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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim

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Speaker 1: Fox along with my co host Lisa Bramowitz. Each day

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Speaker 1: we bring you the most important, noteworthy, and useful interviews

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Speaker 1: for you and your money, whether you're at the grocery

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Speaker 1: store or the trading floor. Find the Bloomberg p m

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Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well,

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Speaker 1: the Sinclair Broadcast Group is not very well known, but

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Speaker 1: it has one hundreds and seventy three broadcast TV stations,

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Speaker 1: mostly in small markets like Sioux City, uh fres No,

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Speaker 1: Little Rock, some bigger ones Pittsburgh, Salt Lake City in Washington,

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Speaker 1: but they have increasingly taken a rather conservative band, Felix

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Speaker 1: to let Bloomberg Business Week Reporter wrote a story about

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Speaker 1: this that was truly fastening and Felix, first, can you

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Speaker 1: just start with how you came to even write about this? Yeah, Well,

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Speaker 1: it's one of those fascinating companies that kind of flies

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Speaker 1: under the radar. Um. The way I got interested is

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Speaker 1: when they announced their four billion dollar acquisition of Tribune

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Speaker 1: Media in May, and I was sitting around with a

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Speaker 1: couple of my colleagues and we're like, how come we

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Speaker 1: don't know much about Sinclair or who runs that are

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Speaker 1: what the culture of the company is like. And for

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Speaker 1: a very important and influential media company, UM, they managed

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Speaker 1: to really keep their name out of the news as

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Speaker 1: much as possible. Tell us about David Smith. He's the

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Speaker 1: chairman of the company. Him and his three brothers inherited

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Speaker 1: the company from their father, Julian back in the who

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Speaker 1: started the company originally in nineteen seventies. And for the

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Speaker 1: first you know, a couple of decades of the company,

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Speaker 1: it was a really small regional business. And then the

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Speaker 1: nineties David Smith really started going out and acquiring other stations,

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Speaker 1: and they've been the most aggressive acquirer of broadcast TV

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Speaker 1: stations to the point where now they're not only the

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Speaker 1: largest station already station group already, but now, uh, you know,

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Speaker 1: with the acquisition of a media they're going to be

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Speaker 1: by far in a way, the largest broadcaster in the country.

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Speaker 1: How did they get around anti trust rules in SEC regulations. Well,

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Speaker 1: it's amazing because you know, David Smith uh and his

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Speaker 1: brothers are all big supporters of Republican politicians and conservative causes. Uh.

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Speaker 1: If Hillary Clinton had won the election, there's no way

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Speaker 1: this Tribune Media deal would have gone through the FCC,

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Speaker 1: H would not have allowed it. And basically what happened

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Speaker 1: is when Trump won his nomination to run the FCC,

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Speaker 1: pretty soon after taking over, changed a rule that limited

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Speaker 1: ownership of local media companies. And as soon as that

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Speaker 1: rule was changed and this arcane rule was re emplaced, UM,

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Speaker 1: then that allowed UH Sinclair to buy Tribune Media and

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Speaker 1: it's the biggest acquisition the company's history. Felix described for

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Speaker 1: people how the television business works when you own a

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Speaker 1: station and are an affiliate of a network, and then

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Speaker 1: your ability to insert local programming. Yeah, well, you know, basically,

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Speaker 1: the station owner UM, even though the branding is from

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Speaker 1: the network like ABC, NBC, Fox, CW, the station group

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Speaker 1: that owns the station, like Sinclair, has a lot of

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Speaker 1: influence and sway over the newsroom, which is really what

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Speaker 1: creates the programming. So the local you know, your morning news,

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Speaker 1: your evening news, your local nightly news, all of that

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Speaker 1: is controlled by a station group that you know, the

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Speaker 1: reports of the station group. And so what's amazing about

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Speaker 1: Sinclair's They've really pioneered this method of injecting essentially centralized

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Speaker 1: conservative political punditry into all of these small stations around

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Speaker 1: the country. So does Sinclair have any direct relationship with

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Speaker 1: President Trump and some of his cohorts like uh Steve

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Speaker 1: Bannon and others. Or is it just sort of a

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Speaker 1: tangential relationship based on the ties of the founders of Sinclair. Uh.

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Speaker 1: You know, Initially during the start of the two thousand

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Speaker 1: and sixteen presidential campaign, they threw their support behind UM

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Speaker 1: Ben Carson, who, like David Smith and his brothers UH,

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Speaker 1: is from the Baltimore area. UM. But once Ben Carson

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Speaker 1: dropped out, they really threw their support behind Trump. They

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Speaker 1: did a lot of you know, these centralized news stories

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Speaker 1: that's were sent out to the station's criticizing Hillary Clinton. Uh.

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Speaker 1: They've broke her to deal with Trump and his campaign

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Speaker 1: to get more access for the reporters in exchange for

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Speaker 1: not really criticizing uh those interviews at all and running

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Speaker 1: them in full. And yeah, they've basically worked pretty hard

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Speaker 1: to UM to align themselves with Trump. UM. Most recently

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Speaker 1: and probably most importantly, they hired Boris Epstein, who was

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Speaker 1: a uh, you know, an aid to the president, one

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Speaker 1: of his real surrogates on TV. Throughout the campaign, they

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Speaker 1: hired Boers After a brief stint in the White House,

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Speaker 1: they hired him to be their chief political analyst and

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Speaker 1: he now does you know, three uh segments a week,

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Speaker 1: many of which is echo White hot House talking points,

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Speaker 1: and each of those segments is then sent out to

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Speaker 1: every single newsroom around the country that they're called what

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Speaker 1: in the in the terms, they're called must runs and

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Speaker 1: even the year. And this creates a lot of tension

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Speaker 1: at the stations, particularly in big areas. Um, you know,

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Speaker 1: they've had a lot of friction with for instance, Como TV,

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Speaker 1: which is the station that they bought in Seattle area.

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Speaker 1: It's a very progressive city. It's a liberal viewership. And

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Speaker 1: when you talk to the people at these stations, they

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Speaker 1: think this is crazy. We're doing our local newscast and

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Speaker 1: all of a sudden we have to cut, you know,

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Speaker 1: two minutes out of the evening news to go to

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Speaker 1: this you know, former Trump spokesperson to do a segment

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Speaker 1: about how great Trump is. Of course, it only matters

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Speaker 1: if people watch, and real quick are people watch ching

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Speaker 1: is listener? Is viewership going up? They have a big

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Speaker 1: aggregate audience. I don't think the audiences are going up.

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Speaker 1: And typically they don't even really with their stations in

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Speaker 1: these markets. They don't really try and have the top

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Speaker 1: station ratings wise. Uh, they usually just um, you know,

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Speaker 1: buy more stations in the market. Well, it hasn't helped

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Speaker 1: the stock stocks up four percent so far this year.

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Speaker 1: Thanks very much, Felix Gillette. Great story. I encourage everyone

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Speaker 1: to read about the Sinclair Bard Broadcasting Well. I am

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Speaker 1: very pleased to welcome Cord Christensen. He is co founder,

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Speaker 1: chief executive officer, and chairman of pet i q, the Boise,

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Speaker 1: Idaho based company that just distributes pet supplies and adjusted

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Speaker 1: it's I p O. It shares her up more than

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Speaker 1: four sent on its first day of trading. Cord, congratulations

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Speaker 1: on the successful I p O. I wanted just to

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Speaker 1: get a sense of from you, first of all, before

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Speaker 1: we get into the actual financing, about pet i Q

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Speaker 1: and what the business model is and what the growth

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Speaker 1: potential is at this point that you see, yes, thank you,

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Speaker 1: we uh care a. Pet i Q are very focused

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Speaker 1: on one thing, and that is providing better availability of

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Speaker 1: the best pet healthcare items and by making those available

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Speaker 1: through major retailers across the United States, and the company

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Speaker 1: founded day one with that focus. We've never changed that

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Speaker 1: focus and ultimately it's a very large market that's growing

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Speaker 1: extremely well already. But there's a significant number of pets

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Speaker 1: out there in the country that do not get great healthcare,

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Speaker 1: and we think because all pets end up buying their

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Speaker 1: products through our customers, we have the best opportunity to

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Speaker 1: help educate consumers, bring in those those consumers that are

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Speaker 1: not providing that, and ultimately grow the market significantly for

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Speaker 1: all people that participate in it. We think it's great

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Speaker 1: for our supplier partners, for the company as shareholders, unnultimately

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Speaker 1: for consumers and their pet owners. Is is this gonna

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Speaker 1: be a shot at veterinary offices, because isn't that where

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Speaker 1: most people are most medication for pets is currently purchased. Yeah,

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Speaker 1: we sure hope not. We built the company hoping that

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Speaker 1: we would grow the total market and help everybody be

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Speaker 1: successful in it, and we've seen we've been in business

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Speaker 1: now since two thousand and nine, and as a company

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Speaker 1: as we've grown there definitely was early days. I think

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Speaker 1: some people that had the fear of the unknown and

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Speaker 1: definitely thought that could be the case. But what we've

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Speaker 1: seen is the market's growing and we're definitely seeing those

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Speaker 1: new pets coming into it, and the veterinarians have grown

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Speaker 1: both the visits and the product business that they have

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Speaker 1: in their clinics every single year we've been in business,

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Speaker 1: and we hope to continue to drive this success in

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Speaker 1: the veterinarian's office. We view them absolutely the critical part

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Speaker 1: of the partnership here at pet i Q and want

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Speaker 1: to support at them enory and every way we can. Okay,

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Speaker 1: I got that. But you know you've got three main

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Speaker 1: categories of business, right, I mean you've got the prescription medication,

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Speaker 1: You've got the over counter medication, and then the health

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Speaker 1: and wellness products. Correct, That is correct? Okay, So I'm

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Speaker 1: looking at, let's say, the prescription medication. I mean, I

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Speaker 1: got to think that if it's less expensive at you know,

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Speaker 1: Walmart or pet Smarter or Kroger or whatever, that that's

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Speaker 1: where people are going to go, as opposed to just saying, okay,

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Speaker 1: give me whatever you prescribed and I'll pay for it. Yeah.

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Speaker 1: I think that definitely could be the first perception. There's

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Speaker 1: definitely going to be some people that say they're going

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Speaker 1: to go there and buy their pet prescriptions where they

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Speaker 1: buy their human prescriptions. But there's been access to pet

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Speaker 1: prescriptions outside of the veterinarian market for a very long time.

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Speaker 1: You have great companies like One Pet Meds that have

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Speaker 1: been selling in that manner for a very long time

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Speaker 1: with with pricing that's been very very established to be

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Speaker 1: a saving So we think we can peacefully coexist. We

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Speaker 1: think we can drive a lot more people into the

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Speaker 1: space and and ultimately the veterinarians will gets the first meeting,

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Speaker 1: they get the opportunity to be with the patient first,

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Speaker 1: and that patient has the opportunity to buy their products there.

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Speaker 1: So more times than not they'll choose to buy at

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Speaker 1: the veterinarian But there will be those that want to

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Speaker 1: come and get their pet prescriptions and they're over the

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Speaker 1: counter medications to our customers, and we view it as

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Speaker 1: a very creative opportunity for everybody that's in the industry. Court.

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Speaker 1: You know, we had a guest on a couple of

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Speaker 1: weeks ago who is saying that there have been studies

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Speaker 1: done that show that people love their pets more than

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Speaker 1: their children. Uh. You know, I have to wonder, just

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Speaker 1: in light of the increasing love and emphasis on pets,

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Speaker 1: whether the entire amount of spending that people uh have

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Speaker 1: every year on their pet healthcare, whether that's rising at

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Speaker 1: an exponential price. Can you can you give us a

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Speaker 1: sense of that? Yeah? I think um I mentioned it

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Speaker 1: a number of times throughout my career, but it's been

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Speaker 1: really interesting. For two years on a row now there's

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Speaker 1: been more pets brought home to US households than actually babies.

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Speaker 1: And so if you just think of the trend as

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Speaker 1: that continues to compound, as those pets year over year

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Speaker 1: do that we're going to see. Well, I'm just like

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Speaker 1: trying to comprehend that the past two years there have

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Speaker 1: been more pets brought home than babies in the US

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Speaker 1: for the first time in our history of our country.

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Speaker 1: Two years in a row. Oh my gosh, Okay, quite

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Speaker 1: sorry now, And so I think it's it's very obvious

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Speaker 1: that with all the new you know, really pet parents.

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Speaker 1: I think we can truly call them pet parents at

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Speaker 1: this point when you start seeing those kind of trends

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Speaker 1: and those kind of things going on our country. We

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Speaker 1: have a customer base that ultimately has a dent of

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Speaker 1: the pets in this country go to major retail outlets

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Speaker 1: and online stores to find their pet supplies. We're at

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Speaker 1: the front and in the very very beginning helping educate

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Speaker 1: them on where they can get quality healthcare. And then remember,

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Speaker 1: every single person that's going to come back and buy

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Speaker 1: a prescription drug at a retailer first is going to

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Speaker 1: go to a veterinarian's office and have that visit. And

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Speaker 1: so again, we think we're very balanced in providing incremental

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Speaker 1: growth for the manufacturers in that space, for the veterinarians,

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Speaker 1: and ultimately just exp banning the pie and if there's

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Speaker 1: more pets coming home than babies, we're in a very

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Speaker 1: good tailwind as far as the market and the market

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Speaker 1: that's already growing at a six percent KR. Who knows

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Speaker 1: what the potential growth rate could be as we continue

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Speaker 1: to drive that awareness. I think the estimate is for

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Speaker 1: what about a nine billion dollar market that was in

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Speaker 1: the SEC filing, a nine billion dollar market in for

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Speaker 1: pet medications. Thanks very much for joining us. Cord Christensen

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Speaker 1: is the co founder and the chief executive of pet

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Speaker 1: i q UH. Their stock begins trading. It is trading

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Speaker 1: right now on the New York Stock Exchange. Thanks very

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Speaker 1: much for being with us. And just a note, uh,

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Speaker 1: Lisa Bramwitz. You know one of the things that you

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Speaker 1: mentioned having to do with the number of pets and

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Speaker 1: so on. As part of their uh filing, they say

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Speaker 1: about seventy of dog owners and seventy seven percent of

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Speaker 1: cat owners view their pets as members of the family. Wow, well,

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Speaker 1: those shares are trading on the NASDAC for I beg

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Speaker 1: your pardon, Yes, yes, but yeah, it's just amazing. All right. Well,

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Speaker 1: let's let's take a look at another story that caught

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Speaker 1: our eye today. Y'alman owner and it is the author

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Speaker 1: of it. He's a senior writer in banking and finance

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Speaker 1: for Bloomberg News. And it was taken a look at

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Speaker 1: the pretty incredible profits that we have seen at the

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Speaker 1: biggest US banks despite these regulations that have sensibly been

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Speaker 1: holding them back. Yellman, can you just give us a

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Speaker 1: sense of how big these profits have been. Um, they're

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Speaker 1: almost as big as they were in two thousand seven,

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Speaker 1: which is pretty amazing because that was a good year

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Speaker 1: before everything fell apart, as you remember, and it was

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Speaker 1: less regulated. This is the crucial point, right because a

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Speaker 1: lot of these Dodd Frank regulations had not yet been implemented.

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Speaker 1: It was pretty much unregulated. You can say, I mean

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Speaker 1: they they you know, um, they tried there were people

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Speaker 1: who tried to regulate it. There with this market, they

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Speaker 1: were told to be hands off. Um. Capital rules were revised,

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Speaker 1: so basically banks could go on without any capital, meaning

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Speaker 1: you don't really need that, could you just borrow as

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Speaker 1: much as you can so um, So their leverage ratios

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Speaker 1: reached you know, one to fifty at times. UM. So

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Speaker 1: there was hardly in the regulation and they were they

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Speaker 1: were making a lot of money and now there's all

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Speaker 1: this regulation they're constantly complaining about and they're making about

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Speaker 1: the same amount of money. So what does that tell

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Speaker 1: you about their desire to have the chains of regulatory

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Speaker 1: authority loosened? So I mean we have to so no

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Speaker 1: put it in context, you know, as as the banker

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Speaker 1: um that the bank lobbyist told me who's quoted in

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Speaker 1: this story. Well, okay, but the GDP nominal terms is

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Speaker 1: bigger than it was, so the number is not one

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Speaker 1: to one comparison. We're basically got back to the records,

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Speaker 1: but it's a bigger GDP. Typically, what happens with banks

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Speaker 1: they're lending an activity goes up as GDP goes up nominally.

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Speaker 1: So if GDP grows two percent nominally regardless of realists,

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Speaker 1: real terms, everything in the bank's assets due too, but

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Speaker 1: they haven't. So in a way, we're not where we

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Speaker 1: were in two thousand seven, but we're getting very close.

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Speaker 1: So we've heard a lot about how certain businesses have

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Speaker 1: become less profitable, talking about debt trading in particular some

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Speaker 1: of their prop trading books, as well as equity trading,

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Speaker 1: which has been losing it's sort of revenue abilities for

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Speaker 1: a while. So what's behind the growth in profits? Um? Well,

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Speaker 1: I mean they have been lending on like so unlike,

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Speaker 1: unlike the common misperception that they have been lending more

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Speaker 1: and more. I mean, again you make comparisons to before

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Speaker 1: the crisis, lending was growing faster, but then a lot

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Speaker 1: of people will say, god, it was growing too fast, right,

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Speaker 1: there were all the subprime stuff that everybody was borrowing.

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Speaker 1: But but lending is not all the same, right. I mean,

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Speaker 1: when you talk about lending and we're talking about revolving

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Speaker 1: lines of credit and straight corporate loans or are these

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Speaker 1: more complicated structures that could potentially have some serious problems

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Speaker 1: that have sort of embedded leverage. I mean, are we

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Speaker 1: talking about just the banks doing their function as basically

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Speaker 1: going out there and providing capital to businesses of all

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Speaker 1: sizes and letting them go out and create American dream.

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Speaker 1: They are doing their function, the lending that's helped, and

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Speaker 1: it's And this is interesting because although this is this

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Speaker 1: is something we thought about, what didn't really including in

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Speaker 1: the story. Um the spreads, I mean, the correct credit.

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Speaker 1: The interest rates are so low, so to be able

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Speaker 1: to actually make decent profits in an in such a

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Speaker 1: horrible interest rate environment is pretty amazing too. But the

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Speaker 1: if you look at net interest margin compared it with

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Speaker 1: now and and pre crisis, the gap isn't that bad.

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Speaker 1: So despite interest rates being so low, banks have managed

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Speaker 1: to keep improved. Recently, they came down because nobody was

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Speaker 1: borrowing for so for several years. Two thousand ten was

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Speaker 1: really bottom. The interesting margins really went down because when

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Speaker 1: there's no loan demand, you can't charge for it. You know,

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Speaker 1: it doesn't want to what interest people. If there are

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Speaker 1: people are in borrowing, you have to keep it low.

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Speaker 1: But now there's demands more and more, the demand has

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Speaker 1: picked up. People are borrowing, companies are borrowing, and the

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Speaker 1: banks are now notching up that interest rate and they

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Speaker 1: are able to make the spread that they used to

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Speaker 1: make before the crisis, which is very healthy. So and

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Speaker 1: trading has has bombed up to I mean this this

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Speaker 1: quarter was not a great quarter. Clearly its second quarter.

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Speaker 1: Everything went down because because everything is quiet. We don't

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Speaker 1: like quiet. We want a lot of scare fear, Brexit

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Speaker 1: and and and World War three. Now we don't want that.

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Speaker 1: But but you know, trading force for several quarters really improved.

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Speaker 1: I mean for some banks, five quarters in a row,

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Speaker 1: they saw massive increases in trading. Morgan Salon was doing great. Um.

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Speaker 1: You know, JP Morgan has just been grabbing market share. UM.

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Speaker 1: US banks are doing great. European banks not so. But

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Speaker 1: that helps the US banks. Yeah, I mean I wonder

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Speaker 1: if you could just briefly just describe the banks paying

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Speaker 1: out interest Let's say on CDs that you're not gonna

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Speaker 1: get anything on in a CD. Right, we're talking maybe

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Speaker 1: one percent at the current rate, not even one, not

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Speaker 1: even one. Now. I mean I was looking at interest

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Speaker 1: rates the banks paid the other day, and a chart, um,

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Speaker 1: and what happened to them? U um, and there was

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Speaker 1: a study. UM, I forget maybe fed or something over there,

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Speaker 1: I see, But interest rates they pay their depositors is

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Speaker 1: around zero. So that has been and it hasn't picked

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Speaker 1: up even as the FED has picked up in its

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Speaker 1: interest rate, right, So it's not even connected. That's because

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Speaker 1: there's still no alternative. I mean, I talked about lending.

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Speaker 1: When there's demand for borrowing, you can jack that up.

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Speaker 1: But deposits, you need to jack up the deposit rate

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Speaker 1: when you're competing with others. That is not there because

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Speaker 1: money markets are no longer in the game, so they

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Speaker 1: don't have to. They don't feel like they have dejected out.

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Speaker 1: No pressure for that, No pressure, Thanks very much. Yeah,

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Speaker 1: I'm an owner on as always senior writer banking and finance.

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Speaker 1: Checkout history at Bloomberg dot com. Well, you know, the

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Speaker 1: Trump administration as well as Bill Schuster, he is a

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Speaker 1: congressman from Pennsylvania, are promoting the idea of turning the

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Speaker 1: air traffic control system into a government well a government

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Speaker 1: authorized private corporation that would be responsible for the air

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Speaker 1: traffic control system in the United States. And here to

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Speaker 1: tell us more about this topic on the airline industry

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Speaker 1: is an expert Bob Crandall. He is the former chief

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Speaker 1: executive of American Airlines and uh, I want to thank

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Speaker 1: you very much. For joining us. R Crandel, thanks for

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Speaker 1: being I'm glad to be here, all right. So, you know,

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Speaker 1: I was going to give them your long history. You know,

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Speaker 1: you worked at t w A, you were you know,

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Speaker 1: American Airlines and so on. I wonder if you could

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Speaker 1: just start off by framing the conversation about the government's

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Speaker 1: participation in the airline industry, because we used to have

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Speaker 1: a regulated airline industry and now we don't. Sort of, well,

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Speaker 1: that's right. Then, we used to have regulated industry in

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Speaker 1: the sense that the the c A B control where

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Speaker 1: airlines could fly and how much they could charge. All

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Speaker 1: that went away in uh. The f a A then

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Speaker 1: has the task of establishing safety standards and at the

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Speaker 1: same time as the task of physically operating the air

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Speaker 1: traffic control system. And what this whole thing is about

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Speaker 1: is that around the world more than fifty countries, almost

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Speaker 1: every other advanced country, in particularly Canada just one north,

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Speaker 1: have taken the actual opera ration of the system out

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Speaker 1: of government and they have put it into what are

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Speaker 1: called a nsps and navigation service providers, which support themselves

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Speaker 1: by charging fees rather than supporting it with taxes as

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Speaker 1: the United States does. It has proven to be a very,

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Speaker 1: very beneficial change. Those systems are cheaper and they and

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Speaker 1: most importantly, I think tim they make better use of

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Speaker 1: the airspace, which is a limited asset. So this is

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Speaker 1: something that has been under discussion in the United States

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Speaker 1: since Bill Clinton's time. Al Gore was the first advocate

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Speaker 1: of it, and in the meantime, virtually every other country

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Speaker 1: has done it, and I hope we will soon get

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Speaker 1: on and do it. All Right, So if we were

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Speaker 1: to do that, the board that would oversee this new corporation,

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Speaker 1: those members would be selected by the airlines. Correct, No, no, no, no, no, no, no,

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Speaker 1: they wouldn't. In fact, uh, general aviation would have a seat,

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Speaker 1: Airports would have a seat. Uh, the government would have that.

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Speaker 1: The government would have a seat that the Controllers Union

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Speaker 1: would have a seat. The in the board overall, there's

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Speaker 1: only one of the only one seat is it would

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Speaker 1: be the passenger airlliances, one for cargo airlines. There's one

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Speaker 1: for charter Would they all have to be part of

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Speaker 1: Airlines for America. That's the sort of umbrella group, right, No, no,

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Speaker 1: the umbrella group is only the passenger airlines to him,

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Speaker 1: So the Airlines for America and the airlines themselves was uh,

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Speaker 1: get one seat on this board and everybody else gets

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Speaker 1: the seat as well, which is which is I think

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Speaker 1: perfectly appropriate. Look, the airlines, because they operate most of

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Speaker 1: the airplanes and most of all big airplanes, will pay

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Speaker 1: most of the seeds. But the system will be dramatically

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Speaker 1: more efficient, and the consequences that the airlines are willing

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Speaker 1: to take on the task of things. He's because they

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Speaker 1: will be able to operate more lanes to more places

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Speaker 1: with fewer delays. So with this potentially new system for

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Speaker 1: air traffic control, do you believe that the actual service

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Speaker 1: of passenger air aircraft will will improve? Oh? Absolutely, Now

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Speaker 1: not Look, we're not talking about on board service, no, no,

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Speaker 1: I understand, but just on time start. But we are

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Speaker 1: listening of the delays that occurred last year were caused

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Speaker 1: by congestion in the in the in the air traffic

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Speaker 1: control system. I mean we are still using technologies that

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Speaker 1: there are World War technology. We use radar, for example,

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Speaker 1: instead of GPS to say where planes are. And because

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Speaker 1: we don't use GPS to locate every airplane, airplanes have

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Speaker 1: to remain on the equivalent think of a series of

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Speaker 1: highways in the sky. And the airplane. Airplanes have to

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Speaker 1: fly down those highways to designated endpoints rather than rather

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Speaker 1: than keeping track of where every airplane is all the time,

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Speaker 1: which is both way more efficient and at the same

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Speaker 1: time safer. So the consequences if you could use all

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Speaker 1: of the air space in an optimal sort of way,

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Speaker 1: there would be fewer delays, and you could have more flights,

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Speaker 1: and they could go to more places more often. It's

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Speaker 1: and and the real big impact of this PIM is

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Speaker 1: that this is going to have a dramatically beneficial impact

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Speaker 1: on the US economy. As you know, traveling tourism is

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Speaker 1: a big employer. If if airplanes can fly more more

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Speaker 1: flights and they if they can incur fewer delays, more

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Speaker 1: people are going to travel, More people are gonna stay

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Speaker 1: in hotels, eating restaurants, etcetera, etcetera, etcetera. So I think

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Speaker 1: this is going to be a big stimulant to the

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Speaker 1: to the U. S economy. And again it's something we

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Speaker 1: ought to get on with and get done. All right, So, Bob,

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Speaker 1: I want you to turn your attention now to what

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Speaker 1: goes on in the plane as far as customer service

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Speaker 1: is concerned, and also the what goes on in the airports.

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Speaker 1: For that, You've obviously seen many of the recent stories

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Speaker 1: and watched maybe perhaps the videos of the treatment of

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Speaker 1: various passengers. What goes through your mind when you see

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Speaker 1: that and you hear these stories? Where where are the

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Speaker 1: people in charge of the actual airlines? Why they're not

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00:25:20,480 --> 00:25:23,199
Speaker 1: walking around like someone would walk around in office and

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Speaker 1: see how things are doing well? Keam You know, Look,

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Speaker 1: I I spent a long time in the industry and

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Speaker 1: at one company that I was particularly fond of, And

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Speaker 1: the reality is, when I see stories like that, I'm outraged.

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Speaker 1: Obviously they should not happen because you were I know

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Speaker 1: that you were famous for Actually you would walk through

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Speaker 1: terminals and you would take the actual planes on a

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Speaker 1: regular basis, and you would make comments, and you would

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Speaker 1: talk to actual passengers. Yes, absolutely, and I talked to

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Speaker 1: spend a lot of time talking to employees. And in fact,

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Speaker 1: I think if if more of the people who run

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Speaker 1: the airlines they did more of that, I think there

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Speaker 1: would be fewer of those awful incidents. But let me

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Speaker 1: let me say this by way of mitigation and explanation,

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Speaker 1: I guess what we've got today is an overcrowded system.

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Speaker 1: Our airports are out of date. Our air traffic control

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Speaker 1: system is out of date, which we've been talking about

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Speaker 1: the consequences. As demand grows, the airports get more and

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Speaker 1: more crowded, the airplanes get more and more crowded, and

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Speaker 1: all that crowding and confusion is very unpleasant. Now the problem,

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Speaker 1: here's the problem. We used to have less crowding and

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Speaker 1: less confusion, and we used to have more regulation. And

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Speaker 1: as deregulation has occurred, people that the traveling public generally

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Speaker 1: has said, look, I am going to select the cheapest flight.

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Speaker 1: That is generally what I'm going to choose. That's the

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Speaker 1: way I'm going to choose. And the consequence of that

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Speaker 1: is that the amount of money available to accommodate passengers

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Speaker 1: in a in a non crowded environment, in a more

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Speaker 1: pleasant way is very limited. So I I look, I'm

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Speaker 1: not happy with the state of the hill and service

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Speaker 1: industry service and I don't think people in the industry

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Speaker 1: are either. On the other hand, if you look at

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Speaker 1: the number of people carried and the tremendous safety of

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Speaker 1: the organization, I think you say, well, they're not doing

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Speaker 1: as well as i'd like them to do in terms

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Speaker 1: of service, but they're doing a pretty down good job

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Speaker 1: of keeping people safe. Well. Thanks very much for giving

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Speaker 1: us a good picture of the airline industry. Bob Crandall

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Speaker 1: is the former chief executive of American Airlines. Thanks for

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Speaker 1: listening to the Bloomberg P and L podcast. You can

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Speaker 1: subscribe and listen to interviews at Apple Podcasts, SoundCloud, or

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00:27:48,920 --> 00:27:52,399
Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm on

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00:27:52,440 --> 00:27:56,600
Speaker 1: Twitter at pim Fox. I'm on Twitter at Lisa abramowits

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Speaker 1: one before the podcast. You can always catch us worldwide

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Speaker 1: on Brook Radio. H