1 00:00:00,120 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,920 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,240 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,960 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,040 --> 00:00:37,360 Speaker 2: Terminal and the Bloomberg Business app. We begin with deepig issue, 10 00:00:37,440 --> 00:00:40,280 Speaker 2: kicking off June, following the best month for stock since February. 11 00:00:40,400 --> 00:00:43,319 Speaker 2: Cameron Dawson of New Wegs Wealth remaining cautious, saying this, 12 00:00:43,400 --> 00:00:46,960 Speaker 2: we've seen large cap equities experiencing volatility in the short term. 13 00:00:47,120 --> 00:00:50,200 Speaker 2: Given fading momentum and breadth, there is plenty of room 14 00:00:50,240 --> 00:00:53,640 Speaker 2: for investors to be disappointed or caught flat footed in 15 00:00:53,680 --> 00:00:55,680 Speaker 2: the short run. Cameron, please to say, joined us now 16 00:00:55,720 --> 00:00:57,480 Speaker 2: for more camera, go monitor, you come winning, It's going 17 00:00:57,520 --> 00:00:59,880 Speaker 2: to see you. What are you advocating for this morning, 18 00:00:59,880 --> 00:01:00,600 Speaker 2: for this quarter? 19 00:01:00,960 --> 00:01:01,480 Speaker 1: Patience? 20 00:01:01,720 --> 00:01:03,920 Speaker 3: I think patients in the very near term, just because 21 00:01:03,960 --> 00:01:08,040 Speaker 3: you've had that deterioration and breadth deterioration momentum. It's not fatal. 22 00:01:08,160 --> 00:01:10,400 Speaker 3: It's not to say that markets can't continue to rise. 23 00:01:10,480 --> 00:01:14,160 Speaker 3: We know that liquidity and trend are still very positive things. 24 00:01:14,600 --> 00:01:17,800 Speaker 3: But there has been this fraying under the surface enough 25 00:01:17,840 --> 00:01:21,279 Speaker 3: to say expect a little volatility as long as growth 26 00:01:21,400 --> 00:01:24,080 Speaker 3: estimates hold in which I think is the most important part, 27 00:01:24,319 --> 00:01:27,800 Speaker 3: then that volatility is viable, meaning any kind of correction short, 28 00:01:27,840 --> 00:01:28,880 Speaker 3: shallow and viable. 29 00:01:29,120 --> 00:01:32,280 Speaker 2: You say, patients, there has been impatience for a rotation 30 00:01:32,360 --> 00:01:34,960 Speaker 2: that's never come about. Now you've been quite in green day, 31 00:01:35,200 --> 00:01:36,800 Speaker 2: over the weekend, or at least the team has What 32 00:01:36,920 --> 00:01:38,120 Speaker 2: was it when I come around? Yeah? 33 00:01:38,240 --> 00:01:40,480 Speaker 4: Is it coming around? No? Will it be a boulevard 34 00:01:40,480 --> 00:01:41,119 Speaker 4: of broken dreams? 35 00:01:41,200 --> 00:01:41,320 Speaker 5: Oh? 36 00:01:41,400 --> 00:01:43,840 Speaker 1: I think probably? It seems like more of a very 37 00:01:43,920 --> 00:01:46,720 Speaker 1: nice I feel like an American idiot. 38 00:01:46,800 --> 00:01:50,120 Speaker 3: So the challenge with small caps is that they are 39 00:01:50,240 --> 00:01:53,840 Speaker 3: so unloved and so under owned. Is that you could 40 00:01:53,880 --> 00:01:57,040 Speaker 3: see a very sharp rally over the short period of 41 00:01:57,040 --> 00:01:59,080 Speaker 3: time that can be ephemeral. Look at the November and 42 00:01:59,160 --> 00:02:03,040 Speaker 3: December rallies. They were very short but very powerful. But 43 00:02:03,080 --> 00:02:05,760 Speaker 3: if you look over the medium to longer term, you 44 00:02:05,840 --> 00:02:09,440 Speaker 3: still have really weak fundamental conditions within small caps. So 45 00:02:09,480 --> 00:02:11,720 Speaker 3: you have forty percent of debt in small caps is 46 00:02:11,720 --> 00:02:14,720 Speaker 3: floating rate. They hate higher for longer. They have fifty 47 00:02:14,720 --> 00:02:17,280 Speaker 3: percent more debt than large caps. So we know that 48 00:02:17,400 --> 00:02:20,639 Speaker 3: higher rates are weighing on these small caps, but appreciate 49 00:02:20,720 --> 00:02:23,120 Speaker 3: that small caps are trading at a new relative low 50 00:02:23,200 --> 00:02:25,720 Speaker 3: versus the market. So don't be surprised if you have 51 00:02:25,760 --> 00:02:28,280 Speaker 3: one of those face ripping kind of counter trend rallies. 52 00:02:28,560 --> 00:02:30,280 Speaker 1: So wake me up when September ends. 53 00:02:30,320 --> 00:02:32,000 Speaker 5: I mean, this is basically what we're looking at at 54 00:02:32,040 --> 00:02:34,359 Speaker 5: a time when we can't really game out when the 55 00:02:34,360 --> 00:02:36,560 Speaker 5: Fed's going to start cutting rates and what the implication 56 00:02:36,639 --> 00:02:39,120 Speaker 5: is going to be for risk acts. Are you saying 57 00:02:39,480 --> 00:02:42,200 Speaker 5: that if there is weakness and. 58 00:02:42,160 --> 00:02:44,120 Speaker 1: The FED does cut rates. 59 00:02:44,120 --> 00:02:46,920 Speaker 5: That is a viable dip, particularly in small caps. 60 00:02:47,360 --> 00:02:51,080 Speaker 3: It depends what you are doing with growth forecasts. We 61 00:02:51,160 --> 00:02:53,079 Speaker 3: wonder if gone are the days of the world where 62 00:02:53,080 --> 00:02:55,960 Speaker 3: we are having a FED that's cutting rates simply because 63 00:02:56,000 --> 00:02:59,160 Speaker 3: inflation is moderating. If the FED moves to cut rates 64 00:02:59,200 --> 00:03:01,320 Speaker 3: or we start pricing them in, is it because of 65 00:03:01,360 --> 00:03:03,920 Speaker 3: a bad reason, Is it because growth is coming and weaker. 66 00:03:04,280 --> 00:03:07,880 Speaker 3: Appreciate that economic surprises have plunged over the last month. 67 00:03:08,120 --> 00:03:10,880 Speaker 3: Look at real personal spending last week coming in much 68 00:03:10,919 --> 00:03:14,600 Speaker 3: weaker than expected. We're watching PMIS really closely. We were 69 00:03:14,639 --> 00:03:17,920 Speaker 3: hoping to see some reacceleration in PMIS that did not 70 00:03:18,160 --> 00:03:20,960 Speaker 3: happen in April. So if we continue to see this 71 00:03:21,000 --> 00:03:24,280 Speaker 3: weakening of data, what it calls into question is consensus 72 00:03:24,280 --> 00:03:27,359 Speaker 3: forecasts that have moved up materially. They're up two hundred 73 00:03:27,400 --> 00:03:29,639 Speaker 3: basis points for twenty twenty four GDP. 74 00:03:29,400 --> 00:03:30,239 Speaker 1: Over the last year. 75 00:03:30,560 --> 00:03:33,359 Speaker 3: That means that nobody's pricing in a recession, which means 76 00:03:33,360 --> 00:03:34,880 Speaker 3: we have to ask the question what. 77 00:03:34,840 --> 00:03:35,640 Speaker 1: Could surprise us? 78 00:03:35,920 --> 00:03:38,600 Speaker 5: So just to plug ism manufacturer coming out today at 79 00:03:38,640 --> 00:03:40,200 Speaker 5: ten am, I am watching. 80 00:03:39,840 --> 00:03:42,200 Speaker 1: That closely, as are you, as is John. Let's put 81 00:03:42,240 --> 00:03:42,960 Speaker 1: some numbers on this. 82 00:03:43,240 --> 00:03:45,480 Speaker 5: If Andrew Hollenhors over at City Group is correct and 83 00:03:45,480 --> 00:03:47,520 Speaker 5: we get one hundred and forty thousand for the headline 84 00:03:47,600 --> 00:03:50,800 Speaker 5: numbers on payrolls on Friday, will there be a sell 85 00:03:50,800 --> 00:03:53,240 Speaker 5: off in the equity market in tandem with a rally 86 00:03:53,280 --> 00:03:54,040 Speaker 5: in bonds. 87 00:03:54,480 --> 00:03:57,640 Speaker 3: I think potentially we still think that bad news is 88 00:03:57,760 --> 00:04:00,720 Speaker 3: bad news, simply because you have to have the context 89 00:04:00,760 --> 00:04:03,800 Speaker 3: of the starting point of estimates. If estimates were expecting 90 00:04:03,840 --> 00:04:05,920 Speaker 3: a recession, you could get bad news, and it still 91 00:04:05,960 --> 00:04:09,040 Speaker 3: wouldn't be that bad because you're already pricing in weaker growth. 92 00:04:09,320 --> 00:04:12,560 Speaker 3: You're not pricing in any weak growth in this economy 93 00:04:12,680 --> 00:04:15,800 Speaker 3: or in the market. Gdpesmates again are at two point 94 00:04:15,840 --> 00:04:19,400 Speaker 3: four percent, but consider EPs estimates for twenty twenty four. 95 00:04:19,640 --> 00:04:22,000 Speaker 3: They're set to be up thirteen percent next year to 96 00:04:22,080 --> 00:04:24,640 Speaker 3: two hundred and seventy seven dollars a share. 97 00:04:25,160 --> 00:04:26,440 Speaker 1: If you start asking. 98 00:04:26,160 --> 00:04:28,800 Speaker 3: The question if that's too high, that's when bad news 99 00:04:28,839 --> 00:04:30,040 Speaker 3: would become bad news. 100 00:04:30,200 --> 00:04:32,479 Speaker 4: How relevant is the election this year to your call? 101 00:04:33,839 --> 00:04:37,400 Speaker 3: I think that the election is relevant in the context 102 00:04:37,520 --> 00:04:40,920 Speaker 3: of yields, mostly because of treasuries and the fact that 103 00:04:41,080 --> 00:04:45,040 Speaker 3: neither party is talking about austerity. Neither party is talking 104 00:04:45,080 --> 00:04:48,440 Speaker 3: about balanced budgets, which means that all this concern about 105 00:04:48,480 --> 00:04:52,440 Speaker 3: treasury auctions likely continues given the fact that you aren't 106 00:04:52,480 --> 00:04:56,160 Speaker 3: going to see any movement to pull back on deficit spending. 107 00:04:56,279 --> 00:04:58,520 Speaker 2: So fiscal policy is a basket case regardless if he 108 00:04:58,560 --> 00:05:00,000 Speaker 2: wins in November. 109 00:05:00,320 --> 00:05:01,320 Speaker 1: We're still doing the Green Day. 110 00:05:01,320 --> 00:05:02,479 Speaker 4: Thank just that what we're doing. 111 00:05:02,520 --> 00:05:06,440 Speaker 3: Yeah, yeah, sure, I think yes, because you're not seeing 112 00:05:06,480 --> 00:05:09,640 Speaker 3: any sign that you're going to move to more fiscal balance, 113 00:05:09,920 --> 00:05:12,760 Speaker 3: which just means that we should get used to more deficits, 114 00:05:13,040 --> 00:05:15,920 Speaker 3: more high high treasury auctions in the fact that yields 115 00:05:15,920 --> 00:05:18,040 Speaker 3: could be pressured higher on the long end. 116 00:05:17,880 --> 00:05:18,400 Speaker 1: Of the curve. 117 00:05:19,080 --> 00:05:21,240 Speaker 5: At what point is it a computative for stocks, Because 118 00:05:21,240 --> 00:05:22,480 Speaker 5: we've been able to live with it for a. 119 00:05:22,400 --> 00:05:26,440 Speaker 3: While, it becomes punitive if you start questioning the growth story. 120 00:05:26,640 --> 00:05:28,360 Speaker 1: You can forgive a lot of things. 121 00:05:28,400 --> 00:05:31,000 Speaker 3: If growth is remaining resilient, you can shake off a 122 00:05:31,080 --> 00:05:33,839 Speaker 3: tighter FED, you can shake off higher interest rates. But 123 00:05:34,080 --> 00:05:37,279 Speaker 3: if you start cutting growth estimates, which really relies on 124 00:05:37,320 --> 00:05:40,480 Speaker 3: the consumer at seventy percent of GDP, that's. 125 00:05:40,320 --> 00:05:43,880 Speaker 1: When you have the punitive action. You said you advise patients. 126 00:05:44,320 --> 00:05:47,680 Speaker 5: How receptive are people to that recommendation considering the fact 127 00:05:47,680 --> 00:05:50,560 Speaker 5: that that doesn't really work for the DNA of most 128 00:05:50,560 --> 00:05:51,640 Speaker 5: people on Wall Street. 129 00:05:51,880 --> 00:05:54,200 Speaker 3: Yeah, I think that there's still is FOMO. I mean, 130 00:05:54,200 --> 00:05:57,360 Speaker 3: look at GameStop this morning, and you've certainly seen a 131 00:05:57,400 --> 00:06:00,560 Speaker 3: big appetite to Russian to risk. Think, when we think 132 00:06:00,560 --> 00:06:03,800 Speaker 3: about patients, you have to consider positioning and sentiment. Sentiment 133 00:06:03,920 --> 00:06:07,840 Speaker 3: is in the ninetieth percentile, meaning that bullishness is broad based, 134 00:06:08,120 --> 00:06:10,240 Speaker 3: as well as the fact that when you look at positioning, 135 00:06:10,279 --> 00:06:13,320 Speaker 3: you can see that aaii positioning is only about one 136 00:06:13,400 --> 00:06:16,480 Speaker 3: hundred and fifty basis points off its twenty twenty two highs. 137 00:06:16,760 --> 00:06:19,760 Speaker 3: People are positioned for strong equity markets. So what we 138 00:06:19,800 --> 00:06:22,039 Speaker 3: look at with clients is we say, if you've enjoyed 139 00:06:22,080 --> 00:06:25,320 Speaker 3: this rally, you need liquidity some kind of patients before 140 00:06:25,360 --> 00:06:28,200 Speaker 3: adding back into the market is definitely warranted. 141 00:06:28,360 --> 00:06:29,159 Speaker 4: You mentioned game stock. 142 00:06:29,200 --> 00:06:30,600 Speaker 2: Can we just finish on that this stock is up 143 00:06:30,600 --> 00:06:32,200 Speaker 2: in the pre market by seventy five percent? 144 00:06:32,240 --> 00:06:34,640 Speaker 4: Speaking of relevancy, how relevant is this? 145 00:06:34,839 --> 00:06:36,240 Speaker 2: I always hear a lot of people every time we 146 00:06:36,279 --> 00:06:38,479 Speaker 2: get a move like this, they try and say this 147 00:06:38,560 --> 00:06:41,520 Speaker 2: means this, This is a signal for whatever their boss 148 00:06:41,640 --> 00:06:43,760 Speaker 2: was yesterday coming into this move. What does it mean 149 00:06:43,800 --> 00:06:47,039 Speaker 2: to you? If anything, It probably means nothing. 150 00:06:47,240 --> 00:06:49,680 Speaker 3: But if we can try to gain anything from it, 151 00:06:49,680 --> 00:06:52,599 Speaker 3: it would be a measure of sentiment and risk appetite 152 00:06:52,920 --> 00:06:55,880 Speaker 3: as well as liquidity, meaning that if you batch all 153 00:06:55,960 --> 00:06:59,920 Speaker 3: of the mean kind of speculative things together, that is 154 00:07:00,200 --> 00:07:03,480 Speaker 3: a reflection of risk appetite in the market. The thing, 155 00:07:03,520 --> 00:07:05,400 Speaker 3: of course that's missing, though, is that some of your 156 00:07:05,480 --> 00:07:08,520 Speaker 3: riskiest parts of the market, small caps have been completely 157 00:07:08,600 --> 00:07:11,080 Speaker 3: sitting out of this rally, so there's a lot of 158 00:07:11,240 --> 00:07:12,560 Speaker 3: conflicting data points. 159 00:07:12,680 --> 00:07:14,840 Speaker 2: Cameron, this was great. Cameron Dawson at New h RAN. 160 00:07:24,360 --> 00:07:26,600 Speaker 2: It's around the table in New York. Is the international 161 00:07:26,680 --> 00:07:29,240 Speaker 2: president and CEO, Tony Capuano. 162 00:07:29,280 --> 00:07:30,560 Speaker 4: Tony, good morning to here morning. 163 00:07:30,880 --> 00:07:33,040 Speaker 2: We've heard from the airlines very mixed reviews and you 164 00:07:33,080 --> 00:07:37,080 Speaker 2: welcome back anytime American having some problems executing United in 165 00:07:37,160 --> 00:07:39,600 Speaker 2: down to say things are okay in the hotel business, 166 00:07:39,600 --> 00:07:41,880 Speaker 2: summer travel. Just walk us through things and how they 167 00:07:41,880 --> 00:07:42,920 Speaker 2: look regionally at the moment. 168 00:07:43,320 --> 00:07:46,440 Speaker 6: Well, it's interesting listening to the airline CEOs because where 169 00:07:46,440 --> 00:07:49,480 Speaker 6: they're consistent is about the strength of demand. And we 170 00:07:49,520 --> 00:07:51,960 Speaker 6: see the same thing in our business. When we looked 171 00:07:51,960 --> 00:07:56,440 Speaker 6: at Q one results across geographies and across segments, we 172 00:07:56,480 --> 00:07:59,280 Speaker 6: saw strong and steady growth. Now Here in the US, 173 00:07:59,400 --> 00:08:02,560 Speaker 6: our biggest mort we are seeing demands start to normalize 174 00:08:02,600 --> 00:08:05,320 Speaker 6: a little bit. We had global RevPAR of about four 175 00:08:05,320 --> 00:08:07,680 Speaker 6: point two percent. It was only about one and a 176 00:08:07,720 --> 00:08:11,880 Speaker 6: half percent here in the US, eleven percent internationally and 177 00:08:11,960 --> 00:08:16,160 Speaker 6: sixteen percent in Asia. Now there's still benefiting from some 178 00:08:16,320 --> 00:08:20,920 Speaker 6: favorable comparisons, but we are seeing more rapid growth internationally today. 179 00:08:21,000 --> 00:08:22,720 Speaker 2: See the same thing in the airline business that if 180 00:08:22,760 --> 00:08:25,200 Speaker 2: you have this international exposure, you seem to be doing 181 00:08:25,280 --> 00:08:27,360 Speaker 2: better right now. What is that about? Is that the 182 00:08:27,360 --> 00:08:28,800 Speaker 2: affluent consumer traveling more? 183 00:08:28,840 --> 00:08:30,080 Speaker 4: What is that? What explains that? 184 00:08:30,160 --> 00:08:30,280 Speaker 7: Well? 185 00:08:30,320 --> 00:08:31,400 Speaker 1: I think it's a few things. 186 00:08:31,480 --> 00:08:34,280 Speaker 6: I think the strength of the dollar is driving lots 187 00:08:34,280 --> 00:08:36,920 Speaker 6: of outbound US travel. In fact, we were looking at 188 00:08:36,960 --> 00:08:40,079 Speaker 6: the numbers for this summer in Western Europe and this 189 00:08:40,160 --> 00:08:43,160 Speaker 6: is off the back of a record twenty twenty three. 190 00:08:43,640 --> 00:08:47,480 Speaker 6: Our forward booking revenue is up about seven percent going 191 00:08:47,480 --> 00:08:52,000 Speaker 6: into destinations like France, Italy, Spain, Greece, and I think 192 00:08:52,000 --> 00:08:54,000 Speaker 6: the same is true for Asia. There was a study 193 00:08:54,000 --> 00:08:57,439 Speaker 6: that just came out that said, for outbound US travelers, 194 00:08:57,800 --> 00:09:02,000 Speaker 6: among the most desirable destinations Tokyo. And I think you 195 00:09:02,080 --> 00:09:03,719 Speaker 6: talked a little about exchange. 196 00:09:03,360 --> 00:09:05,840 Speaker 4: Rates study en one to sixty house exactly. 197 00:09:05,920 --> 00:09:09,760 Speaker 6: The strength of the dollar is certainly driving that travel pattern. 198 00:09:09,920 --> 00:09:12,880 Speaker 5: I want to just sit on the idea of what 199 00:09:13,040 --> 00:09:17,079 Speaker 5: the characteristics of some of these consumers are. Is there 200 00:09:17,120 --> 00:09:20,400 Speaker 5: a feeling that wealthier consumers are going to keep traveling 201 00:09:20,440 --> 00:09:22,840 Speaker 5: and keep spending and the more you can capture them 202 00:09:22,840 --> 00:09:26,600 Speaker 5: with an international offering, the better you are versus say, 203 00:09:26,679 --> 00:09:27,920 Speaker 5: mid and lower income. 204 00:09:28,360 --> 00:09:30,840 Speaker 6: Well, I think for us, we're trying to capture at 205 00:09:30,880 --> 00:09:33,560 Speaker 6: both ends of that spectrum. So we're lucky enough to 206 00:09:33,600 --> 00:09:36,960 Speaker 6: have the industry's largest luxury portfolio. We announced a few 207 00:09:37,000 --> 00:09:41,040 Speaker 6: more conversions just this morning, resorts like Turtle Bay on 208 00:09:41,120 --> 00:09:45,800 Speaker 6: Oahu and Pelican Hill out in California. So we continue 209 00:09:45,800 --> 00:09:48,760 Speaker 6: to see really strong demand and pricing power in the 210 00:09:48,840 --> 00:09:51,240 Speaker 6: luxury tier. At the same time, at the other end 211 00:09:51,280 --> 00:09:53,640 Speaker 6: of the spectrum. Over the last year, we have for 212 00:09:53,679 --> 00:09:56,120 Speaker 6: the first time in our ninety seven year history, moved 213 00:09:56,120 --> 00:09:58,400 Speaker 6: into the mid scale tier, and that is a more 214 00:09:58,520 --> 00:10:02,440 Speaker 6: value focused customer, and they are absolutely traveling. They're just 215 00:10:02,520 --> 00:10:04,920 Speaker 6: looking for a better value proposition. 216 00:10:05,160 --> 00:10:08,480 Speaker 5: You talk about international travel, there is this feeling that 217 00:10:08,720 --> 00:10:13,160 Speaker 5: companies that go international struggle with respect to some of 218 00:10:13,400 --> 00:10:16,000 Speaker 5: the international relations that have been fraying and some of 219 00:10:16,040 --> 00:10:17,840 Speaker 5: the battles therein Are you. 220 00:10:17,920 --> 00:10:19,920 Speaker 1: Finding that that that's become an issue. 221 00:10:20,080 --> 00:10:22,839 Speaker 6: Well, I think we're a bit insulated for that from 222 00:10:22,920 --> 00:10:25,440 Speaker 6: that because of our business model. We've got about nine 223 00:10:25,480 --> 00:10:29,160 Speaker 6: thousand hotels globally and almost the entirety of the portfolio 224 00:10:29,280 --> 00:10:32,640 Speaker 6: is owned by third party owners and franchisees, and so 225 00:10:32,760 --> 00:10:35,120 Speaker 6: in most of those markets, our owner base is a 226 00:10:35,200 --> 00:10:39,360 Speaker 6: local market base and they're based locally. So you go 227 00:10:39,360 --> 00:10:42,360 Speaker 6: to China, for instance, where we're operating more than five 228 00:10:42,440 --> 00:10:46,320 Speaker 6: hundred hotels today, almost the entirety of that portfolio is 229 00:10:46,360 --> 00:10:49,800 Speaker 6: owned by Chinese ownership, and so that maybe insulates us 230 00:10:49,800 --> 00:10:51,800 Speaker 6: a bit from some of the friction that you describe. 231 00:10:51,920 --> 00:10:54,359 Speaker 4: Is that deliberate or is that just one of the outcomes. 232 00:10:54,679 --> 00:10:58,880 Speaker 6: I think it's largely deliberate. The real estate at its 233 00:10:58,920 --> 00:11:02,280 Speaker 6: core is a local business, and so aligning with partners 234 00:11:02,320 --> 00:11:06,040 Speaker 6: that have deep connections both in the public and private sector, 235 00:11:06,280 --> 00:11:10,880 Speaker 6: that understand local business practices, that have existing relationships with 236 00:11:11,040 --> 00:11:13,480 Speaker 6: lenders in those markets has served us quite well. 237 00:11:13,600 --> 00:11:15,600 Speaker 2: You remember the President in the last month, right I did? 238 00:11:15,679 --> 00:11:16,319 Speaker 2: How did that go? 239 00:11:16,720 --> 00:11:17,000 Speaker 8: Great? 240 00:11:17,400 --> 00:11:19,840 Speaker 6: You know, I was lucky enough to be invited for 241 00:11:19,880 --> 00:11:23,840 Speaker 6: a second time. I applaud the administration for engaging the 242 00:11:23,880 --> 00:11:27,440 Speaker 6: business community, and it gave me a short window to 243 00:11:27,559 --> 00:11:31,800 Speaker 6: describe what the administration can do to support the constituents. 244 00:11:31,840 --> 00:11:34,320 Speaker 4: We can you share some of that with us, of course. 245 00:11:34,040 --> 00:11:38,160 Speaker 6: So I started with our associates, our employees, and I 246 00:11:38,280 --> 00:11:44,240 Speaker 6: talked about, particularly in seasonal destinations, the help we need 247 00:11:44,280 --> 00:11:47,600 Speaker 6: from the administration to expand the number of temporary work 248 00:11:47,720 --> 00:11:50,360 Speaker 6: visas to try and fill in some of the gaps 249 00:11:50,360 --> 00:11:53,120 Speaker 6: in high demand markets. As it relates to our owners 250 00:11:53,160 --> 00:11:56,920 Speaker 6: and franchisees. I really talked about some of the constriction 251 00:11:57,120 --> 00:12:00,640 Speaker 6: we see in the debt markets today. Many of the 252 00:12:00,800 --> 00:12:04,040 Speaker 6: regional banks who have been big, big lenders into the 253 00:12:04,040 --> 00:12:07,520 Speaker 6: hospitality sector are kind of sitting on the sidelines waiting 254 00:12:07,559 --> 00:12:10,520 Speaker 6: to see what BUSL III has to offer in mid 255 00:12:10,600 --> 00:12:14,160 Speaker 6: twenty five and what sort of burden that will put 256 00:12:14,160 --> 00:12:16,600 Speaker 6: on their balance sheets. And so I know in our 257 00:12:16,640 --> 00:12:20,400 Speaker 6: pipeline we've got hundreds of shovel ready projects, which the 258 00:12:20,440 --> 00:12:23,920 Speaker 6: Administration was keen to hear about because of both temporary 259 00:12:23,960 --> 00:12:28,640 Speaker 6: construction job creation and permanent operating job creation. But we 260 00:12:28,720 --> 00:12:31,920 Speaker 6: need some help loosening up the debt markets. And then 261 00:12:32,080 --> 00:12:35,319 Speaker 6: for guests, we really spend a lot of time talking 262 00:12:35,360 --> 00:12:40,280 Speaker 6: about visa weight times. And so you've got a market 263 00:12:40,320 --> 00:12:43,040 Speaker 6: like India. I saw this morning their stock markets going 264 00:12:43,679 --> 00:12:46,559 Speaker 6: to all time record highs. That growing middle class has 265 00:12:46,600 --> 00:12:49,880 Speaker 6: a ravenous appetite for travel. But if you're an Indian 266 00:12:50,000 --> 00:12:53,280 Speaker 6: national trying to get visa to come to the US. 267 00:12:53,679 --> 00:12:56,199 Speaker 6: The current weight time is over four hundred days. 268 00:12:56,920 --> 00:12:58,400 Speaker 1: Let's just dissect some of that. 269 00:12:58,480 --> 00:13:00,559 Speaker 5: Let's start of the first part, the idea that you're 270 00:13:00,600 --> 00:13:03,880 Speaker 5: looking for more workers to come to the US to 271 00:13:03,960 --> 00:13:06,600 Speaker 5: help you out. How much does that change under what 272 00:13:06,640 --> 00:13:08,319 Speaker 5: administration versus the other. 273 00:13:08,280 --> 00:13:12,800 Speaker 1: After the election? Yeah, it's a great question. I'm not 274 00:13:12,840 --> 00:13:13,400 Speaker 1: sure we know. 275 00:13:14,040 --> 00:13:14,240 Speaker 8: Right. 276 00:13:15,120 --> 00:13:19,400 Speaker 6: We have seen support from the Biden administration in terms 277 00:13:19,440 --> 00:13:22,920 Speaker 6: of working with Department of Homeland Security to expand some 278 00:13:23,040 --> 00:13:26,240 Speaker 6: of the temporary worker visas. We'll have to see if 279 00:13:26,280 --> 00:13:28,840 Speaker 6: there's an administration change what their posture will be. 280 00:13:29,480 --> 00:13:32,040 Speaker 5: Immigration has been actually one thing that a lot of 281 00:13:32,040 --> 00:13:34,000 Speaker 5: economists who come on the show talk about. This has 282 00:13:34,000 --> 00:13:37,000 Speaker 5: been the big surprise. Has kept wages down and sort 283 00:13:37,000 --> 00:13:40,840 Speaker 5: of kept inflation from spiraling while continuing to allow growth 284 00:13:40,880 --> 00:13:43,880 Speaker 5: to expand. How much have you seen that on a 285 00:13:43,920 --> 00:13:45,760 Speaker 5: practical level in your own business? 286 00:13:46,200 --> 00:13:49,959 Speaker 6: So coming out of the pandemic, obviously we saw very 287 00:13:50,000 --> 00:13:53,280 Speaker 6: strong wage growth here in the US, our biggest market. 288 00:13:53,320 --> 00:13:56,199 Speaker 6: We're starting to see that more normalize, kind of align 289 00:13:56,240 --> 00:13:58,040 Speaker 6: a little better with inflation. 290 00:13:58,360 --> 00:14:00,760 Speaker 5: But if there wasn't as much immigration, much more difficult 291 00:14:00,760 --> 00:14:02,000 Speaker 5: would it be for your business? 292 00:14:02,080 --> 00:14:05,840 Speaker 1: It would be challenging at this point going forward. 293 00:14:06,080 --> 00:14:08,839 Speaker 5: How much are you seeing wage inflation continued to keep 294 00:14:08,880 --> 00:14:11,360 Speaker 5: pace given the fact that it is challenging based on 295 00:14:11,400 --> 00:14:13,480 Speaker 5: what you're saying to get the number of workers. 296 00:14:13,520 --> 00:14:16,720 Speaker 6: Yeah, as I said, it's sort of moderated a bit. 297 00:14:17,960 --> 00:14:21,200 Speaker 6: We're never fully staffed at the hotel level in a 298 00:14:21,200 --> 00:14:24,440 Speaker 6: pre pandemic world. In any given time in the US, 299 00:14:24,520 --> 00:14:27,280 Speaker 6: we might have had four or five thousand open positions 300 00:14:27,760 --> 00:14:30,440 Speaker 6: during the pandemic and the early days of the recovery 301 00:14:30,440 --> 00:14:34,200 Speaker 6: that swelled to twelve fourteen thousand. It's back down to 302 00:14:34,240 --> 00:14:37,040 Speaker 6: around four or five thousand, and as a result of 303 00:14:37,120 --> 00:14:40,560 Speaker 6: feeling as fully staffed as we might be, some of 304 00:14:40,600 --> 00:14:43,200 Speaker 6: that wage pressure has been moderated. 305 00:14:43,320 --> 00:14:45,560 Speaker 2: You mentioned the debt markets. Let's talk about a debt market. Sure, 306 00:14:45,600 --> 00:14:47,720 Speaker 2: or it depends who you are. If you're a big 307 00:14:47,720 --> 00:14:51,200 Speaker 2: company right now, it is wide open for financing issue. 308 00:14:51,240 --> 00:14:53,480 Speaker 2: Debt will street will eat it up. It doesn't matter 309 00:14:53,480 --> 00:14:55,560 Speaker 2: where you are pounding here right now. But if you're 310 00:14:55,560 --> 00:14:57,400 Speaker 2: at the bottom of stacks. To your point, if you're 311 00:14:57,440 --> 00:15:00,560 Speaker 2: local and you're trying to get financing from a medium 312 00:15:00,600 --> 00:15:03,160 Speaker 2: sized regional lender and you've got a couple of hot hoels, 313 00:15:03,200 --> 00:15:05,720 Speaker 2: whatever your business might be, it's a struggle. How are 314 00:15:05,720 --> 00:15:06,440 Speaker 2: you going to help them? 315 00:15:06,600 --> 00:15:10,160 Speaker 6: How do you so it's again, it's not corporate debt, 316 00:15:10,200 --> 00:15:14,720 Speaker 6: it is project specific construction financing debt. We actually see 317 00:15:14,760 --> 00:15:18,600 Speaker 6: plentiful debt available for existing assets, but if you're trying 318 00:15:18,600 --> 00:15:20,160 Speaker 6: to put a shovel on the ground and get a 319 00:15:20,160 --> 00:15:23,920 Speaker 6: construction mini perm loan, that is quite challenging. And the 320 00:15:23,960 --> 00:15:26,760 Speaker 6: irony is when you talk to many of the lenders 321 00:15:26,760 --> 00:15:30,680 Speaker 6: and they look across their commercial real estate portfolios, they say, 322 00:15:30,720 --> 00:15:35,000 Speaker 6: our hospitality loans are the best performing sector. But because 323 00:15:35,040 --> 00:15:38,360 Speaker 6: we've got this uncertainty into mid twenty five about what 324 00:15:38,480 --> 00:15:42,360 Speaker 6: balance sheet requirements we might have, often unfortunately they're saying 325 00:15:42,440 --> 00:15:44,040 Speaker 6: call us middle of next year. 326 00:15:44,280 --> 00:15:47,160 Speaker 5: What I find fascinating is it seems like your business 327 00:15:47,200 --> 00:15:49,560 Speaker 5: is thriving. You're still seeing a lot of travel. It's 328 00:15:49,560 --> 00:15:52,240 Speaker 5: not like people aren't traveling, but that it could be 329 00:15:52,280 --> 00:15:56,440 Speaker 5: even better if rates were lower. Are you basically saying 330 00:15:56,800 --> 00:15:58,880 Speaker 5: that the economy would just be growing at a much 331 00:15:58,920 --> 00:16:01,160 Speaker 5: faster clip, that you would see that much more expansion 332 00:16:01,560 --> 00:16:04,680 Speaker 5: if rates for lower, But that it's not necessarily hampering 333 00:16:04,720 --> 00:16:06,440 Speaker 5: your business and you're a billion pro Now. 334 00:16:06,720 --> 00:16:09,880 Speaker 6: It's a great question, I think for when you look 335 00:16:09,880 --> 00:16:12,520 Speaker 6: at our owner community, the vast majority of them are 336 00:16:12,600 --> 00:16:15,960 Speaker 6: long term investors in the sector, and so they understand 337 00:16:16,000 --> 00:16:19,440 Speaker 6: they've chosen a real estate sector that is cyclical by 338 00:16:19,480 --> 00:16:23,880 Speaker 6: its nature. They are less impeded by the current interest 339 00:16:23,920 --> 00:16:27,800 Speaker 6: rate environment and more impeded by just the sheer availability 340 00:16:27,800 --> 00:16:30,160 Speaker 6: of new origination for construction depth. 341 00:16:30,960 --> 00:16:32,680 Speaker 2: I want to get to these three hotels, sure and 342 00:16:32,880 --> 00:16:35,000 Speaker 2: us this morning? Can I just cite Razilla Pelican Hill. 343 00:16:35,040 --> 00:16:36,920 Speaker 2: There's going to be a whole team over at PIMCO 344 00:16:37,040 --> 00:16:39,200 Speaker 2: waking up this morning and know that hotel very well 345 00:16:39,520 --> 00:16:42,120 Speaker 2: over in Newport Beach. How exciting you about these three 346 00:16:42,200 --> 00:16:43,720 Speaker 2: names this morning you've announced. 347 00:16:43,400 --> 00:16:44,040 Speaker 1: Yeah, all three. 348 00:16:44,800 --> 00:16:47,360 Speaker 6: Early in my career I ran development in the West 349 00:16:47,400 --> 00:16:50,280 Speaker 6: and so I was in Newport Beach when that hotel 350 00:16:50,480 --> 00:16:54,080 Speaker 6: was developed. As you point out, it is an iconic asset. 351 00:16:54,640 --> 00:16:58,440 Speaker 6: Donald Brinn and the Irvine Company have built a generational 352 00:16:58,480 --> 00:17:03,200 Speaker 6: asset there and we are extraordinarily proud that they've selected 353 00:17:03,280 --> 00:17:05,920 Speaker 6: us and the Saint Regis brand for that hotel. It'll 354 00:17:05,920 --> 00:17:08,040 Speaker 6: be a terrific addition to the portfolio. 355 00:17:08,080 --> 00:17:10,120 Speaker 2: How do things change when you do things like this 356 00:17:10,560 --> 00:17:14,320 Speaker 2: incredibly successful resort, very much loved in the area. Do 357 00:17:14,359 --> 00:17:16,119 Speaker 2: you put us in Regis brand on it and it 358 00:17:16,200 --> 00:17:17,760 Speaker 2: changes overnight? What does that look like? 359 00:17:18,000 --> 00:17:21,360 Speaker 6: Yeah, I mean we're still working through some of those specifics. 360 00:17:21,400 --> 00:17:24,520 Speaker 6: I think the Saint Regis brand will maybe be kind 361 00:17:24,560 --> 00:17:27,480 Speaker 6: of underneath the Pelican Hill Resort name. It is such 362 00:17:27,520 --> 00:17:30,000 Speaker 6: an iconic name and there's so much equity in that name. 363 00:17:31,400 --> 00:17:33,159 Speaker 6: This would be a good question for the folks at 364 00:17:33,200 --> 00:17:36,639 Speaker 6: Irvine Company, But I think from their perspective, among the 365 00:17:36,720 --> 00:17:39,760 Speaker 6: things that attracted them to us, the power of our 366 00:17:39,800 --> 00:17:44,160 Speaker 6: revenue engines, the reach of our global loyalty program, and 367 00:17:44,240 --> 00:17:46,760 Speaker 6: the strength we're seeing in the group segment, which is 368 00:17:46,760 --> 00:17:48,439 Speaker 6: an important part of the demand picture. 369 00:17:48,480 --> 00:17:50,359 Speaker 2: There are you going to tell me which luxury hotown 370 00:17:50,400 --> 00:17:51,920 Speaker 2: in New York on Friday? 371 00:17:52,000 --> 00:17:52,520 Speaker 4: On Friday? 372 00:17:52,560 --> 00:17:54,480 Speaker 1: If you have me back, I'll be happy to all right. 373 00:17:54,359 --> 00:17:56,040 Speaker 4: You give us a cool Tony. It's good to see you. 374 00:17:56,119 --> 00:17:56,600 Speaker 1: Nice to see it. 375 00:17:56,680 --> 00:17:59,959 Speaker 2: Thank you, Let's catch up soon. Tony Kawakuana, the Internet 376 00:18:00,080 --> 00:18:01,840 Speaker 2: nor President and c e O. 377 00:18:12,080 --> 00:18:13,840 Speaker 7: John, thank you very much. Indeed, if you look at 378 00:18:13,840 --> 00:18:16,000 Speaker 7: the ir for data, what it will tell you is 379 00:18:16,000 --> 00:18:18,919 Speaker 7: that a lot of the profitability in this sector is 380 00:18:18,960 --> 00:18:22,200 Speaker 7: coming from the United States, and within the United States, 381 00:18:22,280 --> 00:18:24,440 Speaker 7: it's coming from the big carriers. As you say, we're 382 00:18:24,520 --> 00:18:27,440 Speaker 7: joined by one of those now, the CEO of United 383 00:18:27,520 --> 00:18:31,520 Speaker 7: Scott Kirby. Nice to see, sir, Thanks for eving. We 384 00:18:31,600 --> 00:18:34,080 Speaker 7: saw a little hiccup a few days back. American comes out, 385 00:18:34,359 --> 00:18:37,800 Speaker 7: it changes its guidance, the industry reacts, share prices go down. 386 00:18:37,840 --> 00:18:41,159 Speaker 7: You're very quick, very quick to come out and reconfirm 387 00:18:41,200 --> 00:18:42,639 Speaker 7: your guidance on the back of that. 388 00:18:43,000 --> 00:18:44,040 Speaker 4: But are you seeing. 389 00:18:43,840 --> 00:18:46,480 Speaker 7: Any indication that the consumer is softening at the moment? 390 00:18:46,560 --> 00:18:49,240 Speaker 9: You know, it's demand for us is steady as she 391 00:18:49,320 --> 00:18:51,800 Speaker 9: goes in a way kind of boring over the last 392 00:18:51,840 --> 00:18:52,280 Speaker 9: couple of years. 393 00:18:52,320 --> 00:18:53,359 Speaker 8: I think boring is good. 394 00:18:53,400 --> 00:18:55,639 Speaker 9: But it really is not getting a lot stronger, but 395 00:18:55,760 --> 00:18:56,520 Speaker 9: not getting weaker. 396 00:18:56,560 --> 00:18:57,679 Speaker 8: It really is pretty steady. 397 00:18:58,240 --> 00:19:02,399 Speaker 7: And what changes that? Does anything change that? Does the 398 00:19:02,400 --> 00:19:04,679 Speaker 7: fact that the labor market maybe started to show a 399 00:19:04,680 --> 00:19:07,760 Speaker 7: few little cracks, the fact that maybe rates stay higher 400 00:19:07,800 --> 00:19:10,760 Speaker 7: for longer. Do any of these factors impact that that 401 00:19:11,040 --> 00:19:13,879 Speaker 7: strong consumer that was saying to you it could. 402 00:19:13,920 --> 00:19:15,960 Speaker 9: But we spent the last two years talking about the 403 00:19:16,040 --> 00:19:19,320 Speaker 9: risk of recession and the consumer just keeps plowing ahead 404 00:19:19,320 --> 00:19:22,640 Speaker 9: and keeps going, and so I think that's likely going 405 00:19:22,680 --> 00:19:26,600 Speaker 9: to continue. The bigger thing, the more likely change for aviation, 406 00:19:26,680 --> 00:19:27,240 Speaker 9: I think is on. 407 00:19:27,200 --> 00:19:28,160 Speaker 8: The supply side. 408 00:19:28,320 --> 00:19:31,159 Speaker 9: We're at a peak and where the number of seats 409 00:19:31,240 --> 00:19:33,560 Speaker 9: is growing a whole lot faster than the demand in 410 00:19:33,560 --> 00:19:36,560 Speaker 9: the United States. But as we move into the third 411 00:19:36,560 --> 00:19:39,040 Speaker 9: and fourth quarter, those numbers are scheduled to come to 412 00:19:39,200 --> 00:19:41,480 Speaker 9: back down. Lie So I think the supply balance will 413 00:19:41,800 --> 00:19:44,520 Speaker 9: counteract even if there was some seats going through. 414 00:19:44,560 --> 00:19:46,680 Speaker 7: Because is it with you guys at the upper end, 415 00:19:46,880 --> 00:19:49,200 Speaker 7: the full service carriers, I'm suiting really across. 416 00:19:48,920 --> 00:19:51,560 Speaker 9: The board, right, you know, Southwest is probably the biggest 417 00:19:51,680 --> 00:19:54,840 Speaker 9: thrower of seats, but it's really it really is across 418 00:19:54,840 --> 00:19:57,560 Speaker 9: the board. We're growing, others will growing kind of across 419 00:19:57,560 --> 00:19:57,960 Speaker 9: the board. 420 00:19:58,320 --> 00:19:58,879 Speaker 8: Just the peak. 421 00:19:59,000 --> 00:20:01,520 Speaker 9: This is a lot of still recovery from COVID, and 422 00:20:01,560 --> 00:20:04,080 Speaker 9: this was the time that people were getting all their 423 00:20:04,880 --> 00:20:06,480 Speaker 9: ability to grow back in place. 424 00:20:06,680 --> 00:20:08,680 Speaker 8: So second quarters piece, I. 425 00:20:08,600 --> 00:20:10,560 Speaker 7: Can see that capacity in some ways making sense of 426 00:20:10,640 --> 00:20:12,159 Speaker 7: your end of the market. Does it make sense at 427 00:20:12,119 --> 00:20:13,720 Speaker 7: the bottom end of the market, do you think all 428 00:20:13,720 --> 00:20:15,639 Speaker 7: of those low cost carriers survive? 429 00:20:16,800 --> 00:20:18,480 Speaker 9: No, it doesn't make sense, and we can look, we 430 00:20:18,520 --> 00:20:21,600 Speaker 9: do do the route p and ls really accurately for everyone, 431 00:20:21,640 --> 00:20:24,560 Speaker 9: and you know everyone that's you know, as Martin's Lord 432 00:20:24,600 --> 00:20:26,199 Speaker 9: of Us has a big chunk of their route network 433 00:20:26,200 --> 00:20:29,240 Speaker 9: that loses money. The low cost and ultra low cost 434 00:20:29,240 --> 00:20:30,800 Speaker 9: carriage in particular lose. 435 00:20:30,680 --> 00:20:34,679 Speaker 8: An awful lot of money. It's just it's a fatally 436 00:20:34,680 --> 00:20:35,639 Speaker 8: flawed business model. 437 00:20:35,960 --> 00:20:36,919 Speaker 4: So some of them are going to go. 438 00:20:37,359 --> 00:20:39,520 Speaker 8: I think that they're going to struggle to survive. 439 00:20:39,680 --> 00:20:41,159 Speaker 7: Okay, that's about as far as I think I'm going 440 00:20:41,160 --> 00:20:44,439 Speaker 7: to get used to say. That just makes the American issue. 441 00:20:44,880 --> 00:20:47,119 Speaker 7: They pushed the corporate market very hard. Did you benefit 442 00:20:47,160 --> 00:20:47,520 Speaker 7: from them? 443 00:20:48,200 --> 00:20:51,520 Speaker 9: You know, there's a probably a small benefit in market 444 00:20:51,520 --> 00:20:54,200 Speaker 9: share that we watched the data pretty closely, and while 445 00:20:54,520 --> 00:20:56,720 Speaker 9: they we got a little bit of market share from them, 446 00:20:56,840 --> 00:20:59,480 Speaker 9: we thought that they were making up close to one 447 00:20:59,520 --> 00:21:03,560 Speaker 9: hundred percent of their revenue change in terms of distribution expenses. 448 00:21:04,440 --> 00:21:06,439 Speaker 9: And so I think it's gotten a lot of press, 449 00:21:06,640 --> 00:21:10,640 Speaker 9: but we certainly thought it was a marginal issue, both 450 00:21:10,680 --> 00:21:11,640 Speaker 9: for them and for us. 451 00:21:12,640 --> 00:21:15,040 Speaker 7: You talk about the supply side. The industry though, is 452 00:21:15,040 --> 00:21:17,920 Speaker 7: supply constrained. Right now, You've got an issue with the 453 00:21:17,920 --> 00:21:20,199 Speaker 7: prime Whinney engines that are going on three twenty's. You've 454 00:21:20,200 --> 00:21:22,240 Speaker 7: got issues with the Max and the White of Boeing 455 00:21:22,320 --> 00:21:26,240 Speaker 7: issues right now? Is your sense that we are past 456 00:21:26,280 --> 00:21:28,239 Speaker 7: the worst of that there's worse still to come. Come 457 00:21:28,320 --> 00:21:29,359 Speaker 7: and just give us to say to something. 458 00:21:29,840 --> 00:21:31,440 Speaker 9: You know, I think we are past the worst. I 459 00:21:31,520 --> 00:21:35,040 Speaker 9: think we've acknowledged the problems by and large. You know, 460 00:21:35,119 --> 00:21:38,480 Speaker 9: you talked about two of the big manufacturers that are issues, 461 00:21:38,560 --> 00:21:42,560 Speaker 9: Pratt and Boeing. I think that we're we're probably moving 462 00:21:42,720 --> 00:21:44,920 Speaker 9: up from here. It's not going to be overnight. They're 463 00:21:44,960 --> 00:21:48,000 Speaker 9: not going to get back to one hundred percent, you know, quickly. 464 00:21:48,960 --> 00:21:49,920 Speaker 8: But that's okay. 465 00:21:50,200 --> 00:21:52,639 Speaker 9: Like you know, particularly when I took them Boeing, you know, 466 00:21:52,920 --> 00:21:55,280 Speaker 9: like I'm not worried about the next twelve to eighteen months. 467 00:21:55,359 --> 00:21:57,960 Speaker 9: I want to get structural the structure and they want 468 00:21:58,000 --> 00:22:01,879 Speaker 9: to also, and then get them back to delivering high quality, 469 00:22:02,000 --> 00:22:04,040 Speaker 9: delivering on time, delivering on schedule. 470 00:22:04,440 --> 00:22:06,440 Speaker 8: And that's the path that's most important. 471 00:22:06,640 --> 00:22:06,920 Speaker 4: Talk. 472 00:22:07,359 --> 00:22:09,680 Speaker 7: So when you thought a would be five years a Boeing, yeah, 473 00:22:09,680 --> 00:22:10,880 Speaker 7: I think that's a realistic number. 474 00:22:11,200 --> 00:22:14,639 Speaker 9: I think it'll be faster than five years, but it 475 00:22:14,760 --> 00:22:18,679 Speaker 9: depends on them really making the kinds of cultural changes 476 00:22:19,080 --> 00:22:21,199 Speaker 9: that they need to make. If they make the cultural changes, 477 00:22:21,480 --> 00:22:25,359 Speaker 9: I think Boeing gets fixed or gets back, gets their 478 00:22:25,440 --> 00:22:28,880 Speaker 9: mojo back quicker. If they don't make cultural changes, they're 479 00:22:28,920 --> 00:22:29,880 Speaker 9: not going to get their mojo back. 480 00:22:30,359 --> 00:22:31,760 Speaker 7: If you was to give advice to the chair on 481 00:22:31,840 --> 00:22:33,320 Speaker 7: what kind of a person needs to sit in that 482 00:22:33,480 --> 00:22:35,840 Speaker 7: cease of CEO, what kind of advice. 483 00:22:35,560 --> 00:22:36,000 Speaker 4: Would you give? 484 00:22:36,119 --> 00:22:39,600 Speaker 9: So you know, what I hope they do is somebody 485 00:22:40,160 --> 00:22:44,240 Speaker 9: that focuses on the culture of Boeing and letting the 486 00:22:44,280 --> 00:22:46,520 Speaker 9: one hundred and forty thousand only has one hundred and 487 00:22:46,520 --> 00:22:50,800 Speaker 9: forty thousand great people, engineers, mechanics. Let them go build, 488 00:22:50,960 --> 00:22:55,639 Speaker 9: design great products, build great technology, and focus on that 489 00:22:55,880 --> 00:22:57,720 Speaker 9: and not focus on the short term financials. 490 00:22:57,880 --> 00:22:58,600 Speaker 8: I think that's the. 491 00:22:58,600 --> 00:23:04,320 Speaker 9: Biggest Issueocus on the upfront. Build great airplanes, great products, 492 00:23:04,359 --> 00:23:05,959 Speaker 9: and the financials will take care of themselves. 493 00:23:05,960 --> 00:23:08,560 Speaker 8: Don't try to manage the back end. Manage it upfront. 494 00:23:08,800 --> 00:23:12,159 Speaker 7: Start from that. Let's stay with the FAA. You've been 495 00:23:12,240 --> 00:23:15,320 Speaker 7: under review by the FAA. Any indication kind of how 496 00:23:15,359 --> 00:23:16,680 Speaker 7: long that process is going to last? 497 00:23:16,720 --> 00:23:17,240 Speaker 8: Where are we? 498 00:23:17,760 --> 00:23:21,119 Speaker 9: Yeah, everything in that process has gone well so far, 499 00:23:21,320 --> 00:23:22,359 Speaker 9: no major findings. 500 00:23:22,600 --> 00:23:24,040 Speaker 8: I think the FA would tell you that. I know, 501 00:23:24,080 --> 00:23:25,439 Speaker 8: the FA would tell you the same thing if they 502 00:23:25,440 --> 00:23:28,359 Speaker 8: answer the question. You know, we feel good, we think it. Actually, 503 00:23:28,400 --> 00:23:30,040 Speaker 8: we've taken this as an opportunity. 504 00:23:30,480 --> 00:23:32,840 Speaker 9: Really we had a great safety foundation, but we did 505 00:23:32,920 --> 00:23:35,320 Speaker 9: have a number of events that happened. But take that 506 00:23:35,480 --> 00:23:38,320 Speaker 9: as an opportunity to make not just safety number one, 507 00:23:38,600 --> 00:23:41,159 Speaker 9: but top of mind awareness all the time. And you know, 508 00:23:41,280 --> 00:23:43,800 Speaker 9: I for the rest of my career, for example, every 509 00:23:43,840 --> 00:23:45,639 Speaker 9: time I talk to employees, you know, I'm going to 510 00:23:45,680 --> 00:23:48,160 Speaker 9: talk about keeping safety top of mind. We've all believed 511 00:23:48,160 --> 00:23:50,720 Speaker 9: it's number one in aviation, but keeping it top of 512 00:23:50,800 --> 00:23:54,199 Speaker 9: mind when everything is going great, you know, still focus 513 00:23:54,280 --> 00:23:56,440 Speaker 9: on that all the little things because all the little 514 00:23:56,480 --> 00:23:56,920 Speaker 9: things matter. 515 00:23:57,000 --> 00:23:58,480 Speaker 7: What do you want to see from the next administration? 516 00:23:58,600 --> 00:23:59,879 Speaker 7: What do you want to see from the next incoming 517 00:24:00,040 --> 00:24:00,520 Speaker 7: the White House? 518 00:24:00,720 --> 00:24:01,879 Speaker 8: What helps this industry? 519 00:24:02,040 --> 00:24:02,840 Speaker 7: What helps America? 520 00:24:03,040 --> 00:24:05,800 Speaker 8: Well, it's more about help America and help the world. 521 00:24:05,960 --> 00:24:09,320 Speaker 9: You know, I think the United States is I think 522 00:24:09,440 --> 00:24:11,959 Speaker 9: it's it's the greatest country in the history of the planet. 523 00:24:12,600 --> 00:24:13,400 Speaker 8: But what makes us. 524 00:24:13,400 --> 00:24:18,040 Speaker 9: Great is positivity, optimism, vision for the future. And I 525 00:24:18,119 --> 00:24:21,159 Speaker 9: want us to get back to being positive, being optimistic, 526 00:24:21,359 --> 00:24:23,840 Speaker 9: looking to the future and how to make things better 527 00:24:24,640 --> 00:24:27,240 Speaker 9: and focusing on that, and I think we need that 528 00:24:27,359 --> 00:24:29,720 Speaker 9: in the United States. I think people would respond positively 529 00:24:29,880 --> 00:24:32,600 Speaker 9: to that. The world needs it, and we can make 530 00:24:32,680 --> 00:24:34,040 Speaker 9: the country in the world a better place. 531 00:24:34,440 --> 00:24:36,560 Speaker 7: You are by far and away the most international of 532 00:24:36,600 --> 00:24:40,119 Speaker 7: the US major carriers. Do you think a Trump administration 533 00:24:40,280 --> 00:24:43,119 Speaker 7: makes your job harder being an international carrier? Do you 534 00:24:43,160 --> 00:24:45,000 Speaker 7: think we're going to see more fragmentation? I guess the 535 00:24:45,080 --> 00:24:46,840 Speaker 7: question that I'm really asking you. 536 00:24:46,880 --> 00:24:49,679 Speaker 9: Know, I don't think it really affects demand or our 537 00:24:49,720 --> 00:24:53,560 Speaker 9: ability to fly around the world in any measurable way, 538 00:24:53,640 --> 00:24:54,320 Speaker 9: one way or another. 539 00:24:54,920 --> 00:24:57,320 Speaker 7: Great to see you, Thanks very to see Thank you, Scott, 540 00:24:57,320 --> 00:25:01,040 Speaker 7: Thank you very much, indeed, Scott Kirby John of the 541 00:25:01,119 --> 00:25:03,639 Speaker 7: United here at the IARTA AGM in Dubai. 542 00:25:04,600 --> 00:25:08,120 Speaker 2: This is the Bloomberg Surveillance podcast, bringing you the best 543 00:25:08,200 --> 00:25:11,480 Speaker 2: in markets, economics, angio politics. 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