There's
Speaker 4: a lot of progress that can be made, but there's
Speaker 4: almost an intolerance for good, and we need to figure
Speaker 4: out a way to celebrate good and then continue towards
Speaker 4: great Today, you know, the greenwashing claims, the regulations around
Speaker 4: what you can and cannot say. Everything's now going in
Speaker 4: our ten k. I mean, there's just transparency everywhere, which
Speaker 4: I fully support. I think it's really important to be
Speaker 4: clear about what's going on, but not at you know,
Speaker 4: not by causing inertia to happen in spaces where we
Speaker 4: just need fast innovation today and then we need to
Speaker 4: scale today. And so that's that I think will settle out.
Speaker 4: I'm not worried about that in the long term, but
Speaker 4: immediately it suddenly becomes what was voluntary ambition is now
Speaker 4: becoming sort of corporate risk, which is just stupid.
Speaker 3: Yeah, and kind of final question of the day is
Speaker 3: you have the last say, which I think is great.
Speaker 3: I want to hear your thoughts on You have a
Speaker 3: room full of investors, policymakers, energy producers. What's your ask
Speaker 3: of them? What can they do to help move this
Speaker 3: industry along?
Speaker 4: I love that question. We need creative finals dancing solutions,
Speaker 4: We need creative financing solutions. And what I mean by
Speaker 4: that is that in a four percent margin, I'm eyes
Speaker 4: wide open about how United is adopting staff compared to
Speaker 4: my peers, and we are we adopting too fast or
Speaker 4: too slow? And how do we make sure that there's
Speaker 4: parity and costs because we are such a super price
Speaker 4: sensitive industry that actually shouldn't be a barrier, and that
Speaker 4: shouldn't be how we're thinking about building a marketplace for
Speaker 4: something that doesn't exist, and the only way to address
Speaker 4: that is creative financing. And that's a lot policy. But
Speaker 4: then it's a lot you know, the financial institutions coming
Speaker 4: to the table and helping us sort of share risks,
Speaker 4: spread that out, figure out mechanisms that allow us to
Speaker 4: actually step into this space materially without asking me to
Speaker 4: sign a ten year off take agreement, which I'm not
Speaker 4: going to do. So we need to continue to sort
Speaker 4: of nudge and push and shape what is a bit
Speaker 4: of a different approach for financing for industries like mine
Speaker 4: that needs a transition. And I think we're going to
Speaker 4: get there, and I'm really excited about that, so thank
Speaker 4: you to all of you out there. They're going to
Speaker 4: open up your check book after this conversation.
Speaker 2: I think that's a great note to end on. Lauren,
Speaker 2: thank you so much.
Speaker 4: Pleasure.
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